Chapter 10

Marketing Management
Promotion
Manohar D. Rao
md_rao@hotmail.com | 98456.92657
MD Rao: Marketing Management | Notes to supplement class discussion: Do not circulate | 10.1
Course Road Map
Module Topic Chapters Quiz Group Lecture #
Exercise
1 Overview 1 1,2
2 Environment, Customer and the New Economy 3,5 3,4
3 Strategy / Planning 2 5,6

4 Buyer Behaviour 6,7 7,8,9

5 Segmentation, Targeting, Positioning 8,11 10,11,12

6 Competition 9 13,14
 
7 Product 10,12,13,20 15,16,17,18

8 Place 15,16 19,20

9 Price 14 21,22
 
10 Promotion 17,18 23,24,25,26

11 Demand Forecasting / MIS 4 27,28

12 Sales / Implementation 19,22 29,30
 
4 9
Grading
Quiz (Best 3 of 4) 30
Class Participation (Discussion / Attendance) 10
Group Exercises 10
Final Exam 50
Total 100
Note: The primary text will be "Marketing Management" by Kotler, Keller, Koshy and Jha
Chapter numbers here are for the 13th edition published by Prentice Hall of India.
Promotion - Topics
• Why Promote?
• Communication
●
What is communication?
●
The marketing communications mix
●
Communications platforms
●
The communication process
●
Integrated marketing communications
• Managing Promotional Tools

●
Advertising
●
Print advertising
• Reaching out to Rural India
Why Promote At All?
McGraw-Hill’s famous
“Man in chair”
advertisement
Compelling reasons
for companies to
advertise
Communication
What is it?
• Content:
Meaningful, “Sticky”
• Platform: Appropriate
to target / message • Ease of
• Comprehensible understanding
Encode Message Decode

Media
• Who to target
• What to say • Competing/ Receiver
Sender • What response sought interfering messages
Noise
• Awareness
• Interest
• Conviction
• Action
Feedback Response
• Buying phase • Information Message may not

• Post-purchase • Demonstration be received well:
• Negotiation •Selective attention
• Order •Selective distortion
•Selective retention
Communication
The marketing communications mix
• Form of paid, non-personal

presentation and promotion
g of ideas, products or services
sin Pro Sale by an identified sponsor
r ti m s
dve ot
ion
A • Temporary inducements for
the trial or usage of a product
or service
Marketing • Programs to promote the

Comms. Mix image of a company or of its
P
offerings
t i ng
ubic
ct
e
• Face-to-face interaction with

e
k
i ty
r
r
Ma
i
prospective customers to
D
/ PR
impart information, answer
questions and secure orders
Personal Selling • Direct communications with

prospective customers
through email, phone, fax,
the Internet or paper mail
Based on Philip Kotler and KevinKeller.Marketing Management, 12 ed. New Delhi.Pearson Education, 2007.
Communication
Communications platforms
Advertising Sales Publicity / PR Personal Direct
Promotion Selling Marketing
•Print media •Free samples •Press coverage •Official •Email

Meetings campaigns
•Radio •Coupons •Seminars
(beware
•Discounts •Event •Informal
•Video (TV, spamming)
sponsorship Interaction
Cable,
•Rebates •Mailers
Movies) •Presentations
•Social cause
•Contests •Telemarketing
•Brochures sponsorship •Custom demos
•Demonstration •TV shopping
•Logos •Lobbying •Testimonials
•Trade shows and •Internet
•Packaging •Annual Reports
references shopping
(Outer / •Loyalty bonus
•Publications
Inserts) •Support for
customer’s
•Posters
own sales
•Hoardings initiatives
•POP displays
Based on Philip Kotler and Kevin Keller. Marketing Management, 12 ed. New Delhi.Pearson Education, 2007.
Communications Platforms
Sales promotion, public relations, direct marketing
Sales Promotion Public Relations Direct Marketing
Reaching / delivering
Promoting quicker / greater Promoting/protecting goods/services by
Objective purchase through the use of image among groups with
current or potential interest using Consumer-Direct
diverse incentive tools
(CD) channels
In many packaged goods Traditionally treated as a Rapid growth in use:
Importance companies, accounts for 65% minor element; increasing particularly with
of promotion spends in importance electronic marketing
Does not appear to attract Impact usually indirect:
Limitations/ Invasion of privacy
long-term, loyal, customers so creates favourable
Shortcomings much as deal-seekers attitudes Fairness issues
Objectives → Tools → Program Objectives → Message → Objectives → Target →

Major decisions → Implementation Vehicle → Implementation Offer → Channel
Samples Coupons Direct mail
Rebates Price packs Publications
Fax
Consumer Gifts Prizes Events
eMail
products Free trials Warranties Sponsorships
Voice mail
Tie-in/Cross Frequency News
Database marketing
Speeches
Discounts Allowance Catalogue marketing
Industrial Public-service activties
Free goods Sales contests Telemarketing
products
Trade shows eMarketing
Publicity/PR: Lobbying
• “Lobbyists are the very

lifeblood of the
Beltway…”
• “…failing to lobby
effectively against the
sale of these aircraft”
• “…no fewer than eight

law firms are singing
the Pak tune in various
parts of the US
legislative and
executive machinery”
Source: ToI – 17 Dec 2004 p 01
Direct marketing: New media
• RSS Feeds
• eMail
• Web Banner Ads
• Click through rates

• eMail: ~ 80%
• Ad banners < 1%
• Permission marketing
• Allow customers to say what is
sent to them (or opt out totally)
• Corporate • Unsubscribe option
Blogs • Personalisation
• Newsletters with news of interest
Communication
The communication process
Manage Integrated Marketing Communications
Identify Set Design Select Set Determine Measure

Target Objectives Message Channels Budget MarCom Results
Audience Mix
•Assess •Define •What •Personal •Depth of •Tools •Set

Image type of •How •Non- pocket •PLC metrics
response personal stage to
sought •When •% Sales measure
(ABC) •Product before-
•Content •Industry
type hand
practices
•Structure
•Objective
•Format -and-task
Communication
The communication process: Assess image
• Target audience and positioning define what, how, where and when to say
• “Share of mind” and “Share of heart” influence communications tasks
• Researching image: semantic differential
Favourably disposed 
A: High, High: Maintain
• Develop an optimum set of relevant
dimensions
B: Low, High: Reach out
• Administer to sample of respondents
• Average and map results
• Check variance C: High, Low: Control
damage; Repair
Few Flavours Many Flavours D: Low, Low: Repair
Low Nutrition High Nutrition Familiar with Brand 

Poor Taste Great Taste
High Price Right Price
Unavailable Readily Available
Communication
The communication process: Set objectives
• Cognitive: Opinion/belief - Smoking is

unhealthy
Affective Cognitive
• Affective: Emotion/Feeling - I do not like
XYZ company because they make
cigarettes
• Behavioural: Emotion-driven action - I will

Behavioural not buy XYZ’s other products
ABC Components of Attitudes

Response-Hierarchy Models
Model Cognitive Affective Behavioural
AIDA Attention  Interest  Desire  Action
Hierarchy-of-Effects Awareness  Knowledge  Liking  Preference Conviction  Purchase
Innovation- Awareness  Interest  Evaluation  Trial  Adoption
Adoption
Communications Exposure  Reception  Attitude  Intention  Behaviour
Cognitive response 
Communication
The communication process: Create the message
•What to say
•How to say it
Content Structure Format Source
•Who should
say it
•Appeal •Ask questions, •Print: •Celebrities

allow viewers Headlines,
•Rational •Credible
to form own visual, copy
sources
•Emotional conclusions
•Radio: Words,
vs. giving one •Expertise
•Moral voice quality,
•One-sided vs. vocalisation •Trust-
two-sided worthiness
•TV: Above +
arguments •Likeability
Presenter’s
•Order: image (if
Strongest first applicable),
vs. last body
language
Communication
The communication process: Select channels
• Key Buying Influences

• Opinion Leaders
Personal
Communications • Testimonials
• Ads with high
“conversation value”
“The Law of the Few,” says • Word-of-mouth / “Buzz”
Malcolm Gladwell, applies to
Selecting Word-of-Mouth: Focus on • “Viral” marketing
Channels Mavens, Connectors, Salesmen
• Print
Non-Personal • Broadcast
Communications
• Network
• Electronic
Consumer products sellers’ promotion mix
• Display
tends to use more of non-personal channels;
Industrial products promotion mix, personal
Communication
The communication process: Establish a budget ...1
“I know half of my advertising is wasted. The trouble is, I don’t know

which half” - John Wanamaker (“Father” of the department store)
Affordability •A purely financial approach that ignores the

actual need for promotion; makes long-term
promotion planning difficult
•Relates spending to sales; Number normally

Percentage based on precedent; Discourages promotion
-of-Sales in break-out situations when perhaps critical
Budgeting
Promotion •Spend industry-average, on the assumption
that this is collective wisdom and that
Competitive promotion wars are averted. However, each
Parity firm has its own objectives and constraints
•Requires assumptions of market share,

objectives, impressions needed for trial,
Objective-
and-Task insertions and costs to be articulated clearly
Communication
The communication process: Establish a budget ...2
Goal: 10% of 50
Mn = 5 Mn Users
• Establish goal (e.g. market share)
33% Triers loyal

• Likely to continue to use after trial 50 Mn = 15 Mn Pot. Users
• Likely to try if sufficiently exposed

40% Try = 37.5Mn
75% of Market
• % Market to be reached “Sufficiently” exposed to
ad ?% of market
Try
25 Impressions
• Ad. impressions needed to induce trial (40%) for Trial
Stay
(33%)
• GRP to be bought (= Reach x Frequency) GRP = 75 x 25
= 1875
• Budget based on average GRP cost 5Mn
Avg. GRP = Rs.5000

Budget = 5000 x
1875 = Rs. 93.75L
Communication
The communication process: Determine mix- media characteristics
Advertising Sales Publicity/PR Personal Direct
Reach Very wide Wide Wide Narrow Wide
Repetition Very High High Low Very High Medium
Varied; Incentives- Image most May feel Low response rate;

Response Impersonal driven effected obligated Economical
General; Can be Specific; General; Can Highly Fairly highly

Content very expressive temporary be dramatised customised customised
Credibility Medium High Very High Very High Low
Consumer
2 1 4 3 5
Products
Industrial
3 2 4 1 5
Products
• A “Push” strategy promotes the product through the channel - Manufacturer  Distributor  Retailer 
Consumer - primarily by personal selling and trade promotion. Industrial Products’ mix focus on this
• A “Pull” strategy uses promotion mainly directed at end-consumers to induce them to ask for the product,
primarily by advertising, sales promotion, and direct marketing. Consumer Products’ mix focus on this
Communication
The communication process: Determine mix- selecting media
Factors that influence mix

• Market share
Cost Effectiveness 
• Competitiveness / Clutter
• Substitutability
• Buyer readiness
• PLC Stage
Gary Lilien found, in a major

project (ADVISOR) that for
• Advertising / PR Industrial companies:
• Personal Selling • Average marketing
• Sales Promotion budgets were 7% of sales
Aware Informed Convinced Ordered Ongoing • 10% of this was spent on

advertisements
Buyer Readiness Stage
• Higher-than-average
spends were seen from
Introduction Growth Maturity Decline those with superior
1.Advertising/Publicity 1. Advertising 1.Sales Promotion Sales Promotion;
quality, uniqueness,
2. Word of Others decline higher frequency of
2.Person Selling: Dist. 2.Advertising
Mouth/ purchase or who enjoyed
3.Sales Promotion: Trial 3.Personal Selling
Demand high customer growth
MarComs mix and PLC Stage Based on Philip Kotler and Kevin Keller.Marketing Management,
12 ed. New Delhi.Pearson Education, 2007.
Communication
The communication process: IMC
“Integrated Marketing Communications is a concept of
marketing communications that recognises the added value of a
comprehensive plan” - AAAA
Advertising Sales Publicity / PR Personal Direct
Seamless Integration
P&G requires each new

communication program to be
jointly designed by its:
• Advertising agency
• PR agency
Clarity • Direct marketing units
Consistency • Promotion-merchandising firms
Maximum • Internet operations
impact
Managing Promotional Tools:
Advertising
Managing Promotional Tools
The 5 M’s of advertising
Mission Money Media Message Measurement
•Sales •PLC •Reach, •Generation •Commun-

Objectives Frequency, ication
•Share •Evaluation
Impact
•Advertising •Competition •Selection
Objectives •Major types •Sales
•Ad, frequency •Execution
• Inform •Specific
•Substitutability vehicles • Rational
• Persuade
• Emotional
• Remind •Timing
•Social-
• Reinforce •Geographical
responsibility
allocation
review
Advertising: Objectives
“An advertising goal (objective) is a specific communication task

and achievement level to be accomplished with a specific audience
in a specific period of time” - Russell Colley
Inform •Create awareness of new

products or of new features of
current products
•Create Liking  Preference

Persuade  Conviction  Purchase
Best when able to evoke
Ad. cognitive and affective
Objectives responses simultaneously
Remind •Induce repeat purchase of

products and services
•Reassure customers that they

made the right choice; reduce
Reinforce cognitive dissonance
Advertising: Major media types
Newspapers Magazines TV Radio Outdoors
Reach Very wide Limited Very wide Very wide Limited
Repetition High High Low: High cost Very High Very high
Varied; Incentives- Image most May feel Low response rate;

Response Impersonal driven effected obligated Economical
Impact High High Very high Low Medium
Credibility Very high Very high High High Medium
Clutter High Medium Very high High High
Local
Very high High Low Medium Very high
coverage
Advertising: Media timing
Level Rising Falling Alternating
Concentrated
(Burst)
Continuous
Based on Philip Kotler and Kevin Keller. Marketing Management,


Msgs
Intermittent / Mth

12 ed.New Delhi.Pearson Education, 2007.

Timing should  Mth 
consider:
• Buyer turnover Application
• Purchase frequency Concentrated One selling season
• Forgetting rate Continuous Level Expanding markets; Frequently purchased items;
(The higher the Buyer High “forgetting” rate
Turnover, Purchase
Frequency, Forgetting
Rate, the more
Pulsing Low continuous + Wave of heavy ads: some
continuous the ads.) consider more cost-effective than level
Intermittent (Flighting) Low funding; Infrequent purchase cycle; cyclical
Advertising: Message
Message Generation
• Single benefit: “Rolaid spells relief” (Rosser Reeves / Ted Bates)
• Character for benefits mix: Green Giant stands for fresh frozen, vacuum packed,
packed in butter sauce (Leo Burnett / Leo Burnett). Also Marlborough Cowboy,
Pillsbury Doughboy
• Story highlighting problem, solution: FedEx (Doyle, Dane, Bernbach)
Message Execution
“The facts are not enough … Don’t forget that Shakespeare used some pretty
hackneyed plots, yet his message came through with great execution.”
• Positioning: Rational vs. Emotional vs. Sensory
• Headlines: News / Question / Narrative / Command / 1-2-3 Ways / How-what-why
• Style: Lifestyle / Fantasy / Mood / Testimonial / Technical expertise / Scientific evidence
• Format Elements: Ad. size / Colour / Illustration / Configuration
Print advertisement research: Picture / Headline / Copy tend to be important in that order
Research using electronic eye movement studies: Consumers can be led by placements
of dominant elements
Advertising: Measuring effectiveness
• Jay Forrester, “… probably no more than one fifth of one percent of total
advertising expenditure is used to achieve an enduring understanding of how to
spend the other 99.8%”
• Russell Colley has listed 52 possible advertising objectives in his DAGMAR

(Defining Advertising Goals for Measured Advertising Results) model
• Most measurements in practice tend to deal with specific ads or campaigns
• Most often, the communication effect (awareness, liking, preference) is

measured; Impact on sales, while more difficult to measure, is key
Communication-effect research Share of

Sales-effect research
Expenditure
• Copy testing • Historical
(Correlation…)
• Portfolio tests Share of
Voice
• Experimental Design
• Laboratory tests
Share of (ANOVA…)
Mind/Heart
• In-home tests
Share of
Market
… Demand Forecasting

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Marketing Management

• Managing Promotional Tools

• Reaching out to Rural India

Encode Message Decode

• Buying phase • Information Message may not

• Form of paid, non-personal

Marketing • Programs to promote the

• Face-to-face interaction with

Personal Selling • Direct communications with

•Print media •Free samples •Press coverage •Official •Email

Sales Promotion Public Relations Direct Marketing

Objectives → Tools → Program Objectives → Message → Objectives → Target →

• “Lobbyists are the very

• “…no fewer than eight

Source: ToI – 17 Dec 2004 p 01

• Click through rates

Manage Integrated Marketing Communications

Identify Set Design Select Set Determine Measure

•Assess •Define •What •Personal •Depth of •Tools •Set

• “Share of mind” and “Share of heart” influence communications tasks

• Researching image: semantic differential

Low Nutrition High Nutrition Familiar with Brand 

High Price Right Price

Unavailable Readily Available

• Cognitive: Opinion/belief - Smoking is

• Behavioural: Emotion-driven action - I will

ABC Components of Attitudes

•Appeal •Ask questions, •Print: •Celebrities

• Key Buying Influences

“I know half of my advertising is wasted. The trouble is, I don’t know

Affordability •A purely financial approach that ignores the

•Relates spending to sales; Number normally

•Requires assumptions of market share,

33% Triers loyal

• Likely to try if sufficiently exposed

Avg. GRP = Rs.5000

Reach Very wide Wide Wide Narrow Wide

Repetition Very High High Low Very High Medium

Varied; Incentives- Image most May feel Low response rate;

General; Can be Specific; General; Can Highly Fairly highly

Credibility Medium High Very High Very High Low

Factors that influence mix

Gary Lilien found, in a major

Aware Informed Convinced Ordered Ongoing • 10% of this was spent on

P&G requires each new

Mission Money Media Message Measurement

•Sales •PLC •Reach, •Generation •Commun-

“An advertising goal (objective) is a specific communication task

Inform •Create awareness of new

•Create Liking  Preference

Remind •Induce repeat purchase of

•Reassure customers that they

Newspapers Magazines TV Radio Outdoors

Reach Very wide Limited Very wide Very wide Limited

Varied; Incentives- Image most May feel Low response rate;

Impact High High Very high Low Medium

Credibility Very high Very high High High Medium

Clutter High Medium Very high High High

Based on Philip Kotler and Kevin Keller. Marketing Management,

12 ed.New Delhi.Pearson Education, 2007.

• Russell Colley has listed 52 possible advertising objectives in his DAGMAR

• Most measurements in practice tend to deal with specific ads or campaigns

• Most often, the communication effect (awareness, liking, preference) is