Name of the project Development of Education at the Silesian University in Opava
Registration no. of the project CZ.02.2.69/0.0./0.0/16_015/0002400
MARKETING COMMUNICA-
TION
Distance learning study materials
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍ-
KOVÁ
Karviná 2018
Subject: Marketing
Key words: Marketing communication, marketing communication process, communication
objectives, STP, advertising, sales promotion, personal selling,
public relations, direct marketing, sponsorship, online communications,
new trends in marketing communication, marketing communication
planning and managing, marketing communication efficiency testing.
Annotation: The aim of this study is to offer the current comprehensive overview of
the fundamentals, techniques and applications of marketing communications.
Study text also provides an overview of basic terminology in the
field of marketing communications used in practice. Study text will be
especially appreciated by Czech and foreign students who have already
completed an introductory marketing course and they want to expand
their knowledge in the area of marketing communication. Specialized
text can also be beneficial to marketers, because it provides detailed, systematically
organized information how to understand the behaviour of
target group of customers and how to determine appropriate marketing
communication campaign.
Author: Ing. Kateřina Matušínská, Ph.D.
Ing. Veronika Braciníková
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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Table of contents
INTRODUCTION ...............................................................................................................7
QUICK OVERVIEW OF STUDY TEXT...........................................................................8
1 PRINCIPLES AND MEANING OF MARKETING COMMUNICATIONS ............9
1.1 Communication..................................................................................................10
1.1 Marketing communication.................................................................................13
1.2 The marketing communications mix .................................................................15
1.3 Integrated marketing communication (IMC).....................................................17
2 THE PROCESS STP ON B2C MARKET ................................................................23
2.1 Segmentation......................................................................................................24
2.1.1 The process of market segmentation..............................................................26
2.1.2 Segmenting markets.......................................................................................26
2.2 Targeting............................................................................................................27
2.2.1 Evaluating market segments ..........................................................................28
2.2.2 Targeting strategies........................................................................................30
2.3 Positioning .........................................................................................................32
2.3.1 Perceptual mapping........................................................................................35
2.3.2 Repositioning.................................................................................................36
2.4 The benefits of the process segmentation and targeting ....................................39
3 ADVERTISING.........................................................................................................46
3.1 The selected types of advertising.......................................................................49
3.2 Message source in advertising ...........................................................................53
3.3 Emotional appeals in advertising.......................................................................54
3.4 Psychology in advertising..................................................................................60
4 SALES PROMOTION...............................................................................................66
4.1 Target groups and sales promotion tools ...........................................................68
4.2 Sales promotion at the point of purchase...........................................................70
4.2.1 POP/POS DISPLAYS....................................................................................71
4.2.2 Merchandising................................................................................................73
4.2.3 The power of sensory marketing....................................................................74
5 PERSONAL SELLING .............................................................................................80
5.1 Personal selling definition..................................................................................81
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5.2 Types of personal selling ...................................................................................82
5.3 Personal sales process........................................................................................83
5.4 Structuring of sellers..........................................................................................85
5.5 Sellers’ remuneration.........................................................................................86
5.6 Multilevel marketing..........................................................................................87
5.7 Body language as a powerful tool of personal selling .......................................88
6 PUBLIC RELATIONS ..............................................................................................92
6.1 Public relations definition..................................................................................93
6.2 Target groups of PR...........................................................................................94
6.3 Internal PR – Human relations...........................................................................95
6.4 Corporate social responsibility (CSR) ...............................................................96
6.5 Publicity.............................................................................................................97
6.6 Lobbying............................................................................................................98
6.7 Communication in the crisis period.................................................................100
6.7.1 Types of crisis..............................................................................................100
6.7.2 Emergency plan ...........................................................................................101
6.8 Measuring the results of PR activities .............................................................104
6.9 Event marketing...............................................................................................105
6.9.1 Types of event marketing.............................................................................106
6.9.2 Roadshow.....................................................................................................108
7 DIRECT MARKETING..........................................................................................112
7.1 Direct marketing definition..............................................................................113
7.2 Direct marketing objectives .............................................................................115
7.3 Direct marketing tools and media....................................................................115
7.3.1 Untargeted distribution ................................................................................116
7.3.2 Direct response printed advertising .............................................................116
7.3.3 Untargeted television offer ..........................................................................116
7.3.4 Direct mail ...................................................................................................117
7.3.5 Telemarketing ..............................................................................................117
7.3.6 Catalogs........................................................................................................118
7.3.7 New interactive media .................................................................................118
7.4 Mobile marketing.............................................................................................119
7.5 Customer relationship management.................................................................122
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7.5.1 Analytical CRM...........................................................................................123
7.5.2 Operative CRM............................................................................................124
7.5.3 Collaborative CRM......................................................................................124
7.6 Geomarketing...................................................................................................125
8 SPONSORSHIP.......................................................................................................130
8.1 Sponsorship definition .....................................................................................131
8.2 Major sponsorship decisions............................................................................132
8.3 Objectives of sponsorship................................................................................133
8.4 Selected types of sponsorship..........................................................................135
9 ONLINE MARKETING COMMUNICATION......................................................140
9.1 Online marketing communication definition...................................................141
9.2 Online customer´s characterization..................................................................142
9.3 Online versus off-line marketing communication ...........................................143
9.3.1 Advantages and disadvantages of online and off-line marketing
communication.........................................................................................................144
9.3.2 Selected online tools within marketing communication mix.......................145
9.4 Websites and social media in marketing communication................................150
9.4.1 Websites.......................................................................................................151
9.4.2 Social media.................................................................................................151
9.4.3 Marketing communication on social networks............................................152
10 ALTERNATIVE FORMS OF MARKETING COMMUNICATIONS IN DIGITAL
ERA..................................................................................................................................161
10.1 Guerrilla marketing..........................................................................................163
10.2 Viral marketing................................................................................................166
10.3 Product placement............................................................................................167
10.4 Green marketing...............................................................................................167
10.5 Experiential marketing.....................................................................................170
10.6 Content marketing............................................................................................171
10.7 Affiliate marketing...........................................................................................173
10.8 Case studies of selected alternative forms in marketing communications ......175
10.8.1 Guerrilla marketing..................................................................................175
10.8.2 Viral marketing........................................................................................176
11 MARKETING COMMUNICATION PLANNING AND MANAGING ...............181
11.1 Situation analysis .............................................................................................182
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11.2 Objectives and target group setting..................................................................182
11.3 Objectives setting.............................................................................................183
11.4 Target groups setting........................................................................................184
11.5 Budgeting.........................................................................................................184
11.6 Marketing communication mix strategy..........................................................186
11.7 Selection of marketing communication mix elements.....................................186
11.8 Media selection ................................................................................................186
11.9 Marketing communications coordination and integration ...............................190
11.10 Marketing communications implementation ...............................................191
11.11 The checking of marketing communication campaign results according to
defined objectives and target groups............................................................................192
12 MARKETING COMMUNICATION EFFICIENCY TESTING............................194
12.1 Marketing communication research according to time....................................197
12.2 Marketing research...........................................................................................198
12.3 Research methods ............................................................................................201
12.3.1 Secondary research ..................................................................................201
12.3.2 Primary research ......................................................................................201
12.4 Stages in the marketing research process.........................................................206
12.5 Psycho-physiological methods of marketing communication testing .............206
THE LIST OF LITERATURE.........................................................................................210
SUMMARY OF THE STUDY TEXT ............................................................................218
OVERVIEW OF AVAILABLE ICONS .........................................................................219
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INTRODUCTION
We all meet with marketing communication every day and we usually do not realize it.
Many people think that marketing communication is the same like supermarket or advertising.
This understanding of marketing communication is incomplete and quite distorted,
because it does not include all relevant forms of communication with the market in commercial
and non-commercial environments. Sales? Leaflets? Telemarketing? Tasting? Billboards?
Loyalty cards? Yes, all this and many other communication tools belong to the
marketing communication that targets massively at customers every day. In marketing
terminology, we use the term „marketing smog“ for this phenomenon. It means that current
customers are already immune to these tools, therefore it is necessary to look for other ways
how to communicate with them, build a positive relationship and loyal approach to brands
and products. It is not possible to say that traditional marketing communication tools are
not applicable. They have and will continue to have meaning in the future, but it is necessary
to focus on new media, personalization and customization of the offer, as well as the
humanization of sales space. It is the best marketing communication direction if the company
wants to distinguish itself thanks to an added emotional value.
The aim of this study text is to offer readers the current and comprehensive overview of
the fundamentals, techniques and applications of marketing communications along with
new perspectives on current practice in marketing communications in the consumer market,
and provide actual examples in Czech and foreign environment. Study text is designed for
Czech and foreign students, who have already completed an introductory course in marketing
and want to expand their knowledge of various aspects of marketing communication.
When reading the study material, it is necessary to take into account that the interpretation
of the concept of marketing communications is based on consumer market (B2C).
Marketing communication of the industrial market (B2B) has of course its merits and specifics,
but it will not be addressed in the study material. It is important to realize that the
context of marketing communications is very large and it was not possible to deal with all
aspects of marketing communications.
First of all, we recommend to become acquainted with the signs, abbreviations and symbols
used in the study text. A comprehensive list of them is available at the end of this study
text. Informative, navigation and orientation symbols will support a quick insight into the
issue.
We wish you a lot of success during reading and working with the study material.
Authors
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QUICK OVERVIEW OF STUDY TEXT
The study material is divided into well-arranged 12 chapters and their content corresponds
to the syllabus of the marketing communication course.
The chapters 1 - 2 are devoted primarily to theoretical basis of marketing communications.
The capter 1 aims to acquaint the students with the issues of marketing communication
in general way. First of all, it is important to acquire basic concepts such as communication
meaning, to explain the essence and elements of the communication process and
name the elements of markting communication mix. Chapter 2 describe the process of segmentation,
targeting and positioning when segmentation is concerned with the process of
identifying different groups of customers who are similar in ways that are relevant to marketing.
Targeting decisions can then be made based on the range of identified segments. In
order to choose the most appropriate target markets, it is necessary to understand what
different segments want and the extent to which the organization can supply those wants.
Finally, having identified target markets, the organization must then consider how to position
itself in those markets.
Chapters 3 - 9 discuss in detail the issues of marketing communication elements. These
chapters can be considered as fundamental. Each chapter is dedicated to the individual element
of the marketing communication mix. The students are familiarized in detailed form
with advertising, sales promotion, personal selling, public relations, direct marketing, sponsorship
and online marketing communication.
Chapter 10 describes the very specific and current problems of selected new trends in
digital period, unusual communication techniques and the use of non-traditional media in
today's media market in order to get the attention of customers, which is becoming more
and more troublesome for most companies.
In Chapter 11, the planning of communication is explained. It is also necessary to pay
attention to marketing communication planning and measurement and verification of the
effectiveness of marketing communications, which can be found in Chapter 12.
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1 PRINCIPLES AND MEANING OF MARKETING
COMMUNICATIONS
QUICK OVERVIEW OF THE CHAPTER
The first chapter aims to acquaint the students with the issues of marketing communication
in general way. First of all, it is important to acquire basic concepts such as communication
meaning, to explain the essence and elements of the communication process with
respect to the applicability in marketing. In this context, the terms as opinion leader and
and the so-called Word of Mouth (more commonly known as WoM) come into existence.
After studying the basic prerequisites for communication between the customer and the
seller (the producer), the marketing communication itself is defined. It is possible to define
it from different perspectives. There is used so-called wider and narrower definition in the
text. The most crucial knowledge of this chapter (the whole course) includes the marketing
communication mix and its elements. It should be noted that the composition of the marketing
communications mix differs according to different publications. The presentation of
marketing communication mix in this text is based on seven basic elements including: advertising,
sales promotion, personal selling, direct marketing, public relations, sponsorship
and on-line marketing communicaiton. The elements of marketing communication mix can
also be grouped into two sections, namely ATL marketing communication and BTL marketing
communication. In practice, so-called Integrated Marketing Communication (IMC)
is used predominantly meaning that communications elements that have traditionally been
used independently of each other are combined in such a way that a synergic effect is
reached.
GOALS OF THE CHAPTER
1. To define communication and the elements of the marketing communication process.
2. To get acquainted with the issues of opinion leader and WoM.
3. To describe the use of consumer behavior patterns in marketing communication.
4. To define marketing communication.
5. To define the basic elements of the marketing communication mix.
6. To emphasize the importance and synergy effect of integrated marketing communica-
tions.
Principles and meaning of marketing communications
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KEY WORDS OF THE CHAPTER
communication, marketing communication proces, opinion leader, WoM, teasing,
AIDA, AIDAS, AIDCAS, marketing communication, marketing smog, marketing mix,
marketing communication mix, ATL, BTL, TTL, advertising, sales promotion, personal
selling, direct marketing, public relations, sponsorship, on-line marketing communication,
IMC
Marketing communication is an ever-changing field. New theories, new techniques, cultural
changes and technological advances all combine to create a dynamic environment
within which marketers try to ensure that their messages get through to their target audiences.
(Blythe, 2003, p. 1)
1.1 Communication
The communication is one of the most human of activities. The exchange of thoughts
which characterises communication is carried out by conversation, by the written word and
by pictures.
DEFINITION
Communication has been defined as a transactional process between two or more parties
whereby meaning is exchanged through the intentional use of symbols. (Blythe, 2003, p.
2)
The key elements here are that the communication is intentional (a deliberate effort is
made to bring about a response), it is a transaction (the participants are all involved in the
process), it is symbolic (words, pictures, music, and other sensory stimulants are used to
convey thoughts). (Blythe, 2003, p. 2)
The communication process is the mechanism available to communicate with a target
audience. Communication is more than simply sending a message. Communication is a
two-way process, in as much as the message also needs to be received, understood and
possibly acted on. There is the universal scheme of communication process (H. D. Lasswell
– Power and Personality, 1948) that means Who says What to Whom through Which
channel with What effect?
Communication is the sharing of meaning and requires five central elements: a sender,
a message, a receiver, and the processes of encoding and decoding (see Image 1). The
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sender may be a company or salesperson who has information to convey. This information,
such as the particulars on a new weight reduction drink, forms the message. Consumers
who read, hear, or see the message are the receivers. The message is communicated by
means of a media (TV, radio, outdoor, Internet, salesperson etc.). (Berkowitz, Kerin and
Rudelius, 1989, p. 435-436)
Image 1: The marketing communication process
Source: Berkowitz, Kerin and Rudelius (1989, p. 435)
Encoding and decoding are essential to communication Encoding is the process of having
the sender transform an abstract idea into a set of symbols. Decoding is the reverse
process of having the receiver take a set of symbols, the message, and transform them back
to an abstract idea.
Figure 1.1 also shows a feedback and noise. Feedback closes the communication flow
from receiver back to sender and indicates whether the message was decoded and understood
as intended. Noise includes extraneous factors that can work against effective communications,
such as distorting message or the feedback received. Noise can be a simple error,
such as a printing mistake that affects the meaning of a newspaper advertisement, or using
words or pictures that fail to communicate the message clearly.
The process of communication is not always a successful one. Errors in communication
can happen in several ways. The sender may not adequately transform the abstract idea into
an effective set of symbols. Or a properly encoded message may be sent through the wrong
channel and never make it to the receiver. Or the receiver may not properly transform the
set of symbols into the correct abstract idea. Finally, feedback may be so delayed or distorted
perform, truly effective communication can be very difficult. For the message to be
communicated effectively, the sender and receiver must have a mutually shared field of
experience – similar understanding and knowledge.
Sender
Sender
Message
Message
Media
Media
Message
Message
Receiver
ReceiverNOISE
NOICE
Encoding
Encoding
Decoding
DecodingDecoding
Decoding
Encoding
Encoding
feedback
feedback
Principles and meaning of marketing communications
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Opinion leaders and WoM
In the context of marketing communication process, it is necessary to mention two crucial
terms such as opinion leaders and Word of Mouth.
It is opportunity to use the very topical word-of-mouth communications (in general way
with support of electronic means we can say viral marketing). Word-of-mouth communications
are characterized as informal, unplanned, unsolicited, interactive and bidirectional
conversations. These recommendations provide information and purchasing support and
serve to reinforce and individual´s purchasing decisions. Personal influence is important
and can enrich the communication process (Smith, 2011, p. 42-43).
Informal non-profit sources (friends, family, neighbours, etc.) are credible because
they don´t have any profits from the products they talk about. Therefore, oral communication
is the most effective communication way. Informal non-profit communications resources
are called opinion leaders. Formal non-profit sources have generally higher credibility
than commercial formal sources. Formal non-profit resources are considered as
“neutral” and are objective in evaluating the product. In this context we talk about opinion
former. These are often journalists, critics, judges, government officials, analysts, specialists
in a particular field, etc. (Foret, 2006)
Modelling consumer behaviour – AIDA
There are some basic questions that have to be answered in conjunction with advertising
planning and research. No surprise that some authors have started to theorize about the
effectiveness of various messages and their psychological impact on consumers. The theories
have offered various models for this kind of work. For example, by using AIDA model
and its modifications. (Kaftan, 2001, p. 234)
AIDA is an acronym used in marketing communication (advertising) that describes a
common list of events that may occur when a consumer engages with a marketing communication
(advertising).
• A - Attention (Awareness): attract the attention of the customer.
• I - Interest: raise customer interest by focusing on and demonstrating advantages
and benefits (instead of focusing on features, as in traditional advertising).
• D - Desire: convince customers that they want and desire the product or service and
that it will satisfy their needs.
• A - Action: lead customers towards taking action and/or purchasing.
Using a system like this gives one a general understanding of how to target a market
effectively. Moving from step to step, one loses some percent of prospects.
Later versions of the theory have edited the AIDA steps. New phases such as satisfaction
- satisfy the customer so they become a repeat customer and give referrals to a product
(AIDAS) and confidence (AIDCAS) have been added.
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One significant modification of the model was its reduction to three steps (CAB):
• Cognition (Awareness or learning)
• Affect (Feeling, interest or desire)
• Behavior (Action).
Along with these developments came a more flexible view of the order in which the
steps are taken, suggesting that different arrangements of the model might prove more
effective for different consumer-to-product relationships.
Additionally, as experts have examined this theory more defined practices and theories
have been developed including the T.I.R.E.A. scale that focuses on breaking down the
decision making process into more defined components. Each step focuses on a progressive
journey through the decision making process.
• T - Thought
• I - Interest (Desire)
• R - Risk (Evaluation)
• E - Engagement
• A - Action
The Thought portion of the decision making process can occur randomly and be stimulated
by a variety of stimuli but generates little of no attention by an individual. It simply
creates an awareness of something but generate little or no interest. Similar to seeing food
after one has become full after a meal... one may be aware of the food that is there but there
is little need or interest in obtaining it. Interest occurs when one wants or needs something
- hunger is an example. The level of interest (or desire) increases as hunger and or the wants
and desires increase. Risk and it´s evaluation occur as interest increases. One may desire
steak but withhold obtaining it due to cost, or other reasons (such as health related issues,
etc.) Engagement - an emotional response when Interest and Desires exceed Risks. Action
- a physical response to obtain what one wants and desires and is willing to assume the
risks and/or costs in obtaining it.
The basic aim of marketing communications is to attract attention. That is the reason
that many various original ideas come into existence. In practice, so-called Teasing (tease
- irritating, misbehaving, provoking) is implemented in marketing communication campaigns.
The aim of this concept is to draw customer´s attention in the longer term. It's actually
a continuing communication, which is based on the story. The aim is to stimulate curiosity
and desire to know what happens next.
1.1 Marketing communication
Marketing communication can be regarded as a communication aimed at attracting the
attention of the buying public to a certain firm or product and influencing the people´s
Principles and meaning of marketing communications
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behaviour to such an extent that they would seriously consider becoming the customers of
the firm and buyers of the product in question. The general theme is inducement and an
underlying effort needed to arouse the interest of potential buyers, hence marketing
communication is a universal name used to describe the ways in which firms get their
message across to target groups and boost sales. (Kaftan, 2001, p. 227-228)
Marketing communication is closely related to marketing (the element of marketing mix
– see Image 2) and makes the customer the final decision maker of which products are
selling. This also means that there needs to be a meaningful communication between the
customer and the firm. Marketing communication can be viewed as the application of information
collected during marketing research. At the end of the process, the company
should be prepared to communicate its commercial message to its current and potential
customers in an informative and persuasive way. Before any decision is made on the choice
of the most suitable forms of promotion, the basic questions of communication have to be
answered: (1) who are the receivers? (2) What is to be told? (3) By what means should the
message be transmitted? (Kaftan, 2001, p. 227-228)
DEFINITION
The term of marketing communication can be defined from two points of view. Broader
sense means all planned and unplanned communications at all points of firm´s contact with
current and potential customers (product packaging, brand image, price, point of sale, advertising,
employee behavior, traditions, logo, colours, etc.). It is therefore appropriate in
this context to use the concept of integrated marketing communications (see subchapter
1.3). Narrow sense can be understood as elements of the marketing communication mix.
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Image 2: The marketing mix versus marketing communication mix
Source: authors´ work
There are several general objectives of marketing communication: (1) to create demand,
(2) to support the product differentiation (positioning), (3) to point out the product value
and benefit for customers.
By the development of new technologies, new communication media come into existence.
Communication becomes electronic, digital, mobile, viral, etc. Companies are looking
for new communication methods and concepts to reach their target groups better.
Today we use communication projects that use a variety of new non-traditional media and
tools, which can include, for example, guerrilla marketing, DRTV, mobile marketing, viral
marketing, product placement, ambush marketing and other (more details in Chapter No.
9).
It is also necessary to mention the term “marketing smog” as a negative aspect of contemporary
marketing communication. It means that marketing communications annoy,
disturb and even reduce the quality of people´s life living in developed markets. (Karlíček
et al. 2013)
1.2 The marketing communications mix
The communication mix represents the fourth element in the marketing mix according
to the concept 4Ps. The communication mix is the term for a summarization of the main
means of commercial communications by which companies try to get their messages across
to the potential audiences. It is also the term for the way these means are mixed (combined)
and applied to ensure the best possible effect. The decision on the best combination depends
on the kind of product (ordinary, special, luxury, long-term or short-term consumption),
Product
Price
Place
Marketing Commu-
nication
Marketing
communication
mix
Marketing mix
Principles and meaning of marketing communications
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the stage of the product life cycle (introduction, growth, saturation, decline), market character
(B2C x B2B), company market position and its financial resources (large x small
company), marketing communication strategy and the decisions on the customer´s side.
(Kaftan 2001, p. 228-229)
Image 3 lists some of the elements of the communication mix and the Table 1 illustrates
the basic characteristics of the mentioned elements of the communication mix.
Image 3: Elements of the marketing communication mix
Source: authors´ work
Marketing communications were divided into above the line (ATL) and below the line
(BTL). Above the line means advertising uses independent media (primarily TV, radio, and
the press) where the advertisements can be seen, heard or read by any viewer, listener or
reader. This method accounts for nearly 60 % of all advertising. Below the line advertising
is directed at people in certain places or jobs and uses sales promotion, direct mail, sales
literature and special events such as displays, trade fairs and exhibitions, or closer contacts
with potential buyers etc. In practice there is the most common use of the communication
through the line (TTL) which is the combination of communication above and below the
line. (Kaftan, 2001, p. 229-230)
Marketing communication mix
Marketing communication mix
BTL
Sales promotion, Public relations, Direct
marketing, Sponsorship, Online marketing
communication, non-traditional media,
WoM
BTL
Sales promotion, Public relations, Direct
marketing, Sponsorship,On-line marketing
communication, non-traditional media,
WoM
ATL
TV, Press, Radio, Outdoor, Indoor, Internet,
Cinema
ATL
TV, Press, Radio, Outdoor, Indoor, Internet,
Cinema
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Table 1: The basic characteristics of the marketing communication mix elements
Element Explanation
Advertising A paid insertion of a message in a medium.
Sales promotion
Activity designed to give a temporary boost to sales, such as
money-off coupons, free samples, two-for-the price-of one promotions,
freegifts,piggy-backingwithanotherproduct,lottery, multipacking
etc.
Personal selling
Face-to-facecommunications between buyers and sellers designed
to ascertain and meet customer´s needs on a one-to-one basis.
Public relations
The planned and sustained effort to establish and maintain goodwill
and mutual understanding between an organisation and its
publics.
Direct marketing
An interactive system of marketing which uses one or more advertising
media to create a measurable response and/or transaction at
any location.
Sponsorship
Funding of arts events, sporting events etc. In exchange for publicity
and prestige.
Online marketing com-
munication
The use of websites and social medial for commercial communication
purposes.
Source: own formation according to Blythe (2003, p. 33-34)
1.3 Integrated marketing communication (IMC)
A popular concept in recent years has been integrated marketing communications
(IMC). The integrated marketing communication has been defined in a number of ways,
stressing various aspects, benefits and organizational consequences of IMC.
DEFINITION
According to Kotler (1999) the IMC solution calls for recognizing all contact points
where the customer may encounter the company, its products, and its brands. Each brand
contact will deliver a message, either good, bad, or indifferent. The company must strive
to deliver a consistent and positive message at all contact points.
The various definitions incorporate the same core idea: communications instruments that
traditionally have been used independently of each other are combined in such a way that
a synergic effect is reached, and the resulting communications effort becomes „seamless“
or homogeneous. The major benefit of IMC is that a consistent set of messages is conveyed
to all target audiences by means of all available forms of contact and message channels.
(Pelsmacker, Geuens and Bergh, 2007, p. 8)
Principles and meaning of marketing communications
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Integrated marketing communications (IMC) is a process for managing customer relationships
that drive brand value primarily through communication efforts. Such efforts often
include cross-functional processes that create and nourish profitable relationships with
customers and other stakeholders by strategically controlling or influencing all messages
sent to these groups and encouraging data-driven, purposeful dialog with them. IMC includes
the coordination and integration of all marketing communication tools, avenues, and
sources within a company into a seamless program in order to maximize the impact on end
users at a minimal cost. This integration affects all firm's business-to-business, marketing
channel, customer-focused, and internally directed communications. Integrated Marketing
Communications is a simple concept. It ensures that all forms of communications and messages
are carefully linked together.1
Although Integrated Marketing Communications requires a lot of effort it delivers many
benefits. There are some mentioned benefits in the following text. It can create competitive
advantage, boost sales and profits, while saving money, time and stress. IMC wraps
communications around customers and helps them move through the various stages of the
buying process. The organisation simultaneously consolidates its image, develops a dialogue
and nurtures its relationship with customers. IMC also increases profits through increased
effectiveness. IMC can boost sales by stretching messages across several communications
tools to create more avenues for customers to become aware, aroused, and ultimately,
to make a purchase. IMC also makes messages more consistent and therefore more
credible. This reduces risk in the mind of the buyer which, in turn, shortens the search
process and helps to dictate the outcome of brand comparisons. Finally, IMC saves money
as it eliminates duplication in areas such as graphics and photography since they can be
shared and used in say, advertising, exhibitions and sales literature.
Despite its many benefits, Integrated Marketing Communications, or IMC, has many
barriers. In addition to the usual resistance to change and the special problems of communicating
with a wide variety of target audiences, there are many other obstacles which restrict
IMC. These include: Functional Silos; Stifled Creativity; Time Scale Conflicts and a
lack of Management know-how.2
CASE STUDY
There are two case studies of integrated marketing communication campaigns from
practice in the text below.
1
Integrated Marketing Communications [online] [cit. 7th
April 2014] Available at: http://en.wikipe-
dia.org/wiki/Integrated_marketing_communications
2
Marketing Communications: What is IMC? [online] [cit. 7th
April 2014] Available at: http://www.multi-
mediamarketing.com/mkc/marketingcommunications/
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Gopro is leveraging user-generated content to own action sports
GoPro uses the theme “Be a HERO” to connect with its target audience in a meaningful
way. Using brand-related sponsorships and endorsements, outdoor ads, SEO, web, and
heavy social media, GoPro integrates all of their marketing efforts with plenty of engaging
content from customers themselves. Top it all off with a comprehensive “always
on” brand ambassador marketing program, and you’ve got a winning challenger brand.
GoPro integrated marketing strategy: search + social + out of home + video
GoPro uses the theme “Be a HERO” to connect with its target audience in a meaningful
way. Using brand-related sponsorships and endorsements, outdoor ads, SEO, web, and
heavy social media, GoPro integrates all of their marketing efforts with plenty of engaging
content from customers themselves. GoPro users can submit their original videos using the
latest GoPro HERO 5 to win Video or Photo of the Day on GoPro’s social media channels.
The brand was able to score one of the top ads of the year by using a firefighter’s original
GoPro video, proving that when you have a strong brand message, even user-generated
content will represent your campaign and make it successful. Out of home ads in key markets
leveraged user-generated content to show the cool factor and associate further with the
adrenaline junky lifestyle. Tie in with sponsorships around the integrated campaign instantly
delivers a targeted, scalable audience.3
Always “Like a Girl” campaign
Always briefed its agencies to create a campaign that leveraged the brand’s legacy of
supporting girls as they make the transition from puberty to young women, while reinforcing
why the brand is “relevant to me” and also one that understands the social issues girls
today face at puberty.
Research conducted for the campaign showed over half the women claimed they experienced
a decline in confidence at puberty. The opportunity was clear. Empowering girls
during this time of their lives when confidence is at its lowest would give a powerful, relevant
and purposeful role.
“We explored different factors that influence girls during the vulnerable time of puberty.
During this exploration, someone taped a piece of paper to the board that read ‘like a girl’.
That’s all it said. Among all the ideas and pieces of paper in the room, we were instantly
drawn to it. The idea was explained as: ‘like a girl’ has been around forever and is uses in
derogatory ways, let’s change the meaning of it. From that day on we started to build on
that idea,” says Judy John, Chief Executive Officer/Chief Creative Officer of Leo Burnett
Canada.
3
LonelyBrand: 5 Companies who are doing integrated marketing right in 2017 [online] [cit. 26th
July 2017]
Available at: https://lonelybrand.com/blog/3-companies-integrated-marketing-right/
Principles and meaning of marketing communications
20
The creative team set out to redefine confidence in a way that was more relevant and
remain true to the brand turning the phrase ‘like a girl’ from insult it into a term of empowerment.
The campaign that ensued was built around a social experiment to show the
impact the phrase “like a girl” had on society, especially on girls pre and post-puberty.
The centrepiece was a video that captured how people of all ages interpret the phrase
‘like a girl’. “We thought the best way to start a movement and spark a conversation was
to create a video that would encourage people to share and participate,” says John.
Documentary filmmaker Lauren Greenfield was brought on board to produce the film.
The result revealed that between puberty and adulthood, many women internalise the
phrase to mean weakness and vanity. The experiment also showed how a little encouragement
can go a long way in changing perceptions of what ‘like a girl’ means.
Once the film was shot, a campaign was then constructed around it to spread the message
and empower women by showing that ’like a girl’ should be a meaningful and powerful
statement all women should embrace. Social hashtag #LikeAGirl was introduced as a rallying
cry. John adds: “The hashtag was essential in rallying people to change the meaning of
‘like a girl’ by showing the world that it can mean amazing things.”
“Having a hashtag that captured the essence of the idea and encouraged people to take
part in changing the meaning of it had an impact on our success,” she believes. “But also
key to the campaign’s success were the relevance of the insight, the power of the creative
idea and the authenticity of the responses we captured on film”.
Always #LikeAGirl generated considerable global awareness and changed the way people
think about the phrase ‘like a girl’, achieving more than 85m global views on YouTube
from 150+ countries.
Prior to watching the film, just 19 % of 16-24s had a positive association toward “like a
girl”. After watching, however, 76 % said they no longer saw the phrase negatively.
Furthermore, two out of three men who watched it said they’d now think twice before using
the “like a girl” as an insult.
Always’ brand equity showed a strong double digit percentage increase during the
course of the campaign while most of its competitors saw slight declines. Six months on,
Always ran a 60-second spot highlighting the campaign during the 2015 Super Bowl. Two
months later, it released a follow-up video showing how the meaning of the phrase is already
changing to mark International Women’s Day.
The campaign won D&AD Pencils across eight separate categories, including Direct,
Digital Marketing and Film Advertising. It was one of only five projects to win a Black
Pencil in 2015 and the only one to do so in the 'Creativity for Good' category.
“This film is proof of the power that creativity holds,” John says. “People connect with
and buy the brands that share similar points of view or values they have. These brands have
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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big ambitions and they make a positive and emotional connection with their consumers.
That’s why purpose-driven brands are succeeding.”4
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 1. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. AIDA is acronym used in marketing communication (advertising) which repre-
sents:
a) Attention, interest, desire, action
b) Advertising, interest, desire, action
c) Attention, interest, demand, action
2. WoM is usually used in marketing communication practice describing the situation
when:
a) People are paid to create and to spread positive communication about products, brands,
firms, etc.
b) People are ready to buy the products thanks to the advertising.
c) People generally create informal, unplanned, unsolicited, interactive and bidirectional
conversations about products, brands, firms, etc.
3. Among elements of marketing communication mix does not belong:
a) Sales promotion
b) Merchandising
c) Direct marketing
4. ATL marketing communication includes:
a) Sales promotion, sponsorship, direct marketing, new trends
b) Advertising
4
DanDad: Case Study: Always #LikeAGirl [online] [cit. 28th
July 2017] Available at: https://www.dan-
dad.org/en/d-ad-always-like-a-girl-campaign-case-study-insights/
Principles and meaning of marketing communications
22
c) Online marketing communication, logistics
5. Marketing smog can be interpreted as:
a) A negative aspect of contemporary marketing communication - too many annoying
commercial messages in various media and places.
b) A negative aspect of contemporary marketing communication – too many sexual symbols
in advertising.
c) A negative aspect of contemporary marketing communication – too many investments
into advertising by companies while the money could be used for social purposes.
SUMMARY OF THE CHAPTER
The first chapter can be understood as introduction to the field of marketing communication.
After reading this chapter, you should be able to define marketing communication
and further understand the meaning of terms such as marketing communication process,
AIDA, AIDAS, AIDCAS, TIREA, opinion leader and Word of Mouth.
Pay great attention to the marketing communication mix itself (do not interchange it
with general marketing mix!), which can be understood in a wider or narrower sense. The
knowledge that will be required throughout the whole course is related to the elements of
the marketing communication mix: advertising, sales promotion, personal selling, direct
marketing, public relations, sponsorship and online marketing communication. The elements
of the marketing communication mix could be also divided into two groups – communication
above the line (advertising) and communication below the line (sales promotion,
personal selling, direct marketing, public relations, sponsorship, online marketing
communication, new trends and media). In practice, companies often use combination of
these marketing communication mix elements in their marketing communications campaigns,
which can be understood as communication through the line or integrated marketing
communications.
ANSWERS
1a, 2c, 3b, 4a, 5a
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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2 THE PROCESS STP ON B2C MARKET
QUICK OVERVIEW OF THE CHAPTER
The second chapter aims to acquaint the students with the issues of STP process. An
undifferentiated/mass marketing or total market approach assumes that all customers have
similar needs and wants and can be served by a single marketing mix. Firm offers one
product concept to most of the market, ignoring the individual requirements of separate
market segments. The diversity of customer needs in most markets means this is not now a
common approach.
First of all, it is important to know how to define segmentation, targeting and positioning.
Within segmentation students will get knowledge of segmentation criteria on B2C
market and segmentation requirements. After segmentation there is the stage of targeting.
Now the firm is in the process of searching for suitable segment – segments according to
its production. The firms can choose from various targetins strategies. The number of strategies
can vary according to the different publications. There are to extreme options – undifferentiated
targeting (one same approach to all customers) and customized targeting
(one-to-one marketing). The final stage of the process STP represents the positioning. Today,
it is very important to create positive positiong of brand (product, firm) among customers
but also in general public. Then customers can become brand lovers (brand lawyers),
they buy products, they are loyal, they spread positive WoM and so on.
GOALS OF THE CHAPTER
1. To describe the stages of the STP process.
2. To determine market segmentation conditions, segment properties, segmentation crite-
ria.
3. To set targeting strategies.
4. To characterize positioning, its types, positioning strategies.
5. To characterize the perceptual map and repositioning.
KEY WORDS OF THE CHAPTER
segmentation, segmentation criteria, targeting, targeting strategy, positioning, positioning
strategy, perceptual mapping, repositioning
The process STP on B2C market
24
Nowadays companies cannot connect with all customers in large, broad, or diverse markets.
But they can divide such markets into groups of consumers or segments with distinct
needs and wants. A company then needs to identify which market segments it can serve
effectively. This decision requires a keen understanding of consumer behaviour and careful
strategic thinking. To develop the best marketing plans, managers need to understand what
makes each segment unique and different. Identifying and satisfying the right market segments
is often the key to marketing success. (Kotler and Keller, 2012, p. 235)
To compete more effectively, many companies are now embracing target marketing.
Instead of scattering their marketing efforts, they´re focusing on those consumers they have
the greatest change of satisfying. Effective target marketing requires process STP – segmentation
– targeting and positioning (see Image 4 below).
Image 4: The process STP
Source: own formation according to Kotler and Keller (2012, p. 235)
2.1 Segmentation
Very few product or services can satisfy all customers in a market. Not all customers
want or are prepared to pay for the same things. Therefore to implement the marketing
concept and successfully satisfy customer needs, different product and service offerings
must be made to the diverse customer groups that typically comprise a market. The technique
that is used by marketers to get to grips with the diverse nature of markets is called
market segmentation. (Jobber, 2010, p. 260)
DEFINITION
Market segmentation is aggregating prospective buyers into group that (1) have common
needs and (2) will respond similarly to a marketing action. The groups that result from this
process are market segments, a relatively homogenous collection of prospective buyers.
(Berkowitz et al., 1989, p. 196) Segmentation is the division of consumer markets into
meaningful and distinct customer groups (Levens, 2012, p. 131).
SEGMENTATION
Identify and profile distinct
groups of buyers
who differ in their needs
and wants.
POSITIONING
For each target segment,
establish and communicate
the distinctive benefit(s)
of the company´s
market offering.
TARGETING
Select one or more market
segments to enter.
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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Market segmentation, then, consists of dividing a diverse market into a number of
smaller, more similar, sub-markets. The objective is to identify groups of customers with
similar requirements so that they can be served effectively while being of a sufficient size
for the product or service to be supplied efficiently. Usually, particularly in consumer markets,
it is not possible to create a marketing mix that satisfies every individual´s particular
requirements exactly. Market segmentation, by grouping together customers with similar
needs, provides a commercially viable method of serving these customers. It is therefore at
the heart of strategic marketing since it forms the basis by which marketers understand their
markets and develop strategies for serving their chosen customers better that the competition.
(Jobber, 2010, p. 260)
There are a number of reasons why organizations undertake segmentation: (Drummond
and Ensor, 2005, p. 67)
• Meet consumer needs more precisely: In a generic market customer´s demands
will differ, by developing a distinct marketing mix for each consumer segment an
organization can offer customers better solutions for their needs.
• Increase profits: Differ consumer segments react in contrasting ways to prices,
some are far less price-sensitive than others. Segmentation allows an organization to
gain the best price it can in every segment, effectively raising the average price and
increasing profitability.
• Segment leadership: In any particular market the brands that have dominant shares
of the market will be highly profitable. Their market leadership gives them economies
of scale in marketing and production and they will also have established access
to distribution channels. Small companies or new entrants in a market are unlikely
to be able to gain leadership, they can however take a dominant share of a particular
market segment. This focus can allow them to develop a specialist marketing mix to
satisfy the needs of the consumers in that group while at the same time building a
competitive cost position relative to other companies in that segment.
• Retain customers: Providing products or services aimed at different consumer segments
allows an organization to retain that customer´s loyalty as their needs change.
As an individual moves through life their needs in financial services will change.
For example, young single individuals may need a minimum of credit and banking
facilities and car insurance, while younger families will need in addition life insurance
policies and mortgages and in middle age these needs will turn to pension
provision. If an organization can provide all these services they may retain a customer
who otherwise would transfer to another brand. An organization may also be
able to use segmentation as a way of moving a customer over time from entry level
products or services to products at the premium end of the market.
• Focus marketing communications: Segmentation allows an organization to identify
media channels that can specifically reach the target groups. For example, young
women interested in fashion are likely to read certain fashion magazines. Rather than
spending money on mass-market media that reach far wider that the target group,
The process STP on B2C market
26
organizations can target their money and effort by using media focused directly on
their potential consumer group.
2.1.1 THE PROCESS OF MARKET SEGMENTATION
The segmentation process involves establishing criteria by which groups of consumers
with similar needs can be identified. These criteria have to identify consumer groups that
have the following characteristics: (Drummond and Ensor, 2005, p. 68; Kotler and Keller,
2012, p. 253)
• The consumers in the segment respond in the same way to a particular marketing
mix – homogenous.
• The consumers within the segment have to react in a clearly different way from other
groups of consumers to the marketing mix on offer – heterogeneous.
• The group has to be large enough to provide the return on investment necessary to
the organization.
• The size, purchasing power, and characteristics of the segments can be measured –
measurable.
• The segments can be effectively reached and served – accessible.
• Effective programs can be formulated for attracting and serving the segments – acti-
onable.
2.1.2 SEGMENTING MARKETS
Successful segmentation relies on a clear understanding of the market. Knowledge of
consumer behaviour or organizational buyer behaviour is the crucial foundation on which
that market understanding is built. This text below will summarize both consumer segmentation
criteria and approaches to organizational market segmentation. The choice of a segmentation
base can be one of the most critical decisions that influence the success of market
segmentation.
Segmenting consumer markets
Segmentation is a creative process and can be conducted using a range of different variables,
each bringing a particular perspective to the dynamics of the market. Segmentation
variables are the criteria that are used for dividing a market into segments. Segmentation
criteria can be divided into three main categories: profile, behavioural, psychographic variables
(see Table 2). (Drummond and Ensor, 2005, p. 75)
• Profile variables are used to characterize the consumer but in terms that are not
expressly linked to, or predictive of, an individual´s behaviour in the specific market.
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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• Behavioural variables relate to the behaviour of the consumer. Thus behavioural
factors such as benefits sought, usage and the purchase occasion all come under this
category.
• Psychographic variables identify individuals´ attitudes, opinions and interests to
build up a lifestyle profile that includes the consumer´s consumption patterns. Thus
these profiles are inextricably associated with specific purchasing behaviour.
There is no hierarchy to these variables. Marketers can use any variable at a starting
point (first order variables), and then add further variables (second order variables) to give
the grouping a clearer definition. Thus a segment of consumers seeking physical fitness
may initially be determined using benefit segmentation. Profile variables may then be added
such as age, gender, geodemographics etc., in order to more clearly identify the consumer
in order to allow the company to develop specific media communication and distribution
plans. (Drummond and Ensor, 2005, p. 76)
Table 2: Consumer segmentation variables (criteria)
Variables (criteria) Examples
Profile
Age Under 12, 12-18, 19-25, 26-35, 36-49, 50+
Gender Female, male
Life cycle Young single, young couples, young parents, middle-aged empty
nesters, retired
Social class Upper middle, middle, skilled working, unwaged
Terminal education age 16, 18, 21 years
Income Income breakdown according to study objectives and income levels
per country
Geographic North vs south, urban vs rural, country
Geodemographic Upwardly mobile young families living in larger owner-occupied
houses, older people living in small houses, European regions
based on language, income, age profile and location
Behavioural
Benefits sought Convenience, status, performance, price
Purchase occasion Self-buy, gift, special occasions, eating occasions
Purchase behaviour Solus buying, brand switching, innovators
Usage Heavy, light
Perceptions, beliefs and values Favourable, unfavourable
Psy-
cho-
graph
ic
Lifestyle Trendsetter, conservatives, sophisticates
Personality Extroverts, introverts, aggressive, submissive
Source: Jobber (2010, p. 264)
2.2 Targeting
Targeting is centred upon the decision about which segment (s) an organization decides
to select for its sales and marketing efforts. Target marketing, in other words, is where the
organization identifies market segments, selects one or more of them, and develops products
and marketing mixes tailored to each.
The process STP on B2C market
28
DEFINITION
According to Levens (2012, p. 136) targeting is the process of evaluating and selecting
the most viable market segment to enter.
Marketing segmentation reveals the organization´s market segment opportunities. The
organization then has to evaluate the various segments, and decide how many and which
ones to target. (Omar, 1999, p. 95)
2.2.1 EVALUATING MARKET SEGMENTS
In evaluating different market segments, an organization should examine two broad issues:
market attractiveness and the company´s capability to compete in the segment.
(Jobber, 2010, p. 278)
In organizational markets (B2B), individual customers may be evaluated on such criteria
as sales volume, profitability, growth potential, financial strength and their fit with market
and product strategy. Their allocation to a segment will be based on these factors. (Jobber,
2010, p. 281)
A. Market attractiveness
There are a number of criteria that can be used to judge the attractiveness of a market
segment. These fall under three broad headings: market factors, the nature of competition
and the wider environmental factors. Market factors will be discussed in detail,
the others only briefly.
1. Market factors (Drummond and Ensor, 2005, p. 212-214)
• Segment size: A large segment will generally have greater sales potential. This in
itself will make it more attractive but it may also offer the potential of gaining economies
of scale because of the larger volumes involved. Large segments with their
potentially larger sales can justify the higher investments that may be necessary for
organizations wishing to operate within them. However, large segments may not
always be the most attractive. Large segments can be more competitive as their very
size will attract other companies into them. Smaller organizations may not have the
resources to address a large market and therefore may find smaller segments more
appropriate for their attention.
• Segment´s rate of growth: Segments that are growing are normally seen as being
more attractive than segments where growth has peaked or even begun to decline.
Segments in growth are seen as having a longer-term potential and therefore justify
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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29
any investment necessary. Once again, however, these segments are likely to be
more competitive as other companies also recognize their potential.
• Segment´s profitability: If an organization is already operating in this segment it is
not its profitability alone that should be reviewed. In order that all segments are evaluated
on a consistent basis it is the profitability of all companies operating in the
segment that should be calculated. This will have to be an estimate based on analysing
competitor´s activities.
• Customers´ price sensitivity: Segments where consumers have low price-sensitivity
are likely to be more attractive as higher profit margins can be gained. Consumers
will be more concerned about quality and service rather than price alone. Pricesensitive
segments are more susceptible to price competition, which leads to lower
margins.
• Stage of industry life cycle: Entering a segment that is in the early stages of an
industry´s life cycle offers the advantages of potentially high growth in the future.
In the early stages there are also likely to be less competitors. However, the early
stages of the industry life cycle are characterized by the need for high investment in
new plant, promotional activities and securing distribution channels.
• Predictability: The potential value of a market will be easier to predict if it is less
prone to disturbance and the possibility of discontinuities. In the long term a predictable
market is likely to be more viable.
• Pattern of demand: The attractiveness of a segment will be affected by any seasonal
or other cyclical demand patterns it faces (gift and card market - Christmas time).
The same problem occurs in other industry sectors such as travel and tourism.
• Potential of substitution: In any market there is the potential for new solutions to
be developed that will address consumers´ needs. An organization should review
markets to establish whether new innovations could be used in the segment.
2. Competitive factors (Jobber, 2010, p. 280)
Segments that are characterized by strong aggressive competition are less attractive than
where competition is weak (nature of competition). A segment may seem superficially
attractive because of the lack of current competition, but care must be taken to assess s the
dynamics of the market (new entrants). Segments will be more attractive if there is a real
probability of creating a differentiated offering that customers value (competitive diffe-
rentiation).
3. Political, social and environmental factors (Jobber, 2010, p. 280-281)
Political forces can open new market segments. Alternatively the attraction of entering
new geographic segments may be reduced if political instability exists or is forecast. Changes
in society (social trends) can give rise to latent market segments, under-served by
current products and services. The environmental trend towards more environmentally
friendly products has affected market attractiveness both positively and negatively.
The process STP on B2C market
30
B. Company´s capability (Jobber, 2010, p. 281)
Against the market attractiveness factors must be placed the firm´s capability to serve
the market segment. The market segment may be attractive but outside the resources of the
company. Capability may be assessed by analysing exploitable marketing assets, cost
advantages, technological edge, and managerial capabilities and commitment.
2.2.2 TARGETING STRATEGIES
In addition to choosing the basis upon which to segment a market, choices must be made
regarding which segments to target. This is not necessarily a sequential process. Indeed,
choice of segmentation criteria and choice of targets (the targeting strategy) is an interactive
and interdependent set of processes which may well require a high degree of iteration before
a final strategic position is arrived at. Segments must be evaluated in terms of market
attractiveness and the company´s capability. This information can then be taken into consideration
when deciding which segments to target. The basic array of targeting strategies
is as follows: (Waite and Ennew, 2007, p. 157; Jobber, 2010, p. 281-284)
• Undifferentiated: It serves an entire marketplace with a single marketing mix which
does not distinguish between sub-segments of the market. Occasionally, a market
analysis will show no strong differences in customer characteristics that have implications
for marketing strategy. Alternatively, the cost in developing a separate market
mix for separate segments may outweigh the potential gains of meeting customer
needs more exactly. Under these circumstances a company may decide to develop a
single marketing mix for the whole market. Undifferentiated marketing is more convenient
for managers since they have to develop only a single product.
• Differentiated: It is organized into a number of segments, each of which is targeted
with a tailored marketing mix. For example, airlines design different marketing mixes
for first-class and economy passengers including varying prices, service levels,
quality of food, in-cabin comfort and waiting areas at airports. One potential disadvantage
of a differentiated compared to an undifferentiated marketing strategy is
the loss of cost economies. However, the use of flexible manufacturing systems can
minimize such problems.
• Focused: A choice is made to target a small subset of the segments of a multi-segment
marketplace with a single marketing mix that best suits the needs of that segment.
The identification of several segments in a market does not imply that a company
should serve all of them. Some may be unattractive or out of line with business
strengths. Perhaps the most sensible route would be to serve just one of the market
segments. When a company develop a single marketing mix aimed at one target
market (niche) it is practising focused marketing. This strategy is particularly appropriate
for companies with limited resources. Focused marketing allows research and
development expenditure to be concentrated on meeting the needs of one set of
customers, and managerial activities can be devoted to understanding and catering
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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for their needs. Large organizations may not be interested in serving the needs of
this one segment, or their energies may be co dissipated across the whole market that
they pay insufficient attention to their requirements. One form of focused marketing
is to concentrate efforts on the relatively small percentage of customers that account
for a disproportionately large share of sales of a product (in some markets 20 per
cent of customers account for 80 per cent of sales). An example of focused marketing
in the B2C market is given by Bang & Olufsen, the Danish audio electronics firm.
It targets upmarket consumers who value self-development, pleasure and open-mindedness,
with its stylish television and music system.
• Customized – each individual that comprises the target market is the subject of a
marketing mix that is tailored in some way to the individual´s specific needs. In some
markets the requirements of individual customers are unique and their purchasing
power sufficient to make designing a separate marketing mix for each customer viable.
Many service providers, such as advertising and marketing research agencies,
architects and solicitors, vary their offering on a customer-to-customer basis. They
will discuss face to face with each customer their requirements and tailor their services
accordingly. Customized marketing is also possible on the Internet, with customers
being treated differently on an individual basis. An example is the locomotive
manufacturers will design and build products to specifications given to them by individual
rail transport providers. A fascinating development in marketing in recent
years has been the introduction of mass customization in consumer markets. This is
the marketing of highly individual products on a mass scale. Car companies such as
Audi, BMW, Mercedes and Renault have the capacity to build to order where cars
are manufactured only when there is an order specification from a customer. Dell
Computers will also build customized products, often ordered on the Internet.
Behavioral targeting is a recent development that optimizes the online advertising potential
for products and services. The ultimate idea is to increase interest in particular product
at a point when the consumer is actively shopping within the product category. Behavioral
targeting works by placing a cookie, information that a Web site places on your
computer to identify you at a later time, on behaviour. An example would be a consumer
searching a variety of automotive sites and then receiving an offer for vehicle insurance.
(Levens, 2012)
The process STP on B2C market
32
Image 5: Targeting strategies
Source: Jobber (2010, p. 282)
2.3 Positioning
Having selected a target market or markets, the organization then has to decide on what
basis it will compete in the chosen segment or segments. This has to be done in such a way
that consumers can allocate a specific position to the company´s product or service within
the market, relative to other products. Consumers have to cope with a huge amount of product
information. Customers will position a product in their mind in relation to other products
on the market based on their perception of the key attributes it contains. (Drummond
and Ensor, 2005, p. 222)
DEFINITION
Marketing positioning is arranging for a brand or product to occupy a clear, distinctive
and desirable place in the minds of targeted customers relative to competing products or
brands. It is based on the product´s or brand´s attributes, standing, quality, the types of
users, its strengths and weaknesses price and value, plus any other memorable characteristics,
as perceived by the target market. (Dibb and Simkin, 2004, p. 67)
Undifferentiated marketing
Undifferentiated marketing
Marketing mix
Marketing mix
Differentiated marketing
Differentiated marketing
Whole market
Whole marketMarketing mix 1
Marketing mix 1
Marketing mix 2
Marketing mix 2
Segment 1
Segment 1
Segment 2
Segment 2
Focused marketing
Focused marketing
Marketing mix
Marketing mixCustomized marketing
Customized marketing
Marketing mix 1
Marketing mix 1
Marketing mix 2
Marketing mix 2
Customer 1
Customer 1
Customer 2
Customer 2
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Before you position your product or service, you should answer the following strategic
questions about your market and your products or services:5
• What's your customer really buying from you? Remember that McDonald's isn't
just selling burgers and fries. It sells fast food that tastes the same, no matter when
or where it's ordered, in an environment that's clean and friendly to families.
• How's your product or service different from those of your competitors? A
cheeseburger is a cheeseburger, you may think. But look how McDonald's, Burger
King and Wendy's differentiate their fast food. They offer different side dishes
(onion rings at Burger King, french-fried potatoes at McDonald's), different toys
with kids' meals (a big incentive for the under-age-10 set), and different ways of
cooking their burgers (Burger King´s are broiled, McDonald's, grilled).
• What makes your product or service unique? In New England, McDonald's is the
only fast-food chain to offer lobster rolls (a lobster salad sandwich served in a grilled
hot-dog roll) in the summer.
Once you've answered these strategic questions based on your market research, you can
then begin to develop a positioning strategy for your business plan. A positioning statement
for a business plan doesn't have to be long or elaborate, but it does need to point out who
your target market is, how you'll reach them, what they're really buying from you, who
your competitors are, and what your USP (unique selling proposition) is. Remember, the
right image packs a powerful marketing punch. To make it work for you, follow these
steps:6
• Create a positioning statement for your company. In one or two sentences,
describe what distinguishes you from your competition.
• Test your positioning statement. Does it appeal to your target audience? Refine it
until it speaks directly to their wants and needs.
• Use the positioning statement in every written communication to customers.
• Create image-marketing materials that communicate your positioning. Don't
skimp.
• Include your team in the image-marketing plan. Help employees understand how
to communicate your positioning to customers.
There are four critical factors for successful positioning: Credence, Competiveness,
Consistency, Clarity. (Drummond and Ensor, 2005, p. 223; Jobber, 2010, p. 285-286)
• Credence: The attributes used to position the product have to be perceived to be
credible by the target customers. It would be very difficult for a nuclear power generator
to position itself as environmentally friendly.
5
Entrepreneur – positioning. [online] [cit. 19th
May 2014] Available at: http://www.entrepreneur.com/ency-
clopedia/positioning
6
Entrepreneur – positioning. [online] [cit. 19th
May 2014] Available at: http://www.entrepreneur.com/ency-
clopedia/positioning
The process STP on B2C market
34
• Competiveness: The product should offer the consumer benefits which competitors
are not supplying. For example, the success of the iPod was based on the differential
advantage of seamless downloading of music from a dedicated music store, iTunes,
to a mobile player that produced better sound quality than its rivals.
• Consistency: A consistent message over time is invaluable in helping to establish a
position against all the other products and services fighting for a share of the consumer´s
mind. The good example can be Gillette (“The best a man can get”) and
L´Oréal (“Because you´re worth it”). Both receive high recall when consumers are
researched because of the consistent use of a simple message over many years.
• Clarity: The positioning statement an organization chooses has to create a clearly
differentiated position for the product in the minds of the target market. Complicated
positioning statements are unlikely to be remembered. Simple message such as
“BMW: the ultimate driving machine”, Wall–Mart´s “Low prices, always” are clear
and memorable.
Brand positioning is the creation of a clear and distinctive image for the brand. A
brand can be positioned using a range of associations, such as: (Drummond and Ensor,
2005, p. 222)
• Product attributes: Heinz positions its products on the attributes of no artificial
colouring, flavouring or preservatives.
• Product benefits: Volvo positions itself using the product benefits of safety and
durability.
• Usage occasions: The convenience store SPAR eight-till-late shops are positioned
on the usage occasion. Customers use the shops when they need to shop out of normal
hours or near to their home.
• Users: Ecover cleaning products are positioned as environmentally friendly products
for the green customer.
• Activities: Lucozade is positioned as an isotonic drink for sporting activities.
• Personality: Harley Davidson motorbikes are positioned as a macho product with a
free spirit.
• Origin: Audi clearly illustrates it German origins in the UK market by the use of the
“Vorsprung durhc technik” slogan. The hope is the product will be linked to the
German reputation for quality engineering.
• Competitors: Pepsi-Cola positions itself as the choice of the next generation, reflecting
the fact that in blind tasting tests younger people preferred Pepsi over competitors´
offerings.
• Product class: Kellogg´s Nutrigrain bars are positioned as “morning bars”, a substitute
for the traditional breakfast.
• Symbol: Esso petrol has used the symbol of the tiger to position itself in the market.
Levens (2012) states three types of positioning: functional, symbolic and experiential.
Functional positioning is based on the attributes of products or services and their corresponding
benefits and is intended to communicate how customers can solve problems or
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fulfil needs. An example would be high quality. Symbolic positioning is based on characteristics
of the brands that enhance the self-esteem of customers. An example would be the
concept of physical appearance. Experiential positioning is based on characteristics of the
brands that stimulate sensory or emotional connections with customers. An example would
be the feeling of joy.
Whichever positioning approach is taken, there are a number of positioning mistakes
that can be made by an organization. The first one is underpositioning. In this situation
consumers have only a very limited perception of the brand and are unaware of any distinguishing
features. In the case of overpositioning, consumers have a perception that the
brand is only active in a very focused area, when in fact the brand covers a much broader
product range. And the last one is confused positioning, when consumers have an unclear
view of how the brand relates to competitive offerings. (Drummond and Ensor, 2005, p.
227-228)
2.3.1 PERCEPTUAL MAPPING
A useful tool for determining the position of a brand in the marketplace is the perceptual
map. This is a visual representation of consumer perceptions of the brand and its competitors
using attributes (dimensions) that are important to consumers. Perceptual maps can
also be valuable in identifying the strengths and weaknesses of brands as perceived by
consumers. Such findings can be very revealing to managers, whose own perceptions may
be very different from those of consumers. The key steps in developing a perceptual map
are as follow: (Jobber, 2010, p. 287)
• Identify a set of competing brands.
• Identify important attributes that consumers use when choosing between brands
using qualitative research.
• Conduct quantitative research where consumers score each brand on all key attri-
butes.
• Plot brands on two-dimensional map(s).
In the case of Image 6, in the hotel market the key attributes are deemed to be the price
and the facilities. Hotel A on this map is seen as expensive but with a full range of facilities.
Hotel B is perceived to be inexpensive but with limited facilities. Both of these reasonably
consistent offerings. Hotel C, however, is seen as expensive but with an intermediate level
of facilities. This position does not offer any unique aspects. There may of course be more
than two key attributes in a market. Figure does not map out quality. To gain a fuller picture
obviously more than one positioning map can be developed. There will be a number of
alternatives from which to choose (3D perceptual maps etc.). (Drummond and Ensor, 2005,
p. 224-225)
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Image 6: A perceptual map of various hotels
Source: Drummond and Ensor (2005, p. 225)
2.3.2 REPOSITIONING
Occasionally a product or service will need to be repositioned because of changing
customer tastes or poor sales performance. Repositioning involves changing the target markets,
the differential advantage, or both. A useful framework for analysing repositioning
options is given in Table 3. Using product differentiation and target market as the key variables,
four generic repositioning strategies are shown. (Jobber, 2010, p. 288)
Table 3: Repositioning strategies
Unchanged target market Changed target market
Unchanged product attrib-
utes
Image repositioning Market repositioning
Changed product attrib-
utes
Product repositioning Total repositioning
Source: Drummond and Ensor (2005, p. 240)
CASE STUDIES
Redvolution: Repositioning the Nescafé brand
The nescafé brand was born during World War II when Nestlé was struggling with
falling revenues. During the 1930s, Brazil had a lot of surplus coffee as its supply exceeded
Full range of facilities
Low price High price
Hotel B
Hotel A
Hotel C
Limited facilities
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demand in the market. Brazil requested Nestlé to help it preserve the coffee so that it did
not go waste. One of the coffee experts of Nestlé, Max Morgenthaler, came up with an idea
of making soluble coffee that would not lose its natural flavour even it was stored. The idea
was to create a new way of coffee making without having to boil the coffee powder in hot
water or milk.
After seven years of painstaking development, Max Morgenthaler’s team developed the
world’s first instant coffee, which was branded as Nescafé. The Nescafé brand of soluble
coffee could be preserved for a long time and consumed by just adding some water to it.
The brand was initially released in Switzerland in the year 1938. Despite the initial high
expectations of the Nescafé brand, it took a few years for it to gain popularity in the market
due to World War II. Soon, Nestlé started expanding the brand to other countries like
France, USA, and Great Britain.
The sales of instant coffee began slowing down around the world at the beginning of the
twentieth century due to a change in consumer preferences. Following the trends in the
coffee industry, the sales of Nestlé’s soluble coffee brands too had fallen since the year
2008 (Refer to Exhibit – IV for the sales of Nestlé’s soluble coffee brands between the
years 2008 to 2013). The main reason for the decline in the demand for instant coffee was
the availability of easier ways to brew fresh coffee. Conventional consumers of instant
coffee started using portable coffee machines that made fresh coffee in minutes.
In order to make the Nescafé brand appealing to younger customers, Nescafé started a
repositioning exercise called ‘REDvolution’ in June 2014. The repositioning exercise was
mainly developed with younger customers in mind. Under the repositioning campaign, all
the products that were sold under the Nescafé brand would share the same visual identity,
communication, and digital strategy. The brand would have the same characteristics in all
the 180 countries where it was sold. The repositioning exercise of Nescafé was based on
three visual markers. The final accent on the logo of Nescafé, a structurally redesigned red
mug, and a blockmark called ‘hub’ (a view from the top of the mug).
As part of the repositioning exercise, Nestlé introduced a number of new products under
the Nescafé brand. A milk-rich and chilled coffee product called Shakissmo was launched
in seven European markets in June 2014. Shakissmo was the first ever chilled ice coffee
product sold by Nestlé in the European markets. In order to make the product appealing to
younger customers, Nestlé sold the Shakissmo range of ice coffee products in specially
designed plastic cups that created foam when they were shaken. Shakissmo was targeted at
the younger customers who were drinking coffee for the first time in their lives.
Nestlé aimed to implement the repositioning exercise in 90 percent of the countries
where it had operations by the end of 2014 and to reach the rest of the market in the year
2015. Nestlé also launched customized campaigns based on the REDvolution repositioning
exercise in some markets around the world. In the Middle-Eastern markets, Nestlé launched
a new advertising campaign called “My Inspiration” for its Nescafé My Cup range of instant
coffee. The My Inspiration campaign featured younger customers who were aspiring
The process STP on B2C market
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to grow in their life. The advertising campaign persuaded the youth to try new things in life
and discover the aspects of life that inspired them.7
Repositioning the Burberry brand
In the 2000s, the brand Burberry became inextricably linked with “chav culture”, a stereotype
of the British working class that sent sales plummeting. Burberry had been a brand
for the country aristocrat; inextricably tied with genteel pursuits. When Burberry decided
to turn things around, they didn’t try to go back to the country house. They capitalized on
their history to rebrand as a fashion-forward, upscale and glamorous brand that epitomized
contemporary Britain.
As in many branding missteps, it had begun innocently enough. In 2001, they had hired
the gifted Christopher Bailey away from Gucci’s womenswear division. Bailey had been
key to injecting sex appeal into a conservative brand, making Kate Moss the face of Burberry.
Burberry was suddenly, and unexpectedly, cool. Looking to capitalize on their success,
Burberry extensively licensed their products. It provided a cash injection, but opened
the door to downmarket imitation. When Angela Ahrendts took over in 2008, the brand
was in trouble.
Ahrendts said that one of her first jobs was to take back control of Burberry’s intellectual
property. However, simply removing the check from dog beds wasn’t sufficient; Burberry
needed a new story, and like all prime storytellers, they started by understanding their audience.
Burberry’s customers are now increasingly based overseas, with exploding demand
in China. In order to take back their brand, they simply couldn’t turn back the clock. They
needed to tell their story how they were moving forward, but in an authentic way that took
the best aspects of the existing brand identity with them.
Bailey cites Apple as the brand that inspires his conception of Burberry. Bailey, with
Ahrendts’ support, moved Burberry aggressively into the digital space at a time when many
design houses saw elaborate websites as liabilities. This sparked innovation.
Burberry embraced social media, livestreaming of fashion shows and digital engagement
with consumers. The content generated energized rebranding efforts by showing
Burberry in an aspirational context. Burberry even redesigned its Regent street store to
reflect the burberry.com website, providing a seamless experience from digital to retail.
Their digital prowess became so admired that Ahrendts was eventually lured away from
Burberry by Apple itself.
At Burberry’s website, history is lovingly curated with images in a mobile-friendly
setup. To move confidently into the digital sphere, you need content. Kept scrupulously up-
7
IBS Center for Management Research: REDvolution: Repositioning the Nescafé Brand [online] [cit. 14th
July 2017] Available at: http://www.icmrindia.org/casestudies/catalogue/Marketing/REDvolution%20Repositioning%20the%20Nescaf%C3%A9%20Brand-Excerpts.htm#Repositioning
The Nescafe Brand
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to-date, the timeline connects Burberry’s current campaigns with the highlights of the company’s
past. Although the house check was limited to less than 10% of products, it still
peeked out under shirt collars in advertising. Furthermore, Burberry’s contemporary marketing
efforts were decidedly upmarket, using aristocratic models in the English countryside
shot by Mario Testino. It was a fresh and irreverent throwback to their original fusty
image that still emphasized Burberry’s sophisticated side.
Carefully curating their corporate history allowed Burberry to draw a clean line from
their past exploits to their forward-thinking approach today. It brought the brand respectability
and a sense of adventure. They also embraced their “Britishness”, employing young
British actors, musicians and models and bringing their runway shows to London from
Italy. Exploiting their history reinforced their brand alignment, but also underlined that they
understood what they did well.
Burberry had reached an impasse with their brand not only because of their downmarket
associations, but because they had not evolved their brand for some time prior to Bailey’s
hiring. For all brands, creativity and evolution will continually refresh their brand. Ahrendts
and Bailey agreed on a creative vision that leveraged the best of Burberry’s history, but
was resolutely contemporary.
Burberry was successful in rebranding itself because it was determined to start fresh.
That’s not to say that they jettisoned everything of their history. Instead, they leveraged it,
moving to become a fashion powerhouse that finally began to be spoken of in terms of
innovation and style. That brand now, in the minds of consumers, means British, plaid –
and innovation. Burberry adopted a logo of a knight with the Latin motto “Prorsum”, meaning
“forwards”. This Latin motto seems ever more appropriate as Burberry, the brand,
moves with audacity.
Even if you’re not passionate about high fashion, there is much to learn by following
Burberry’s moves. A high level of comfort with innovation allowed rebranding to stretch
beyond shaking off uncomfortable perceptions to become truly forward-facing.8
2.4 The benefits of the process segmentation and targeting
Segmentation, targeting and positioning is a means by which a number of important
benefits are secured for both providers and consumers of products and services. Alongside
the benefits, there are also costs associated with segmentation. Identifying, measuring and
maintaining a system of segmented markets is a cost in itself. Additionally, costs are incurred
through the development of different products and different marketing campaigns
8
EchoStories: Rebranding Done Right: a Burberry Tale [online] [cit. 14th July 2017] Available at:
http://www.echostories.com/rebranding-burberry-case-study/
The process STP on B2C market
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for these different segments. Any exercise in market segmentation must be aware of these
costs, and look to implement market segmentation only where the benefits outweigh the
costs. In summary, the benefits are as follows: (Ennew and Waite, 2007, p. 148-149)
• It facilitates efficient resource utilization. Indiscriminate use of the marketing mix
is a wasteful use of precious resources. By identifying and targeting discrete segments
of consumers, a company is able to limit the scope of individual components
of the mix and thus reduce costs. To take a simple example, an advertising programme
involving the use of the press media will be less expensive if it involves the
use of magazines that are read by a discrete target segment of consumers rather than
the entire population. Similarly, products designed to meet the particular needs of a
given segment will not need features they do not require. Thus, segmentation results
in greater resource efficiency, which benefits consumers through better value, shareholders
through reduced waste and lower costs, and the environment through resource
efficiency.
• It allows effective targeting of new customers. The logical next step from segmenting
a market is the selection of segments to target for marketing activities.
Nowadays, it is unusual for a company to have a completely indiscriminate approach
to targeting new customers. As the costs of customer acquisition have increased and
companies become increasingly focused upon customer profitability, they have to
be selective in respect of which kinds of people or organization they want to be their
customers. It must be appreciated that different customers display different characteristics
and behaviours that impact upon customer value.
• It facilitates competitive advantage. The more specific an organization´s approach
to segmenting the market, the easier it is to establish and maintain competitive advantage.
This arises by virtue of the fact that competitive advantage is a relative
concept that involves differentiating an organization from its rivals in the eyes of its
customers. Self-evidently, the more indiscriminate the approach to targeting, the
wider the array of competitors against whom an organization will have to seek do
differentiate itself.
• It directs the marketing mix. Best practice dictates that each target segment chosen
by an organization should be subject to a specific and relevant marketing campaign.
In this way, marketing is managed to achieve the best fit with each target segment.
• It enhances customer satisfaction. Segmentation and targeting is an effective means
of enhancing customer satisfaction through the ways in which the mix should
achieve a close match with customer needs and wants. Clearly, the more precisely a
product and its features reflect the characteristics of a given group of individuals, the
greater the degree of satisfaction they should experience from its consumption. The
corollary to this is that the absence of well-managed segmentation results in a generalized
approach to the market. This results in customers feeling that a number of
product features are irrelevant to them, and that communications messages are illjudged
and lacking real relevance to their personal circumstances and preferences.
As a consequence, such consumers will always be vulnerable to competitors with a
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more focused approach to segmentation that enables them to deliver greater customer
satisfaction.
CASE STUDIES
Porsche: market segment strategy
The product lineup for Porsche includes:
• 911 in the midsize premium sporty car segment.
• 718 Boxster in the compact premium sporty car segment.
• 718 Cayman in the premium sport coupe segment.
• Cayenne in the midsize crossover utility vehicle (CUV) segment.
• Macan (latest addition) in the compact CUV segment.
• 918 Spyder (latest addition) in the open-top super sport car segment.
The price of a Porsche ranges from approximately $50,000 to $845,000 with segmented
price points based on the model selected.
The basis of market segmentation for Porsche involves dividing a market according to
defined smaller easily defined group of consumers with the same wants and needs. Porsche
identifies segments to target using two variables including, descriptive elements and behavioral
elements. Descriptive elements include demographic, psychographic, and geographic.
Behavioral elements include individual responses to brands, usage, and benefits.
Porsche segments markets based on five critical elements required to evaluate a segment.
These elements include ensuring a market segment is measurable, accessible, substantial,
differentiable, and actionable.
Demographic
Demographic data provides Porsche with a distinguishable way to measure variables of
a market estimating the market size and the media to use to reach the market segment. The
demographic of the Porsche owner, includes a college graduate, household income over
$100,000, 85% male, and 15% female. The typical Porsche owner is 40 years old and up
with Porsche targeting the 25-54 age demographic seeking a slightly younger audience with
the “Engineered for magic, every day” campaign.
The age demographic rose from an average age of 48 in 2007 to an average age of 51 in
2012. Porsche’s targeted marketing efforts focus on reducing the average age of the Porsche
owner and increasing the number of female owners.
Porsche provides an example of an automotive icon focusing on demographics using
age and gender. The “Engineered for magic, every day” campaign, in part, targets women
The process STP on B2C market
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with an image of a mother in a Porsche 911 in front of a school with the text reading school
bus.
Additionally, Porsche uses tennis star Maria Sharapova as a spokesperson to engage a
younger female audience. The results in the years 2014-2016 indicate a growth from 8% to
15% in female purchasing the Cayenne CUV and Panamera four-door sport sedan prima-
rily.
Psychographic
Porsche uses a psychographic segmentation approach dividing the segment based on
behavioral elements, such as psychology, lifestyle, personality traits, and values to gain
deeper insight of the consumer. The same demographic can possess different behavioral
elements.
Psychographic profiling provides Porsche with the ability to customize the messaging
to target the specific psychographic profiles developed by Porsche.
• The top gun profile consists of an ambitious and driven individual who cares about
power and control expecting to be noticed.
• The elitist profile, includes an individual from old money (blue blood), has the attitude
a car is just a vehicle and not an expression of a person’s personality.
• The proud patrons owner profile sees a Porsche as a trophy considering it a reward
for hard work with ownership as the main goal not being noticed.
• The bon vivants profile consists of thrill seekers and jet setters with the Porsche as
a means of excitement.
• The fantasist profile sees the Porsche as a form of escape and does not care about
impressing others.
Porsche has added another profile consisting of individuals enjoying a sporty vehicle for
daily use by women and younger drivers with the latest marketing campaign, “Engineered
for magic, every day”.
Geographic
Porsche uses a traditional geographic segmentation approach grouping markets based
on countries, continents, regions, states similar to other worldwide automotive brands.
Porsche is a global brand with dealerships located on every continent in major cities.
In the United States dealerships are located in major cities with the manufacturer dividing
the market into four regions (north, south, southwest, northwest).
Porsche varies the product mix offered by dealerships within each region. As an
example, the dealers in the warmer south and southwest regions offer a higher percentage
of convertibles in the product mix versus the north and northwest regions in the United
States with marketing following suit.
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Creating New Segments
In 2003, Porsche launched the Cayenne creating the first sport utility vehicle with luxury
and high performance. Porsche’s introduction of the Cayenne created a new market segment
in an attempt to expand the brand. The introduction of the Cayenne has resulted in a
vehicle that accounts for half of Porsche’s profits.
In 2009, Porsche launched the 2010 Panamera a four-door sport coupe based on the
market research department identifying a need for a sporty four-door that drives like a sport
car. The Panamera is the first of its kind creating a new segment of the four-door luxury
sport car.
Porsche’s effort to move outside of the sport car niche with the Cayenne and Panamera
product launches have stimulated demand resulting in increased sales for the brand. The
Panamera and Cayenne have proved to be effective brand extensions appealing to a wider
audience by offering unique product offerings.9
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 2. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. The segmentation is:
a) Division of the whole market using segmentation criteria into specific segmentation
groups. The condition is that individuals within the segment are homogeneous and
heterogeneous compared to other segments.
b) Division of the whole market using segmentation criteria into specific segmentation
groups. The condition is that individuals within the segment are heterogeneous and
homogeneous compared to other segments.
c) The process of addressing one target segment of customers (consumers) to meet their
needs with tailor-made special products and services.
2. Targeting is:
a) Market segmentation into market segments based on segmentation criteria.
9
Stephenzoeller: How to Segment Your Target Market: A Porsche Success Story [online] [cit. 25th
July
2017] Available at: http://www.stephenzoeller.com/targetmarketsegmentporsche/
The process STP on B2C market
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b) A place of product (brand) in customers´mind.
c) Selection of the target segment.
3. Positioning is:
a) A place of product (brand) in customers´mind.
b) Market share of the firm.
c) Placement and presentation of products in shops.
4. What defines the best the customization?
a) Tailor made products.
b) Positive customers references.
c) Product launch on the market.
5. What is the nature of mass customization?
a) The goal is to create a mass product that will only be sold through personal sales to
individual customers.
b) The aim is to create a product that will meet the individual needs of customers, but
will be offered massively.
c) The aim is to create a product that can be sold in unaltered form on foreign markets.
SUMMARY OF THE CHAPTER
The second chapter aimed to acquaint the students with the issues of STP process. The
process of segmentation, targeting and positioning is central to effective strategic marketing.
Segmentation is concerned with the process of identifying different groups of customers
who are similar in ways that are relevant to marketing. Targeting decisions can then
be made based on the range of identified segments. Finally, having identified target markets,
the organization must then consider how to position itself in those markets. (Waite
and Ennew, 2007)
After reading and study the chapter 2 students should know how to define segmentation,
targeting and positioning. Within segmentation the attention should be paid to segmentation
criteria and requirements. There were also mentioned some various strategies in the field
of targeting and positiong. The issue of positioning has been extended by perceptual mapping
designing and repositiong.
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Pay great attention to the problematics of customization and mass cutomization. Today
marketers try to implement this customer´s approach into the marketing communication
campaigns. Keep in mind that the market trend of mass customization is booming and represents
many advantages for the firm as well as for the customers.
ANSWERS
1a, 2c, 3a, 4a, 5b
Advertising
46
3 ADVERTISING
QUICK OVERVIEW OF THE CHAPTER
The third chapter aims to acquaint the students with advertising as one of the marketing
communication mix elements. The role of advertising in the life of a modern society may
be questioned, but cannot be ignored. Advertising represents the significant way how to
reinforce image of the brand. Advertising is the most costly ingredient of the marketing
communication mix, owing largely to high production and media expenses. Although expensive,
on a per capita basis, advertising´s costs are relatively low. Media selection can be
very specifically related to the target audience. The effectiveness of advertising is very
difficult to assess. Advertising is generally deployed in conjuction with other ingredients
of the marketing communication mix. (Dibb and Simkin, 2007, p. 109-110)
First of all, it is important to know how to define advertising. Among the most typical
features belong: mass, paid, impersonal. It is possible to find very easily many definitions
of advertising but all of them are based on the characteristics mentioned before. This chapter
deals with issues as types of advertising from various points of view, the use of positive
and negative emotions and the message source meaning. The last part is devoted to psychology
in advertising with emphasis on still inconclusive effects of subliminal perception
(advertising).
GOALS OF THE CHAPTER
1. To define advertising according to various criteria.
2. To name the specific types of advertising.
3. To determine the importance of emotional appeals and message sources in advertising.
4. To emphasize the importance of psychology in advertising.
KEY WORDS OF THE CHAPTER
advertising, advertising on the B2B and B2C market, 3D advertising, indoor advertising,
cooperative advertising, social advertising, subliminal advertising, message source, emotion,
vampire effect, humor, fear, eroticism, warmth, music, drama, psychology in adver-
tising
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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Advertising has been seen as both a positive and negative force in society. Since the
1960s the debate has been about whether advertising shapes the society or whether it merely
reflects societal norms in order to do its job and sell things. (Copley, 2004, p. 104)
Advertising is also associated with a phenomenon of false fame effect. This term refers
to the fact that advertising increases the level of perceived popularity of brands. It seems
that people perceive advertised products as more popular than those that are not advertised.
(Karlíček and Král, 2011, p. 49)
The style and form of an advertisement should adequately reflect its contents, which in
turn have to focus on the usefulness of a product or service, and give it credibility as well
as distinction by which it can be easily recognized and differentiated from competition. The
definite format is thus matter of creativity, text, humour, style and tone which can evoke
mood or fantasy, show the use of the product in daily life - emotional appeals and present
a well-known, popular personality – message source (and all this can be underscored by a
catchy tune, adapted song or musical theme).
DEFINITION
There are many definitions of advertising, but what they have in common is that it is a
communication between company and target audience through a medium with a commercial
aim. (Vysekalová and Mikeš, 2007, p. 14)
• A paid form of non-personal presentation of ideas and products by an identified
sponsor. There are the three basic features of advertising: mass, paid, impersonal.
(Kaftan, 2011, p. 229)
• Advertising is a paid form of non- personal marketing communication about an organization
and/or its products that is transmitted to a target audience through mass
media. (Dibb and Simkin, 2007, p. 109)
• Advertising involves using media channels such as TV, print and cinema. As such
media are used to convey a message, idea or product, advertising is a non-personal
form of communication, i.e. advertising is aimed at the mass market as opposed to
the individual.(Drummond and Ensor, 2005, p. 148)
• Advertising is one of the most fundamental ways to sort out information. And that´s
the gift of advertising: to connect with people in a human way, to make the kind of
emotional connections that are at the core of storytelling. (Smith and Zook, 2012, p.
282)
• Advertising has the capacity to reach huge audiences with simple messages. These
messages are intended to enable individuals to comprehend what an offering is, appreciate
what its primary benefit is and how this might be of value to an individual.
(Fill, 2011, p. 223)
Advertising
48
• Advertising is a communication in order to influence the sale or purchase of goods
or services that meet the needs of manufacturers, suppliers and customers. Advertising
can also represent the information leading to the acquisition of certain ideas
(social advertising). (Jurášková, Horňák et al., 2012, p. 190)
Based on the above definitions, the basic tasks of advertising can be identified: (Dibb
and Simkin, 2007, p. 111)
• Promoting products, brands and organizations.
• Stimulating primary and selective demand.
• Off-setting competitors´ advertising.
• Supporting the sales force´s endeavours in the field.
• Educating the marketplace/target consumers.
• Increasing uses for a product.
• Reminding and reinforcing attitudes.
• Reducing sales fluctuations.
• Communicating a brand´s positioning.
Advertising has three primary objectives – to inform, to persuade, and to remind.
(Levens, 2012, p. 228)
Informative advertising is used to provide consumers with information on the product
or service, as well as to build awareness and initial demand of a new product. It can also be
used to explain the features and functions of a product or to correct false impressions.
Example: Advertisement for General Motors cars called “GM Fuel Economy – Surprised?”
is an example of the informative advertising. Many consumers believe that Japanese
cars, like Honda and Toyota, always deliver better fuel economy than American made cars,
like GM's products. This ad presents the EPA estimated fuel economy for several GM vehicles
in an attempt to show potential customers that their assumptions about the company's
cars may not be entirely accurate. The ad does not directly state the comparison to Honda
and Toyota, instead opting to talk only about GM's cars, but the suggestion that viewers
would be surprised by the fuel economy of the GM vehicles means that the company believes
that consumers view the GM product line as being deficient in this area, which would
imply a comparison to other companies´ offerings.10
Persuasive advertising is used to develop brand preferences and is also effective at
increasing customer loyalty. Marketers often use comparative advertising to persuade consumers
to switch brands. Example: Burger King and McDonald´s constantly deliver
messages emphasizing claims of “flame-broiled” or quality, as in the case of BK, or value,
10
University of Washington: Marketing Examples [online] [cit. 18th
August 2017] Available at:
http://uwmktg301.blogspot.cz/2010/03/blog-post_04.html
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as with McDonald´s. Subway used comparative ads to point out its health benefits relative
to McDonald´s and other fast food burger shops in general.11
Reminder advertising is used by well-established brands to maintain brand awareness
and remind customers to buy. The brand´s stage in the product life cycle will influence the
objectives. For example, in the introductory stage of the product life cycle the objective
will use informative advertising to establish or increase awareness among the target market.
In the maturity stage, the objective may be to encourage brand switching by consumers,
which calls for the use of persuasive advertising. Example: In the United States, some drug
company had been using reminder ads on television to promote their products; these ads
provided very little information to consumers. One example was a set of advertisements
that stated the names of particular drugs, accompanied by images of bright sunny meadows
and the statement “At last, a clear day is here”. They did not provide information about
when these drugs should be used, or about their possible side effects. (Deber and Mah,
2014, p. 367)
The advantages of advertising over other forms of communication are well known to be
in terms of control – the sender pays for the space and can therefore say what he or she
likes, where and when to say it and to whom, providing creative power of advertising means
that it can be very cost-effective, especially in consumer markets where there is little
between brands other than the ingenuity of the advertising that becomes part of the brand´s
architecture. On the other hand, the disadvantages of the non-personal nature means there
is no opportunity for immediate feedback, and costs of production and media can be very
high yet credibility can be low. Most people know that advertising exists to persuade and
if they so wish viewers, listeners and readers can “screen out” messages either psychologically
through selective perception or physically by, for example, leaving the room when
the commercial break is on. Another disadvantage of advertising as mass communication
is that messages were thought to have to be very general in their appeal. These days, however,
the fragmentation that has occurred in the various media means that there are smaller
groups of recipients of messages, and marketers therefore have the ability to target these
more with more specific messages. (Copley, 2004, p. 105)
3.1 The selected types of advertising
The following text will specify the selected types of advertising that can be found in the
current companies communication practice. These are an Indoor advertising, 3D advertising,
Cooperative advertising, B2B advertising, Social advertising and Subliminal adverti-
sing.
11
Yourbusiness: Examples of Comparative Advertising [online] [cit. 26th
August 2017] Available at:
http://yourbusiness.azcentral.com/examples-comparative-advertising-12783.html
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50
Indoor advertising
Indoor advertising means the advertising media which are placed inside buildings (shopping
centers, means of transport, railway stations, airports, schools and other public areas).
It is both the formats that are used in outdoor advertising (CLV, posters) and special formats
(floor graphic, advertising on shopping carts, advertising on the shelves, LCD screens in
the waiting zones, etc.). Although the meaning of the word “indoor” is the opposite, indoor
is still often included into forms of outdoor advertising.12
Indoor advertising can be also said as advertising behind closed doors, it means everything
that is inside buildings such as shopping centers, stations, etc. It´s just the kind of
advertising, when we do not need an umbrella or raincoat.13
There are several reasons to use indoor advertising in communication activities. Public
places have a potential of high people´s concentration and they pass the advertising closely
at the same time. For example, advertising placed in means of public transport represents a
large effect the people spend there some time (15 minutes in average) and they have enough
time to read the commercial message. Other advantages include good targeting and low
financial demands.
Cooperative advertising
In the context of product advertising, companies can implement cooperative advertising
which serves to stimulate interest in some products that should not compete, but should
complement each other and fulfill a similar consumer´s need (so-called complementary
goods). The effectiveness of such advertising usually has a synergistic effect. As an
example, Ariel washing powder and Lenor fabric softener, Shell gas station and car maker
Škoda, etc.
Cooperative advertising can also have the form of cooperation between wholesaler and
retailer. It is a way how to do advertising by retailer, which could be for him impossible
because of financial requirements. (Přikrylová and Jahodová, 2010)
3D advertising
3D advertising is an effective communication tool, which operates primarily in shape,
color and other communication elements to attract the target group. 3D advertising is understood
by customers as an added value. Customers usually get it for free as a bonus for
increased consumption, loyalty, etc.
12
Mediální slovník [online]. [cit.11th
April 2014]. Available at: http://www.mediaguru.cz/medialni-slovnik/indoor/
13
Slovník pojmů [online]. [cit.11th
April 2014]. Available at: http://www.3b-board.cz/slovnik-pojmu/indoor-
reklama/
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3D advertising is an advertising item that has three dimensions - height, width and depth.
This includes a very wide range of things from the area of signmaking, advertising print
and POP/POS displays. However, the main meaning of 3D advertising can be seen in promotional
gifts and items, when logo or another company identification symbols are placed
on them.
The stationery, small electronics and calendars are among the prevailing types of 3D
advertising in the Czech Republic. General population receives 3D advertising mostly to to
some purchased product. Thanks to 3D advertising value the recipients perceive the advertising
message naturally. Most 3D advertising subjects are used for people´s own use.
The latest trend is to offer promotional items, which are environmentally friendly, the
so-called “green concept”. Eco-promotional items are made from materials such as bamboo
or organic cotton. Used materials and their treatment are carefully selected with respect and
care to the environment and society. As a specific eco-promotional items can be mentioned
biodegradable pen, eco pen from corn derivatives, water-powered calculator, organic shopping
or travel bag made from natural cotton and other items made from wood, etc.14
B2B advertising
B2B advertising (industrial advertising) is an interesting area of advertising at all. This
is an advertisement of goods and services for different types of business, not for individual
consumers. It should be taken into account that the consumer and industrial markets have
their own characteristics, and therefore, there are crucial differences between advertising
in these markets (see Table 4). The main difference is in the intensity of different media
use, but also in communicating messages and target audience. Mass media such as television,
radio, press have an important role in the consumer market. On the other hand, professional
press and Internet prevail in the industrial market. If the advertising is compared
with other elements of the marketing communication mix, it is clear that the most preferred
is a personal selling, direct marketing and sales support tools in B2B market. The major
communication ways include trade publications, catalogs, exhibitions and fairs, etc.
Of course, the issue of industrial market is more extensive, but this study publication is
aimed at the consumer market, so the issue of industrial market will not be specified in
details.
14
Marketing a média 3/2008, Ekologické chvění 3D reklamy
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Table 4: Differences between B2C and B2B advertising
DIFFERENCES
B2C B2B
The use of own money The use of company money
A large number of buyers A small number of buyers
The buying decision is made by individuals
(family members)
The buying decision is made by group
Short decision/buying time Long decision/buying time
SIMILARITY
All buying decisions are made by people!
Source: Vysekalová a Mikeš (2007, p. 16)
Social advertising
Social advertising is communication in order to influence public opinion in a particular
social field. It could be also information leading to the acquisition of some positive ideas
useful for selected social groups or the general public. These campaigns are usually realized
by non-profit organizations and sponsored by significant economical entities. (Jurášková,
Horňák et al., 2012, p. 197)
The aim of the campaigns may be issues such as global poverty and humanitarian assistance,
home violence, child´s abuse, ecology, smoking, car accidents, child labor, animal
cruelty, H.IV., etc. This type of advertising must be real, believable, intelligent, human and
very sensitive. The level of advertising exaggeration is a very delicate matter in these cases.
There could be connection between commercial and social advertising in some cases
and it is difficult to determine the primary intention (for example campaigns of Benetton
company which have been created by O. Toscani).
Social advertising, in comparison with commercial advertising, use slightly different
principles. It has a completely different atmosphere than the classic commercial advertising.
It has always a great idea to use unconventional techniques. Agencies and creatives
understand a social advertising as an opportunity where they can use their favorite music,
ideas, techniques - all without limitations and contracting authority´s corrections.
Subliminal advertising
Subliminal advertising is a form of a hidden advertising, in which the visual or sound
effect below the threshold of conscious perception. Recipient can register subliminal signals
only below the threshold of conscious perception. The subliminal advertising becomes
a psychological commercial weapon and consumers cannot defend themselves. Subliminal
perception is usually considered as a kind of unconscious perception. As an example is
message that glimmers between scenes of advertising so fast that it cannot be seen or
message that can be heard only when the sound is played back. (Jurášková, Horňák et al.,
2012)
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The birth of subliminal advertising dates to 1957 when a market researcher named James
Vicary inserted the words “Eat Popcorn” and “Drink Coca-Cola” into a movie. The words
appeared for a single frame, allegedly long enough for the subconscious to pick up, but too
short for the viewer to be aware of it. The subliminal ads supposedly created an 18.1 %
increase in Coke sales and a 57.8 % increase in popcorn sales. Vicary´s results turned out
to be a hoax. But more recent experiments have shown that subliminal messages actually
can affect behaviour in small ways.15
Scientists still conduct experiments to give an answer to the question if subliminal
messages really influence consumer´s behaviour because the real effect has not been proven
scientifically. Despite this fact, subliminal advertising is legally prohibited in the Czech
Republic in many other countries legally prohibited. The prohibition is difficult to monitor
in practice.
3.2 Message source in advertising
It is an undeniable fact that the mascot or a celebrity may be advantageous as mediators
in communication process. Message source can be a powerful force in creating interest or
steps, in terms of shopping or use of selected goods or services. This identification may be
based on admiration, desire or empathy.
Message source is usually a person, a figure, an organization that appears in the advertising
to be in favour of the advertiser. Referral process includes the identification, selection
and use of the message source to be ready for communication with the target segment.
(Tellis, 2000, p. 252)
There are three basic types of message source in practice: specialists, celebrities,
common man (Tellis, 2000).
• Specialists - individuals who have sufficient knowledge and can help potential
customers to evaluate the product. Experts are usually selected because of knowledge,
experience, training and learning.
• Famous people (celebrities) who are known because of their publicity. Most of
them work in the area of entertainment and sport.
• Advertisers often use the famous person voice in a way that is heard in the background
and without identification it is called the voice-over. In most cases, however,
the voice in the background belongs to an anonymous lay speaker.
• Common man are unidentified people appearing in advertisements. They are chosen
to look and behave in similar way as target group of the product. The advantage
of this message source is to show the prospective customer that someone like him/her
15
BusinessInsider: The Shocking Drink And Incredible Coke History Of Subliminal Advertising [online].
[cit. 6th
August 2017]. Available at: http://www.businessinsider.com/subliminal-ads-2011-5
Advertising
54
uses and is satisfied with the advertised product. These advertisements are known as
“advertisements of life” because it focuses on real-life situations.
Animated character spokesperson can act in advertisements and can get into the potential
customers subconscious. The well-known mascot is the nimble figure of Michelin
company – Bibendum which is more than116 years old. The animals and small children act
more and more in advertisements because of emotional reasons.
3.3 Emotional appeals in advertising
Most advertised brands are not normally new to consumers as they have had some experience
of the brand, whether that be through use or just through communications. This
experience affects their interpretation of advertising as memories have already been formed.
The role of feelings in the way ads work suggests a consumerist interpretation of how
advertising works rather than the rational, which is much more a researchers´ interpretation.
Consumers view advertising in the context of their experience of the category and memories
of the brand. Aligned with this approach is the concept of likeability, where the
feelings evoked by advertising trigger and shape attitudes to the brand and attitudes to the
advertisement. Feelings and emotions play an important role in advertising especially when
advertising is used to build awareness levels and brand strength. (Fill, 2011, p. 240)
The communicator uses a variety of stimuli that should arouse emotions. These initiatives
include images, sounds, sequence of events and activities. Suggestions are more interesting
and can be more easily remembered than arguments. Emotional advertising aims to
evoke the customer´s feelings rather than thoughts. Emotionally tuned advertisements include
many nonverbal elements, stimuli evoking imagination and feelings (the tragic story
causes sadness, thunder and lightning induces fear, etc.).
If there are too many emotions in advertisement, it is called as “vampiric effect”. It
means that people can remember advertising because of genuine humor, erotic appeals,
famous music, but no connection between advertising message and product (brand) comes
into existence.
The benefits of emotional appeals in advertising include: (Matušínská and Stoklasa,
2013)
• Emotions draw the viewers into the story and divert their attention from the intent to
convince them.
• Emotions require less effort from the viewer. When a viewers watch logical arguments,
they must listen to them carefully and evaluate them. Pictures and music
require less cognitive effort.
• Stimuli which evoke emotions are usually more interesting.
• Emotions can remain in memory much longer than arguments.
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There are a number of initiatives that have a strong emotional effect. They include humor,
eroticism, warmth, fear, music, drama, etc.
Humor is a funny expression based on the contradictions of the individual components.
According to Vysekalová and Mikeš (2007, p. 163) humor in advertising has these
specifics:
• The attention can be better achieved by humor.
• Humor can promote the brand name and increase interest.
• Funny advertisement can longer remain mind.
• Humor in advertising can support the transition from one brand to another.
• Humor does not support the process of persuasion.
• Humor can damage the brand in general.
• Humor is inappropriate in conjunction with sensitive goods and some types of ser-
vices.
Humor is widely used emotional technique all over the world. Humor in advertising has
been the subject of many studies and it has been found only one common aspect of all
studies - humor attracts attention. However, the question is how much the attention is drawn
to the brand. The brand recognition, a positive attitude towards the brand and purchase
intentions increase were not supported by any results. The prevailing opinion states that
humor is more efficient for existing and well-known brands than for brands new and unfa-
miliar.
Image 7: Variables affecting the effectiveness of humor in advertising
Source: Pelsmacker, Geuens and Bergh (2003, p. 220)
Existing or
new product
Type of humor
Previous
brand percep-
tion
Relationship
between the
product and
humor
Effectiveness of
humor in ad-
vertising
Type of pro-
duct
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FOR INTERESTED PERSONS
One of the most well-known examples is Coca Cola’s beach ad. The ad shows a thirsty
man reaching for his Coke; unbeknownst to him, a thirsty penguin has stolen the beverage
and finds it refreshing. The ad succeeds because it’s cute, clever, and appeals to Coke fans
young and old. Other brands that have successfully developed humorous ads include the
Old Spice “Smell Like a Man” ads and the Altoids “Curiously Strong” ad creatives.16
There is no clear answer to efficiency of erotic in advertising. Erotic attracts attention
and many people argue that it is its greatest benefit. Many experts state that erotic reduces
remembering of the brand and commercial message. The perception of advertising is more
negative if there is a naked woman than naked man or couples. Stronger erotical appeal is
typical of advertised products as underwear, bath foam, shaving cream, perfume, alcohol,
clothes and cosmetics. Surveys show that men respond to erotic subtext in advertising more
positively than women.
Advertisement will be considered as erotical, if it contains any of the following ele-
ments:
• partial or complete nudity,
• physical contact among adults,
• sexy or provocatively dressed person
• alluring or sensual face expression,
• suggestive speech or sexualized music.
FOR INTERESTED PERSONS
Calvin Klein is well known for its provocative ad campaigns - from a nearly nude Kate
Moss to a frolicking Lara Stone and Justin Bieber - the iconic American brand has covered
it all, almost. For autumn/winter 2015 the jeans division of the brand delves into the world
of digital dating with a campaign featuring an array of models pictured in suggestive positions
with the script of a conversation based on a real life online encounter displayed next
to them. “Hahah a light threesome never hurt anyone," "You know he's not as good as me,”
“We gotta buy your roommate some ear plugs” is just some of the 'sexts' featured in the
racy advertising images. Emphasising the real life element of the campaign, the imagery
also features the tag line “raw texts, real stories.” The campaign was described by the brand
16
Crescendoagency: Advertising Appeals: Cut Through the Clutter with Humor [online]. [cit. 15th
August
2017]. Available at: https://crescendoagency.com/2015/10/01/advertising-appeals-cut-clutter-humor/
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as “an innovative sociological experiment turned fashion campaign, the visuals provide an
editorial narrative of how a modern generation uniquely approaches sexual connection in a
digital world." The campaign was shot by Mario Sorrenti, a long time favoured photographer
for the brand. Melissa Goldie, Chief Marketing Office of the brand explained the
campaign: “Through this campaign, we’re creating an emotional connection with today’s
technology driven generation, highlighting the new normal channel for modern meet-ups.”
Recently Calvin Klein introduced Kendall Jenner in her second campaign for the brand,
this time modelling for the underwear division. Jenner took over from Justin Bieber and
Lara Stone who fronted last season’s lingerie campaign. This new campaign which features
models rather than famous faces, marks a step away from the celebrity featured advertising
that the brand has traditionally favoured.17
Warmth can be described as something that evokes pleasant and positive feelings such
as love, friendship, comfort and empathy. Although the warmth is used now less than a few
years ago, it is still the common emotional technique. The warmth leads to more positive
emotional reactions. It irritates less and supports a positive attitude towards brand and buying
intentions. According to marketing researches the warmth is accepted more by women
and empathetic people. (Pelsmacker, Geuens and Bergh, 2003) A typical example might be
a airlines services when a stewardess with a nice smile on her face serves passengers on
board of the aircraft in order to fulfill their every desire. The use of warmth prevails in
advertising of services.
FOR INTERESTED PERSONS
Google´s Android is global market leader in the mobile operating system market, but
Apple's iPhone and iPad continue to lead in terms of engagement and monetisation. The
internet giant wanted to find ways to emphasise the open platform of Android, which allows
greater customisation than its iOS counterpart. In February 2015, Google´s Android ramped
up the cuteness overload for its follow up ad to “Be Together, Not The Same”. But by
pairing unlikely animals, the mobile operating system drove home a powerful message that
helped it become the most shared ad ever. Google produced a heartwarming video showcasing
animals forming unlikely friendships. Directed by Agency Droga5, each clip in the
montage features unconventional pairs of animals: dogs and elephants, chimps and horses,
even tigers and bears. According to data and video tech company Unruly, the one-minute
17
Independent: Calvin Klein Jeans Launches „Sexting“ Ad Campaign [online]. [cit. 20th
August 2017].
Available at: http://www.independent.co.uk/life-style/fashion/news/calvin-klein-jeans-launches-sexting-ad-
campaign-10424579.html
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clip has become the most shared ad of all time. It has been shared a total of 6.4 million
times across Facebook, Twitter and blogs.18
An appeal of fear is something that should propose people to reduce some risks by purchasing
the product displayed in the advertisement (e.g. insurance). It can also warn of
buying some products and doing some dangerous activities (alcohol drinking while driving
or smoking causes cancer, etc.). The motive of fear in advertising is usually presented as a
threat of negative consequences that can occur if people do not own a product or do/don´t
do some activities.
Typical risks that arouse feelings of fear: (Pelsmacker, Geuens and Bergh, 2003, p.
222)
• physical risks,
• social risks,
• time risk,
• risk of performance reduction,
• financial risks,
• risk of certain opportunities losing.
Image 8: Effects of fear in advertising and consumer responses (U-curve)
Source: Tellis (2000, p. 224)
18
DigitalTrainingAcademy: Case study: Android ‘Friends Furever’ becomes most shared viral ever [online].
[cit. 15th
August 2017]. Available at: http://www.digitaltrainingacademy.com/casestu-
dies/2015/11/case_study_android_friends_furever_becomes_most_shared_viral_ever.php
Consumer´s
reaction
Intensity
of fear
low medium high
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FOR INTERESTED PERSONS
High fear appeal ads include classic anti-smoking or anti-drug ads, which connect to the
underlying health risks of smoking or doing drugs. Ads for mouthwash, which suggest that
bad breath, may be keeping you from getting a date or a new job.
Household cleaning products like the Swiffer are often advertised with a low fear response:
Viewers feel like they need the product in order to combat harmful germs hiding
in plain sight. The ads from the World Wildlife Foundation play upon an innate fear of the
unknown or “monster” to suggest that if humans do nothing about climate change, they
will become monsters.19
Music in television and radio advertising has been used for a long time. The main effort
is to raise attention, cause a pleasant mood, relaxation and friendliness. Music can support
positive product evaluation and the adoption of communication message. According to the
outputs of various marketing researches, it is clear that some tunes are already inextricably
linked to particular products.
It seems that there is a general consistent opinion about the positive influence of proper
music on the effectiveness of advertising, but there are not too much empirical evidence
about these effects. It is certain that the music evokes usually very positive feelings. It is
also expected that certain music will have a positive effect on remembering of concrete
product or brand. (Pelsmacker, Geuens and Bergh, 2003)
FOR INTERESTED PERSONS
Nike is one of the brands which frequently use music in their ad creative to capture
consumer attention, better connect with their target audience, and ultimately to drive sales.
The key element of “Nike music shoe” advertisement is that it approaches youngsters to
bring enjoyment through music and dance. In order to make this ad creative, in the centre
of it, two hip young boys are shown, who generate beats with the help of Nike shoes.20
Nike sneakers are tricked out as musical instruments. The shoes were wired through a digital
system and bent to produce what sounds like electronic distortion in a bad Moby song,
which is every Moby song, by the way. There’s also a making-of video, posted after the
19
Crescendoagency: Advertising Appeals: Cut Through the Clutter with Humor [online]. [cit. 15th
August
2017]. Available at: https://crescendoagency.com/2015/10/22/advertising-appeals-appropriately-use-fear-
appeal-messaging/
20
Amalbangor: Nike music shoe: An attractive commmercial advertisement [online]. [cit. 15th
August
2017]. Available at: https://amalbangor.wordpress.com/2014/03/26/nike-music-shoe-an-attractive-commer-
cial-advertisement/
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jump. It took an engineering team and lots of Macbooks and software development to make
the shoes sing.21
The dramatic approach is the most compelling form. It relies mainly on emotions than
on logic. The dramatic approach draws the viewer into the action together with persons
involved in the plot. If the argument is successful, it persuades the audience by force of
logic and the importance of the evidence. Drama should be able to take advantage of its
three components: story, plot and characters.
FOR INTERESTED PERSONS
MetLife Hong Kong produced heartbreaking ad "My dad's story": Dream for My Child
featuring a daughter who describes all the things she loves about her dad, yet the story
breaks down when she also describes all the ways he lies to her.22
3.4 Psychology in advertising
The vast majority of marketers aren’t psychologists. But many successful marketers regularly
employ psychology in appealing to consumers. Smart, skillful, honest marketers
use psychology legally, ethically, and respectfully to attract and engage consumers, and
compel them to buy. Studies have shown psychological appeals resonate more with consumers
than feature and function appeals. In advertising copy, benefits which often have a
psychological component – generally outsell features. Demonstrating how that new
dishwasher will improve a potential customer’s life tends to have more influence rather
than explaining how it works.
According to Vysekalová et al. (2007) the role of psychology is included in the definition
of advertising and marketing communications: “Purposeful communication effect,
the dissemination of specific initiatives aimed at a specific audience, creating and changing
of attitudes, beliefs and customs, leading to desirable actions.“
The role of psychology represents the forms of intentional effect on people leading to
communication goals achievement. But on the other hand there are also some negative
effects of advertising in terms of psychology such as: (Vysekalová et al., 2007)
21
Adweek: Get your melodic feet in Nike musical shoes [online]. [cit. 15th
August 2017]. Available at:
http://www.adweek.com/creativity/get-your-melodic-feet-nike-musical-shoes-12527/
22
Hubspot: Emotional Advertising: How Brands Use Feelings to Get People to Buy [online]. [cit. 15th
August
2017]. Available at: https://blog.hubspot.com/marketing/emotions-in-advertising-examples
KATEŘINA MATUŠÍNSKÁ, VERONIKA BRACINÍKOVÁ - MARKETING
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• Illusory happiness.
• Socialization of socially harmful values.
• Limitation of maturation process.
• Dissatisfaction caused by unrealistic world.
• Manipulation with people.
• Consolidating of social structures.
• Waste of resources.
Vysekalová et al. (2007) defines basic terminology connected with psychological effects
in advertising:
Absolute threshold - the lowest level at which an individual can perceive the stimulus.
The point at which a person can tell the difference between "something and nothing „ (i.e.
the distance at which a driver may observe a billboard on the highway, is the absolute threshold
of the individual).
Association - the connection between the perceptions that have left an imprint in the
memory. Advertisements must associate product characteristics with the brand. It is best if
the name of the product creates the direct association with its characteristics – Dobrá voda
(Good Water). Association relates to positioning.
Discrimination threshold - the minimum difference that can be detected between two
similar stimuli is called the discrimination threshold, or just noticeable difference. In some
cases it is desirable low discrimination threshold, sometimes high discrimination threshold.
Learning - a relatively permanent change in behaviour that is the result of stimuli (behavioural,
cognitive and visual learning, classical conditioning).
Motivation (lat. Mover - motion) - stimuli should cause the human activity - mainly the
purchase of a commodity. Among the sources of motivation belong: habits (innovators,
conservative) - interests and overall lifestyle (e.g. interest in tennis) - idols (celebrities, what
they dress, what they eat) and values. Among the values belong: value for money (a bargain,
economical package, discounts, bulk purchases) - the time value (products that save
time - the willingness to pay more) - the value of differentiation, uniqueness (custom production,
the unique characteristics of the product, higher price) - health value (shoes, textiles,
food, cars) - the value of love (buying gifts for others, parties organizing, celebrations)
- the value of technical maturity (purchase of the most advanced technology) - the value of
environmental protection (recyclable packaging) - the value of animal protection (vegetarians
, rejection of fur and products tested on animals) – value of conformity (products
which are not too outdated or too modern).
Perceptual distortion - individuals are exposed to many influences that tend to distort
the perceptions and these are: physical appearance, stereotypes first impression (halo
effect), hasty conclusions.
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Persuasion - change of mind, attitudes or behaviour caused by some communication.
Selective attention - the tendency of humans to register from the many suggestions only
those that meet the common needs or those which are expected or different from the others.
Stimuli inducing activation: intensity stimulus, size and colour, emotional, rational and moral
appeals, effect of surprise, novelty of initiative, uncertainty and conflict. Use of communication
such as "How to look young and fresh?" "How to have the cleanest clothes?" "How
to get rid of excess kilos quickly and effortlessly?" "If you order within 24 hours you get a
gift!"
Selective remember - the message recipient can usually remember only what fits with
their mental models and chooses a particular information that supports his or her opinions.
Sensory memory - all data transmitted to us through the senses (smell, colour and touch)
and senses remain only a second or two. Short-term memory - state of real mind in which
information is processed and kept only for a short time. If the information is repeated, then
is transferred from 2 to 10 seconds into long-term memory. Number of information which
may be in short-term memory is 4 to 5. Long-term memory - information last longer - a
few minutes, days, years. Companies want to facilitate the transmission and storage of the
product and the brand in the long term memory of customers. Brand visible images help to
this process (Nike - tick, Adidas - three stripes etc.).
Sensory perception - the process of perception begins with something in the real world
stimulating five human sensory organs: sight (print, TV, outdoor, Internet, POP etc.), hearing
(Cinema advertising, TV, radio), smell (POP, part of print advertising – e.g. perfumes,
spices), touch (print ad samples), taste (POP - tasting).
Subliminal perception - it is not scientifically proven that subliminal perception exists.
Subliminal advertising is prohibited in Czech legislation. Opponents argue that it is interference
in the free choice of man, it could be misused for commercial, political and promotional
purposes. Numerous scientific experiments in this field have been constantly realized.
Subliminal messages are defined as signals below the absolute threshold level (ATL)
of our conscious awareness. The first thing we need to understand is that we cannot become
consciously aware of subliminal stimuli even if we look for it. The use of subliminal perception
in advertising is quite broad. By one definition, it is: “The use by advertisers of
images and sounds to influence consumers' responses without their being consciously
aware of it.”
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CASE STUDY
Alza – “Sales up to -200 %. Now we pay you!” – selective attention
The type of discount of 200 % was something new for Czech customers but they have
not heard about it before and therefore many of them were very interested in this campaign
(see Image 9). People who bought products in e-shop Alza.cz and agreed with their participation
in contest they could win this type of discount. It means that these lucky winners
did not pay for the bought product but at the same time they obtained the voucher at the
same price level for next purchase in Alza e-shop.
Image 9: Alza company - outdoor campaign
Source: Aktualne.cz [online]. [cit. 7st
August 2017]. Available at: https://zpravy.aktualne.cz/vyprodej-az-200-na-
alzacz/r~6762dfdcd81d11e6b13b002590604f2e/r~c4450b1ad81a11e681020025900fea04/
Marlboro - a blur of ingenuity – subliminal perception case study
When the EU banned tobacco advertising in July 2005, Marlboro was a sponsor of Ferrari
- one of the most successful Formula One racing teams (see Image 10).
Image 10: Marlboro logo as a hidden presentation
Source: Campaign [online]. [cit. 7th August 2017]. Available at: http://www.campaignlive.co.uk/article/marl-
boro-coke-kfc-used-subliminal-advertising/1383489
Keen not to lose out on the visibility of this lucrative partnership, the cigarette brand
decided to make the most of a legal loophole. Forbidden from plastering the car with the
Marlboro logo, the brand opted to stamp a rather peculiar barcode on Ferrari's racing cars.
At first glance, this may look like an odd decision, but the barcode bore more than a passing
resemblance to the Marlboro logo when flashing past F1 spectators at home and on the
track.23
23
Campaign [online]. [cit. 7th August 2017]. Available at: http://www.campaignlive.co.uk/article/marl-
boro-coke-kfc-used-subliminal-advertising/1383489
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QUESTIONS
Now it is time to test your acquired knowledge from Chapter 3. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. The 3 basic features of advertising are:
a) Mass, paid, impersonal.
b) Mass, paid, personal.
c) Mass, unpaid, impersonal.
2. The best example of cooperative advertising can be said:
a) Pepsi and Coca-Cola soft drinks.
b) Ferrari car brand and KIK textil.
c) Sensodyne toothpaste and Orbit chewing gums.
3. 3D advertising means:
a) A very wide range of things from the area of signmaking, advertising print and
POP/POS displays. However, the main meaning of 3D advertising can be seen in interactive
megaboard along roads.
b) A very wide range of things from the area of signmaking, advertising print and
POP/POS displays. However, the main meaning of 3D advertising can be seen in promotional
gifts and items, when logo or another company identification symbols are
placed on them.
c) A very wide range of things from the area of signmaking, advertising print and
POP/POS displays. However, the main meaning of 3D advertising can be seen in logo
of brand placed on the public transport means.
4. What the vampiric effect in advertising mean?
a) The offensive and aggressive emotions used in advertising.
b) Receivers cannot remember advertising because of inappropriate emotions and there
is no connection between advertising message and product (brand) in their mind.
c) Receivers can remember advertising because of suitable emotions, but there is no connection
between advertising message and product (brand) in their mind.
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5. What does subliminal advertising mean?
a) Subliminal advertising works on the basis of subconscious influence. The recipient of
a subliminal message often does not even notice it. This type of advertising is not legal.
b) Subliminal advertising works on the basis of subconscious influence. The recipient of
a subliminal message often does not even notice it. This type of advertising is legal.
c) Subliminal advertising works on the basis of subconscious influence. The recipient of
a subliminal message often does not even notice it. This type of advertising can be used
only on TV.
SUMMARY OF THE CHAPTER
The third chapter aimed to acquaint the students with the issues of advertising as one of
the marketing communication mix elements. Many people think that marketing or marketing
communication is actually advertising. But after reading the previous chapters, we already
know that it is not correct because there are many diverse communication tools that
can be used. But on the other hand it is true that advertising with the use of different media
is the basis of every marketing communication campaign.
After reading and study the chapter 3 students should know how to define advertising,
to name various types of advertising, types of message sources and positive and negative
emotions. Within psychology in advertising student should be able to describe the the principle
of subliminal advertising functioning.
Pay great attention to the problematics of vampiric effect and be able to interpret it in
correct way and to give some examples.
ANSWERS
1a, 2c, 3b, 4c, 5a
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4 SALES PROMOTION
QUICK OVERVIEW OF THE CHAPTER
The fourth chapter aims to acquaint the students with sales promotion as one of the
marketing communication mix elements. While advertising offers a reason to buy, sales
promotion is the incentive to purchase. Sales promotion offers buyers additional value, an
inducement to generate an immediate sale. It cannot change the long-term trends.
First of all, it is important to know how to define sales promotion. Sales promotion tries
to support a short-term increase in sales. Sales promotion will often be useful for low-value
items and is also suitable for encouraging first-time purchase. This chapter deals with issues
as advantages and disadvantages of sales promotion, target groups and tools (customers on
B2B or B2C markets and own staff). In connection with sales promotion, merchandising
and communication with the customer at the point of sale can not be omitted. The meaning
of unsolicited purchasing decisions and the POP/POS displays influence is emphasized.
The last part is devoted to very popular and useful marketing theme – sensory marketing
with an emphasis on the sales environment.
GOALS OF THE CHAPTER
1. To define sales promotion as an element of marketing communication mix, advantages
and disadvantages of its use.
2. To define and characterize tools of sales promotion.
3. To emphasize the growing importance of sales promotion directly in shops (POP/POS
materials).
4. To mention issues of merchandising and sensorial marketing in in-store communicati-
ons.
KEY WORDS OF THE CHAPTER
sales promotion, small impulse theory, POP materials, POPAI, merchandising, sensory
marketing, colours
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Sales promotion covers a wide range of activities intended to provide a short-term
increase in sales. Sales promotion will often be useful for low-value items and is particularly
good for encouraging first-time purchase. It is also most effective when used as part
of an integrated promotion campaign. (Blythe, 2003, p. 189)
The theory of small impulse explains that a short exposure may cause growing interest
in using more of the product. Marketers use this effect offering free samples to motivate
customers to buy and consume products. (Pelsmacker, Geuens and Bergh, 2003) On the
other hand, sales promotion is often a threat of the long-term image because too frequent
use of sales promotion tools may lead to the fact that the product (brand) can be considered
as cheap and unwanted and it can also undermine a longer-term brand strategy.
It is very hard to say in percentage terms what is spent on sales promotions. Sales promotion´s
role in the communications mix is very much dependent upon the context in which
it is used. Estimates vary but a typical promotional budget of an FMCG would be 60-70
per cent on sales promotions with most of the rest on advertising. However, during last
decade this has perhaps risen to 85 per cent. (Copley, 2004)
DEFINITION
Sales promotion is activity and/or material inducing sales through added value or incentive
for the products to resellers, sales people or consumers. (Dibb and Simkin, 2007, p.
129)
Sales promotion are a range of tactical marketing techniques designed within a strategic
marketing framework to add value, usually monetary, to a product or service in order to
achieve specific sales and marketing objectives. (Copley, 2004, p. 186)
Sales promotion is marketer-controlled communication to stimulate immediate audience
response by enhancing the value of an offering for a limited time. (Levens, 2012, p. 221)
The main reasons for the use of sales promotions can be reduced to four: (Fill, 2011, p.
304)
• As a reaction to competitor activities.
• As a form of inertia – this is what we have always done.
• As a way of meeting short-term sales objectives.
• As a way of meeting long-term objectives.
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According to Cézar (2007, p. 89) sales promotion is extended, powerful, very visible
hand of the advertising communication that reaches the point of sales. Due to this hand the
customer should:
• change his/her mind in favour of another brand,
• find what he/she wants to buy,
• buy what he originally did not intend to buy,
• see, taste, look through and buy next time.
There are some advantages and disadvantages of sales promotion tools (see the Table 5
below).
Table 5: Sales promotion advantages and disadvantages
Advantages Disadvantages
Flexibility and variability Short-term, temporary effects
Immediate and visible shopping reaction The high costs
New customers acquiring Competitors imitation very easily
Impact on the purchasing habits of consumer
goods
Threats to the long-term brand image
Stimulation of falling demand
Positive customers acceptance
Better feedback measurability compared
to traditional advertising
Good synergy with other elements of the
marketing communication mix
Neutralization of competitive events the
customers so called as “brand swit-
chers”
Source: Authors´ work
4.1 Target groups and sales promotion tools
Some sales promotions are aimed at customers, some are aimed at retailers, others
are aimed at sellers – staff, but in all cases the intention is to provide an extra incentive to
buy (or stock) a specific brand or product range. (Jahodová and Přikrylová, 2010)
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Image 11: Target groups of sales promotion
Source: Authors´ work
The most important is sales promotion toward consumers and business customers, or
members of the trade (retailer and wholesalers). Consumer promotions take many forms
and they are designed to motivate consumers to try a product or buy it again by offering an
economic incentive. Consumer promotions offer marketers a higher degree of control and
their effect can be easily measured through product sales, coupon redemption, and other
consumer responses. Trade promotions are incentives offered to retailers to support their
mutual business.
The text below will specify sales promotion tools based on target groups (see Image 11
above).
Some sales promotion techniques – customers: (own formation according to Blythe,
2003, p. 190-192)
• Discounts, coupons (seasonal, multibuys, banded packs, reduced shelf price, extrafill
packs)
• Tasting, product sampling - in-home sampling (sending to the households), instore
sampling (in the place of purchase), out-of-home sampling (in the street), point-ofuse
sampling (free sample of sauce when you buy a meat)
• Free gift with each purchase
• Money-off vouchers (couponing)
• Two for the price of one
• Loyalty programmes (clubs)
• Competitions, lotteries
• Trade fairs
• Events, Road shows
Producer
Distributor
Seller
Customer
Sales force promotions
Trade promo-
tion
Custo-
mer
promo-
tion
Sales promotion
70
• 3D advertising - customers enjoy 3D advertising because of extra product value
(they can get something useful and without paying for it) such as pencils, t-shirts,
caps, umbrellas, cups, flash disks, calendars, …
• POP/POS displays
• Etc.
Some sales promotion techniques – retailers: (own formation according to Blythe,
2003, p. 190-192)
• Purchasing discounts
• Goods free of charge
• Promotional materials
• Cooperative advertising allowances
• Training and support
• Sales contests
• Events
• Buy-back
• POP/POS displays
• Etc.
Sales promotion techniques – sales force:
• Various types of motivation programmes (training, contents, promotional materials,
discounted price of goods for own use, etc.)
4.2 Sales promotion at the point of purchase
There was a time when below the line point of purchase materials were considered relevant
only to cosmetics, perfumery, confectionery and other impulse purchases. Today merchandising
techniques, where POP/POS displays are included, apply to a broader spectrum
of markets, from consumer to industrial. Although vast budgets can be spent above the line
on advertising to gain the customer´s attention or change an attitude, fewer resources are
sometimes allocated to the crucial moment in the buying process – the buying cycle where
the customer is physically in front of the product or service and is about to make a decision
as to whether to buy or pass by the point of purchase. Indeed, merchandising techniques
have spilt over into websites where goods and services are displayed. In a sense, merchandising
and point of purchase are even more important in the online world. (Smith and Zook,
2012)
Marketing communication at the point of purchase is a very powerful tool because it
reaches the customer at the moment of deciding to buy or not to buy a product or brand.
Many customers decide in the shop and they do not know which brand to buy in advance.
Therefore, more and more attention is paid to the communication at the point of purchase.
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The communication at the point of purchase can be also called as in-store marketing
communication.
4.2.1 POP/POS DISPLAYS
POP/POS is an abbreviation for “point of purchase” (sometimes POS as point of sale)
which literally means the place where a product can be purchased, and usually serves as a
synonym for a retail outlet. The selection of suitable means of promotion for specific products
(signs, posters, leaflets, video shows) is often made with regard to windows, shelves
or at shop counters. One of the devices is a Q-TV, where suitable programmes are shown
to queuing people e.g. in post offices, banks or supermarkets. (Kaftan, 2001, p. 237)
POP/POS displays influence the consumers at the place of purchase where it is not necessary
to activate their memory functions. In many consumer markets the consumer´s final
decision to buy is often made inside, and not outside, the store. It is said that about 85 % of
all purchase decisions are realized at the point of sale. An important source of further
POP/POS displays functionality increasing is their cooperation with other communication
tools used in communication campaign. (Boček et al., 2009, p. 16)
The principal tasks of POP/POS displays are:
• To remind all communications message, which were spread by other communication
media, e.g. mass media.
• To provide detailed information related to the offered products (its specific utility
values and benefits of purchase - price, packaging 3 for 2, gift associated with the
product, etc.)
• To complete the marketing communication process and create an intense signal for
impulse sales.
Other aspects of POP/POS displays include:
• Store image
• Packaging
• Store layout
• Presentation of goods (Merchandising)
• Environment in store (smell, temperature, lighting, etc.)
The purpose of POP/POS displays is to make a business owner's products appear more
professional and appealing to the customer's eye. They are an integral component of successful
marketing, but remain invisible to the average consumer. The customer is thinking
about a particular product but often they are drawn to the one which is displayed in a more
prominent fashion without knowing. Well done POP/POS displays will draw consumers to
one product over another, or give one store the appearance of being more organized and
clean. POP/POS display can be a simple plastic holder for a card with product information
Sales promotion
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or it can illuminate a banner in an atmospheric light box. Mobile merchandisers, freestanding
units made from wire, plastic or other materials are some of the tools being offered in
the POP/POS display industry. Marketing and design combined with an inventory of
POP/POS products complete a business owner’s marketing needs in one stop. Some companies
offer simple solutions for POP/POS displays, including the use of suction cups, poster
holders, lobby displays and brochure holders. The variety of POP/POS displays is as
varied as the kinds of businesses which use them.24
The Image 12 shows the POP/POS
displays classification and the Table 6.
Image 12: POP/POS displays classification
Source: Boček et al. (2009, p. 18)
Table 6: The selected most common alternatives of POP/POS displays
A-stands Leaflet holder Shelftalker
Brand communicator The place around cash
desks
Shelftray
Bundling Multipack Shop in shop
Price tag Onpack, Inpack Sticker
Premium locations Facing Tester
Wobbler Hanger Window displays
Posters Plasma screens In-store sampling
Source: own formation according to the professional articles at www.istrategie.cz
24
More about POP displays [online]. [cit. 19th
April 2014]. Available at: http://www.thomasnet.com/about/dis-
plays-point-of-purchase-pop-23510399.html
POP/POS displays
APPLICATIONTIMEPLACE
Outdoor (venkovní)
Indoor
In-store (prodejny)
Others (hotels, restaurants,
hospitals, tourist
centres, etc.)
Short-term
Long-term
Wall
Shelf
Cash desk
Floor
Others
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In the area of POP/POS displays the Point of Purchase Advertising International
(POPAI) has the important role. POPAI, established in 1936, is the leading non-profit international
advocate and voice of the in store marketing industry. It is composed of chapters
worldwide and serves more than 1,400 member companies internationally. It promotes,
protects and advances the broader interests of its community through original research,
certified education, awarding industry excellence, hosting trade forums and protecting intellectual
and legislative rights.25
4.2.2 MERCHANDISING
Merchandising is a specific area of sales promotion, the purpose of which is to achieve
maximum persuasion at the point of sale. It concentrates on attracting consumers to specific
shops in order to satisfy specific needs through specific products. Sometimes the term
is used for the planning and supervision involved in the marketing of products. It concerns
factors (time, place, volume, price) influencing the marketing objective. (Kaftan,
2001, p. 237)
Shortly, Merchandising or „5R“: (Matušínská, 2007, p. 88)
• Right product
• In right place
• In right time
• For right price
• Supported with right presentation
Merchandising is a comprehensive care of goods and POP/POS displays at the
point of sale, including the care of the visual aspect of the store. (Jurášková, Horňák et
al., 2012, p. 134) The aim of merchandising is to change the passive offer to the active
offer.
Not only clear and concise information are transfer through merchandising, but it is created
the type of shop environment that must be “friendly and inviting”. The seller, of course,
pays attention to sales maximize. This can be achieved by a proper distribution of goods at
the point of sale to navigate customers and stimulate them to buy in complex way. In this
context, cross-merchandising (trade compatibility) as the specific sales technique can be
mentioned. It reminds the customer of related end-use products, which are carefully positioned
beside each other (tea – mugs, shoes – socks, toys – sweets, pasta – pasta sauce,
shirts – ties, etc.).
Merchandising techniques such as display and store design are therefore vital communications
tools that can guide a buyer towards making a purchase. They are often the last
chance to communicate with the buyer. Merchandising does not apply just to the traditional
25
POPAI [online]. [cit. 19th
April 2014]. Available at: http://www.popai.com/about-popai/
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retail outlets of supermarkets, garages and department stores, but also to DIY stores, browngoods
retailers (stereos and TVs), corner shops, office-equipment showrooms and cashand-carry
wholesalers. (Smith and Zook, 2012)
Skillful supplier merchandising requires an ability to empathize with both the customer
and the retailer/wholesaler (distributor). Understanding customers is one thing. Understanding
distributors and their perspectives, goals, strategies and tactics is another. It is easy to
grasp the importance of maintaining the theme of an advertising campaign inside a store
with carefully designed POP/POS displays. It is not so easy to understand when, why and
how a retailer will allow its space to be used for such in-store promotions and display, i.e.
what its merchandising policies are and how to operate within that framework. (Smith and
Zook, 2012)
4.2.3 THE POWER OF SENSORY MARKETING
A motivated consumer is ready to act – how is influenced by his or her perception of the
situation. In marketing, perceptions are more important than reality because the affect consumers´
actual behaviour. Consumers perceive many different kinds of information through
their senses.
Sensory marketing is as application of the understanding of sensation and perception to
the field of marketing. All five senses may be engaged with sensory marketing: sight,
sound, smell, taste, and feel. Touch is the first sense to develop and the last sense we lose
with age. Scent-encoded information has been shown to be more durable and last longer
in memory than information encoded with other sensory cues. Ambient music in a store
has also been shown to influence consumer mood, time spent in a location, perception of
time spent in a location, and spending. Humans can distinguish only five pure tastes: sweet,
salty, sour, bitter, and umami. Umami comes from Japanese food researchers and stands
for “delicious” or “savory” as it relates to the taste of pure protein or monosodium glutonate.
Many visual perception biases or illusions exist in day-to-day consumer behaviour.
For example, people judge tall thin containers to contain more volume than sort fat ones,
but after drinking from the containers, people actually feel they have consumed more from
short fat containers than tall thin containers, over-adjusting their expectations. (Kotler and
Keller, 2016, p. 189-190).
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Table: 7: Selected colour and its emotion
RED
Red is a dynamic and dangerous colour with great strength. It can signify
passion, lust, and heat as well a blood, fire, and revolution. Red is
great for men´s products or any product requiring a warning label.
It also works well for impulse products such as candies.
ORANGE
Orange reflects the autumn harvest, fire, and the heat of the sun.
Orange is a weighty colour, suggesting depth and volume. It evokes intense
feeling, energy, and inspiration. Products that work well with
orange include pasta, precooked entrees, and insect repellants.
YELLOW
Yellow is welcoming, open, and vivacious. Yellow is a light, warm or
comforting, upbeat colour suggesting laughter. Yellow takes on more
weight and stands out when combined with a dark colour. Most products
will work with yellow or yellow highlights, but some of the obvious
include vegetables, fruits, sun products, hair products, or paper
products.
GREEN
Green is a relaxing colour. It is a colour of nature, cleanliness, good health,
and money. Green is a good choice for products such as vegetables,
garden equipment, tobacco products, pickles, and pasta.
BLUE
Blue is an earthy colour, signifying water, the sky, and ice. Blue, depending
on its hue, can be light or depressing. Blue is a relaxing and
refreshing, youthful colour that supports make-believe ideas and intelligence.
Blue can represent such products as soups, cold beverages,
travel, or frozen-food products.
BLACK
Black symbolizes sadness, isolation, and death or the need to set something
apart or end something. Black can also denote elegance, honor,
and dignity. It is often used for expensive products such as jewelry,
cars, perfumes, or liquors. Black can also be used as an accent colour
to pop lighter, more vibrant colours off the page.
Source: Blakeman (2015, p. 83)
Effective colour choices can play a very important role in sensory marketing (see Table
7). Certain colours evoke specific emotions and can be used to set a mood or attract the
eye. In the unfortunate event the target should forget the product name, often the use of
unique colour combinations on packaging can help with recall when determining which
product to purchase. Colours can make people feel warm, cold, stressed, or lethargic. It is
known that sun should be yellow and the sky blue. The elegance, reassurance, or casualness
of a colour comes from life´s experiences. (Blakeman, 2015, p. 82)
The application of sensory marketing is typical exactly at the point of sale, this is called
as sensory merchandising, which represents a new form of in-store marketing. It uses
factors which create an atmosphere in the store (music, smell, color, taste and tactile elements)
and give the consumers a positive response for the purchase of certain kinds of
goods. Psychological studies have shown that the environment can affect mood, emotional
reactions, thoughts and physical reactions of individuals. Sensory merchandising examines
the way how the customer responds to the physical retail environment. While the visual
and auditory cues are widely used in this respect, the importance of olfactory, gustatory
Sales promotion
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and tactile perception is increasingly explored and understood. As with all marketing strategies,
sensory branding has its limits. Indeed, each consumer, according to his or her experience
or culture, has their own reference system and perception. For this reason, sensory
branding has to have a localized approach and can’t be universal.
CASE STUDIES
The meaning of sensory marketing: various case studies
Courvoisier cognac wants to tempt its target through sensory marketing. The campaign
entitled “Le Nez de Courvoisier” explores the nuances that make up the emotion tied to the
specially selected music to enrich the sensory experience of drinking Courvoisier. For
example, if the target enjoys the candied orange flavour, he can listen to music that suggestively
brings out that sweet and tangy taste. Additional offerings like crème brûlée and
gingersnap also have accompanying musical offers for consumers to choose from. (Blakeman,
2015, p. 297)
Starbucks is the world largest chain of coffee shops, with around 40 million visitors per
day. A visit to Starbucks is much more than a cup of coffee. By using a sensory marketing
framework the company creates a deeper and more personal relationship with its customers.
This is achieved by involving all five human senses to offer the customer total sensory
experience. As early as the 1980s Starbucks developed a strategy for creating and delivering
a sensory experience to consumers as a way to strengthen the brand. Giving the brand
further aesthetic and emotional values and dimensions was seen as essential to creating a
view of the chain as a third place outside of home and work. A visit to Starbucks should be
an experience for the mind and the heart. The inspiring environment makes it comfortable
to read a book or talk with friends. The green and yellow of the interior, together with
pleasant lighting, offer a soothing and restful visual experience. The relaxing music is selected
with precision and care by the Starbucks content team to create the “sound of Starbucks”.
Add to this the smell and taste of the freshly grounded coffee, as well as the comfortable
texture, solidity, and shape of the armchairs, and you have the characteristics of
the sensory experience of the brand.
Singapore Airlines is an example of a successful olfactory marketing company. Singapore
Airlines introduced Stefan Floridian Waters, an aroma. An aroma which has been
specifically designed as part of Singapore Airlines. Stefan Floridian Waters formed the
scent in the flight attendants' perfume, was blended into the hot towels served before taking
off and generally permeated the entire fleet of Singapore Airlines planes. The patented
aroma has since become a unique and very distinct trademark of Singapore Airlines.
One example that illustrates how sensory marketing influences behaviour through conscious
perception is the German wine and French wine experiment (see Image 13).
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Image 13: Sensory marketing: German wine and French wine Experiment
Source: Are you being influenced by subliminal messages? [online]. [cit. 7th August 2017]. Available at:
http://blog.visme.co/subliminal-messages/
In an experiment conducted in a British supermarket, a selection of German and French
wines of the same price and sweetness were displayed (see Image 13). The store then played
German and French music on alternate days. What happened next is intriguing: sales of
German wine increased on days when German music was played, and the same occurred
with French wine when French music was played. Interestingly, even though the consumers
in this case could hear in-store music, very few of them reported music as a main factor in
their choice of wine. Needless to say, sensory marketing works best when we don’t notice
them.26
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 4. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. Sales promotion belongs to:
a) Marketing mix.
b) Medial mix.
c) Marketing communication mix.
26
Are you being influenced by subliminal messages? [online]. [cit. 7th August 2017]. Available at:
http://blog.visme.co/subliminal-messages/
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2. How many purchasing decisions take place directly in shops?
a) About 75 - 85 % of purchasing decisions.
b) About 99 % of purchasing decisions.
c) About 20 % of purchasing decisions.
3. POP/POS materials are:
a) Promotional materials used directly at the point of sale to present the products and
directly influence the purchasing decision.
b) Promotional items that are distributed to customers as a part of loyalty programs.
c) Promotional items that are distributed to company employees.
4. What can be included in merchandising?
a) Print advertising.
b) Tasting.
c) Publicity.
5. What can be connected with sensory marketing?
a) Loyalty program.
b) Telemarketing.
c) Aroma.
SUMMARY OF THE CHAPTER
The fourth chapter aimed to acquaint the students with the issues of sales promotion as
one of the marketing communication mix elements. After reading and study the chapter 4
students should know how to define sales promotion, to name some of the sales promotion
advantages and disadvantages, to know marketing tools how to support the sale on the B2C,
B2B marketing and how to motivate own staff. Today is very important to communicate
with the customers directly on the place of purchase because there are many marketing
researches confirming the fact that about 85 % of purchasing decisions are made unplanned
in the shops thanks to influence of merchandising and POP/POS displays.
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Pay great attention to the problematics of sensory marketing and be able to give some
examples. Sensory marketing explains how sensory aspects of products (i.e. the touch,
taste, smell, sound and visual aspects) affect consumer emotions, memories, perceptions,
preferences, choices and consumption of these products. It is marketing that engages the
consumers´ senses and affects their perception, judgment and behaviour. In the short term
we remember just 1 % of what we touch, 2 % of what we hear, 5 % of what we see, 15 %
of what we taste and 35 % of what we smell. Sensory marketing is said to be an important
area of marketing communication in the future.
ANSWERS
1c, 2a, 3a, 4b, 5c
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5 PERSONAL SELLING
QUICK OVERVIEW OF THE CHAPTER
The fifth chapter aims to acquaint the students with personal selling as one of the marketing
communication mix elements.
The beginning of the chapter deals with the definition of personal selling. Personal selling
is one of the oldest tools of marketing communication (marketing communication mix),
which, despite the development of new media and technologies, maintains an important
position in the marketing communication of many organizations. The biggest advantage of
personal selling compared to other communication mix tools is the personal contact between
the organization and the customer. Other benefits include fast feedback, personalized
communication and, ultimately, greater customer loyalty. Afterwards there are defined the
different types of personal selling and described the personal sales process. The chapter
continues with structuring of sellers, sellers’ remuneration and multilevel marketing, which
inherently builds on the principles of direct sales of goods that have been applied in the
early 19th century. At the end of the chapter the body language as a powerful tool of personal
selling is appointed. Nonverbal communication has considerable merit for a communication
element such as personal selling.
GOALS OF THE CHAPTER
1. To define personal selling as an element of marketing communication mix and its advantages
and disadvantages.
2. To name different types of personal selling.
3. To describe the personal sales process.
4. To emphasize the sellers’ structures according to their advantages and disadvantages.
5. To determine multilevel marketing and importance of non-verbal communication in personal
selling.
KEY WORDS OF THE CHAPTER
personal selling, seller, multilevel marketing, body language, sellers’ remuneration,
sales process, retail
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In some countries, personal selling is perceived as an effort to sell as many products
using unfair business practices, persuasion and coercion. But this is not the real personal
selling. After a long development, personal selling evolved from one-off sales to relational
marketing, thus creating long-term relationships with customers. Also, changes in technology
have allowed personal sales shift to greater speed and convenience for both personal
dealer and the customer.
5.1 Personal selling definition
Personal selling can be understood as the process of influencing the customer through
personal contact and can be considered a very effective marketing communication tool
especially in a situation where we want to change preferences, stereotypes and habits of
consumers. Thanks to their immediate personal action, personal selling is capable to be
much more effective than conventional advertising and other marketing communication
tools to influence the customer and convince him of the merits of the bid. However, the
reach of personal selling compared with advertising is much more limited and mainly very
expensive in the calculations of relative indicators of the CPT. (Pelsmacker, Geuens and
Bergh, 2003, p. 463-464)
The greatest advantage of personal selling in comparison with other instruments of
communication mix can be considered the direct contact between the company and the
customer, which also brings continuing benefits: instant feedback, personalized communication
and thus greater customer loyalty. If the seller is in intensive and direct contact with
customers, he can better understand their wants and needs, their individual expectations
and motivation. This makes him subsequently able to prepare customer offer individualized
and tailored to their needs. Direct contact also allows dealers to modify communication to
the needs of each individual customer and use of such arguments that bring customers to
the right decision. Immediate feedback allows the seller to provide the right communication
strategy that can in principle be adjusted at any time based on the responses and reactions
of the customer. (Karlíček and Král, 2011, p. 149)
The main task of a seller is to identify the needs of customers, propose and ideal solution,
not a "hard" sell. Another objective of personal selling is the presentation of the company.
Personal selling is an important factor in building a company's image. In particular, the
industrial market has customer contact mostly with the seller, and therefore the way of his
behavior, clothes, reveals his company's image. The seller is actually "image agent" of the
company. The same importance has the seller as a representative of customers by collecting
their feedback, different views and ideas, which are then brought to the firm. Personal
selling has many advantages, but also disadvantages, as all communication tools. (Pelsmacker,
Geuens and Bergh 2003, pp. 464)
Other benefits of personal selling include building long-term customer loyalty. This means
that the seller knows his customers very well, has all the necessary information about
them and is able at any time to react to unexpected problems that customers may encounter.
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As a result, it creates a kind of added value and customers do not want to lose the care. The
main issue of personal selling is the cost. When comparing the CPT of personal sales with
advertising costs, then we have to admit that personal selling is very expensive. But if we
look at personal sales from the perspective of a company that needs to reach and satisfy
very specific group of customers, which cannot be reached by other communication channels,
then we realize that personal selling is very cheap tool. (Karlíček and Král, 2011, p.
149)
On the side of disadvantages, we will have to include the aversion of B2C market in the
Czech Republic to dealers (but on B2B it is very effective). It is also necessary to take into
account that the above-mentioned advantages are time consuming, which may negatively
affect the costs of the activities of the company. This time demands also means a small
number of customers can be served at a particular time. Providing high quality personal
selling also needs a constant training of employees. And even after training the company
can never be quite sure whether the personal seller communicates in a way that corresponds
to the strategy of the company. (Karlíček and Král, 2011, p. 150)
Table 8: Advantages and disadvantages of personal selling
Advantages Disadvantages
Influence Costs
Targeted communication Reach and Frequency
Interactivity Control
Relations Consistency
Coverage
Source: Pelsmacker, Geuens a Bergh (2003, p. 468)
5.2 Types of personal selling
Different sales tasks require different sales communication activities. Basic types of sales
by target groups can be divided as follows:
• Retail sales are focused on selling products to commercial organizations, such as
hypermarkets, supermarkets, etc.
• Order sales are repeated purchases, i.e. a situation where the purchase takes place
without a presentation. If for some reason the quantity or quality of the product ordered
is changed, then it is called a modified repeated purchase. (Jahodová and
Přikrylová, 2010, p. 128)
• Missionary sale is informing and persuading not the direct customers, but rather
customers of the direct customers. A good example can be the pharmaceutical sector.
Sellers of pharmaceutical companies are trying to persuade pharmacists for the purchase
of goods and also the local doctor to prescribe the medication. Direct customers
of the pharmaceutical industry are therefore wholesale, not pharmacists and
doctors.
• Retail is focused on direct contacts with final end customers.
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• Business-to-business sales are focused on components, semi-finished or finished
products and services for other companies.
• Professional sales focus on influential people, decision makers, trend setters and
organizer. For example, a company will make an attempt to influence architects and
designers to include a specific product in their plans and offers.
5.3 Personal sales process
The process of personal selling is a set of steps in set order that the retailer must perform
to achieve his goal to sell. The aim is to establish, maintain, deepen and enlarge lasting,
mutually beneficial relationships. (Matušínská, 2007, p. 95)
Different authors define the sales process differently. One possible approach is to use
the AIDA model applied to personal selling, see Table 9.
Table 9: Stages of a sales process
Customer reactions Steps Seller activity
Attention 1 Identification and estimation of potential custom-
ers
2 The first contact with the customer
Schedule preliminary testing
Interest 3 Presentation - description of product properties
and their relation to customer needs
Demand 4 Product demonstration / services on site
5 Resolve customer objections
Action/behavior 6 Closing of the transaction, the customer's statement
of intent to purchase a product
7 Aftersales activity of the seller to ensure repeat
purchases, early customer loyalty, enhancing satisfaction
with the purchase
Source: Přikrylová and Jahodová (2010, p. 129)
Another possible view is the one created by Pelsmacker, Geuens and Bergh. Although
every sale is somewhat different process according to the type of business, customer and
his needs, we can say that the sales process has several stages (Pelsmacker, Geuens and
Bergh, 2003, p. 468-473):
1. Identification and qualification of potential customers (prospecting)
• Profiling of potential customers - products offered by the company usually do not
interest all customers equally. The first task is to think about who might want to buy
the product. The STP process can be utilized for this task.
• Compiling a list of potential customers - search is possible in various ways, for
example in different directories, direct addressing, sending direct mail or telemarketing,
exhibitions and fairs, buying databases, etc.
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• Qualify potential customers - qualified potential customer is the one about whom we
know that he needs the product, has the power to buy and is able to pay for it.
2. Preparation of first contact
It is important that the trader prepares statements (the message that needs to be delivered
to the customer) and determines what he wants to achieve and how to proceed in case of
refusal.
3. Making contact
The process of making contact consists of two steps: obtaining access to the client and
creation of mutual understanding and emotional harmony that begins when the seller enters
client's office. The first impression is very important, therefore it is necessary to prepare
well for this entry.
4. Analysis of customer needs
At this stage of the process, the trader must uncover the real needs of the customer, i.e.
what values and benefits are sought and expected. A key skill is thoughtful questioning and
active listening.
5. Presentation
During the presentation dealer explains the individuality of the product and its aspects
important for the client in relation to the discovered needs. There are three basic types of
presentations (Pelsmacker, Geuens and Bergh, 2003, p. 471):
• Tailored presentation - according to the needs of the client, it is deemed the most
appropriate. However, it is very challenging and only experienced dealers can cope
with it well (it is also time consuming).
• Organized presentation - sellers are using the structure or checklists prepared by the
company and only comment the slides. It is a suitable form for new and inexperienced
dealer, as it helps them to not forget anything.
• Standardized presentation - is strictly structured and prepared in advance by the company.
It has the form of a show, i.e. screening with commentary (like at the shows),
reading brochures or delivery of materials. Transmission of such material is suitable
for doorstep selling.
6. Dealing with objections
Objections occur most often during the presentation, and therefore the seller must be
prepared in advance to flexibly react.
Techniques for solving of objections (Pelsmacker, Geuens and Bergh, 2003, p. 471):
• The boomerang method - allows changing the objections into reasons for purchase.
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• Turn the objection into a question and have it agreed upon by the customer.
• A third person - appeals to the experience of others with the product.
• Rejection - disagreement with the client, which can be risky. Can only be used if it
can be clearly demonstrated that the client is wrong.
7. Agreement
The assumption that the closure of a deal naturally follows the previous steps carefully
may not always be true. To identify a suitable time for closing the deal, the seller should
the signals transmitted by the client, such as gestures, warranty issues, possible discounts
or delivery dates. If the seller is too hasty with an attempt to close the trade, he may create
customer's shopping resistance. (Lyková, 2002, p. 77)
8. After sales care
The sale does not end when signing the contract because the seller must take care of the
customer after the sale, i.e. to check whether he was satisfied with everything related to the
delivery. It is necessary to cultivate a relationship with a view to establishing long-term
relationships, which are key elements of future sales. Among the follow-up steps we can
include not only after sales care of acquired customers, but also contacting those who did
not buy. Sellers should keep information about objections, decision makers, clients' needs
and the reasons why the business was closed. All this should be used to ensure that the
following sales will be successful. (Pelsmacker, Geuens and Bergh, 2003, p. 473)
5.4 Structuring of sellers
Structuring of sellers can be done in four different ways that can be combined for specific
tasks (Pelsmacker, Geuens and Bergh, 2003, p. 474-475):
• Geographical structure: alternative based on geographical distribution, the seller
is allocated to a certain territory, in which he sells all products.
• Focus on product: this alternative is based on the seller allocation to a particular
product or product line, whose sales he specializes in.
• Customer orientation: alternative based on contact with certain customers, whom
the trader sells a product, such as banks, schools, metallurgic companies, etc.
• Functional specialization: alternative based on the function/activity, the sale is divided
into a number of activities on which the different sellers specialize. Customer
is being served by a team of specialists, where one focuses on the contract, the other
on the installation and another on additional services, etc.
Advantages and disadvantages of the mentioned alternatives of sellers structuring are
shown in Table 10.
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Table 10: Advantages and disadvantages of different sellers’ structures
Structure Advantages Disadvantages
Geograph-
ical
• Reduced travel costs and thus
lower overall costs
• Visible division, who is responsible
for whom, one vendor
for one customer
• The seller must sell all products
• Difficult for dissimilar, complex
products, the inability of special-
ization
• Risk that more attention will be
given to products which are sold
more easily
Product
• Expertise in products and
sales processes
• Better control of sales perfor-
mance
• High travel costs
• Duplicity in contacts
Customer
• Better understanding of customer
needs
• Higher costs
• The seller must sell all products,
but customer needs are similar
Functional • Customer orientation
• Specialization
• Duplicity of contacts
Source: Pelsmacker, Geuens a Bergh (2003, p. 476)
5.5 Sellers’ remuneration
There are three basic ways of remuneration, which include direct wage, direct commission
or a combination of both. Method of direct wage offers sellers a fixed salary for a
specific period and is useful when it is difficult to assess their performance. This happens
in a situation where the seller must perform many non-sales activities and where the aim is
primarily to build relationships with prospective clients. Method of direct commission
offers sellers a percentage of sales or profits, and is suitable for when you want to achieve
a quick sale. The combination of both methods is the most commonly used procedure fixed
wage is associated with commissions or bonuses. It is suitable for situations where
the company wants to control costs while favoring additional sales. (Pelsmacker, Geuens
and Bergh, 2003, p. 478-479)
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Table 11: Characteristics of remuneration schemes
Method Advantages Disadvantages
Direct wage
• Greater control over the level of
wages
• Lower wages for the seller in the
field
• Greater control of activities
• Easy feasibility
• Secure facilities for the seller
• Increased motivation to help the
customer than to sell
• No incentives, no extra effort
• High fixed labor costs
• Increased need for supervi-
sion
Direct com-
mission
• Maximum incentives
• Less need for control
• Easy feasibility
• No fixed labor costs
• Less control of activities
• Low motivation to perform
non-sales activities
• Services for the best clients
• Large differences in sellers
wages
• Cost of sales is difficult to
predict
Combina-
tion
• Income security
• Change of costs of sales when
changing sales
• A small control of activities
• The incentive for greater ef-
fort
• Difficult feasibility
• More difficult to anticipate
costs
• Higher cost of sales
Source: Pelsmacker, Geuens a Bergh (2003, p. 479)
5.6 Multilevel marketing
Multilevel marketing inherently builds on the principles of direct sales of goods that
have been applied in the early 19th century. It is a direct sale through a distribution network
of independent distributors who gradually acquire, train and motivate new resellers. One of
the most famous is American Amway Corporation, founded in 1959 by R. De Vos and J.
Van Andel. The advantage of commercial business through MLM is that the entrepreneur
can start with relatively minimal financial costs and due to the fact that the entrepreneur
does not usually create supplies and only delivers goods that are ordered by individual
customers, the risk of loss of business is relatively low. (Matušínská, 2007, p. 101)
Multilevel marketing (MLM), also in other words, network marketing is a system that
brings together two marketing strategies – direct marketing and franchising. Entities that
use this system mainly engage in direct sales of products through their representatives have
more or less similar systems of redistribution commissions. The problem of multilevel marketing
in the Czech Republic is that it is oftentimes mistaken for illegal practices called the
"pyramid". For these practices, nothing is really sold but the money is only generated by
new members. New member must usually pay a larger sum or buy goods sold for a certain
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amount. Right multilevel marketing but does not have the above-described functioning nothing.
(Matušínská and Stoklasa, 2012, p. 90)
In a classical system, the product is produced for a hundred CZK, then it is sold to wholesalers,
warehouses, carriers, dealers, retailers and ultimately the consumer buys it. To
inform the consumer about the product, it is necessary to create a communication campaign
and pay for its implementation. What was worth a hundred CZK may eventually be sold
for a triple price. It is a long and expensive journey. (Matušínská 2007, p. 101)
In the case of multilevel marketing, the traditional intermediaries are skipped and part
of the money saved goes directly to sellers that represent the classic work of intermediaries.
In addition, the sellers get more money saved as part of the work of people who are in their
structure. The rest of the money saved is used for product development, or to reduce the
final price of the product. We can say that MLM is a system that prevents waste. The saved
money is split between buyers, sellers and promoters. Through MLM, a company can enter
a market with an exceptional product, even though it does not have enough money to enter
the market in a classic way. (Matušínská 2007, p 101)
5.7 Body language as a powerful tool of personal selling
Sales interview uses verbal and non-verbal (body language) communication. Nonverbal
communication has considerable merit for a communication element such as personal
selling. To establish contact with the partner we use not only words but also all other (nonverbal)
signals which are transmitted and that create 55 % of added information conveyed
verbally. Nonverbal expressions give emphasis to what is spoken. (Wage, 2002, p. 18)
The sight speaks of confidence and respect for each other. Mimics inform about emotions,
it is relatively the easiest to read and imitate (smile, frown, etc.). The voice, his height,
color, melody, intensity, it all reveals psychological stress or relaxation (monotone voice
expresses tension, melodic release, high voice stress). Very loud verbal speech is a sign of
a desire to control communication. Gestures are the guided of verbal communication. Excessive
use of gestures indicates an increased emotion. Interpersonal distance expresses
relation to a person in the sense of inferiority and superiority and in terms of likes and
dislikes. (Wage, 2002)
Nonverbal communication consists of a number of components, which include (Wage,
2002):
• gesture – speech of arms,
• haptics – speech of touching,
• kinesics – speech of movements,
• facial expression – speech of facial muscles,
• paralinguistics – acoustic phonetic elements in speech,
• visics – speech of eyes,
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• use of voice – various modulations, tone,
• posturology – language of stances,
• proxemics – spatial distance of a speaker. There are 4 types of communication distances:
intimate, personal, social and public (all types of dialogues between seller
and the customer should take place in a personal distance).
Body language around the world
Head: Nodding head generally means agreement or approval. But Bulgarians and Greeks,
for example, are known for their unusual manner of saying yes or no: nodding up and
down signifies a negative. In China, when talking with someone who is older than you, you
should lower your head and bend slightly to show respect.
Eyes: Good eye contact is expected in the West. Strong eye contact is most notable in
Spain, Greece and Arab countries. Finns and Japanese are embarrassed by another´s stare,
and seek eye contact only at the beginning of a conversation.
Ears: The Portuguese tug their earlobes to indicate tasty food, but in Italy this gesture
has sexual connotations and in Spain it means someone is not paying for their drinks.
Nose: A hearty nose blow into a handkerchief is typical in the West, while public nose
blowing is frowned upon by the Japanese. Tapping your nose means “confidential” in England,
but “what out” in Italy.
Lips: In some cultures – Filipino, Native American, Puerto Rican and many Latin American
cultures – people use their lips to point, instead of a finger. In the West, people often
kiss when they meet or when they say goodbye; in many Asian countries, it is considered
too intimate of an action to be displayed in public.
Arms: Many cultures use their arms freely, as in Italy, where they often wave their arms
around when talking, or the US. But northern Europeans find it hard to tolerate gesturing
with the arms, associating it with insincerity and over-dramatization. In Japan, gesturing
with broad arm movements is considered impolite.
Hands: The American “goodbye” wave can be interpreted as the signal for “no” in many
parts of Europe and Latin America. The Italian goodbye wave can be interpreted by Americans
as “come here”. The American “come here” gesture can be seen as an insult in most
Asian countries. In Malaysia it is taboo to point with your index finger, but you can point
with your thumb. “Thumbs up” is used in many cultures, none more so than Brazil however,
where the signal is used everywhere. However, it´s a rude sexual signal in some Islamic
countries, Sardinia, and Greece, and can signify the number 1 in France. People of different
statuses in China do not shake hands. Shaking hands is reserved for those who are of the
same social status, are friends, or interact as business people.
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Legs: Sitting crosslegged is common in North America and some European countries,
but it´s viewed as disrespectful to show the sole of your shoe to another person in Asia and
the Middle East.27,28
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 5. Keep in mind that
only one answer is correct! The correct answers can be found at the end of the chapter.
1. Repeated purchases, the purchases take place without a presentation, are:
a) Order sales.
b) Retail sales.
c) Business-to-business sales.
2. Direct sale through a distribution network of independent distributors who
gradually acquire, train and motivate new resellers, is named as:
a) Green marketing.
b) Content marketing.
c) Multilevel marketing.
3. Components like gesture, haptics, visics are parts of:
a) Nonverbal communication.
b) Verbal communication.
c) Online communication.
4. Alternative based on contact with certain customers, whom the trader sells a
product, such as banks, schools, metallurgic companies, etc:
a) Functional specialization.
b) Customer orientation.
c) Geographical structure.
27
Study: Body Language in Different Cultures [online]. [cit. 6th August 2017]. Available at:
http://study.com/academy/lesson/body-language-in-different-cultures.html
28
BusinessInsider: The shocking differences in basic body language around the world [online]. [cit. 6th August
2017]. Available at: http://www.businessinsider.com/body-language-around-the-world-2015-3
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5. Which component deals with spatial distance of a speaker?
a) Gesture.
b) Proxemics.
c) Posturology.
SUMMARY OF THE CHAPTER
After reading the chapter 5 students should know, how to define personal selling as an
element of marketing communication mix and its advantages and disadvantages. Also they
should name different types of personal selling. The students are now able to describe personal
sales proces and emphasize the the sellers’ structures according to their advantages
and disadvantages. The can determine multilevel marketing and importance of non-verbal
communication in personal selling.
Personal selling can be understood as the process of influencing the customer through
personal contact and can be considered a very effective marketing communication tool
especially in a situation where we want to change preferences, stereotypes and habits of
consumers. The process of personal selling is a set of steps in set order that the retailer must
perform to achieve his goal to sell. The aim is to establish, maintain, deepen and enlarge
lasting, mutually beneficial relationships. Sales interview uses verbal and non-verbal (body
language) communication. Nonverbal communication has considerable merit for a communication
element such as personal selling. To establish contact with the partner we use not
only words but also all other (non-verbal) signals which are transmitted and that create 55
% of added information conveyed verbally. Nonverbal expressions give emphasis to what
is spoken.
ANSWERS
1a, 2c, 3a, 4b, 5b
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6 PUBLIC RELATIONS
QUICK OVERVIEW OF THE CHAPTER
The sixth chapter is related to public relations and its role as a marketing communication
mix tool.
The chapter starts with the definition of public relations with the emphasize on used four
working models. Afterwards the internal and external target groups of public relations are
defined. Also the tools used in communication towards these different groups are determined.
Corporate social responsibility is the issue of another subchapter. A socially responsible
firm should be achieving commercial success in ways that honour ethical values and
respect people, communities, and the natural environment. At the end of this chapter the
publicity and lobbying are determined. Publicity is part of public relations known as the
way how the company is presented in the form of unpaid reports in the mass media. Lobbying
is institutionalized promotion of collective views in democratic conditions.
GOALS OF THE CHAPTER
1. To define public relations as an element of marketing communication mix, along with
distinguishing their four working models.
2. To determine target groups of public relations.
3. To specify internal PR as an integral part of general PR.
4. To describe corporate social responsibility as the way, how to build reputation without
resorting to image-based advertising.
5. To name concept of publicity and lobbying.
6. To emphasize the importance of communication in the crisis period and measuring the
results of PR activities.
7. To describe event marketing and its types.
KEY WORDS OF THE CHAPTER
public relations, corporate communication, lobbying, human relations, corporate social
responsibility, publicity, crisis communication, emergency plan, PR activities, event mar-
keting
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Each company has in addition to the relationship with customers, suppliers and customers,
also other “publics” that are important to it. The public is a group of people who have
some influence on the company. Public relations (PR) describe a broad range of activities
that promote positive public opinion on the company. (Kotler and Keller, 2007, p. 632)
PR originally included only the position of press secretary, whose main activity was to
bridge the gap between the opinion of the company and view of the media on its activities.
Maintaining contacts and generate goodwill is very difficult process that is why large companies
must create PR departments that are responsible for a variety of activities. These
activities can be divided into five missions (Kotler and Keller, 2007, p. 632-633):
• Press relations - presentation of news and information about the company in the
best light.
• Product publicity - effort to disclose information about the specifics of the products
as efficiently as possible.
• Corporate communication - promoting understanding of the company through internal
and external communication.
• Lobbying - meeting with government officials and lawmakers on future legislative
action.
• Advice – for the high management of the company about the image in the eyes of
the public.
In practice, a series of marketing activities are very often connected. PR is the part of
BTL activities. However, there is a very close link with the advertising and media as part
of ATL. The main aim of advertising is to make sales of goods or services that the company
offers, while PR is responsible for selling the company's reputation, inspire confidence, etc.
PR occupies a specific position within the communication mix. We can call it the managerial
function of the whole marketing communications.
6.1 Public relations definition
Public relations represent planned and systematic efforts to achieve and maintain the
reputation and mutual understanding between an organization and its public.
Public relations are the management function that establishes and maintains mutually
beneficial relationships between organizations and the publics, on which depend its success
or failure. (Cutlip, Center and Broom, 2000, p. 12)
PR is purposeful and planned long-term effort towards mutual understanding and harmony
between organizations and the public. At the same time it is a management function
that establishes and maintains mutually beneficial relationships between organizations and
various groups of the public, whose attitudes and behavior determine the success or failure
of an organization. (Pelsmacker, Geuens and Bergh, 2003, p. 301)
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Building good relationships with different target groups through the acquisition of favorable
publicity, building up a good "image of the company", solution and avoidance of
adverse rumors, legends and events. The main PR tools include press relations, product
publicity, corporate communications, lobbying and consulting. (Kotler, 2007, p. 888)
From a historical perspective, we can distinguish four working models of public relations,
which have been used:29
• Press agencies/Publicity model - this model has used unilateral dissemination of
information to ensure publicity, regardless of the veracity and relevance.
• Public information – the first press release was published (IL Lee, October 28, 1906).
Principles used in this approach were true, correct and timely information to the public.
• Two-way asymmetric model - this model focuses on the bidirectional communication
of two groups, namely a company and the general public, but the communication is
asymmetric, i.e. that the company takes into account the feedback, but it communicates
more. A pioneer in the use of this model is E. Bernays (author of the term PR), who
demonstrated the use of scientific knowledge in this model.
• Two-way symmetric model - two-way communication, in the latter model is symmetrical,
i.e. the feedback is obtained from the public continuously.
The goal of public relations is to build relationships with the press, generate information
of interest to the media or to pass information to the media for the purpose of attracting
attention to a particular person, product or service. Another important task of the PR is
promoting awareness about the company, its reputation and build trust. An equally important
task is also gaining publicity for a particular product. A very important goal of PR is
also strengthening and maintaining relationships at the local, national and international levels,
as well as building and maintaining good relationships with legislators and officials
to influence legislation and other law (lobbying). Quality PR should focus on maintaining
good relations with shareholders and other members of the community, but should not
forget also to develop relationships with members of non-profit organizations and strengthen
community development. (Kotler, 2007, p. 888-890)
6.2 Target groups of PR
The target groups of PR activities include internal and external public. Internal public
relations are also called Human Relations and it includes mainly employees of the company.
In addition to internal public relations activities are focused on the external public,
which is divided into four main groups, as shown in Table 12.
29
Web portal APRA, 2013. [online]. [cit. 21st May 2013]. Available at: http://www.apra.cz/cs/
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Table 12: Target groups of PR
Internal External
Employees Public rela-
tions
Financial Media Marketing
Families of
employees
Public Investors TV Suppliers
Unions Local commu-
nities
Bankers Radio Distributors
Shareholders Government Consultants Press Competition
Interest groups Stock exchange Wholesalers
Retail
Source: Pelsmacker, Geuens a Bergh (2003, p. 306)
According to the chosen target group we have to use different tools, see Table 13.
Table 13: PR tools according to various target groups
Internal External
Consulting Public rela-
tions
Financial Media Marketing
Open Days Advertising Advertising Press releases Product loca-
tion
Internal presen-
tation
Annual reports Annual reports Press confer-
ences
Meetings
Training pro-
grams
Company
events
Meetings Interviews Sponsoring
Team projects Sponsoring Events
Team meetings Brochures Brochures
Social activities
Business bulle-
tin
Internal direct
mail
Annual reports
Mailboxes for
suggestions and
comments
Source: Pelsmacker, Geuens a Bergh (2003, p. 311)
6.3 Internal PR – Human relations
Internal PR is nowadays seen as an integral part of general PR. In order to have a successful
PR, a positive harmony is needed within the organization. Such harmony can only
be achieved if internal communications is working properly. In practice, this means that
the internal PR must be built in the long term and not just in times of crisis. (Svoboda, 2009,
p. 88)
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Internal PR is the means by which the company communicates within itself. The basic
tool is the information, by which the company encourages employees to identify with the
company. Other instruments are various forms of direct contact, which can be done through
appointments, meetings, conferences, seminars, etc. Other good tools for internal communication
are boards, letters, periodical newspapers, brochures, catalogs, reports to shareholders,
and annual reports.
The ideal relationship between the owners or managers and employees requires a true
and regular communication.
To create harmony at the workplace it is important to follow these 7 rules:
• complete and true information flowing freely up, down and sideways,
• credibility and trust between employer and employee,
• healthy and safe working conditions,
• fair and equitable remuneration,
• conflict-free workflow,
• job satisfaction of each employee most of the time,
• pride in the organization and optimistic view of the future.
Neglecting communication will stimulate the creation of myths and misconceptions and
enable the creation and enforcement of a distorted image of the company.
6.4 Corporate social responsibility (CSR)
It is the way how to build reputation without resorting to image-based advertising – to
publicise the good things the firm is doing. Many firms chose to support a worthwhile
cause, often a charitable cause, so that the organisation is perceived as a good corporate
citizen and or socially responsible. This can take the form of sponsorship or a simple philanthropic
donation. If this is communicated in an altruistic way, consumers are less likely
to be sceptical about the firm´s motives.
According to Ang (2015, p. 245) such initiatives form a domain known as “corporate
social responsibility”, and examples if CSR include:
• Community services (support for health programs and education).
• Social inclusion program (support of people with disabilities).
• Employee help (support for the personal development of employees).
• Environmental responsibility (enforcing pollution controls).
• Quality-enhancement activities (ensuring safety in products).
• Ethical overseas operations (support for fair labour practice).
A socially responsible firm should be achieving commercial success in ways that honour
ethical values and respect people, communities, and the natural environment. Thus, CSR
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encompasses more than pushing a particular cause. It is a set of values that signals a firm´s
status and activities with respect to its perceived societal obligations. CSR is, however, also
a strategic tool, and a firm should publicise it. CSR does not mean that consumers are
willing to pay a premium for the products or services of firms that have an active CSR
profile. In fact, they are quite intolerant if the quality of the product or service drops because
of the firm´s effort in CSR. (Ang, 2015, p. 245 – 246)
Today´s consumers are looking for more than just material products or quality services
when choosing a company to work with: Nine in 10 consumers expect companies to not
only make a profit, but also operate responsibly to address social and environmental issues,
according to a study by Cone Communications. Eighty-four percent of global consumers
also said they seek out responsible products whenever possible. While many companies
now practice some form of social responsibility, some are making it a core of their operations.
Starbucks, for example, has created its C.A.F.E. Practice guidelines, which are designed
to ensure the company sources sustainably grown and process coffee by evaluating
the economic, social and environmental aspects of coffee production.30
6.5 Publicity
The concepts of PR and publicity are often seen as synonymous, but it is not true, because
publicity is only a part of PR, it is the way how the company is presented in the form
of unpaid reports in the mass media. Generally, publicity includes any spontaneous,
unaffected attention of journalists and media enterprise, of course, even the unwanted
(especially in the period of crisis communication).
Publicity can be obtained through written press releases and articles for newspapers or
in the form of video and digital printed packages. Another option is getting publicity
through press conferences, receptions and tours for journalists, media events, public utterances,
interviews and conferences, lectures, seminars and TV debates. Other tools that can
be used to raise the profile of the company are for example: sponsorship, exhibitions, corporate
identity, advertising, sales promotion, and personal letters. Positive editorial comments
are usually the result of carefully maintained relations with the media. It is also important
to focus on what the media and journalists really need and give them this information.
An interesting observation is that most of the articles or advertising spots, which were
aired in TV, were not written by the journalists themselves, but many of them have been
created by experts in the field of PR. The work of editors depends on a constant influx of
professionally presented press releases and reports from the organizations, as the editors do
not have time to search for all events, from which their news feed is composed. (Smith,
2000)
30
What is CSR? [online]. [cit. 21st August 2017]. Available at: http://www.businessnewsdaily.com/4679-
corporate-social-responsibility.html
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The tools to create a good publicity can be summarized as follows:
• Press releases.
• Common promotional materials.
• Kits for journalists (package containing business cards, information about the company,
its history, biographies of executives, product description, photos of people
and products, the latest press releases, etc.).
• Internet.
• Informational e-mails and newsletters.
• Press conferences.
• Lectures and seminars.
• Interviews.
• Inviting journalists to domestic or foreign trips.
• Receptions for journalists.
The approach to publicity developed to the marketing public relations (MPR), which
aims to support the promotion of a company or a product. Unlike the publicity, it does not
only aim to control the media space, but to support a more visible product or company.
MPR thus overcomes publicity and performs the following tasks (Kotler and Keller, 2007,
p 633):
• Assisting in new product launch.
• Assisting in the re-establishing of existing product (re-launch).
• Creating interest in a product category.
• Influencing specific target groups.
• Defense of the product, which has public issues.
• Creating a corporate image in a way that has a positive impact on the company's
products.
6.6 Lobbying
Lobbying is currently very topical method of public relations, which has a long tradition.
Use of lobbying does not impact only the sphere of public affairs, but is increasingly becoming
a part of economic life. The essence of lobbying is that through communication, with
the use of social - psychological methods, it deals with the interests of subjects, where both
parties come to a conclusion of harmony and mutual understanding of the subject of lobbying.
Lobbying is characterized mainly by the technique of individual action. Lobbying
is done by the lobbyists. They are trying to communicate (lobbying) with people who
through their competence may influence the development or decision of public interest.
(Svoboda, 2009)
Lobbying is institutionalized promotion of collective views and interests in the market
democratic conditions. It is basically an indirect, unofficial information of political power,
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legislative and administrative authorities of the producers, distributors, consumers, as well
as trade unions and civic associations and charities. The basic principle is the transmission
of true, but generally little known information to those who have to decide on this area. Or,
on the contrary, in the context of lobbying may be manufacturers, distributors or consumers
interested to know ahead of politicians, legislators and officials about the upcoming legislative
measures, for which they would be able to prepare in advance, or they might try to
influence the final decision.
Lobbying should not be confused with corruption, provided it is carried out in accordance
with the accepted principles of the Code of Conduct. There should be no preference
for narrow personal or group interests above the interests of the whole society.
CASE STUDY
PepsiCo: Fights guidelines for marketing to kids
The soft drink giant spent millions this year to fight a set of proposed standards that
would regulate how products are presented to kids. Lobbyists are supposed to report what
they do and how much money they spend doing it, but this information is not easily available
to the public. CBS News reports that PepsiCo spent $750,000 to lobby government
for quarter. This comes to roughly $3 million annually, a drop in PepsiCo's annual $30.6
billion sales in the U.S. -- $57.8 billion worldwide.
What is Pepsi lobbying about? PepsiCo lobbied the House, Senate, Executive Office of
the President, FTC, FDA, and USDA, focusing on these issues, among others:
• Childhood obesity (generally, no specific legislation).
• Food and beverage labeling (generally, no specific legislation).
• Marketing and advertising issues in response to Interagency Working Group on
Food Marketed to Children (IWG).
• Restrictions on use of supplemental nutrition assistance program (no specific legis-
lation).
• Implementation of S. 3307-healthy, Hunger-Free Kids Act of 2010.
• Biofuels policy generally.31
31
Theatlantic: Lobbying in Action: PepsiCo Fights Guidelines for Marketing to Kids [online]. [cit. 27th August
2017]. Available at: https://www.theatlantic.com/health/archive/2011/12/lobbying-in-action-pepsico-
fights-guidelines-for-marketing-to-kids/250572/
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6.7 Communication in the crisis period
Crisis communication happens when companies must deal with conflict, whether with
the public, competition, state regulation or with people inside the company. The goal of
crisis communication is to determine possible conflicts and crises in the organization, prepare
for them and communication control when the crisis is already underway. At a time
when the company gets into unforeseen crisis, PR has an extremely important role. The
crisis may have multiple causes: toxic substances appear in the company products, sunken
ship poisons water, new car model fails to pass the challenging tests or the top executives
of companies find themselves in a public scandal. Properly constructed PR strategy must
always reckon with the possibility of a crisis and PR must be prepared. (Pelsmacker,
Geuens and Bergh, 2003, p. 315)
The crisis is anything that may harm or endanger the company's reputation, sales, market
value, relationships with customers and other target groups, i.e. the future of the company.
Another definition says that the crisis is a sudden event or a long-term problem (can also
be activated by a sudden accident) that can damage the reputation of the company, affect
its value and have impact on development. It is important to realize that the crisis is preceded
by the conflict, which only changes into a crisis when mismanaged. If the company
cannot handle the crisis, it may develop into a disaster, which has devastating implications
for the company. (Chalupa, 2012, p. 23-33)
6.7.1 TYPES OF CRISIS
Possible crisis can be classified as "known unknowns" and "unknown unknowns". In
industries such as railway, aviation and shipping, chemical industry, nuclear power, oil
refining, production of electricity, pipelines, coal mining, construction and tunnels, it is
quite possible that sometimes a disaster appears. Risk is "known”, but if it happens or when
it happens, is "unknown". In the event of a crisis "unknown unknowns", we cannot accurately
determine for the business sector the type of the crisis and the time of its origin (natural
disasters, criminal offense, etc.).
Other division of possible crisis takes into account modern means of communication
(i.e. social networks) and adjusts its classification accordingly. Internet is able to stretch
and tell the whole world about a crisis, that would otherwise be time-bounded and the firm
would solve it. The media then purposefully seek information on sensationalism and "deep
human stories" so that they could broadcast it to the audience (evening news is full of negative
events, accidents, etc.). Thanks to the media coverage of the crisis, the data is then
readily available for many years after its resolution. Types of crisis (Chalupa, 2012, p. 28-
31):
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• Image crisis – troubled products (low quality, contamination), environmental damage
(single, repeated due to problems with the production), public campaigns (protests
by competition and opponents), burdens (the devastation of the landscape), human
factors (personal crisis, death, suicide).
• Malicious attacks – damage to corporate reputation (slander, rumors, astroturfing),
the crisis caused by criminal acts (espionage, handling with the products, contamination),
crisis information (data theft, theft of know- how), cyber-attacks (theft of
client data, website takedown, spyware).
• The crisis in conjunction with natural hazards – floods, storms, fires (inability to
meet all business commitments).
• Business crisis – physical nature (accidents at work, death in service), economic
nature (crisis of management, hostile takeovers, problems with financing), personal
(strikes, violence and the departure of key employees).
6.7.2 EMERGENCY PLAN
The essence of crisis communication consists mainly in preventive measures. Company
should have a plan for crisis communication, which would include members of the Crisis
Staff, their duties, responsibilities and procedures on how to prevent the spread of false
information and rumors, and how to transform rumors into acceptable message with a
happy end for the company.
Preparing an emergency plan includes:
• Analysis of potential problems: an analysis has to be in writing, which must be
approved by management of the company.
• Preparation of the plan: once management approves the analysis and design of the
crisis plan, preparation of a detailed plan is set in motion.
• Circumstances and personnel of the crisis plan: in this stage of contingency planning,
the company must determine when, where, how and with whom (management
or special staff) the company talks to the public. The main goals are to have staff to
operate phones and deal with the challenges of the media.
• Means of communication: the plan must be detailed to cope with the expected requirements
for means of communication, which will be given for emergency use
(phones, faxes, e-mail, internet). Their numbers should be planned for a particularly
serious crisis of a few hundred to thousands of devices.
• Training: Selected personnel must be trained so that they are well prepared for the
solution of the crisis.
• Simulation exercise: at irregular intervals the company should carry out unannounced
practical exercises in cooperation with selected target groups (e.g. police, local
authorities). This should be appropriately documented (e.g. videos) and then evalu-
ated.
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CASE STUDIES
Samsung: Response to the galaxy note 7 crisis
The Galaxy Note 7 was Samsung’s most sophisticated phone ever, and many industry
experts predicted that it would challenge Apple’s dominance over the market. That idea
went down when Note 7 phones started spontaneously combusting in September 2016. The
risk of explosion was so great that the Federal Aviation Administration deemed the devices
a fire hazard and banned them from all U.S. flights.
When it was first reported that the Note 7s were exploding, Samsung responded quickly
on all fronts – it immediately made public statements about the news and issued a global
recall of the phones within weeks. Communicating swiftly and often with key audiences is
the cornerstone of any crisis response, and Samsung nailed this. By immediately taking
action the company showed its key audiences that it was taking the situation seriously.
However, it’s critical that the information a company shares about the situation is accurate.
This is where Samsung went wrong.
The company acted too quickly and many of its initial statements had to be retracted.
Samsung initially said that Hong Kong customers’ phones were not at risk of exploding,
only to take it back the next day when it was discovered that phones sold in Hong Kong
were, in fact, affected. Then the company based its explanation for the cause of the explosions
on incomplete evidence. Samsung confidently stated that the phone’s battery was the
cause of the explosions and rushed to produce 2.5 million replacement phones. This resulted
in a second and arguably worse crisis – the replacement phones started exploding,
too.
Samsung finally conceded that it didn’t know the cause of the explosions and was forced
to discontinue the Note 7 altogether. By providing inaccurate information and acting too
quickly, Samsung lost the trust of its customers and investors, and stands to lose millions
of dollars in revenue. Its stock took a nosedive in mid-September, plunging 7 percent in
one day.
The Note 7 crisis has not doomed Samsung altogether – the other areas of the company’s
business are doing well and its stock has bounced back – but there are some major lessons
to be learned. From a PR perspective, the biggest takeaway is to share information early
and often, but make sure the information you’re sharing is accurate. Samsung could have
salvaged a lot of trust, and dollars, if the company had stated that they did not know the
cause of the explosions but would keep the public updated as it worked to uncover the root
of the problem.32
32
Communiquépr: A Critical Look at Samsung’s Response to the Galaxy Note 7 Crisis [online]. [cit. 17th
August 2017]. Available at: http://www.communiquepr.com/blog/?p=9133
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The Volkswagen emissions scandal
In September 2015, the Environmental Protection Agency accused Volkswagen of manipulating
its engine controls to be able to pass laboratory emissions tests. Not only was
the company violating the Clean Air Act by selling vehicles that didn’t meet environmental
requirements, but it was also violating its customers’ trust by making its cars seem more
environmentally friendly.
Unfortunately, the way the company handled the scandal made things even worse. As
the story continued to evolve, the company’s response was seen as inconsistent and, at
times, contradictory to previous statements. Executives claimed they didn’t know about the
cheating, only to reveal they did just a few days later. Meanwhile, the company’s PR and
social media teams struggled to keep up. As the company set out to recall millions of vehicles,
officials promised to reimburse some, but not all, customers for their troubles.
All the while, consumers reported that the company seemed to be handling the crisis in
a dishonest way by not fully “owning” its role in the scandal.33
Southwest airlines’ social media response
Right in the middle of the busy 2016 summer travel season, Southwest Airlines was
suddenly struck by a wide-reaching technology failure. Its website and other key systems
were down for more than 12 hours, prompting the airline to cancel thousands of flights.
Over the course of four days, the company worked to respond to customer complaints quickly
and effectively, in large part by leveraging social media. Its approach offers some key
lessons.
Southwest did several things right in its social media response: It apologized profusely
for the inconvenience, admitted fault, and continually posted updates as the crisis unfolded.
Southwest’s team even made use of photos and videos posted to Facebook and Twitter to
personalize the response.
Unfortunately, the onslaught of customer-service requests and complaints seemed to
overwhelm the company’s social media team. Not long after the IT outage began, complaints
on Twitter began going unanswered for hours and, in the case of Facebook, days. Ideally,
the company would have answered each customer in a more timely manner.
Finally, Southwest seemed to forget that such a crisis is bound to impact all of its social
media channels even Instagram. The company failed to post an apology or acknowledge-
33
Rockdovesolutions: 3 Crisis Management Case Studies We Can Learn From [online]. [cit. 17th August
2017]. Available at: https://www.rockdovesolutions.com/blog/3-crisis-management-case-studies-we-can-
learn-from
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ment of the situation on its Instagram account, instead choosing to feature its typical content.
As a result, the account received hundreds of angry comments and all of them went
unanswered, surely leaving a bad taste in the mouths of many followers.34
6.8 Measuring the results of PR activities
In the implementation of PR activities the company cannot receive immediate measurable
feedback. PR can be done with significantly lower cost, but much more effort and
time expenditure. Another significant advantage is also that PR activities have greater credibility.
The downside is undoubtedly worse measurable results.
PR can be assessed on the basis of three performance indicators (Pelsmacker, Geuens
and Bergh, 2003, p. 315):
• Input indicators – measure the PR activities, such as the number of new messages,
the number of calls made, the number of business meetings, the number of visits to
supermarkets and distributed brochures. We are measuring the effort, not the results,
it is therefore not suitable for finding out the efficiency of the PR, but may be useful
to determine the activities executed.
• Output indicators – measure the results of PR in the direction of media coverage
and publicity. An example of such measurement is space covered in newspapers,
time devoted to the company or event or brand on television, the length of the printed
communication, amounts of readers or viewers. Measuring outcomes is indeed a
useful indicator, but does not provide information about how well the objectives
have been achieved.
• Success indicators – measure the extent of achievement of predetermined objectives
in relation to groups that are of interest. This procedure is very similar to measurement
of the effectiveness of ads. Examples of measurements: the proportion of the
target audience reached, changes in knowledge and awareness, changes in opinions
and attitudes, the development of image and reputation, the extent of change in be-
havior.
Svoboda (2009) states that when monitoring publicity, it is important not to focus only
on the quantity of published articles, but also on the quality of the information published.
Nowadays, most large companies use the services of communication agencies, which deal
with monitoring of the press and other media. These agencies are focused on the evaluation
of the quantity (length of the article, the number of mentions or broadcast minutes) and
quality (favorable, unfavorable and neutral evaluation). On this basis, the company will
34
Rockdovesolutions: 3 Crisis Management Case Studies We Can Learn From [online]. [cit. 17th August
2017]. Available at: https://www.rockdovesolutions.com/blog/3-crisis-management-case-studies-we-can-
learn-from
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evaluate the effectiveness of PR. When measuring PR, it is essential to determine what the
company wants to measure. It could be media coverage, PR effect in the perception of
public communication, the effect on attitudes, beliefs and behaviors or reactions that occur
due to PR within the organization.
6.9 Event marketing
Event marketing describes the process of developing a themed exhibit, display, or presentation
to promote a product, service, cause, or organization leveraging in-person engagement.
Events can occur online or offline, and can be participated in, hosted, or sponsored.
The promotion of these activities can occur through various inbound and outbound
marketing techniques.
In today’s buyer-empowered world, marketers need to seize every opportunity to build
relationships, generate goodwill, and earn the trust of prospective buyers and customers.
The modern consumer wants more than a pitch when evaluating solutions or making purchasing
decisions. Events offer a unique opportunity for them to interact with brands to get
a firsthand sense of a company’s focus, perspective, and personality. Event marketing needs
to be an integral part of the demand generation mix, and a strategic combination of
offline and online events are essential to any company’s bottom line.
A key reason for a business to participate in an event is to establish and build its brand.
Event marketing allows company to cultivate and express its identity firsthand. Through
events, company gains the perfect venue to share ideas, thoughts, and name in the exact
manner. Another important reason businesses choose to participate in an event is to generate
leads. The right event allows company to interact with a group of prospects. Events
offer an unparalleled level of customer engagement, with an opportunity for positive personal
interaction that builds loyalty. Most people attend events to network and be educated.
Both are powerful draws in their own ways. No matter what type of event you are at, it is
critical to impart knowledge that the audience will value – and that sets company apart.35
New trends penetrate this type of marketing primarily thanks to the development of new
technologies, such as smart phones, mobile phones equipped with cameras, text and Internet
messages. Through these technologies, consumers can participate actively and involve
themselves in the program, have the option of different polls, or be photographed and then
contacted via email with the photo. We can notice the increasing popularity of roadshows
in the parking lots of supermarkets, or on the occasion of the opening of new shopping
centres, etc. (Frey, 2011)
35
Marketo [online]. [cit. 7th August 2017]. Available at: https://www.marketo.com/event-marketing/
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Effects related to event marketing:
• Active emotional experience, which effectively places the brand (product or service)
to the customer's emotional environment, creating a stronger and more enduring relationship
between him and the brand.
• Information through images that is generally more effective than verbal information.
• Creative communication that attracts potential customers and differentiates from the
competition.
• The use of innovative means of communication, such as new information and telecommunication
technologies which allow two-way communication of the brand and
the customer and provide for a relatively accurate assessment of the effectiveness of
reach and impact of communication campaigns.
• Integrated Communications – effectively connecting means of communication to the
widest possible reach with the target groups while maintaining a unified communications
strategy.
• Uniqueness, multi-sensitivity, drama, interactivity.
6.9.1 TYPES OF EVENT MARKETING
Events come in a large variety of flavors, and can be held in countless venues, whether
online or off. The basic division could be seen in two sections: Online events and offline
events.36
Online events connect presenters and participants through a web-based interface.
Common types of online events include webinars, virtual events, and live streaming events.
Online events are often less costly than in-person events and can enable you to easily reach
geographically dispersed audience.
Offline events require physical attendance and interactions take place in person. While
they often require more investment than virtual events, offline events allow face-to-face
relationship building. Offline events include: tradeshows, conferences, seminars or breakfast,
lunches, dinners. These are typically smaller, more targeted events. They can be both
customer and prospect focused. The last types of events are usually very intimate with 8-
10 people, or can be larger with 50 or more attendees. On a larger scale, breakfasts, lunches,
and dinners can include thought leadership presentations as part of the event.
The categorization of event marketing activities is not precisely defined because of the
vast range of activities and uniqueness and unrepeatability of this communication too. Šindler
(2003, p. 236) divides event marketing activities into 5 basic categories:
• According to the content of event marketing: working-oriented events, informative
events, entertaining events.
36
Marketo [online]. [cit. 7th August 2017]. Available at: https://www.marketo.com/event-marketing/
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• According to the target groups: public and corporate events.
• According to the concept of event marketing: event marketing using occasions
(such as company anniversaries), branded or product event, image event, event marketing
based on know-how, combined event marketing.
• According to the accompanying experience.
• According to the location: outdoor and indoor events.
In recent years, the use of event marketing as a regular component of the company´s
communications mix can be seen more and more. The modern technologies are used very
often to improve the events as cell broadcasting or location-based marketing and so on.
Despite the effort to reduce financial costs, new events are more imaginative (beach building
in the middle of the square), more interactive.
CASE STUDY
How to meet green?
One of the objectives of the 2015 Canadian Medical Association Annual Meeting was
to create the greenest event going. The 148th Canadian Medical Association Annual Meeting
took place at the World Trade and Convention Centre, Halifax, Canada. The Canadian
Medical Association (CMA) is a national, voluntary association of physicians that advocates
on behalf of its members and the public for access to high-quality health care. At the
Annual Meeting and General Council, CMA members set the policy direction for the association
for the year through debate, discussion and the passage of motions. For four days in
August 2015, Halifax was at the centre of the national conversation on current medical
policy issues and how to improve health care of Canadians. Quick facts: 4-day delegatestyle
meeting, 83,000 Canadian physicians represented, 537 attendees, $860,733 estimated
direct expenditures.
Like many organizations and event planners, the Canadian Medical Association (CMA)
is committed to creating and maintaining a healthy environment for all. Every choice makes
a difference when it comes to protecting the environment, especially when hosting largescale
events for thousands of people. That’s why they wanted their Annual Meeting to be
the model of event sustainability. They wanted to achieve this by focusing on 3 main areas:
food, pollution and waste, power.
With goals in mind and strict requirements, CMA worked with their chosen venue to
gather creative suggestions – from culinary to property services – on how to best “meet
green”. Together, they were able to identify event needs and co-design custom solutions
and services to help realize CMA’s vision for a sustainable conference.
Creating a sustainable menu was the first step in the process. The convention centre
culinary team focused on sourcing local menu items that were organic, fairly traded, sea-
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sonal and not processed, helping to reduce the carbon footprint and support the local Halifax
economy. The team also ensured that imperfect fruits and vegetables that might otherwise
be thrown away were worked into the menu, knowing that a few bumps and bruises
won’t change the taste of the local produce. And, when the delegates were fed and full,
leftovers were donated to Feed Nova Scotia, helping to reduce food waste and support a
great local community service.
Hosting thousands of people can produce a lot of waste. Event planners need to work
with your venue and local organizations to implement simple ideas and tactics before your
delegates arrive. Planning ahead can make sure you produce less waste overall. Nova Scotia
already produces the least waste per capita and has the highest waste diversion rate in
Canada, making it easy for CMA to take advantage of their leading recycling and composting
programs. Waste was reduced throughout the 4-day event by reducing onsite materials,
reducing signage, printing on recycled materials and asking suppliers to reduce packaging.
It was important to the CMA to cut back the event’s carbon footprint and seek out partners
who provide renewable energy alternatives. Although being together in person is best,
CMA encouraged remote participation for its members who couldn’t attend the event, using
technology to limit carbon footprint. This was made easier, and greener, thanks to a partnership
between the convention centre, its partner hotels and CMA which saw each organisation
purchase clean, renewable energy through Bullfrog Power for all event power ne-
eds.
Some of the achievements of the CMA in their quest to host a green meeting were: 45%
of food locally or regionally sourced, 300+ lbs of food donated to local food bank Feed
Nova Scotia, 3044 lbs of waste recycled or composted, close to 19,848 kwh of green energy
used during the event.37
6.9.2 ROADSHOW
Roadshow or moving presentation with live, immediate contact with the target group.
This is a type of event and a public relations tool. It is an activity that has a creative character,
it moves from place to place, it generates media publicity and it is part of integrated
marketing communications. Roadshow is an organized promotional event that works on
the principle of traveling to pre-selected locations to promote product, service or brand in
general. (Jurášková and Horňák, 2012, p. 202)
Roadshow addresses consumers directly at their place of residence and its primary goal
is to introduce a product or brand to consumers, gain new customers or increase customer
37
Event websites [online]. [cit. 7th August 2017]. Available at: http://www.eventmanagerblog.com/how-to-
meet-green
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loyalty. Roadshow is a form of demonstration that brings customers mostly bonuses, discounts,
competitions and other similar attractions. A key factor for a successful roadshow
is the appropriate selection of location where it will take place, as well as its timing. (Jurášková
and Horňák, 2012, p. 202)
CASE STUDY
Škoda Monte Carlo roadshow 2016
Within the Monte Carlo Roadshow 2016, the participants received a gifts, if they attended
testing drives. As part of an accompanying program for the whole family, participants
were able to see the BMX Biketrial show, the Freestyle ropeskipping show and many other
interesting activities for both small and large motorists. During the whole event, the presentation
of cars and seminars on the Transport Safety Research took place. A contest regarding
two Škoda cars and Monte Carlo trip winning was prepared for the participants.
The figure below shows selected locations of the Škoda Monte Carlo Roadshow in the year
2016.38
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 6. Keep in mind that
only one answer is correct! The correct answers can be found at the end of the chapter.
1. The way how to build reputation without resorting to image-based advertising
– to publicise the good things the firm is doing is called:
a) Customer relationship management.
b) Corporate social responsibility.
c) Marketing public relations.
2. Institutionalized promotion of collective views and interests in the market democratic
conditions is:
a) Loggying.
b) Publicity.
c) Roadshow.
38
Škoda auto websites [online]. [cit. 7th August 2017]. Available at: http://www.skoda-auto.cz/o-spolec-
nosti/akce-a-udalosti/montecarloroadshow#DynamicFrameWebPart
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3. What is the goal of crisis communication?
a) To determine possible conflicts and crises in the organization and to deal with them.
b) To represent planned and systematic efforts to achieve and maintain the reputation.
c) To include any spontaneous, unaffected attention of journalists and media enterprise.
4. The process of developing a themed exhibit, display, or presentation to promote
a products, cause, or organization leveraging in-person engagement is called:
a) Buzz marketing.
b) Product placement.
c) Event marketing.
5. What is one of the possible reasons for image crisis:
a) Physical nature (accidents at work, death in service).
b) Troubled products (low quality, contamination).
c) Economic nature (crisis of management, problems with financing).
SUMMARY OF THE CHAPTER
Now the students should be able to define public relations along with distinguishing
their four working models. Also after reading chapter 6 they should determine target groups
of PR and specify internal PR, corporate social responsibility and concept of publicity and
lobbying. They should be able to emphasize the importance of communication in the crisis
and describe event marketing.
PR represent planned and systematic efforts to achieve and maintain the reputation and
mutual understanding between an organization and its public. The target groups of PR activities
include internal and external public. Internal PR are also called Human Relations and
it includes mainly employees of the company. The external group includes suppliers, distributors,
competitors etc. A socially responsible firm should be achieving commercial success
in ways that honour ethical values and respect people, communities, and the natural
environment. Crisis communication happens when companies must deal with conflict,
whether with the public, competition, state regulation or with people inside the company.
The crisis is anything that may harm or endanger the company's reputation, sales, market
value, relationships with customers and other target groups. Company should have a plan
for crisis communication, which would include members of the Crisis Staff, their duties,
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responsibilities and procedures on how to prevent the spread of false information and
rumors, and how to transform rumors into acceptable message with a happy end for the
company. In today’s buyer-empowered world, marketers need to seize every opportunity
to build relationships, generate goodwill, and earn the trust of prospective buyers.
ANSWERS
1b, 2a, 3a, 4c, 5b
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7 DIRECT MARKETING
QUICK OVERVIEW OF THE CHAPTER
The aim of the seventh chapter is to describe direct marketing as a tool of marketing
communication mix.
Direct marketing as the transmition of the promotion message directly to the existing or
future consumers in a way to bring about an immediate measurable response and its objectives
are described at the beginning of the chapter. Afterwards the direct marketing tools
are determined. There are described the tools as direct mail, telemarketing, catalogs. The
new interactive media are presented at the end the this subchapter. Another subchapter
contents the determination of mobile marketing, one of the direct marketing methods, its
definition and tools. Customer relationship management is related to direct marketing,
that´s is why this concept with its analyical, operative and collaborative part, is defined in
this chapter. At the end of the chapter the geomarketing is defined. Geomarketing consists
of digital maps and market data from various studies. This discipline allows not only displaying
geodata, but also analyzing them. Existing and potential customers can be observed,
how they behave in different territories.
GOALS OF THE CHAPTER
1. To define direct marketing and its objectives.
2. To distinguish the diffrences between direct media and mass media.
3. To name direct marketing tools and media with their untargeted and targeted distri-
bution.
4. To determine mobile marketing and it tools.
5. To describe concept of customer relationship management and its principles and technological
aspects.
6. To define main aspects of geomarketing.
KEY WORDS OF THE CHAPTER
direct marketing, direct marketing tools, telemarketing, direct mail, catalogs, mobile
marketing, customer relationship management, geomarketing
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At the beginning of the sixties, direct marketing was understood (DM) as a particular
type of distribution (direct sales through different channels), because it was the most used
in the form of mail-order sales. In the seventies it became an instrument of marketing
communication with an emphasis on feedback and optimizing responses to mailings and
other direct marketing tools. In the nineties, the main focus became DM building long-term
relationships and increasing customer loyalty. Today, DM can be considered as a personalized
direct marketing and marketing as lifetime value. Typical features of DM include
measurability, long-term and reciprocity. (Pelsmacker, Geuens and Bergh, 2003, p. 387-
388)
7.1 Direct marketing definition
Direct marketing is defined as the use of direct channels to reach customers and delivery
of goods and services without using marketing middlemen (intermediaries). Marketers using
direct marketing seek measurable reaction, usually a customer order. Currently, many
marketers use direct marketing to build long-term relationships with customers. It can be a
distribution of offers tailored for each customer, building loyalty through customer loyalty
programs, sending birthday cards, etc. (Kotler and Keller, 2007, p. 642)
Direct marketing transmits the promotion message directly to the existing or future consumers
in a way to bring about an immediate measurable response. It also includes the
creation of the respondent database. We can say that direct marketing is contacting existing
and potential customers in order to generate immediate feedback and measurable response.
The word "direct" means the use of media allowing direct contact, such as mail, catalogs,
phone contacts or brochures. To obtain an immediate response, we can use coupons, phone
calls and personal visits. For making direct contact with customers possible, it is essential
to have and develop the database. (Pelsmacker, Geuens and Bergh, 2003, p. 388)
Direct marketing in terms of passivity or activity of a potential or current customer can
be divided into two main groups, namely active and passive direct marketing. Active direct
marketing is initiated and lead by a trader who does not expect an immediate reaction from
the consumer. It is actually communication with current and potential customers through
the direct media - email, phone, fax, e-mail. Passive direct marketing is an approach where
consumers identify themselves as potential customers of a product, service or retail stores
themselves and react to stimuli sent by the merchant. Such behavior must be encouraged
by the marketing communications.
Direct marketing has many advantages compared with other communication elements it's
a great targeted form of presentation in terms of saving resources that are otherwise lost
in mass communication to customers by the mass media, because the money is invested
only in promotion that targets only specific target group of customers. Evaluation of the
advertising campaign is clear, easy and fast. A very simple way to determine whether the
offer was a successful campaign is the number of new customers. DM also contributes to
creating and updating customer database.
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The great advantage of direct marketing is the ability to serve the customer who does
not have time because he is fully occupied by working activities, family and friends, and
doesn’t want to spend his free time in queues in crowded stores. Communication for such
a busy client must be personalized, only then it has a chance to impress. The use of mobile
phones and the internet, product delivery the next day, it all adds to the growing popularity
of direct marketing. The customer saves time and has a much wider range of goods available.
(Kotler and Keller, 2007, p. 642-644)
Table 14: The difference between mass and direct media
Mass media Direct media
Segmentation Individualization (targeting, interaction)
Remembering, recognition and measurement
of image
Measuring sessions by clients
Mass unilateral communication Targeted bilateral communication
Market share The share of the customer (the amount
and frequency of purchase)
Anonymity of the customer Customer profile
Standard product The "tailor-made" product
Mass distribution Individualized distribution
Mass presentation Personalised offers
All customers Profitable customers
Attracting customers Customer retention
Source: Pelsmacker, Geuens and Bergh (2003, p. 27)
Development of direct marketing has gone through several phases (Kotler and Keller,
2007, p. 644-645):
• Carpet bombing - the company gains a contact database and sends out a mass mailing
to everyone. The disadvantage is the low personalization and hence the low
success rate.
• Database marketing - the company is working with databases and selects the appropriate
customers to send offer. The advantage is better targeting, but it is still a
relatively unsuccessful method.
• Interactive marketing - this is the application of the idea of actively-passive approach
to direct marketing. The company promotes its contact in different communication
channels and offers the customer to contact them.
• Timed personalized marketing - can be used at a time when the company has sufficient
relevant information about customers and is able to reach out with specifically
tailored offer.
• Marketing of a lifelong value - marketers prepare a plan of lifetime value of each
customer, based on knowledge of the life events and major changes.
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7.2 Direct marketing objectives
Most marketers have as their primary objective the use of direct marketing to gain new
orders. From the above it is clear that the DM performs other functions, and thus has other
objectives. With such objectives can be DM (Pelsmacker, Geuens and Bergh, 2003, p. 389-
392):
• Direct sales: sales of products and services without contact with business intermediaries.
A good example is the sale by mail order or catalog order. Catalogs are delivered
to potential customers and orders are accepted by phone, fax, mail, post.
• Sales support and distribution: DM may also support activities of the sales team,
dealers and retailers. DM is also used to support personal selling, as it maintains
personal contacts and thus reduces the need for frequent visits to retailers, which are
very costly. In this case, the form of direct marketing funnel, through which only the
real buyers contact the company and are then visited. In this regard, DM performs
certain tasks of the sales team and enables cost reduction.
• Loyalty and Customer Retention: relationship marketing has two positive effects,
to strengthen the loyalty of customers in conjunction with the acquisition of new
with the fact that the longer you stay with the brand, the more you get. Customer
revenue will increase, operational costs will decrease, positive communication between
people will attract more customers and also loyal consumers are usually not
sensitive to price.
7.3 Direct marketing tools and media
Direct marketing in addition to direct communication channels also uses the mass, respectively
non-targeted media. Unlike conventional mass marketing communication, it generates
a direct response from the recipients. Among the forms of DM, we can also include
personal selling, from which it developed. (Pelsmacker, Geuens and Bergh, 2003, p. 392)
The functionality and popularity of different media varies over time. Tools that were
considered obsolete are again gathering momentum, new tools are created and left behind.
A very popular tool is untargeted mailing (e.g. leaflets from retail chains), its effectiveness
is disputed by the company focus, however, it can be increased by the utilization of geomarketing
(see below). Telemarketing is a widely used tool worldwide, in the Czech Republic,
however, faces potential reluctance of customers to accept the offer by phone.
Addressed direct mail still occupies an important position. After a period of decline, when
it was thought that e-mails will be able to fully replace the mail, there was a period of
rediscovery of the power of addressable mailing, which brings tangible physical sensations.
Typical areas of DM application are mail-orders and financial and telecommunication services,
where the direct mail has its place through regular distribution of statements in en-
velopes.
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7.3.1 UNTARGETED DISTRIBUTION
This is the untargeted distribution of direct marketing leaflets to no one in particular, to
all potential customers across the board for one territory. In 2010, the leaflets were the
second largest advertising medium after TV in the Czech Republic. The distribution of 4
billion flyers into mailboxes was paid by clients from the ranks of chain stores and other
retail entities and it cost about CZK 1.2 billion in 2010. Including printing and other costs,
the leaflets are a business worth about CZK 6 billion a year. The research company GfK
Incoma states that 30 % of customers buy according to leaflets and a further 46% follows
them regularly.39
7.3.2 DIRECT RESPONSE PRINTED ADVERTISING
This type of advertising is published in print in order to (Pelsmacker, Geuens and Bergh,
2003, p. 392):
• Create direct customer reaction by sending a coupon or calls to a specific phone
number.
• Establish close and clear link between the answer and what is the content of the
advertisement.
• Identify the respondent.
This type of print ads is untargeted and does not point to one particular customer. Advertisement
is published in the mass media (newspapers, magazines). The main objective
of this type is the selection of interested customers and it is also a good way to provide
those interested in more information than what would a traditional form of advertisement
contain. After submitting the coupon, interested parties can get more information. (Pelsmacker,
Geuens and Bergh, 2003, p. 393)
7.3.3 UNTARGETED TELEVISION OFFER
Modern television broadcast receivers can be used in several ways. Older teletext offered
the opportunity to rent a website to disseminate the message and generate a response.
Modern interactive television allow much more. Another option is to use non-targeted offer
via TV as teleshopping. The newest trend is television advertising with direct reactions
(Direct-Response Television - DRTV), which is the use of minute-long spots in prime time
at which the viewer can respond with his remote controller. It is thus the use of digital
broadcasting to not only spread the signal to the customer, but also to get his response. It
should be noted that the use of specially adapted transmitter and receiver are required. The
customer can immediately send his phone number to the company and get a personalized
39
Web portal iDirekt, 2011. V ČR se ročně roznesou 4 miliardy letáků za 12 milard Kč [online]. [cit. 22nd
May 2013]. Available at: http://idirekt.cz/marketingove-zpravodajstvi/v-cr-se-rocne-roznesou-4-miliardy-
letaku-za-12-miliardy-kc
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offer when attracted by advertising. The minute spots are often of lower quality than the
ads that are commonly used. They can be broadcast in the prime time only because of “last
minute” sales of advertising space. The shorter length differentiates them from the tele-
shopping.
7.3.4 DIRECT MAIL
Direct mail is one of the most effective direct marketing tools. Shipment is directly addressed
to specific recipients. The primary goal is to attract the customer enough that he is
interested in the mail/package. That implies very good creativity to be utilized. The content
of the consignment should include the offer created so that the clients’ attention is caught
and he reads it. The more is the communication original, colorful and graphically well treated,
the more the client is interested. A good choice is also to use something that can add
the feeling of plasticity/texture. If it is financially suitable, add small gifts. Paper and printing
should be of the highest quality for the offer to work.40
7.3.5 TELEMARKETING
Rapidly growing field of direct marketing is telemarketing. Telemarketing can be defined
as any measurable activity using the phone, which aims to help you find, acquire and
develop a relationship with the customer. The use of this medium has grown enormously
in recent years. Telesales and search for new clients helps to create, check and update the
database and sales information.
The phone is the most direct of all direct media tools, and has a number of advantages.
It is flexible, interactive and fast. Telemarketing campaigns can be launched immediately,
and their effectiveness can be instantly monitored. On the other hand, it also has certain
disadvantages: the sale is a very difficult, phone calls are annoying to some customers, and
costs are 10 to 20-fold higher than when using the mail. (Pelsmacker, Geuens and Bergh,
2003, p. 397)
Huge global call centers serving U.S. customer line telephone operators, service lines of
major U.S. banking institutions and corporations (HP, Dell, IBM, etc.) or line handling the
booking of flights for American and British companies, all are located in Bangalore in India.
These call centers employ fluent English-speaking domestic workers, who for the need
of their work also use an English name.
Also for telemarketing we have a choice between activity and passivity. In the case of
passive (in-bound) telemarketing, potential client contacts the call center himself on the
basis of untargeted mail, distribution or television advertising. In the case of active telemarketing
(out-bound) the company is actively trying to communicate with the customers.
40
KARFÍKOVÁ, D., 2008. Úvod do direct marketingu. [online]. [cit. 22nd May 2013]. Available at:
http://www.m-journal.cz/cs/marketing/direct-marketing/uvod-do-direct-marketingu__s398x457.html
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The communication has precisely pre-defined goal that it needs to achieve. Telemarketing
provides four basic functions: we are using it to make phone sales, tele-prospecting, and
tele-care, we also passively provide technical support and customer service. (Kotler and
Keller, 2007, p. 648-649)
Table 15: Active and passive telemarketing
Type of telemarke-
ting
Generating sales Sales support
In-bound telemarketing
(inside)
Acceptance of or-
ders
• Information about the product and the
company
• Customer Service
• Service Complaints
Out-bound telemarketing
(out) Tele-sales
• Arrange meetings for the seller
• Reaching new customers
• Update business database
• Support Marketing Communications
• Support business tourism
• Tele-factoring
Source: Pelsmacker, Geuens and Bergh (2003, p. 397)
7.3.6 CATALOGS
Companies use catalogs as an inventory of their goods, visually presented to the customer.
The classic form of a printed catalog today is gradually being replaced by electronic
form, whether stored on removable media or distributed via the Internet. Although customers
cannot evaluate the products in any physical sense, catalogs provide them with a comfortable
freedom of choosing from a wide range of products while also saving their time.
Many marketers now even sell their catalogs in bookshops and newspaper stands. Advances
in technology give marketers the opportunity to experiment and make their catalogs
interactive, animated, with music, etc. (Pelsmacker, Geuens and Bergh, 2003, p. 397)
7.3.7 NEW INTERACTIVE MEDIA
With the development of various devices and technologies, direct marketers are able to
get their message to potential customers through new media. This may be the use of electronic
devices - web, mobile, marketing position – i.e. GPS or car-navigation, online TV and
radio, etc. These media have developed very aggressively in the last decade. E-marketing
is trying to predict the behavior and perceptions of the target group, and based on these
factors suggests the most effective methods within the selected target groups of users to
bring them to the site and persuade to purchase or other required action. In order for the
effect to be the most efficient, offer must impress at the right time with the right product.
Initially, we have to ask ourselves what is the user, in our case the potential customer, most
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interested in? Based on the findings of his needs we provide information or service that can
bring him to our site.41
7.4 Mobile marketing
It is the one of the direct marketing methods. Mobile marketing can refer to one of two
categories of interest. First, and relatively new, is meant to describe marketing on or with
a mobile device, such as a cell phone using SMS, MMs or WEB Marketing. Typical characteristics
of this type of mobile marketing are mobile, anytime, globally, integrated and
customized (MAGIC). Second, and a more traditional definition, is meant to describe marketing
in a moving fashion - for example - technology road shows or moving billboards.
Although there are various definitions for the concept of mobile marketing, no
commonly accepted definition exists. “Mobile marketing is broadly defined as the use of
the mobile medium as a means of marketing communication or distribution of any kind of
promotional or advertising messages to customer through wireless networks.” More specific
definition is the following: “using interactive wireless media to provide customers with
time and location sensitive, personalized information that promotes goods, services and
ideas, thereby generating value for all stakeholders”.
In November 2009, the Mobile Marketing Association updated its definition of Mobile
Marketing: Mobile Marketing is a set of practices that enables organizations to communicate
and engage with their audience in an interactive and relevant manner through any mobile
device or network. (Matušínská and Stoklasa, 2012)
Rapidly evolving mobile marketing uses many different tools (Přikrylová and Jahodová
2010, p. 261-262):
• Advergaming - interactive games on mobile devices with advertising content. Greatly
expanded by the so-called freemium payment model for content (game / app is
free, but commercial message is displayed until the user pays).
• Cell Broadcasting - This technique is based on the fact that a certain transmitter of
a mobile operator spreads within its range the advertising information, for example
by participating in the event the customer is informed about the program and special
offers from various stalls. Customer receives these text messages only in the range
of the transmitter.
• Location-based marketing - advertising notices for shops, cinemas, hotels, gas stations,
etc. Derives from the current position of the user's mobile phone, example
would be the Foursquare.
• Logos, pictures, and ringtones - formerly a popular tool was sending a logo of
popular brands, images or melodies for a fee. This builds emotional ties, increasing
41
KARFÍKOVÁ, D., 2008. Úvod do direct marketingu. [online]. [cit. 22nd May 2013]. Available at:
http://www.m-journal.cz/cs/marketing/direct-marketing/uvod-do-direct-marketingu__s398x457.html
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loyalty, supports brand and what is important, the accumulated database of contacts
can be used for further marketing activities of the company.
• Two-way SMS communication – means a communication between the consumer
and the company, which is of the advertising nature. The promotional materials of
the company provide a telephone number where customers can send SMS with their
request. The reply is generated either in the form of SMS or other communication
channel based on the preferences stated in the first SMS. The advantage of this form
of communication is high frequency of SMS messages flowing in both directions.
• SMS advertising – are either in the form of traditional advertising messages with
SMS or sponsored SMS, which are free for the sender, provided that part of the text
is devoted to advertising. So far it is the most used tool.
• Advertising MMS - allows for multimedia design of the advertising message, for
example in the form of text, audio, picture or video clip.
• SMS competitions, voting, polls - the goal is to convince users to send a message
to a specific phone number. After sending this message the reward is the opportunity
to get a discount or to win something. Therefore, it is often used as a form of sales
promotion. The price of the SMS is usually higher than normal SMS, decided by the
event organizer and it is used to cover the costs and usually also crate some profit.
With the acquisition of the contacts it gives the opportunity to the organizers of these
campaigns to perform simple researches, to reach new customers or to reward the
most loyal ones. Very popular used form is donor SMS (DMS).
• Special graphic codes - are placed on product packaging, print media, etc. After
their capture by mobile phone, it decodes the encrypted information and automatically
displays additional text, animations, images, music or dials a number. It connects
a print ad with the online environment. The requirement for the decryption of
the code is the need to have installed a special mobile application. Examples are QR
codes, see below.
One of the innovations with the greatest impact is certainly QR codes, which originated
in Japan and has existed since 1994. However the penetration to Europe and the Czech
Republic has happened only during the last years. QR abbreviation refers to the word quick
response, thus meaning quick reply. This special type of 2D code has the ability to encrypt
up to 7089 numeric characters which can communicate commercial communication when
photographed by camera in a mobile phone. For decryption, it requires either special applications,
or application and Internet connection. After decryption, it takes user of the applications
to a web site or an e-shop of the company. With the gradual expansion of smart
mobile phones, we can meet more frequently with this type of mobile marketing. Examples
are posters in the subway that can be made of groceries, movie tickets, electronic version
of a print (newspapers, magazines), etc. Gradually, however, QR codes will be replaced by
newer technology. It may be an already patented system by Google for picture recognition
and assignment of whatever the context, or perhaps MVS - mobile visual search (visual
search via mobile phone). Mobile visual search works easier than QR codes, for which the
consumer needs to have installed a special application. User in MVS takes a picture with
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his or her smart mobile phone of an object (the company logo, banner) and MVS application
provides information on the company, or even the possibility of buying goods via mobile
phone.42
CASE STUDIES
Audi start-stop app
Audi’s thought so far out of the box with their app it doesn’t even seem like marketing
at first glance. Their App, called ‘start, stop’ doesn’t make any attempt to sell its cars (at
least not on the face of it). It is a simple app, which detects when open apps aren’t being
used and sends users notifications to close it, to save processing power and battery life.
This makes the phone more efficient, and promotes Audi’s stop-start technology, which
automatically turns the car engine off when stationary to save fuel. The beauty of the campaign
is that it makes users associate Audi with efficiency whilst proving them with a helpful
service. It doesn’t seem like an ad at all, because it is the sort of app that you might
install anyway, but that doesn’t mean it isn’t working to promote Audi’s brand.43
Nivea sun protection track your kids app
Another brilliant example of making a mobile campaign so useful it ceases to even seem
to be an advert is Nivea’s ground breaking ‘the protection ad’ for it’s Nivea Sun Kids range.
It wasn’t a purely mobile campaign however; it combined mobile with print to create
something truly unique. The print adverts in magazines had a detachable 'protect strip' akin
to a wristband, which is put round the child’s arm when the family is at the beach. The
parent is invited to download the app, which communicates with the bracelet so that the
parent can use the app to dictate an area outside of which the child cannot stray, and if the
child does so the app beeps to alert the parent.44
Ford mobile marketing campaign
Ford made use of an excellent mobile marketing strategy to promote the release of their
new Escape and Taurus models recently. All that was required was for people who wanted
more information on the vehicles to send a text with the word ‘FORD’ to 63611. These
customers were contacted and asked which vehicle they wanted further information on and
they were then asked to provide their names and local zip codes as well. This info was sent
42
BAROCAS, J., 2012. Why QR Codes Won’t Last. [online]. [cit. 23rd May 2013]. Available at: http://mas-
sivewebsitemarketing.com/uncategorized/why-qr-codes-won%E2%80%99t-last.html
43
Smartinsights: 7 examples of effective mobile marketing campaigns [online]. [cit. 25th August 2017].
Available at: http://www.smartinsights.com/mobile-marketing/mobile-advertising/7-effective-mobile-mar-
keting-campaigns/
44
Smartinsights: 7 examples of effective mobile marketing campaigns [online]. [cit. 25th August 2017].
Available at: http://www.smartinsights.com/mobile-marketing/mobile-advertising/7-effective-mobile-mar-
keting-campaigns/
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to local Ford dealerships, where follow up calls were made to clients, resulting in an astounding
15.4% conversion rate.45
National geographic channel mobile advertising compaign
National Geographic Channel took a unique approach to co-viewing with a mobile advertising
campaign that drove tune-ins for a documentary about President Lincoln. National
Geographic Channel worked with Millennial Media and mediahub / Mullen on a tabletonly
campaign that leveraged at-home Wi-Fi networks. The day that the program premiered,
creative began running to target at-home tablet users. Once the program began, the
creative changed to give consumers a co-viewing experience. For example, the mobile ad’s
video and text dynamically updated as the show aired to reflect different scenes in the program.
By targeting at-home Wi-Fi networks for tablets specifically, the goal behind the
campaign was to reach mobile users at home who were most likely to be near a TV and to
serve these users additional relevant information via their tablets.46
7.5 Customer relationship management
One of the first definitions by Kotler and Armstrong (2004, p. 248) specifies customer
relationship management as special software programs and analytical techniques that serve
for integration and utilization of vast amount of data about individual customers stored in
databases. Customer relationship management consists of sophisticated software and analytical
tools which sort customer`s information from all sources, conduct deep analysis and
use these outcomes for strengthening the relationship with the customer. CRM is therefore
a process of gathering, processing and utilization of information about company`s customers,
that works on the basis of database technology. The outcome is capability to recognize,
understand and foresee needs, wishes and purchase habits of customers. Bilateral
communication between the company and its customers is of course needed. Some authors
define CRM as software, hardware and personal equipment of a company that is responsible
for aforementioned functions. Storback and Lehtinen (2002, p. 18) claim that: “the
goal of customer relationship management is not to be close to a customer but to live with
him“.
According to Lehtinen (2007, p. 18) CRM came into being together with development
of marketing which gradually became more personal until it transformed into direct marketing.
Individual customer often becomes the goal of direct marketing.
45
Creative: 5 Examples of Great Mobile Marketing Campaigns [online]. [cit. 25th August 2017]. Available
at: https://36creative.com/mobile/2771/5-examples-great-mobile-marketing-campaigns/
46
New.soldsie: 4 Examples from the Best Mobile Marketing Campaigns [online]. [cit. 25th August 2017].
Available at: https://new.soldsie.com/blog/4-examples-best-mobile-marketing-campaigns/
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CRM systems are present in the market for quite some time but only in the last decade
they made a huge shift from narrowly specialized utilization and focus on technical aspect
to mass utilization in all areas of company management. This shift is especially noticeable
in Czech Republic for some reasons: market deregulation connected with our EU accession,
new business models taken from the “west”, internet penetration, technological progress.
CRM is gradually becoming “common” not only in large international companies but also
in local small and medium enterprises.
There is a long way from definitions for the customer to see the benefits of CRM in the
real world. From the theoretical point of view CRM systems might be divided into three
parts: analytical, operative and collaborative, see Figure 7-1. In order for any action in CRM
to be successful it requires consistent data about customers which will be accessible to
every employee of a company. That is also highly demanding on a technology providing
CRM in a company.
Image 14: Technological aspects and principles of CRM
Source: author`s work based on TREJBAL, J. Technologické aspekty. [online]. [cit. 23rd May 2013]. Dostupné
z: <http://cs.wikipedia.org/wiki/Soubor:Technologicke_aspekty.jpg>
7.5.1 ANALYTICAL CRM
The work of analytical CRM is customer data analysis, its evaluation, modelling and
prediction of customer behavior. In real life situation the analytical CRM can for example
gather all the data about customers inquiring a specific product by using data mining (tool
for data gathering), what services they purchased right away and what services they purchased
eventually. It can find patterns in their behavior and propose next steps during upselling
or cross-selling. It can evaluate efficiency of a marketing campaign, propose prices
or even develop and propose new products. This way it serves as some sort of help during
decision making, e.g. manuals for employees working in services concerned with how to
react to certain customer`s behavior.
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7.5.2 OPERATIVE CRM
It mainly supports the actual contact with customers conducted by front office workers
and general automation of business processes including sales of products, services and marketing.
All communication with the customer is tracked and stored in the database and if
necessary it is effectively provided to users (workers). The advantage of this approach
being the possibility to communicate with various employees using various channels but
creating the feeling that customer is being taken care of by just one person. It can also
minimize the time that the worker has to spend typing the information and administrating
(the data is shared). This allows the company to increase the efficiency of their employees
work and they are then able to serve more customers.
7.5.3 COLLABORATIVE CRM
All departments in a company gather data about their customers. It is not uncommon
that these departments compete or are even hostile to each other. That undermines efforts
of CRM to share relevant data throughout the whole company (e.g. information from help
line can help the marketing department choose a point on which it will focus during the
next campaign). The goal of collaborative CRM then is maximum sharing of relevant information
acquired by all departments with the focus on increasing the quality of services
provided to customers. The ultimate outcome of this process should be an increase in customer`s
utility and his loyalty.
As has been described, the basic principle of CRM is to work with the customer data
and offer these customers better solutions to their needs and wishes. As author understands,
the Caring Economy and CRM both seek to satisfy people (customers and companies),
economically by allowing companies to earn and customers to save money, and non-economically
as described further. According to Matušínská (2009, p. 191) the basic advantages
and benefits of CRM systems are these:
• satisfied customer does not consider leaving,
• product development can be defined according to current customer needs,
• a rapid increase in quality of products and services,
• ability to sell more products,
• optimization of communication costs,
• proper selection of marketing tools (communication),
• trouble-free run of business processes,
• greater number of individual contacts with customers,
• more time for customer,
• differentiation from competition,
• real time access to information,
• fast and reliable predictions,
• communication between marketing, sales and services,
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• increase in effectiveness of teamwork,
• increase in staff motivation.
The unlimited potential to get closer to customers is hindered by negatives of CRM.
Aside from the fact that proper implementation and running of CRM is very difficult (technology,
people – employees, initial money investment etc.) the concern exists about the
safety of information that companies keep about their customers, sharing information with
third party and its overall protection. The entire operating principle of CRM (gathering
information, recording calls, analyzing all client`s activities etc.) is invasion of privacy of
customers.
7.6 Geomarketing
The modern trend in direct marketing is called geomarketing. Today the data that was
previously only in tables, marketers enter into geographic GIS software that can create individual
maps of different marketing factors that play an important role in untargeted mailing.
Geomarketing is a field that processes the results of customer surveys in the form of
geographic maps. The basic principle of geomarketing is not to try to communicate with
the greatest number of potential or existing customers, but to focus on customers, who are
most likely to hear the advertising messages, i.e. search for regions or specific customers
who will be included in the ad campaign.
Geomarketing consists of digital maps and market data from various studies. This discipline
allows not only displaying geodata, but also analyzing them. Existing and potential
customers can be observed, how they behave in different territories (regions, counties, zip
code, municipalities, parts of municipality, up to the specific address). The observed factors
can be socio-demographic (age, gender, education, etc.) or economic (purchase force,
unemployment, housing type, etc.).
This method can determine the following:47
• optimizing the placement of outdoor advertising in specific media in the region,
• analysis of commuting distance,
• analysis of specific access roads to the store, the company and its subsidiary,
• geographic visualization of clients on digital maps by chosen parameters,
• geographic opportunities, risks but also the strengths and weaknesses of regions in
terms of demand and supply,
• determining the catchment areas of customer segments and markets,
• creating and optimizing sales territories,
• analysis of the purchasing power of the Regions,
47
ČICHOVSKÝ, L., 2012. Geomarketing zvyšuje efektivitu reklamy a informačních kampaní. [online]. [cit.
23rd May 2013]. Available at: http://www.marketingovenoviny.cz/index.php3?Action=View&AR-
TICLE_ID=10744&geomarketing-zvysuje-efektivitu-reklamy-a-informacnich-kampani
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• analysis of business data,
• assessment of transport accessibility of stores, etc.
For geomarketing analysis and targeting, we can use a large amount of source data. Most
often data used are from the Czech Statistical Office, which are carriers of basic information
such as gender, age, income, etc. In addition we can use the data derived from geomarketing
analyzes, such as distance from branches or stores, commuting to the point of sale, or the
amount of customers per branch.
The use of geographic information systems in marketing becomes common even in the
Czech Republic (Obi, Bata, IKEA and others). The initial investment in software and map
layers returns very quickly in the form of savings from well-run direct marketing campaigns,
proper location for a new store or optimized sales representatives.
CASE STUDIES
Carrefour campaign
Carrefour has extensive proximity devices in all 28 of its hypermarkets in a European
country through which the retail chain offers its consumers a simple, intuitive, and fun app
for orientation inside hypermarkets from area to area. The retailer’s proximity-enabled app
offers navigation, automates the commercial content delivery, and collects essential data
about in-store consumer behaviour. Its proximity marketing campaign keeps consumers
informed about the products, services, and actual special offers from each of the store de-
partments.
Once users download Carrefour’s Smart Shopping app, they can select the sections they
would want to go to for shopping from a predefined list of store departments. After the
shopping list is completed, the application calculates a route, and shows the path to follow
on the store map. As users advance from one area to another, the route is updated and the
mobile phone shows them their next directions. At each aisle of the hypermarket where
they stop, shoppers get notifications or active promotions with details about the products.
Utilising proximity devices, Carrefour has seen an astonishing rise in its application’s
engagement rate which went up by 400% and the number of app users which grew by 600%
in a period of seven months.48
48
Proxera: Case studies: Proximity in action [online]. [cit. 17th August 2017]. Available at: http://pro-
xera.net/case-studies/carrefour/
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Google: geomarketig
One of the trailblazers in the geomarketing arena is Google. By leveraging information
about customer behaviors history and preferences in conjunction with contextual location
data, they are leading the charge in creating new ways to reach their customers.
A prime example of this is their Google Now program, which proactively delivers information
to users, based on their search habits - for all means and purposes, it is an intelligent
personal assistant.
Say for example, that you have been emailing or texting back-and-forth about your son’s
soccer match. As the time gets closer, a reminder will pop up on your phone with driving
directions to the soccer ground.
Google Now will also keep an eye on your inbox and recognize flight confirmations,
hotel reservations and concert tickets. It will take that knowledge and give you a relevant
message when appropriate — such as giving you your hotel information when you land, or
letting you know when it's time to leave for a concert.
Google Now is a flagship example of a contextual, geo-targeting campaign that helps
users in their day-to-day lives. Platforms that can process the sheer volume of data now
available to companies will z the mobile experience by combining location with consumer
context. Contextual geo-marketing is the art of knowing why customers are at a location,
not just that they’re there. And, as Google have shown us, when you know the “why,” you
can better serve customer needs on an individual basis.49
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 7. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. Any measurable activity using the phone, which aims to help you find, acquire
and develop a relationship with the customer, is named:
a) Geomarketing.
b) Operative CRM.
c) Telemarketing.
49
ExactDrive: Geomarketing With Google [online]. [cit. 17th August 2017]. Available at: http://www.exact-
drive.com/news/geomarketing-with-google
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2. The process of gathering, processing and utilization of information about company`s
customers, that works on the basis of database technology is:
a) Mobile marketing.
b) Direct marketing.
c) Customer relationship management.
3. What is specific for geomarketing?
a) The field that processes the results of customer surveys in the form of geographic
maps.
b) Use of the mobile medium as a means of marketing communication or distribution
of any kind of promotional or advertising messages to customer through wireless
networks.
c) Transmition of promotion message directly to the existing or future consumers in a
way to bring about an immediate measurable response.
4. Sharing of relevant information acquired by all departments with the focus on
increasing the quality of services provided to customers is the goal of:
a) Analytical CRM.
b) Operative CRM.
c) Collaborative CRM.
5. Shipment is directly addressed to specific recipients in:
a) Telemarketing.
b) Direct mail.
c) Catalogs.
SUMMARY OF THE CHAPTER
After studying chapter 7 the students should be able to define direct marketing and its
objectives. Also they should be able to distinguish the differences between direct media
and mass media and name the tools of direct marekting. The students are now able to determine
mobile marketing, describe concept of customer relationship management and define
geomarketing.
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Direct marketing is defined as the use of direct channels to reach customers and delivery
of goods and services without using marketing middlemen (intermediaries). Direct marketing
in addition to direct communication channels also uses the mass, respectively nontargeted
media. Unlike conventional mass marketing communication, it generates a direct
response from the recipients. A very popular tool is untargeted mailing (e.g. leaflets from
retail chains), its effectiveness is disputed by the company focus, however, it can be increased
by the utilization of geomarketing, the modern trend in direct marketing. The basic
principle of geomarketing is not to try to communicate with the greatest number of potential
or existing customers, but to focus on customers, who are most likely to hear the advertising
messages. This discipline allows not only displaying geodata, but also analyzing them.
Customer relationship management has the same base – collecting and analysing data about
customers. This concept consists of sophisticated software and analytical tools which sort
customer`s information from all sources, conduct deep analysis and use these outcomes for
strengthening the relationship with the customer. The outcome is capability to recognize,
understand and foresee needs, wishes and purchase habits of customers. Bilateral communication
between the company and its customers is of course needed.
ANSWERS
1c, 2c, 3a, 4c, 5b
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8 SPONSORSHIP
QUICK OVERVIEW OF THE CHAPTER
The eighth chapter deals with the sponsorship, another element of marketing communication
mix.
At the beginning of the chapter the sponsorship is defined as a commercial relationship
between the provider of finance – resources, or services, and individual – events or organizations
that in turn provide opportunities that can be commercially exploited. The decisions
in the field of sponsorship are determined in another subchapter, because making
sponsorships successful requires choosing the appropriate events, designing the optimal
sponsorship program, and measuring the effects of sponsorship. In other subchapter is stated
that the sponsorship has two basic communication objectives: to generate awareness
and promote positive messages about the product and the company. At the end of the chapter
the selected types of sponsorship with concrete examples are introduced.
GOALS OF THE CHAPTER
1. To define sponsorship as one of the elements of marketing communication mix.
2. To determine major sponsorship decisions.
3. To name objectives of sponsorship with their main determinations.
4. To describe selected types of sponsorship with concrete examples.
KEY WORDS OF THE CHAPTER
sponsorship, sports sponsorship, sponsorship fit, events, partners, cultural sponsorship,
commercial sponsorship, media, ambush
Sponsorship is used by many businesses to increase awareness of their brands or to persuade
the target audience to think more positively about the organization and/or its products.
There are examples of organizations that are truly philanthropic, expecting no benefits
from donations or sponsorship arrangements, but in general sponsorship is a commercial
arrangement.
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Once part of the endeavours of public relations to build among its target audience positive
perceptions of a client´s brand, sponsorship has grown into an industry in its own right,
with specialist sponsorship bodies and media guidelines. Sports events and the arts, where
the donor´s logo and brand will be exposed to large audiences and viewers of broadcast
events, are still the largest receivers of commercial sponsorship.
Sponsorship is often confused with the donation, which also leads to the dedication
of funds products, but without the right to contractual consideration. These activities should
be included in public relations because they are an expression of social responsibility in the
field of charity especially towards the non-profit sector! Sponsorship is always part of
the communication activities with the expected marketing benefits for sponsor, and
therefore sponsorship must be taken into account as a separate element of the marketing
communication mix! (Přikrylová and Jahodová, 2010)
8.1 Sponsorship definition
Sponsorship is the financial or material support for an event, activity, person, organization,
product or cause by an unrelated organization or donor. Funds are made available
to the recipient of the sponsorship deal in return for the prominent exposure of the sponsor´s
name or brands. (Dibb and Simkin, 2007, p. 120)
Sponsorship is a commercial relationship between the provider of finance - resources,
or services, and individual - events or organizations that in turn provide opportunities that
can be commercially exploited. It is a thematic communication tool, when sponsor helps
the sponsored subject to carry out his/her project and the sponsored subject helps to fulfill
sponsor´s communication objectives. (Přikrylová and Jahodová, 2010, p. 130)
The arts, sports television programmes, medical services and education facilities are
sponsored. Sponsorships is a spin-off own specialist consultants and advisers.
It is essential when selecting a sponsorship partner that a marketer identifies a recipient
with which his or her target market customers have a positive affinity. Reputable partnerships
are crucial: if the image of one partner is tarnished, the fall out will impact detrimentally
on the other partner(s).
The basic principles of sponsorship include (Karlíček and Král, 2011, p. 147):
• Sponsorship of events (institutions) must match the sponsor´s brand.
• Sponsored event (institutions) must reach the target audiences.
• Sponsorship should be strengthened by the presentations in other communication
activities of the sponsor.
• Partnership with the event (institutions) should be long-term.
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Sponsorship is popular for both the sponsor and the sponsored party (sponsored individual)
because of the benefits that can be accrued by being linked to each other – it is a winwin
situation. The sponsored group or individual benefits from the financial support from
the sponsor, while the sponsor enjoys the promotional value that comes with the partnership.
Some of the benefits to the sponsor could be: (Ang, 2015, p. 248)
• Exposure. Some sporting event like the Olympics offer massive audiences worldwide,
increasing the reach significantly.
• Lack of clutter. Unlike advertising, sponsorship allows the brand to shine through,
with much less clutter.
• Opportunity to build image. Through evaluative conditioning, the sponsor will benefit
from the positive associations of the sponsored group or individual.
• Differentiation. The sponsor is able to differentiate itself from its competition.
• Exclusion of competition. Exclusive sponsorship allows the sponsor to prevent
competitive access to the same promotional opportunities.
• Opportunity to sell goods or services. Exclusivity can extend to goods or services
sold.
• CSR. The sponsoring firm is able to demonstrate its corporate citizenship if the property
of sponsorship is cause-related.
According to Dibb and Simkin (2007) the primary benefits for the sponsoring organization
are:
• Increased brand awareness.
• Enhanced media coverage.
• Refined corporate image and community standing.
• Improved employee morale.
8.2 Major sponsorship decisions
Making sponsorships successful requires choosing the appropriate events, designing the
optimal sponsorship program, and measuring the effects of sponsorship. Because of the
number of sponsorship opportunities and their huge cost, many marketers are becoming
more selective. The event must meet the marketing objectives and communication strategy
defined for the brand. The range of objectives is varied: to increase awareness, to build and
image, to improve or maintain relations, to increase sales and open closed markets, to attract
distributors or agents. It must have sufficient awareness, possess the desired image and be
able to create the desired effects. The audience must match the target market and make
favourable attributions for the sponsor´s engagement. An ideal event is also unique but not
encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects
of enhances the sponsor´s brand or corporate image.
Many marketers believe the marketing program accompanying an event sponsorship ultimately
determines its success. At least two to three times the amount of the sponsorship
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expenditure should be spent on related marketing activities. Event creation is a particularly
important skill in publicizing fund-raising drives for non-profit organizations. Fund-raisers
have developed a large repertoire of special events, including anniversary celebrations, art
exhibits, auctions, benefit evenings, book sales and so on. More firms are now using their
names to sponsor arenas, stadiums and other venues that hold events, spending billions of
dollars for naming rights to major sports facilities. But as with any sponsorship, the most
important consideration is the additional marketing activities.
It is challenge to measure the success of events. Supply-side methods for measuring an
event´s success assess the media coverage, for example, the number of seconds the brand
is clearly visible on a TV screen or the column inches of press clippings the mention it.
These potential “impressions” can translate into the dollar cost of actually advertising in
the particular vehicle. Although supply-side methods provide quantifiable measures, equating
media coverage with advertising exposure ignores the content of the respective
communications. The advertiser uses media space and time to communicate a strategically
designed message. Media coverage and telecasts only expose the brand and do not necessarily
embellish its meaning in any direct way. The demand-side method identifies the
sponsorship´s effect on consumers´ brand knowledge. Marketers can survey spectators to
measure their recall of the event and their resulting attitudes and intentions toward the
sponsor. (Kotler and Keller, 2016, Smith and Zook, 2012)
8.3 Objectives of sponsorship
It can be stated that the sponsorship has two basic communication objectives: to generate
awareness and promote positive messages about the product and the company (see Table
8-1). Sponsorship and advertising, there are many differences - advertising is under the full
control of the company. Effective sponsorship must be accompanied by other communication
activities.
When selecting a sponsorship partnership, it is essential that both parties are at ease with
each other´s standing and that the target audience would not be surprised or alienated by
the choice of partner. This relation is known as the sponsorship fit. Therefore, the company
should carefully analyze the common association of the brand and the sponsored event or
institution. (Karlíček and Král, 2011, p. 143) For example, a product for the higher income
demographic group will be supported by the sponsorship of tennis, golf or art, while sponsorship
of popular music festivals is typical of products for young people.
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Table 16: Objectives of sponsorship
The communication
objectives
of the
company
Public
Public awareness of the company increase
Company image support and enhance
Public perception of the company change
Interest in local affairs
Business relationships and
their subjects
Promoting trade relations
Company hospitality
Trade name presentation
Employees
Improving relations with employees and their moti-
vation
Recruitment enhancing
Help for sales success
Opinion leaders and decision-
makers
Media attention increase
Counterbalance to the negative publicity
The pressure on policy makers and stakeholders
Personal goals of top managers
The objectives
of marketing
communica-
tion
Awareness creation
Awareness among current customers increasing
Awareness among potential customers increasing
The confirmation of leading market position
New product awareness increasing
Brand image
Brand perception change
Connecting brands with a specific market segment
Sales and market share
Generating interest in trying a new product
The increase in sales and market share
Source: Pelsmacker, Geuens and Bergh (2003, p. 334)
Sponsorship can establish awareness and help to build a brand and its presence in a
market. It can also generate goodwill and affection if managed correctly. Sponsorship programmes
can be used for employee motivation schemes. Sponsorship is more effective than
advertising of a CPT basis and can also engage customer if the sponsorship is leveraged
into other environments such as websites, games and user-generated content. Sponsorship
can be used to spread awareness over global markets or local niches.
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Sponsorship cannot close sales. In only creates awareness. It can carry only a very limited
message, usually just a brand name, although some brands leverage the sponsorship
into many diverse aspects, which allows more detailed brand value messages. The message
cannot be controlled, e.g. a football hooligan wearing a club shirt with a sponsor´s brand
can be on the front page of a newspaper attacking a police officer. Guerrilla marketing can
also damage the sponsor´s impact. It is not so easy to change a message or to exit a sponsorship
programme quickly (unless carefully planned). As with PR, there is a lack of control,
as strikes, riots, weather and media all affect the impact of sponsorship. (Smith and
Zook, 2012)
8.4 Selected types of sponsorship
All sector of society can be targeted and reached through sponsorship. Just about anyone
or anything can be sponsored. The obvious areas are sport, the arts, education, community
and broadcast.
• Sports sponsorship is the most famous. Companies can sponsor a football contest,
teams, athletes, sports programs (e.g. O2 Extraliga ice hockey, Škoda Auto as the
main partner of cycling race Tour de France). On the other hand, a sponsorship of
sporting events has many disadvantages and produces a range of threats. It should
be noted that sometimes sportsmen attract media attention. It is not always to the
benefit of the sponsor.
• Cultural sponsorship is the support of theaters, museums, galleries, orchestras, festivals
and cultural events, exhibitions, libraries and so on. It can be a support to individuals,
events or culture areas (e.g. RWE Transgas as a partner of Prague Spring
Music Festival). (Přikrylová and Jahodová, 2010, p. 133)
• Media and programs sponsorship is typical of some countries (also in the Czech
Republic), where the channels are owned by the government and advertising is prohibited.
Sponsors are very closely associated with the program, so the audience
thinks that the sponsor is actively involved in its preparation (e.g. autumnal sponsorship
of the weather forecast by the producer of medicine against flu and cold).
Viewers prefer media and programs sponsorship to classical advertising. According
to research, the effect of this form is only if there is a long-term relationship between
one exclusive sponsor a program.
• Professional sponsorship or the business plan and career growth support with a
view to future participation in the profits of the project (project of Siemens company
- the participation of large enterprises in international research and development cooperation).
(Přikrylová and Jahodová, 2010, p. 133)
• Commercial sponsorship is a project of partners´ support which focused on the
consolidation of long-term business relationships (such as sports club sponsorship).
(Přikrylová and Jahodová, 2010, p. 133)
• Ambush marketing or guerrilla sponsorship. Occasionally a competitor will try
to divert the audience´s attention to itself by implying that it is sponsoring the event.
Sponsorship
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It is called ambushing. Ambush marketing, a term first coined by marketing guru
Jerry Welsh, has not really been rigorously defined. However, it broadly refers to a
situation in which a company or product seeks to ride on the publicity value of a
major event without having contributed to the financing of the event through sponsorship.
It is typically targeted at major sporting events - like the Olympic Games or
the world cups in various games - and is a strategy adopted by rivals of the official
sponsors. What forms does ambush marketing typically take? In its more crude
forms, ambush marketing could involve unauthorised use of logos or designs associated
with the event. More often, however, ambush marketing involves more subtle
forms of confusing or misleading the public about who are actually sponsoring the
event.50
For example, during the 1998 soccer World Cup it was common for firms
to use World Cup events in their advertising or sales promotions without actually
sponsoring anything to do with the event itself. (Blythe, 2003, p. 122) An example
can be also the classic 1984 ambush by Kodak when it sponsored the ABC TV
coverage despite Fuji being the official Olympics sponsor. In 1988 Kodak was the
official Olympics sponsor while Fuji sponsored the US swimming team. (Smith and
Zook, 2012)
CASE STUDIES
Absolut vodka & Lady Gaga tour
Absolut has always pushed the boundaries of contemporary culture through creative
collaborations with artists spanning art, music and fashion. Beginning in 1985, when Andy
Warhol created the first in a series of iconic advertisements inspired by the Absolut bottle,
Absolut has collaborated with more than 550 artists on over 850 commissioned projects.
With its new brand ethos “Transform Today”, Absolut transforms the way the brand collaborates
with artists, and strengthens its effort to connect to global audiences through the
common language of art. Sharing a vision to inspire artistic transformation and connect
with fans through art, music and fashion, Lady Gaga and Absolut created an innovative
partnership to connect with the creative spirit in all of us via a multi-faceted collaboration.
Recognized by Forbes in 2013 as the most powerful musician in the world, Lady Gaga is a
groundbreaking creative force and global superstar. For Absolut, the opportunity to partner
with an artist at Lady Gaga’s echelon was simply too good to pass up. As the exclusive
sponsor of the “Absolut ARTPOP Lounge”, a VIP Seating area built into the stage, Absolut
had high visibility integration into Lady Gaga’s performance at each show. But their partnership
with Lady Gaga extended much further beyond the stage, into social channels, retail
relationships and hospitality.
50
Ambush marketing [online]. [cit. 25th April 2014]. Available at: http://economictimes.indiatimes.com/de-
finition/ambush-marketing
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Key features:
• Category business exclusivity.
• Use of tour name and artist likeness.
• Naming rights to the ABSOLUT ARTPOP Lounge.
• Absolut promotional signature cocktails.
• Exclusive VIP hospitality, seat upgrades, and promotional tickets.
• Off-premise retail activations and promotions.
• Flyaway to experience Lady Gaga in Sweden.
• Social media posts to Lady Gaga’s 65 Million Facebook fans.
Results: 96M+ Impressions to date, 121 Media campaign placements, 500k+ Attendance
at live shows, 28 Sold out shows.51
Nissan and the UEFA champions league
In 2014, Japanese carmaker Nissan agreed a partnership with the Uefa Champions League
(UCL). The challenge was to create an integrated campaign that could be activated in
over 90 countries, deliver a strong business impact and bring to life Nissan’s core brand
pillars of “Innovation and Excitement”.
Nissan’s core objectives for the sponsorship were to drive brand familiarity, positive
opinion and purchase intent. The Uefa Champions League formed a core pillar of Nissan´s
overall marketing communications activities. Fans were given 'unexpected access' to the
biggest games and the biggest players in the biggest annual sporting event in the world.
After the first season, Nissan saw substantial increases in awareness and purchase intent.
Moreover, UCL fans increasingly perceived Nissan as an innovative and exciting brand.52
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 8. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
51
Live nation: Sponsorship [online]. [cit. 20th August 2017]. Available at: http://sponsorship.livena-
tion.com/work/absolut/
52
Sport Business: Sponsorship Works 2016 | Sponsorship Case Study | Nissan and the Uefa Champions League
[online]. [cit. 20th August 2017]. Available at: https://www.sportbusiness.com/sportbusiness-internati-
onal/sponsorship-works-2016-sponsorship-case-study-nissan-and-uefa-champions
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1. What method identifies the sponsorship´s effect on consumers´ brand know-
ledge?
a) The supply-side method.
b) The demand-side method.
c) The employee-side method.
2. Which factor does not belong in objectives of marketing communication?
a) Brand image.
b) Awareness creation.
c) Business relationships and their subjects.
3. How is it called, when competitor tries to divert the audience´s attention to itself
by implying that it is sponsoring the event?
a) Ambush sponsorship.
b) Professional sponsorship.
c) Commercial sponsorship.
4. Which element does not belong in benefits of sponsorship?
a) Lack of clutter.
b) Differentiation.
c) Decreasing productivity.
5. What type of sponsorship is backing of individuals, events or culture areas?
a) Sports sponsorship.
b) Cultural sponsorship.
c) Media and programs sponsorship.
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SUMMARY OF THE CHAPTER
After studying chapter 8 the students are able to define sponsorship, determine major
sponsorship decisions. Also they should name the objectives of sponsorship and its selected
types.
Sponsorship is a commercial relationship between the provider of finance – resources,
or services, and individual – events or organizations that in turn provide opportunities that
can be commercially exploited. It is a thematic communication tool, when sponsor helps
the sponsored subject to carry out his/her project and the sponsored subject helps to fulfill
sponsor´s communication objectives. Sponsorship is always part of the communication activities
with the expected marketing benefits for sponsor, and therefore sponsorship must
be taken into account as a separate element of the marketing communication mix. When
selecting a sponsorship partnership, it is essential that both parties are at ease with each
other´s standing and that the target audience would not be surprised or alienated by the
choice of partner. This relation is known as the sponsorship fit. Therefore, the company
should carefully analyze the common association of the brand and the sponsored event or
institution. Sponsorship can establish awareness and help to build a brand and its presence
in a market. It can also generate goodwill and affection if managed correctly. Sponsorship
programmes can be used for employee motivation schemes. Sponsorship is more effective
than advertising of a CPT basis and can also engage customer if the sponsorship is leveraged
into other environments such as websites, games and user-generated content. Sponsorship
can be used to spread awareness over global markets or local niches. All sector of
society can be targeted and reached through sponsorship. Just about anyone or anything
can be sponsored. The obvious areas are sport, the arts, education, community and broad-
cast.
ANSWERS
1b, 2c, 3a, 4c, 5b
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9 ONLINE MARKETING COMMUNICATION
QUICK OVERVIEW OF THE CHAPTER
The ningth chapter deals with online marketing communication, the last element of marketing
communication mix.
Online marketing communication refers to a set of powerful tools and methodologies
used for promoting products and services through the Internet. The characterization of online
customers is the content of another subchapter. Afterwards the differences between
online and off-line marketing communication are presented. An online community is a virtual
community that exists online. With respect to differences in online and off-line
communities, it is obvious that online communities are more based on shared interests,
while real-life communities and networks depend rather more on place (neighbourhood or
village) of shared ancestry/family ties. There are determined the advantages and disadvantages
of both these areas and also selected online tools are introduced. In the last subchapter
the websites, social media and marketing communication on social networks are cleared
up. Websites can help to establish the credibility of a brand, engage customer in a unique
way and convert them into lifetime customer and brand advocates. Combine this with social
media platforms, and the combination can be used to move customers up the ladder of
engagement and spread the word.
GOALS OF THE CHAPTER
1. To define online marketing communication with its specifications.
2. To determine characteristics of online consumers.
3. To distinguish differences between online and off-line marketing communication and to
name the main advantages, disadvantages and tools of both.
4. To emphasize the role of websites and social media in marketing communication.
KEY WORDS OF THE CHAPTER
online marketing communication, Internet, websites, social media, communities, relations,
applications, social networks, blogs, content
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Internet is a computer network infrastructure allowing the exchange of digital information
in the world. The Internet was originally developed for military purposes and to
communicate in the event of nuclear war and then applied for the exchange of information
in an academic environment. At present, it is an exclusive and independent medium which
is not owned or operated by commercial or government organizations. Internet has essentially
affect on all instruments of marketing mix. The most obvious impact of the Internet
is on marketing communication. Communication via the internet is gaining importance due
to the constant changes and dynamic environment, globalization, but also the development
and greater use of new technologies. Internet offers a new alternative way of marketing
communications to inform about products and to assist within purchasing decisions.
(Pelsmacker, Geuens and Bergh, 2003) Undoubtedly the most used Internet service is the
website and e-mail.
9.1 Online marketing communication definition
Online marketing communication refers to a set of powerful tools and methodologies
used for promoting products and services through the Internet. Online marketing communication
includes a wider range of marketing elements than traditional business marketing
due to the extra channels and marketing mechanisms available on the Internet. Online marketing
has outsold traditional advertising in recent years and continues to be a high-growth
industry. Online marketing communication is also known as Internet marketing, Web marketing,
digital marketing and search engine marketing (SEM).53
Online marketing communication can deliver several benefits such as:
• Growth in potential.
• Reduced expenses.
• Elegant communications.
• Better control.
• Improved customer service.
• Competitive advantage.
The broad online marketing spectrum varies according to business requirements.
Effective online marketing programs leverage consumer data and customer relationship
management systems. Online marketing communication has several advantages, inclu-
ding:54
• Low costs: Large audiences are reachable at a fraction of traditional advertising
budgets, allowing businesses to create appealing consumer ads.
53
Online marketing [online]. [cit. 25th April 2014]. Available at http://www.techopedia.com/defi-
nition/26363/online-marketing
54
Online marketing [online]. [cit. 25th April 2014]. Available at http://www.techopedia.com/defi-
nition/26363/online-marketing
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• Flexibility and convenience: Consumers may research and purchase products and
services at their leisure.
• Analytics: Efficient statistical results are facilitated without extra costs.
• Multiple options: Advertising tools include pay-per-click advertising, email marketing
and local search integration (like Google Maps).
• Demographic targeting: Consumers can be demographically targeted much more
effectively in an online rather than an offline process.
9.2 Online customer´s characterization
Global communications networks that create virtual space change our lifestyle and interfere
with our consumer and buying behaviour. The Internet allows a strong change in
the interaction between consumers and their interaction with companies. Indeed, it is a new
model of marketing communication in a hypermedia environment where consumers can
interact with a given medium while interacting with it and creating the environment they
use. (Vysekalová et al., 2011, p. 69-70)
Since its creation, the Internet has been providing an infrastructure for greater interaction
between the direct seller and the direct consumer. Virtual communities of consumption are
specific groups of virtual communities that focus exclusively on consumer interests and
which can be characterized as sister groups whose online interaction is based on a common
enthusiasm or knowledge of any particular consumer activity. For example, there are members
of an e-mail address sent by a collector of Barbie dolls who create one virtual community,
or of regular contributors to a site dedicated to wine experts. The results of the research
conducted by Kotzines summarize the four different types of virtual communities: (Vysekalová
et al, 2011, p. 69–70)
• Tourists – who do not have social links to a group and have only a superficial interest
or a temporary interest in that consumer activity.
• Mingler – people who fit in the group have strong bonds, but they have only a superficial
interest in the given consumption activity.
• Enthusiasts – They show great interest and enthusiasm for the consumption activity,
but have less social ties to the group.
• Insurgents – who have strong personalities linked to consumer activity as well as
to the group.
An online customer wants to quickly and comfortably find out about the product: the
need for the product to solve, the price of how the product looks and where it is bought. In
a flood of Internet content, it scans capture points in text, images, summaries of boxes and
spreadsheets. It is in "search mode", not tuned to a quiet browsing through the paper catalogue.
Therefore, it is necessary to be maximally concise and concise, the texts must be
drawn attractive and the main ones - supplemented by hyperlinks. What is the main added
value of the online environment is the ability to refer to other related content and to give
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the text a diverse context. Over time, however, customers begin their habits from online
environments to off-line usage. In TV ad, you do not have a call to visit a branch, but rather
a link to a product website. Off-line materials and catalogues are becoming increasingly
hesitant, relying on striking headlines and clear formatting. (Sálová et al., 2017, p. 30)
It is a well-known saying that if you have a good experience with a brand, you may tell
one person; but if you have a bad experience, you tell ten others. Today, through online
sharing of experiences, the experiences can be shared much more widely. In 2012 Smart
Insights reported that over 44 % of adults now use the web to share grievances about products,
with new customers expecting to interact with companies online and get a speed
response. At the same time, many companies are ignoring comments by customers made
on the social networks, with one survey showing that 95 % of customer Facebook posts
were ignored by brands. Some are even facilitating it; for example, McDonald´s asked its
Facebook followers and Twitter fans to share their experiences under a hash tag #McStories,
which was hijacked by customers complaining about negative experiences. (Chaffey
and Smith, 2013)
The report recommends that to minimize the impact of customer complaints: (Chaffey
and Smith, 2013)
• The customer service operation is equipped to monitor and engage with a targeted
spectrum of media.
• Companies fully understand where, why and how their customers are using social
media before making any social media marketing changes.
• A balance is struck across different types of media – telephone, email, web, social
network and mobile.
• The power of online communities is recognized, and customers are encouraged to
help each other.
• Relationships are nurtured with advocates who wield particular influence on the In-
ternet.
• Specialist tools are used to measure the impact of customers´ online activity.
Online marketing certainly has its own specifics, but it is still a person with all the personality,
attitudes, opinions, feelings and social background that makes use of the next option.
Generally, the analysis of online shops or e-commerce projects analyses the technical
side of the project and forgets a little about the man. (Vysekalová et al., 2011, p. 77)
9.3 Online versus off-line marketing communication
An online community is a virtual community that exists online. Its members enable its
existence through taking part in the rules of the community and behaviour of the group.
These groups share a concern or a passion for something they do and learn how to do it
better as they interact regularly. The group has something in common that makes them a
group. It might be an interest, a problem or a love for a brand. This common interest is the
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magnet. The stronger the magnet, the more members in the group. With respect to differences
in online and off-line communities, it is obvious that online communities are more
based on shared interests, while real-life communities and networks depend rather more on
place (neighbourhood or village) of shared ancestry/family ties. Furthermore, there seems
to be a difference in the value of online and off-line communities. In order to become a
truly valuable link, interaction must occur off-line as well as online. (Molenaar, 2013)
At the dawn of online marketing there was a sense that the Internet was somehow different
and separate from the rest of society. The whole thing operated under a variety of
assumptions regarding the independence of Internet activity from off-line activity, which
can be summarized in three famous rules:
• The separation of identity from reality, known as the Vega Rule (What happens in
Vegas stays in Vegas.).
• The separation of online activity from off-line personal reputation, using the Tour
Rule (What happens on tour stays of tour.).
• The separation of actor from action, with an acknowledgement that you could talk
about the action but not who was involved, by using the Chatham House Rule (Participants
are free to use the information received but neither the identity nor the affiliation
of the speaker(s) nor that of any other participant may be revealed).
This approach worked for the first few years of online marketing until the relative ubiquity
of access to the Internet, combined with the widespread plastering of URLs on everything,
led to what can only be described as an e-business singularity – what happens on
the Internet impacts on off-line brands, and what happens off-line is discussed online.
(Dann and Dann, 2011)
9.3.1 ADVANTAGES AND DISADVANTAGES OF ONLINE AND OFF-LINE MARKETING
COMMUNICATION
Given the amount of time people spend of the Internet, particularly on social sites such
as Facebook and Twitter, it makes sense to join. In. The average consumer tends to be way
ahead of most businesses in their use of social media. If your market is spending time on
these sites, so should you – go where your market is. Specific reasons why online marketing
communication works for business include: (Reed, 2012)
• Building trust. People always prefer to do business with people they know. Clients
and customers can get to know companies through their online presentation.
• Starting conversation. It is about conversation, not a lecture. A two-way dialogue
with the customers and prospects is much more effective than a one-way broadcast
of marketing message.
• Building communities and relationships. It necessary to think about market as a
“community of interest” and build around a particular topic related to the business.
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• Low-cost. Most of the tools are available either free or very cheap. The investment
is often in time rather than money.
There is no doubt off-line communication works. It is effective in achieving four critical
things:
• Reach, since newspaper, TV and postal communications are used by virtually all
consumers.
• Brand awareness through using high-impact visuals.
• Emotional connection with brand again through visuals and sounds.
• Explanation of the online value proposition for a brand. (Chaffey et al., 2009)
A further benefit is that for any give objective, integrated marketing communications
received through different media are more effective in achieving that objective. We mentioned
this cumulative reinforcement effect of integrated marketing communications when
referring to the 4 Cs coherence, consistency, continuity and complementarities. Having said
this, the disadvantages of using off-line communications to encourage online channel usage
compared to many online communications tools are obvious. In general the disadvantages
of off-line communications are:
• Higher cost. Return on investment tends to be higher for online communications
such as search engine optimisation, pay-per-click marketing or affiliate marketing.
• Higher wastage. The well-known expression about “half my advertising is wasted,
but I don´t know which half” may be true about off-line marketing, but it is not true
online if the right tracking processes are in place.
• Poorer targeting. Targeting by behaviour, location, time, search keyword, site and
site content is readily possible online. This tends to be more targeted compared to
most off-line media (apart from direct marketing).
• Poorer accountability. It is straightforward to track response online – off-line it is
expensive and error-prone.
• Less detailed information. The detailed information to support a decision can only
be cost effectively delivered online.
• Less personalised. Although direct mail can be personalised, personalisation is
more straightforward online.
• Less interactive experience. Most off-line communications are one-way – interaction
is possible online with the right creative. (Chaffey et al., 2009)
9.3.2 SELECTED ONLINE TOOLS WITHIN MARKETING COMMUNICATION MIX
The text below defines only three elements of marketing communication mix within
online environment.
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Advertising online
Advertising is changing all the time, and it the last years it has seen some massive changes
that challenge the nature of advertising itself. It is morphing into dialogues, social media,
user-generated content and a myriad of wonderful new ways of communicating with
customers. Customers still want relevant advertising to inform them, entertain them and
challenge them just as it always has. After all, advertising does inform, persuade and remind.
It can still, very quickly, help to build brands, raise awareness and nurture brand
relationships, and all in a relatively controlled environment. So, although it will not be the
same as before, there is a future for integrated advertising. This means that managers will
still have to be able to manage the development of an advertising campaign, which will be
explored after considering the new forms of advertising:
• Contextual advertising and behavioural advertising – marketers are now free
from the limitation of segmenting and targeting customers with “monochrome” classifications
such as 18 to 25 year old ABS1s. In addition to age and sex, location,
workplace and college, today marketers can target customers according to their actual
behaviour, interests and passions (by keywords used). As each targeting criterion
is selected, Facebook displays the approximate number of users that fit the profile.
Other online organizations, such as newspapers, can now serve very specific
ads to readers online determined by the words on the pages they read, the number of
pages they read and how often they read these pages. Ads can be selected according
to a customer´s changing status or status updates on Facebook. For example, a man
who announces to his network of friends that he is getting married or updates his
status with “I´m getting married” or I´ve just got engaged” will find that he is subsequently
served ads about wedding photographers, suit hire, limousines, romantic
honeymoon holidays and maybe even wild stag venues. This is contextual advertising;
it is also called behavioural advertising. (Smith and Zook, 2011, p. 282-288)
• Location-based advertising – for some time now, it has been possible for ads tailored
to geographic areas to be served online by Google, Facebook and other platforms.
This is called geo-targeting, which basically serves ads tailored to where website
users are geographically located. Location-based advertising, on the other hand,
uses location tracking technology in mobiles to target customers with specific ads
relevant to their actual location as they travel around. (Smith and Zook, 2011, p. 282-
288)
• User-generated ads – Chevrolet´s Tahoe opened up the concept by placing the winning
user-generated TV ad during the Superbowl. It is increasingly popular, arguably
because it employs the magic formula (identify needs, reflect them and deliver
them). Users are invited to create an ad, whether TV or press. The PR machine works
hard behind the scenes helping to spread the word of mouth as the final selections
are narrowed down to a winner. Social media communities ideally buy into it and
spread the word even further. Naturally, there are some disadvantages, as negative
ads can be created and posted for public viewing. It can be moderated, but as with
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most aspects of social media it is best to be transparent. (Smith and Zook, 2011, p.
282-288)
• Long-form ads – can help a brand stand out from the clutter and do not necessarily
cost more than traditional 30-second or 60-second ad, as, firstly, they can be repurposed
and, secondly, there is less need to buy media space. Absolut Vodka created
a 15-minute
• documentary commercial featuring Jay-Z called NY-Z; Kraft Foods Greek chocolate
brand Lacta created a 27-minute user-generated branded movie initially for online
consumption but eventually seen on local TV (free), as it generated so much buzz.
(Smith and Zook, 2011, p. 282-288)
• Short-form ads – Somebody had to do it sooner or later, and Miller beer did it – a
one-second TV spot during the Superbowl 2009. The ad cost a fraction of the 3
million dollars normally charged for 30-second spots during Superbowl. The ad, played
by actor Windell Middlebrooks, gave one second of inspiration and reminded
viwers that “High Life is common sense in a bottle”. (Smith and Zook, 2011, p. 282-
288)
• Sponsored TV – BBC now only considers commissioning new TV programmes that
satisfy their “find, Play, Search” Criteria. This includes finding the programmes or
user-generated content related to it across several social media platforms, sharing
them with friends, drilling down to new depths of knowledge, and encouraging usergenerated
creativity in everything from apps and widgets to more traditional usergenerated
content. New-staled sponsored TV programmes, like “Bud House” draw
on social media and UGC. (Smith and Zook, 2011, p. 282-288)
• Apps – the new ads – “apps” are useful software applications that provide, or allow
users to do, just about anything from a mobile phone, eg calculator, petrol prices
locator, music identifier, sports new, weather forecast, golf swing analysis, stock
market feeds, managing bills, learning a language, and “On this day”. Kraft Foods
iFood app offers help and reinforces the brand value. One of the most popular is
zippo´s app, which displays a flickering flame. (Smith and Zook, 2011, p. 282-288)
• Integrated mobile, apps, TV and social TV – apps extend the user experience beyond
the TV with a much wider array of engagement activities and, although the TV
programme may be over, prolong the sense of being in an audience or group, thereby
adding value, extending the customer experience, deepening engagement and boosting
satisfaction levels, awareness levels and, ideally, recommendation levels.
(Smith and Zook, 2011, p. 282-288)
• Postmodern ad – a new style of advertising, postmodern advertising, may at first
seem a little abstract, and certainly unconventional, as neither the user nor the product
is the hero. Old-fashioned ad people find it difficult to understand how an ad
that doesn´t appear to address a brand´s values or have any apparent link to the brand
can work. (Smith and Zook, 2011, p. 282-288)
• Creative ads – marketers need even more creativity. Some websites can be information
heavy, and therefore a quick creative ad can be a quick pleasurable experience.
So marketers have to be relevant and increasingly creative, challenging and
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sometimes contentious to break through the clutter. (Smith and Zook, 2011, p. 282-
288)
Sales promotion online
Sales promotion is big business. In fact, it is bigger than advertising in the UK. Sales
promotions, premiums, incentives and motivation schemes are used for both products and
services in consumer, business-to-business and industrial markets. Sales promotions are
action orientated, particularly as they often tempt the buyer to buy, or at least try, a product
or sevice. (Smith and Zook, 2011, p. 358-364)
Virtual gifts: Although marketers are puzzled by why consumers pay real money for
non-existent goods (virtual goods), there is an element of conspicuous consumption involved.
Marketers understand how this influences both off-line and online buyer behaviour,
particularly if it either is a collectable item or has status symbol attachment, or both. The
virtual American Greeting case demonstrates how the difference between the virtual world
and the real world is blurring all the time. The film The Matrix explained this in a more
dramatic manner. This is all brought back down to earth in the box opposite by Michael
Zeisser with a useful analysis of virtual gifts. (Smith and Zook, 2011, p. 358-364)
Social media: It has become an essential element of any sales promotion campaign, as
word spreads fast across social media platforms. Social media is “social”, and that means
people like to be sociable, by keeping in contact, sharing relevant information. In fact, people´s
image or status is increased if they have sourced “free stuff” or special offers, particularly
if the offers are limited offers. Spreading useful information about sales promotions
adds value to the connection, and people are deemed more worthwhile the more good
stuff they have to share, so sales promotions naturally lend themselves to social media.
(Smith and Zook, 2011, p. 358-364)
Direct marketing online
Direct marketing includes any marketing communications tools that interact directly
with customers. This includes direct response advertising, telemarketing and direct mail.
The growth of direct marketing, in general, and direct mail, in particular, has been fuelled
by:
• Tailor-made technology – online newsletters and e-mails as well as off-line
newsletters, newspapers and letters can be personalized by name and also by relevant
needs, for example, many years ago the US Farmer´s Journal´s 825 000 circulation
received a tailor-made magazine with a minimum of 2 000 and maximum of 8 896
different editions per issue. Essentially, the pig farmer´s edition would not carry features
or advertisements about cereal farming, etc. Farmers prefer their magazine to
carry relevant material. The advertisers like it, because it offers better targeting. The
magazine saves money on paper and post. The environmentalists might prefer it too.
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One day everyone might have their own personalized magazine. Personalized interactive
TV programmes are already running in Spain and France, while the Internet
provides personalized newspapers, and tailored online newsletters are common.
(Smith and Zook, 2011, p. 380-384)
• Profiling technology – Basic technology allows different mailing lists and databases
to be added together and even superimposed on each other. Lists can be merged, and
any overlap or duplications can be deduplicated. Geodemographics mix geographical
location, type of neighbourhood and demographic data such as age, income and
family life cycle. Other fields or layers of data can be added. Everyone fits into a
cluster, eg from the keying of an address the database identifies the neighbourhood´s
cluster type or profile. This geodemographic typecasting uses shorthand names to
identify cluster types. For example, a US database company classifies people with
mature families living in affluent suburbs as “pools and patios”, whereas poorer rural
area, are called “shotguns and pickups”. People living there may have aspirations to
move towards “golf clubs and Volvos”. (Smith and Zook, 2011, p. 380-384)
• The list explosion – The third factor fuelling the growth of direct marketing is the
proliferation of lists or databases available both online and off-line. The only restriction
is imagination, or one´s ability to define a target market or customer profile in
a range of different ways. For example, home decorators could be redefined as
“home movers”. The million or so UK home movers could then be reduced to those
moving into certain geographic locations or even neighbourhood areas, which might
indicate their propensity to undertake the decorating themselves. A list, or a section
of the list, can be hired or bought, and tested and/or refined by using certain software
packages. It is important to select and check lists carefully, since the quality of many
of the UK´s “cold” lists can be a problem, although data integrity is now much improved,
especially with newer lifestyle databases. (Smith and Zook, 2011, p. 380-
384)
• Integrated marketing – Direct marketing can, and should, integrate with other
communications tools. It can link different direct marketing tools to create a more
cost-effective method of marketing communications. Depending on the quality of
the lead, the lead can be followed up by mailing a brochure, or hot prospects might
be telephoned to set up an appointment or to invite them to an event. The lead generation
might be created in the first place by a direct mail offer that invites readers,
viewers or listeners to send in for a free gift. Some marketers maintain that 45 % of
business enquirers will buy within the 12 months. The challenge then lies in identifying
the hottest prospects and directing the sales force to the 1 out of every 2.2
enquirers who will buy within the 12 months, and then to follow up the other leads
over time. Identifying the hottest prospects or “screening” can be carried out by following
up with an outbound telephone interview to determine the prospect´s status.
Alternatively, the analysis can be carried out directly from the coupon if it was designed
to capture the required detailed information. The outbound phone call can
screen and ultimately fix an appointment for the sales or progress to the next appropriate
stage in the buying process. Alternatively, an inbound phone catering for an
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0800 or Freephone number can accommodate enquiries generated from either a direct
response advertisement or a mailshot. This is only the start. After the initial sale,
database marketing can help to keep in touch with customers as they move towards
a repeat purchase. Conservative estimates suggest that it is five times easier to sell
to an existing customer than to a new one. (Smith and Zook, 2011, p. 380-384)
• The constant search for cost-effectiveness – Ideally, costs should be measured
against results, not simply outputs. The cost of testing say a telesales campaign might
be, say, 10 000 pounds, but the result might be 2 % success or 20 new customers.
The cost per order or cost per customer in this case is calculated as 500 pounds. The
results, and costs, may vary if, for example, the telesales team is focused only on
appointment setting and the field sales team handles the rest. Telesales can be used
to support a sales force by servicing accounts over the phone instead of having a
sales rep visit every month. Telesales can also be used to generate or even screen
leads. (Smith and Zook, 2011, p. 380-384)
9.4 Websites and social media in marketing communication
Communication on the Internet can have various forms – forms such as websites,
electronic advertising letters, banners, PR articles, paid links and other formats. Many of
the above mentioned issues can be included into other elements of the marketing communication
mix. Therefore, for our purposes, we will include into this marketing communication
element websites and social media.
Websites can help to establish the credibility of a brand, engage customer in a unique
way and convert them into lifetime customer and brand advocates. Combine this with social
media platforms, and the combination can be used to move customers up the ladder of
engagement and spread the word. The website is a controlled environment. Added value
can be given to the site continually, so social media can help to create awareness and engage
customers all the way through a purchase and becoming an advocate. While the website is
generally not a tool for building awareness, it is a tool for nurturing awareness into relationships.
Social media, on the other hand, can create awareness, change attitudes and help
to convert prospects to customers and customers into lifetime customers. (Smith and Zook,
2012)
Websites are totally dependent on traffic. No traffic makes a website useless. Investment
is required for, first, traffic-building campaigns and, second, maintenance of the site with
fresh content. Equally, social media requires a continued feed of fresh content. This can be
resource hungry, and a yet there are a few models to indicate the optimum resource allocation
here. The usual issues of servers crashing, security hacker, scams and spammers jeopardizing
the control of the message are challenges, and constant vigilance is required.
Equally, conversations across the full social media spectrum need to be monitored and tracked
continually. Scope creep can mess up a website, as can poor content management, e.g.
out-of-date content left online. Maintenance is essential. (Smith and Zook, 2012)
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9.4.1 WEBSITES
The websites of the company could be considered as a tool of direct marketing because
they allow direct sales, they are interactive, they can customize the content and form according
to the individual needs and because there is a very good measuring of their effectiveness.
It is also possible to identify the websites as a tool of public relations because they
enable communication with key groups, such as employees, potential employees, journalists,
partners or customers. Websites, however, are also an advertising tool because they
are used primarily to enhance the brand image. Indeed, they are also an instrument of sales
promotion, because it is possible through websites to hand out online coupons, organize
marketing competitions, etc. (Král and Karlíček, 2011)
The quality of the customer´s experience, both online and offline, directly affects brand
image. Poor product quality and sloppy service destroy brands more quickly than any large
advertising budget can build them. Sloppy websites not only kill sales, but they can destroy
a brand. Whether it is broken links, long registration forms or confusing order forms, errorladen
websites all do serious damage. Web usability expert Jacob Nielesen identifies four
basic website factors that keep visitors satisfied and coming back again and again: 1) highquality
content, 2) easy navigation, 3) quick downloading and 4) updated information.
(Smith and Zook, 2012)
Among the principles of website presentation according to Král and Karlíček (2011, p.
182) belong these instructions:
• Before creating websites is necessary to determine their primary function and target
group.
• Websites must offer attractive and actual content to the target group.
• The content of the websites should be convincing and meet the stated objective.
• The websites should be optimized for Internet search engines.
• The websites should be user-friendly, i.e. clear, logical, accessible and intuitive.
• The websites should have aesthetic graphic design that matches the brand positio-
ning.
The microsites are a special type of company presentation on the Internet. This is a
website focused on smaller-scale presentation of selected, usually narrow category of products,
promotions or events. They usually have a different goal, graphics and Internet
address than the company overall websites. The microsites often represent the support of
complex communication campaigns. It is highly effective in practice to connect microsites
with the contest or interactive game (advergaming).
9.4.2 SOCIAL MEDIA
The social media is the biggest change since the industrial revolution. Online social media
can be defined as an open interactive online applications that support the formation of
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informal user networks. Users create and share in these networks, a variety of content, such
as personal experience, innovations sharing, experiences, opinions, videos, music or photos.
(Karlíček and Král, 2011, p. 182)
Social media are a group of Internet based applications that build on the ideological and
technological foundations of Web 2.0 and that allow the creation and exchange of User
Generated Content. In other words social media refer to a broad range of web based applications
and social networking sites are one of the many applications that are available.
Others include weblogs, content communities (e.g. You Tube), collaborative projects (e.g.
Wikipedia), virtual game worlds (e.g. World of Warcraft) and virtual social worlds (e.g.
Second Life). (Fill, 2011, p. 364)
Terminology and division of online social media is very confusing and inconsistent.
According to Karlíček and Král (2011, p. 182) the following groups of social media can be
defined:
• Social networks (Facebook, My Space, LinkedIn, etc.).
• Blogs (significant source of online WoM).
• Discussion forums (discussion of certain product categories - travel or automotive).
• Other online community (e.g. community focused on videos sharing - YouTube,
photo sharing - Tomato, games sharing - FarmVille, etc.). Online communities are
mainly used by companies to spread viral marketing messages.
Principles of online social media (Karlíček and Král, 2011, p. 189):
• Attractive content.
• Content must be in accordance with the communication objectives of the company.
• Content should cause viral spread.
• Content should always be “nourished”.
• The company should communicate with the users in active, interactive and credible
way.
9.4.3 MARKETING COMMUNICATION ON SOCIAL NETWORKS
Social networks are a new type of web applications. They evolved in the late 20th century,
but their massive development can be traced back to the first decade of the 21st century.
The predecessors were the news servers, online photo galleries, internet dating services,
etc. The current form of social networking is based on the relationships between users
(known as "friendship" in the case of Facebook, "follow" in the case of Twitter), content
creation by them and the minimal operator interference in their activities. A major difference
from the previous communication platforms is that the identity of users of social
networks is identical to their real identity. (Bednář, 2011, p. 10)
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Of the total time spent on the Internet, 22.5% of the time is spent on social networks and
blogs, 9.8 % in online games, 7.6 % reading emails, only 4.5 % on web portals, 4.4 %
watching videos and 4 % searching. Social networks and blogs visit 4 of 5 active Internet
users. As many as 53 % of active users of social networks follow a brand and 32 % follow
a celebrity. The main platforms in the Czech Republic are: Facebook, YouTube, Foursquare,
LinkedIn, Twitter and Google+, though the last two are known the least compared to
the world.55
Facebook
Facebook is currently the largest social network that allows you to tailor relationships
(whether personal or professional), communicate, share multimedia content, and provide a
source of fun (competitions, applications, etc.). From the point of view of companies, this
is a unique tool for communicating with existing and potential customers. Whether through
direct interaction or through marketing campaigns, such as buying a product or participating
in a company profile competition. There is plenty of advertising on Faceebook, but it
is important to choose the right streets to get the best results. The largest companies on
Facebook are companies in the field of small-business, technology and software education,
health care (basically everything related to health) and production. With the development
of the Internet in so-called “smart” mobile phones, the number of "mobile" Facebook users
is rising - more than 600 million now. It is therefore necessary to count on them. (Podzimek,
2014, p. 139-143)
Social Communication Opportunities on Facebook: (Podzimek, 2014, p. 139-143)
• Improving the company image.
• Brand building.
• The network is suitable for launching a new product, especially for specific target
groups (eg cyclists, mountaineers, athletes, women on maternity leave, etc.).
• An excellent tool for PR communications.
• Target specific groups according to their interests.
• Improved position on search engines.
• By appropriately selected communications, sales can be increased (or at least promote
sales).
Threats from social networking on Facebook: (Podzimek, 2014, p. 139-143)
• Necessary permanent maintenance and communication with fans.
• The risk of network abuse by own employees.
• The need to keep track of the frequent changes that appear on the network and to
adapt to them.
55
Web portal APRA, 2013. [online]. [cit. 21st May 2013]. Available at: http://www.apra.cz/cs/
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Company profile and marketing tools on Facebook are represented especially by FB
page and FB report. (Podzimek, 2014, p. 139-143)
FB page: The company profile serves for official brand communication with existing
and potential customers. The more the fans have, the more people the company is able to
reach through their communications. The basis of each profile is information about the
company that can be filled in the profile. However, emphasis should be placed on the quality
of the information, not on its quantity. An integral part of the basic “equipment” of the
profile is the used graphics on the profile and the opening photo. Many companies (unfortunately,
even the big ones) often forget that the quality of the pictures of these photos is
very important. They are the presentation and reflection of the company itself, reflecting
the company's unified visual style (corporate design).
FB report: Corporate profile management should be routine and conducted with respect
to the target audience of the company. Posts on the wall should meet these requirements
not only in terms of content (relevant information, images, communication), but also in
terms of time (when fans are most active - not only on specific days but also hours). Time
is also related to the frequency of contributions that should not be too low or too high. An
important part of the message is the interaction with fans - answering questions, responding
to comments, etc. Communication should always be decent and should be conducted by a
trained person, not only with knowledge from the company but also from the Facebook
environment.
YouTube
YouTube is the name of the world´s largest video sharing website. The growth of
YouTube can be largely attributed to the changes in media environment brought about by
advanced technologies in Internet and digital devices. (YouTube Study Club, Become a
Star with Content and Make a Profit from Advertising YouTube, 2015)
YouTube stands at the centre of those changes, promoting a mutually development relationship
between users who enjoy videos, creators, who make those videos, and advertisers.
It is through this relationship that YouTube provides a YouTube partnership opportunity
in which anybody can make profit by allowing advertisements on the video that they
created and uploaded on the YouTube site. In this first chapter, we will discuss the
YouTube environment, and how YouTube is structured. (YouTube Study Club, Become a
Star with Content and Make a Profit from Advertising YouTube, 2015)
The number of videos and users on the site continues to grow, which is great for businesses
looking to take advantage of the opportunity. Not surprisingly, it appears that YouTube
is replacing traditional television viewing for many users. According to Google, an average
YouTube viewer spends 164 minutes online every day; in contrast, viewers spend just 130
minutes per day watching traditional television. YouTube´s viewers come from all ages
and demographic groups. These viewers are active viewers. Yes, most people still watch
YouTube on their computers, but that´s changing. More and more users watch YouTube
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on their mobile phones while they´re on the go; the YouTube app is one of the most popular
applications for the iPhone. And an increasing number of people are watching YouTube in
their living rooms, as an increasing number of flat screen TVs and Blu-ray players come
with Internet connectivity – and a YouTube widget – built in. (Miller, 2011)
Redbull – example: Because Red Bull is an energy drink, their marketing centre around
promoting an active lifestyle that is full of well, energy. Their YouTube channel has over
4 million subscribers and reached a billion total video views in 6 years. Their most popular
videos are full of athletes, daredevils, and other risk takers doing awesome things, such as
climbing frozen Niagara Falls, building a wooden bike from scratch, and driving a race car
on ice.56
Playstation – example: Adweek named Sony´s Playstation YouTube channel as one of
the 10 best brand channels, so it´s a no brainer that there is a lot of wisdom any company
can learn from its almost 3,500 videos. One thing that Playstation does consistently is include
its logo in the left hand corner of its content, reinforcing its company branding and
reminding users who created the video.57
Twitter
Twitter is a form of “microblogging” – that is, the use of very short messages that are
limited in size by the system itself. A user who has signed up with Twitter can post and
receive messages to an entire network of contacts. Messages are limited to 140 characters.
They are intended to be brief status updates or a way to organize a gathering or conduct a
group conversation. Twitter posts – known as “tweets” – are text only. However, users can
easily post pictures along with their tweets through the “twitpic” feature. They can also
include links to other contents in their tweets. As with MySpace and Faceebok, users can
also choose to receive messages from people in their network, or block them if they become
excessive or annoying. (Lusted, 2011, p. 8-9)
Twitter has the potential to filter into every possible aspect of business as a versatile
communications platform and problem – solving tool. It has uses way beyond the marketing
and customer – engagement layer. Twitter can affect pretty much everything, from the way
enterprise software works to how project status is shared. It can fundamentally change
communication and problem – solving, as well as match resources, accommodate human –
resources challenges, and lower expenses. (U. S. Chamber of commerce, 2016, p. 303-319)
Twitter can have powerful effects on personal and professional networks. Sales professionals
can use it to generate leads, journalists can locate sources, publishers can discover
new content, and any business can create better relationships with customers. You can list
56
Smallbiztrends: 6 Companies Killing It on YouTube – What You Can Learn [online] [cit. 29th August
2017] Available at: https://smallbiztrends.com/2015/02/successful-advertising-campaigns-youtube.html
57
Smallbiztrends: 6 Companies Killing It on YouTube – What You Can Learn [online] [cit. 29th August
2017] Available at: https://smallbiztrends.com/2015/02/successful-advertising-campaigns-youtube.html
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to and harness the massive flow of ideas and information passing through Twitter so that
you can advance your business objectives. (U. S. Chamber of commerce, 2016, p. 303-319)
You can use Twitter to create ad-hoc communities, organize and publicize live events,
or extend an experience to a remote audience. You can sell directly – if you do it right – or
you can just develop an inexpensive listening and conversation post among the very people
whose problem your business solves. You can use Twitter to generate traffic to your
business´s website. You can use it to solicit feedback. It can even make your company and
brand easier for users to find on search engines such as Google. (U. S. Chamber of commerce,
2016, p. 303-319)
The Ellen Show´s Oscar selfie – example: Samsung may have pulled off the most
remarkable Twitter marketing stunt of all time. During the 2014 Academy Awards, host
Ellen DeGeneres was running around the event with her Samsung smartphone, taking hilarious
selfies (a self-portrait photograph taken with a smartphone or digital camera) as she
navigated the televised evet. The reason DeGeneres was doing this was not for comedic
relief alone but also because Samsung had sponsored the entire event and needed a representative.
The Oscars hashtag already had a significant amount of user-generated buzz coming
from the live television event, but Samsung wanted to make it epic.
Samsung gave DeGeneres a Galaxy Note 3, which she connected to twitter´s mobile
app. She then proceeded to run into the celebrity audience and announce that she was attempting
to break the record for most retweeted tweets ever while being on live television.
Until that point, the winner was last President Barack Obama´s “Four more years” tweet
with more than 770 000 retweets. Gathering stars such as Bradley Cooper, Jennifer Lawrence,
Meryl Streep, Julia Roberts, Brad Pitt, Angelina Jolie and Kevin Spacey, DeGeneres
took a selfie that will go down in the history books with more than 3.4 million retweets,
this tweet will be a difficult one to surpass. (U. S. Chamber of commerce, 2016, p. 303-
319)
Instagram
Instagram is a social network based on photos, not words. Although Instagram allows
hashtags, likes, and comments, you won´t see text-heavy updates or link sharing. Instead,
both individuals and brand alike let their photographs do the talking. In fact, many people
prefer Instagram to other social platforms because there´s less chatter.
Instagram gives companies an opportunity to show their brand´s creative side and think
outside of the proverbial box. Instead of attracting people with viral videos or discount
codes, they´re using colour and light. (U. S. Chamber of commerce, 2016, p. 349-350)
It´s true that you can snap a photo of just about anything, apply a funky ´70s retro faded
scratched film filter to it, and suddenly it´s “art”. A lot of otherwise boring photos have
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been made “interesting” by virtue of lens flare, faded colours, torn edges, and grain. However
– and here´s the cool part – if you actually take a good photo to begin with and then
add funk to it, you can end up with something truly remarkable. (Linaschke, 2011)
Adidas Originals – example: Adidas cemented their position as a key fashion figure in
the hip-hop industry with their latest Instagram campaign. Using the hashtag #ORIGINALis,
Adidas partnered with big names like Snoop Dogg, Desiigner, and Stormzy to highlight
and promote their Originals lineup. Though Adidas has different product lines for different
sports, like football and basketball, Adidas uses the video with Snoop Dogg, Desiigner, and
Stormzy to build their Originals brand as a totem of hip-hop culture. Partnering with influential
figures in the hip-hop world helps Adidas establish additional credibility and the
videos it has created for this campaign are intriguing and engaging.58
Amazon – example: Amazon ran an Instagram marketing campaign to thank their users
and fans for rating them #1 in corporate reputation. The ecommerce giant posted a simple
image showing their top-notch reputation ranking with a caption telling customers about a
new discount they created in celebration of their big win. This campaign, first and foremost,
is great because it´s a discount. It can be difficult to reliably turn Instagram engagement
into sales, but providing followers with a discount code or linking to a promotional pricing
page is one of the best ways to do it.59
Linked-In
LinkedIn is a place where Relationships Matter (the LindekIn slogan). It was developed
primarily for professional networking. When we look at its mission statement, LinkedIn´s
goal “is to help us be more effective in our daily work and open doors to opportunities
using the professional relationships we already have”. This is not a website that requires a
lot of constant work to be effective. It´s designed to work in the background and help us
reach out to whomever we need while learning and growing ourselves. The key is to set up
our online identity, build our network, and steadily take advantage of the opportunities that
most affect us or greatly interest us. (Elad, 2016)
Internet tools have advanced to the point where online communications within your
network is much more automated and accessible. Sites such as LinkedIn have started to
replace the older ways of accessing your social network. For example, instead of asking
your friend Michael to call his friend Eric to see whether Eric´s friend has a job available,
you can use LinkedIn to see whether Eric´s friend works for a company you want to contact,
and you can then use LinkedIn to send a message through Michael to Eric to accomplish
the same task. (Elad, 2016)
58
Wordstream: The 15 Best Instagram Marketing Campaigns of 2017 [online] [cit. 29th August 2017] Available
at: http://www.wordstream.com/blog/ws/2017/03/24/best-instagram-marketing-campaigns
59
Wordstream: The 15 Best Instagram Marketing Campaigns of 2017 [online] [cit. 29th August 2017] Available
at: http://www.wordstream.com/blog/ws/2017/03/24/best-instagram-marketing-campaigns
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Thus, LinkedIn is known generically as s site where job seekers can post their resumes,
but in actuality, it´s much, much more:
• It´s a place where businesses can sell their products.
• It´s a place where services can pick up new clients.
• As of 2016, it aggregates over 77 % of all jobs in America.
• Its population of 400 million (adding two new members per second) would make it
the fourth largest country on the planet.
• It´s place where brand builders of all stripes can build up their brands – whether the
brand is indeed a business offering a product or service, or just you yourself, complete
with whatever talents you stand to offer to hiring parties. (Nash, 2016, p. 1-2)
Knowledge Quiz SAP – example: Principle and motivation: Test your knowledge
about SAP online, targeting managers and finance consultants. The application generates a
SAP level certificate that the user can place on the profile. A quiz entry condition is to
become a follower of the application's company profile. Goal: 100 application users in 2.5
months. Tools: Manage Company Profile and Directly Address Potential Clients to Inbox,
PPC. Results: 102 users managed to manage profile and write to potential users inbox. PPC
was totally ineffective. The ad had more than 82,000 impressions but generated only 152
clicks, 82 users clicked on the application pre-tab in the Products section. And they only
got 15 real followers. The next step is to set up a group: SAP Education at LinkedIn. (Náplavová,
2014, p. 150-151)
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 9. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. Which element is not under the advantages of online marketing communica-
tion?
a) Multiple options.
b) Low costs.
c) Poorer targeting.
2. People who fit in the group have strong bonds, but they have only a superficial
in-terest in the given consumption aktivity are called:
a) Mingler.
b) Tourists.
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c) Insurgents.
3. What is not considered as disadvantage of off-line marketing communication?
a) Lower costs.
b) Poorer accountability.
c) Higher wastage.
4. Which one from the options can help to establish the credibility of a brand and
engage customer in a unique way?
a) No detailed information.
b) Websites.
c) Wild posting.
5. What is name of the world´s largest video sharing website?
a) Facebook.
b) Instagram.
c) YouTube.
SUMMARY OF THE CHAPTER
The students are now able to define online marketing communication and determine
characteristics of online consumers. After reading chapter 9 they also should be able to
distinguish differences between online and off-line marketing communication and emphasize
the role of websites and social media in marketing communication.
Online marketing communication refers to a set of powerful tools and methodologies
used for promoting products and services through the Internet. Online marketing communication
includes a wider range of marketing elements than traditional business marketing
due to the extra channels and marketing mechanisms available on the Internet. The Internet
allows a strong change in the interaction between consumers and their interaction with
companies. Indeed, it is a new model of marketing communication in a hypermedia environment
where consumers can interact with a given medium while interacting with it and
creating the environment they use. An online customer wants to quickly and comfortably
find out about the product: the need for the product to solve, the price of how the product
looks and where it is bought. Communication on the Internet can have various forms –
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forms such as websites, electronic advertising letters, banners, PR articles, paid links and
other formats. Websites can help to establish the credibility of a brand, engage customer in
a unique way and convert them into lifetime customer and brand advocates. Combine this
with social media platforms, and the combination can be used to move customers up the
ladder of engagement and spread the word.
ANSWERS
1c, 2a, 3a, 4b, 5c
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10 ALTERNATIVE FORMS OF MARKETING COMMUNICATIONS
IN DIGITAL ERA
QUICK OVERVIEW OF THE CHAPTER
The tenth chapter discusses about alternative forms of marketing communication like
guerrilla marketing, viral marketing, product placement, green marketing, experiential marketing,
content marketing and affiliate marketing. The concept of guerrilla marketing was
invented as an unconventional system of promotions that relies on time, energy and imagination
rather than a big marketing budget. The principle of viral marketing is therefore
interesting content of the message that the recipient does not perceive as commercial. In a
broader sense, green marketing refers to a specific type of marketing based on the principles
of traditional marketing but with a focus on organic products. Experiential marketing is the
process of identifying and satisfying customer needs and aspirations profitably, engaging
them through two-way communications that bring brand personalities to life and add value
to the target audience. Content marketing is the process of using different types of content,
such as commentary, reports, blogs, videos, slides, and methodologies in different formats,
either to build the brand or to attract, acquire, or engage target audiences. Affiliate marketing
is a type of performance-based marketing in which a business rewards one or more
affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
GOALS OF THE CHAPTER
1. To define guerrilla marketing and its selected forms.
2. To circumscribe principle of viral marketing with its techniques and aspects.
3. To identify product placement.
4. To understand green marketing with its rules.
5. To determine experiential marketing with two approaches to branding.
6. To illustrate content marketing with its three basic forms.
7. To explain affiliate marketing with its principles.
KEY WORDS OF THE CHAPTER
guerrilla marketing, viral marketing, product placement, green marketing, experiential
marketing, content marketing, affiliate marketing, brand, ambient media
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Alternative media, also known as ambient, emerging, new or non-traditional media, is
defined as creative, shocking, or surprising advertising that appears on unconventional surfaces
that categories of broadcast, print, or out-of-home. The term “alternative media” refers
to the fact that creative teams are no longer tied to a limited palette of surfaces that are
considered static or passive like traditionally delivered print and broadcast vehicles. The
traditional media categories, however, can have added or alternative properties. Broadcast
media, for example, can incorporate web addresses, QR codes, or social media, print can
also incorporate the web, QR codes, augmented reality, or social media into the design,
while out-of-home may employ mobile or digital as well as project three-dimensional
images, to name just a few. This unique partnership between traditional and alternative
vehicles injects a new level of creativity into traditional vehicles never seen before that
includes engagement, surprise, and interactive options. The ambient media represent the
use of, for example, Pump-Top TV, ATM machines, street and sidewalk graphics and stickers,
exercise equipment, coffee cups, shopping bags, grocery cart advertising, parking meter
advertising, sky promotions and so on. (Blakeman, 2015, p. 281)
The more notable salvations associated with ambient media include: (Blakeman, 2015,
p. 292)
• Exposure. Many alternative media vehicles are a part of the target´s daily landscape
when she travels to and from work or shops, while smaller or more personalized
vehicles deliver messages that the target has opted in to receive.
• Engaging. The attention-grabbing creativity creates viral and word-of-mouth opportunities
as consumers share the experience with others on social media, blogs, email,
or phone.
• Interactive. Many alternative options can get the product directly into the hands of
the consumer, creating a one-on-one dialogue between buyer and seller.
• Nonintrusive. Since many alternative media options are permission based or the
consumer chooses to opt in to receive advertising material, it is rarely considered
intrusive.
• Distinctive. The unexpected use of varied surfaces, shapes, and sizes can give and
advertised message fresh appeal.
• Creative. Because of the different surfaces and shapes ambient media can exploit,
it makes attracting attention easier and because of that is often more memorable.
• Niche markets. Brand-loyal consumers can give feedback on product performance
or updates, making them feel a part of the brand´s success.
The more notable deterrents associated with ambient media include: (Blakeman, 2015,
p. 292- 293)
• Clutter. Consumers see thousands of messages every day, so unless the creative is
spectacular or unique, it can blend into its surroundings and be missed.
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• Ethics. Many question the ethics behind some forms of ambient media techniques
such as guerrilla marketing, considering them so covert that consumers do not
always realize they are being exposed to advertisements or promotions.
• Value. Since many media options ad events are often temporary, it is only effective
if it is noticed, it is talked about, and or the target opts in to receive the message.
• Duration. Buzz lasts only as long as consumers are talking about the product.
• Mass reach. When used as a reminder vehicle, most are better at reaching a mass
audience, eliminating interactive and relationship-building opportunities.
• ROI. For many vehicles there is no way to determine whether vehicles were seen or
acted upon.
10.1Guerrilla marketing
Guerrilla marketing is an advertising strategy in which low-cost unconventional means
(graffiti, sticker bombing, flash mobs) are utilized, often in a localized fashion or large
network of individual cells, to convey or promote a product or an idea. The term guerrilla
marketing is easily traced to guerrilla warfare which utilizes atypical tactics to achieve a
goal in a competitive and unforgiving environment.
The concept of guerrilla marketing was invented as an unconventional system of promotions
that relies on time, energy and imagination rather than a big marketing budget.
Typically, guerrilla marketing campaigns are unexpected and unconventional, potentially
interactive, and consumers are targeted in unexpected places.
The objective of guerrilla marketing is to create a unique, engaging and thought-provoking
concept to generate buzz, and consequently turn viral. The term was coined and defined
by Jay Conrad Levinson in his book Guerrilla Marketing. The term has since entered
the popular vocabulary and marketing textbooks.
Guerrilla marketing involves unusual approaches such as intercept encounters in public
places, street giveaways of products, PR stunts, or any unconventional marketing intended
to get maximum results from minimal resources. More innovative approaches to Guerrilla
marketing now utilize mobile digital technologies to engage the consumer and create a
memorable brand experience.
Guerrilla marketing focuses on low cost creative strategies of marketing. Basic requirements
are time, energy, and imagination and not money. Profits, not sales, are the primary
measure of success. Emphasis is on retaining existing customers then acquiring new ones.
(Matušínská and Stoklasa, 2013)
The best known and most widely used definition is the definition by Jay Conrad Levinson
(2011, p. 6): guerrilla marketing is an unconventional marketing campaign designed to
achieve maximum effect with minimum resources. As a main principle Levinson argues
that the biggest investment is not money, but time, energy and imagination. In practice, this
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means that the ultimate cost of the campaign is the time spent on the idea how to impress
or attract customers. Therefore, we can say that guerrilla marketing is not about money, but
about the idea.
The tactics of guerrilla marketing include (Frey, 2008, p. 48):
• Strike at unexpected place.
• Focus on exactly-selected targets.
• Immediately pull back.
Guerrilla marketing also allows through its techniques to get side attention, cause panic
or stir up the public. Its essential feature is its low costs and balancing on the edge of legality.
The message of the GM campaign by Patalas (2009, p. 68) should:
• Clearly indicate who is the broadcaster.
• Include a statement, i.e. inform about the specific benefits.
• Be understandable.
• Entertain.
• Have a direct connection with the offer of products or services.
• Respect the ethical, cultural and religious values and match the performance capabilities
of the company.
• Correspond to the target audience.
• Be credible.
Selected forms of guerrilla marketing
During the rapid development of GM, several forms have appeared that are different
from each other but still retain the original idea of GM. The most interesting and usable are
described below.
Ambient marketing uses to promote a company so-called ambient media, which are
everyday objects from around the consumer used in a new and interesting way to communicate
a message. It aims to promote products in an unconventional way, in order to shock
and attract the immediate attention of a random person, the potential consumer. The target
group is mainly the younger age groups, which are more likely to spread the advertising
message further among their peers. Therefore, it occurs most often in discos, bars, toilets,
universities, theatres, etc. The basic ingredients of this format include humour and fun.
(Patalas, 2009)
Ambush marketing is a form of communication utilizing mass social events and actions
to parasitize on competition. One firm is the main sponsor of the event and spends
hundreds of millions of crowns on the promotion, the competitive company is trying to
promote its name for the same event without paying any sponsorship fees. Most often we
meet with this form of marketing for major events that attract millions of people from all
over the world such as the World Championships or Olympic Games. (Patalas, 2009)
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Astroturfing is marketing, respectively PR activity, which aims to persuade opinion
leaders about public attitudes to a particular topic, so for example, the editors of periodicals
inundate letters and emails from “readers”, which are in actuality written by only a few PR
experts who create fictitious names and accounts. The concept of astroturfing, referred to
as the guerrilla PR, originated from the name of artificial turf, which is used in sports arenas
and gives the impression of a real thick grass. Astroturfing specialists are also trying to
promote services, products, etc., by means of commercial communication, posing as a natural
response of customers – positive or negative customer comments in the discussion
forums, false assessment in web surveys, etc., and thus influence the opinion of ordinary
readers.
Buzzmarketing attracts the attention of consumers and the media to such an extent that
speaking and writing about your brand or company becomes entertaining, fascinating and
interesting topic for the media and consumers. The aim of buzzmarketing is to cause a stir
among the people and the discussion about the product. The subjects of spreading of the
information are media and people who discuss this product, promote it, and dispute its authenticity.
This form of marketing by word of mouth is successful because of the credibility
and unforced attempt to manipulate, as is often the case of advertising. (Hughes, 2006, p.
12)
Mosquito marketing is GM performed purely by small firms, which are with all the
marketing tools trying to be annoying for large firms (as annoying as mosquito).
Sensation marketing is a form of GM, which is trying to create a sensation for the
customers. It tries to use crazy resources (broken car in the middle of a busy road, appointed
crowd of demonstrators, etc.) to produce a large media response and subsequent acknowledgment
that the event was recorded and it is to promote a particular product or company.
Undercover marketing is a hidden form of marketing in which the information recipient
may not recognize that this is a promotion and it influenced him. The carriers of advertising
are mostly celebrities paid to use the product in public. The customer is affected by
this and spreads the information to his friends, because this form is natural for him and sees
it as a fact. Most important thing is, however, that this marketing action remains undetected.
If this happens, companies usually face a negative advertising because of the feeling of
deception and manipulation of the consumer. (Patalas, 2009)
Wild posting is characterized by the placement of a large number of posters at a single
concreting place, which aims to attract maximum attention. Wild posting is a relatively
inexpensive form of guerrilla marketing. (Rajčák, 2013)
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10.2Viral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing
techniques that use pre-existing social networks to produce increases in brand awareness
or to achieve other marketing objectives (such as product sales) through self-replicating
viral processes, analogous to the spread of viruses or computer viruses. It can be delivered
by word of mouth or enhanced by the network effects of the Internet. Viral marketing
may take the form of video clips, interactive Flash games, advergames, ebooks, brandable
software, images, or text messages.
The ultimate goal of marketers interested in creating successful viral marketing programs
is to create viral messages that appeal to individuals with high social networking
potential (SNP) and that have a high probability of being presented and spread by these
individuals and their competitors in their communications with others in a short period of
time.
The term “viral marketing” has also been used pejoratively to refer to stealth marketing
campaigns – the unscrupulous use of astroturfing online combined with undermarket advertising
in shopping centers to create the impression of spontaneous word of mouth
enthusiasm.
Advantages of viral marketing are low costs, quick spread of information, high efficiency
of targeting. And on the other hand, there is a crucial disadvantage such as loss of
information control which are spread among people. (Matušínská and Stoklasa, 2012)
For a campaign to be successful, it must take into account the following three aspects:
• Viral message needs to be based on the novel idea with great creative potential. But
it also depends on the design and choosing the appropriate format (text, audio, video,
etc.).
• Vaccination: the choice of media, but also target people who are susceptible to the
viral behaviour.
• Monitoring: the evaluation of the effectiveness of the action.
The principle of viral marketing is therefore interesting content of the message that the
recipient does not perceive as commercial. The centrepiece is the story or point that must
be interesting enough to provoke an emotion, to persuade to the viral spread. One of the
points of possible success is the uniqueness of the viral element because such communication
is much more memorable. Companies often make the mistake that it is not possible to
find the connection between the content of communication and subject (company), this
leads to misunderstanding and people don’t connect the viral communication with the company.
Other important factor is the timing that can guarantee success, but also failure. (Janouch,
2010)
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Viral marketing techniques include:
• Forwarding: to spread the message we use e-mail/SMS/social networks.
• Email - Challenge: E-mail contains a link to the page with the option of sending a
message to a friend.
• Call on the Web: a challenge to create an e-mail is directly part of the presentation.
• Viral web-link: placing a link to an interesting article or discussion.
The main reason why companies resort to the viral marketing are primarily low cost
(just the initial momentum and further distribution is already underway between people),
rapid dissemination of information and high efficiency among young people. Risk of viral
marketing is mainly in the fact that after the start of the campaign, the marketer has no
control over how the viral message spreads farther.
10.3Product placement
Product placement is a form of advertisement, where branded goods or services are placed
in a context usually devoid of ads, such as movies, music videos, the story line of
television shows, or news programs. Quality product placement puts the product in a positive
context and shows that the use of a product is a normal part of life of the hero of the
film. Although in our film distribution product placement picks up slowly, we expect the
significant development of a stronger interconnection with other promotional activities.
(Frey, 2008, p. 123)
Product placement has been applied for decades in the foreign film industry. It was first
implemented with greater success in the film ET the Extra-Terrestrial, where the main character
(alien) promoted candies Reese's, which sales increased by 65 % after the film was
aired. For some industries, product placement is particularly successful, such as the automotive
industry (film series with an agent James Bond - Aston Martin, BMW, and Ford),
the beverage industry (Coca Cola products in TV talent shows) and high-tech electronics
(Apple products in many films and TV series, and newly competitive products with Microsoft's
introduction of Windows 8). (Frey, 2011, p. 131)
10.4Green marketing
Back in the 1960s, trying to lead an environmentally conscious lifestyle, and especially
integrating green into one´s shopping, was a very fringe phenomenon. But it is now decidedly
mainstream – and changing the rules of the marketing game in a very big way.
In a broader sense, green marketing refers to a specific type of marketing based on the
principles of traditional marketing but with a focus on organic products. This concept also
includes a whole range of ideas, methods, and processes to meet the goals of the business
in the form of “green consumption” that leads the company to a spontaneous tendency to
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protect the environment and to efficiently use natural resources. (Jurášková and Horňák,
2012, p. 82)
Beyond making an environmentally friendly product, business owners can do other
things as part of their green marketing efforts. The following can all be part of a green
marketing strategy:
• Using eco-friendly paper and inks for print marketing materials.
• Skipping the printed materials altogether and option for electronic marketing.
• Having a recycling program and responsible waste disposal practices.
• Using eco-friendly product packaging.
• Using efficient packing and shipping methods.
• Using eco-friendly power sources.
• Taking steps to offset environmental impact.
Consumers who prefer to purchase green products even though they might be more expensive
fall into the “LOHAS” category. LOHAS stands for Lifestyles of Health and
Sustainability. LOHAS describes an integrated, rapidly growing market for goods and services
that appeal to consumers whose sense of environmental and social responsibility influences
their purchase decisions. These consumers are active supporters of environmental
health and are the heaviest purchasers of green and socially responsible products. They also
have the power to influence other consumers.
Ottman (2011) indicates the 20 new rules of Green marketing:
• Green is mainstream. Not too long ago, just a small group of deep green consumers
existed. Today, 83 % of consumers - representing every generation from Baby boomers
to Millennials and Generation Ys – are some shade of green. Moreover, there
are now finely defined segments of green consumers.
• Green is cool. Once a faddish preoccupation of fringe, green is not only mainstream,
it is chic. In fact, green consumers are early adopters and leaders who influence purchasing
behaviour.
• Green inspires innovative products and services that can result in better consumer
value, enhanced brands, and stronger company. Savvy managers no longer
consider the environment to be a burden that represents added cost and overhead –
but an investment that can pay back handsomely.
• Values guide consumers purchasing. Historically, consumers bought solely on
price, performance, and convenience. But today, how products are sourced, manufactured,
packaged, disposed of – and even such social aspects as how factory and
farm workers are treated – all matter.
• A life-cycle approach is necessary. Single attributes such as recyclable, organic, or
energy-efficient matter greatly, but do not mean a product is green overall. Recycled
products still create waste, organic strawberries can travel thousand miles, and CFLs
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contain mercury. So a more thorough, life-cycle or carbon-based approach to greening
is necessary.
• Manufacturer and retailer reputation count now more than ever. Consumers
are now flipping over packages, saying, “Who makes this brand? Did they produce
this products with high environmental and social standards?”
• Save me! Even the greenest consumers no longer buy products just to save the planet.
Today´s consumers buy greener brands to help protect their health, save money
or because they simply work better.
• Businesses are their philosophies. It used to be that companies were what they
made. International Business Machines. General Foods. General Motors. Now, businesses
and brands are what they stand for. Method. Starbucks. Timberland.
• Sustainability represents an important consumer need, and is now and integral
aspect of product quality. Green is no longer simply a market position. Products
need to be green. Brands need to be socially responsible. Period.
• The greenest products represent new concepts with business models with significantly
less impact. If we simply greening up the same old products we have been using
forever, we are never going to get to sustainability. We should adopt new ways of doing
business.
• Consumers do not necessarily need to own products, service can meet their needs,
perhaps even better. Consumers historically met their needs by owning products, but
concepts like e-books are starting prove that utility and service are what really matters.
• The brands consumers buy and trusty today educate and engage them in meaningful
conversation through a variety of media, especially via websites and online
social networks.
• Green consumers are strongly influenced by the recommendations of friends and
family, and trusted third parties. With rampant cynicism about traditional forms of
advertising and backlash in place against perceived greenwashing, savvy marketers leverage
purchase influencers and third parties like NGOs and especially eco-labelers.
• Green consumers trust brands that tell all. Today´s brands become trusted by practicing
“radical transparency”, disclosing the good – and the bad.
• Green consumers do not expect perfection. Consumers expect that the company will
set high goals, keep improving, and report on progress.
• Environmentalists are no longer enemy. Recognizing the power of the marketplace
to effect change, many environmental advocates willingly partner with industry, offering
useful guidance and expertise.
• Nearly everyone is a corporate stakeholder. No longer confined to just customers,
employees, and investors, publics of stripes are now corporate stakeholders: educators,
environmentalists, and children – even the unborn.
• Authenticity. Brands viewed as the most genuine integrate relevant sustainability benefits
into their products. That is why HBSC or Stonyfield Farm aim to reduce carbon
impacts of their operations.
• Keep it simple. Today´s consumers are cutting out the needless purchase, and getting
rid of the gadgets and gizmos that do not add value to their lives.
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In the context of Green Marketing, the concept of Greenwashing appears in marketing
practice. Green washing means forms of marketing communications in which “green public
relations” or “green marketing campaign” is misleadingly used to create the impression that
the company combines its activities with activities that have a positive impact on the environment.
In reality, this company spends more money on “green” advertising than on realistic
eco-friendly access to the environment. Greenwashing efforts can already be applied
by changing the product´s name or package that evokes the natural environment, but contains
harmful chemicals, to the preparation of campaigns that emphasize the socially responsible
and ecological behaviour of companies that damage the environment enormously
by their production. (Rajčák, 2013) If consumers want to be certain they are indeed buying
a green product, they should look for official certifications listed on the product packaging.
10.5Experiential marketing
It can also be also named as customer experience marketing. Experiential marketing
connects consumers with a product or brand thanks to their personal experience. The advantage
is that it gives consumers space to try their products before buying it. Experiential
marketing becomes a marketing method that is built on current customer experience with
products or services. This fact helps not only to increase the sales but also to build a positive
brand image. (Jurášková and Horňák, 2012, p. 72)
According to Smilansky (2009) experiential marketing is the process of identifying and
satisfying customer needs and aspirations profitably, engaging them through two-way
communications that bring brand personalities to life and add value to the target audience:
• Experiential marketing is an integrated methodology, always engaging target audiences
at their will through brand-relevant communications that add value.
• The experiential campaign is built around one big idea that should involve two-way
communication between the brand and the target audience in real time, therefore
featuring live brand experience at its core.
• The other marketing communications channels that are selected and integrated are
the amplification channels, which amplify the impact of the big idea (the live brand
experience – digital, PR, advertising, live broadcasting – TV, radio, online).
Experiential marketing also offers a new approach to branding. The traditional approach
to branding treats a brand as a static identifier of a company´s products through the use of
names, logos, and ad slogans. This service as an identifier – Brand = ID – is indeed a core
function of a brand. But brands are not just identifiers. Brands are first and foremost providers
of experiences. As a result, the ubiquitous logo-blasting approach to identify the product
and to gain mass attention is often inappropriate. In today´s world, it is not enough to
plaster brand name on dozens of products and line extensions. It is not enough to roll out
merchandise from T-shirts and toys to pins and key chains and so on. They need to relate
the brand to something the consumer cares about, thus incorporating it into the consumer´s
daily life. As shown in table below, this requires the use of all communication elements
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and of events and contacts to provide an integrated holistic experience: Brand = EX.
(Schmitt, 2000)
Table 17: Two approaches to branding
BRAND = ID BRAND = EX
Brands as identifiers
Names, logos, and ads
Awareness and image before purchase
Brands as experience providers
Names, logos, ads as well as events,
sponsorships and other customer contacts
Experiences during purchase and con-
sumption
Source: adjusted according to Schmitt (2000)
The term “experiential marketing” is commonly linked with engagement marketing. It
is a marketing strategy that focuses directly on consumers and encourages them to participate
in brand development. The philosophy of engaged marketing is based on transparency,
interactivity and active collaboration with the target audience. (Rajčák, 2013) And today,
it's on marketers to become stewards of the customer journey, and to build bonds with
customers wherever they are – whether that means engaging on social media, presenting a
unified experience across devices, or personalizing content and communications.
10.6Content marketing
Content marketing is the process of using different types of content, such as commentary,
reports, blogs, videos, slides, and methodologies in different formats, either to build
the brand or to attract, acquire, or engage target audiences. Content marketing is often
described as pull marketing – the opposite of push marketing. It is based on the principle
that buyers will ultimately reward companies for sharing relevant content with them in a
timely and accurate way without interruption or annoyance and with their permission. Engagement
of the target audience is usually the first stage of the process of content marketing.
The sharing and endorsing of content within an organization´s own networks is a
further advantage. The ultimate stage of the process is if the target becomes a lead as a
result of engagement with the content. (Doyle, 2016, p. 1333-134)
According to U.S. Chamber of Commerce (2016) content marketing encompasses all
forms of content that add value to consumers, thereby directly or indirectly promoting a
business, brand, products, or services. Content marketing occurs both online and offline,
but the free and simple tools of the social Web have opened up the ability for companies of
all sizes to compete alongside one another, not for market share but for voice and influence.
Today, content marketing focuses on creating content that is meaningful and useful to consumers
with promotion taking a backseat to adding value, particularly adding value to the
online conversation happening across the social Web.
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Content marketing includes the creation of a content management system, or hubs, and
related platforms on which to create, store, format, and distribute content for general and
specific audiences. Companies which create useful and entertaining content that is indirectly
related to their core product or service but which serves to embellish it, which is free
of direct commercial promotion, and which can enhance the audience experience and create
greater customer engagement and relationships, will ultimately enhance their brand.
(Doyle, 2016, p. 133-134)
Content marketing can be used by small organizations and large companies. With so
many different tactics, businesses of all sizes can tailor a mix that works for their product,
their audience and the resources they have available. For example, creating high-quality
blog content is an excellent way to provide resources for audience and make them more
intelligent. But just publishing the post on website won’t get the ROI company is looking
for. That content can featured in a monthly newsletter, promoted on social media pages, or
perhaps be repurposed into an infographic to be more visual and encourage more social
shares.
Content marketing comes in three basic forms – long-form, short-form, and conversations.
The forms of content marketing are constantly changing as new tools to create, publish
and share that content are launched and others are shut down. Enhancements and new
functionality are added to content publishing tools every day, which means the tools company
is using to create, publish, and share content today might not be the tools company is
using tomorrow. (U.S. Chamber of Commerce, 2016, p. 238-245)
Long-form content marketing includes all published content that is longer than a few
sentences and that offers deep value, such as blog posts, articles, ebooks, press releases,
white papers, presentations, videos, podcasts, webinars, and so on.
Short-form content marketing includes all published content with no more than a few
sentences and that communicates useful information, such as Twitter updates, Facebook
updates, LinkedIn updates, images, and so on.
Conversations and sharing content marketing can happen through conversations
about published content ad through the sharing of published content, such as blog comments,
forum comments, Twitter updates, link sharing via social bookmarking, comments
on videos and images, and so on.
Research shows that prior to making a purchase, consumers conduct the majority of their
research online. They read reviews from experts and everyday consumers. They search for
comparison-shopping sites, and they publish question on forums, blogs, social networking
profiles, Twitter, and more. Consumers can learn about products and services and decide
on which purchase is best for them in the privacy of their homes, either anonymously or
otherwise. It is entirely up to each individual. Within seconds, consumers can find honest
opinions through simple searches and by participating in conversations. (U.S. Chamber of
Commerce, 2016, p. 238-245)
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10.7Affiliate marketing
Affiliate marketing is a type of performance-based marketing in which a business rewards
one or more affiliates for each visitor or customer brought by the affiliate´s own
marketing efforts. The industry has four core players: the merchant (also known as “retailer”
or “brand”), the network (that contains offers for the affiliate to choose from and
also takes care of the payments), the publisher (also known as 'the affiliate'), and the customer.
The market has grown in complexity, resulting in the emergence of a secondary tier
of players, including affiliate management agencies, super-affiliates and specialized third
party vendors.
The original form of affiliate marketing was selling through clubs, associations and
networks, whether online or offline. Members within networks, clubs or associations tend
to trust relevant offers from within the group. For example, an insurance company might
ask a football club to encourage its members to buy its credit card. Each time a football fan
buys a card, the club gets a commission and the member gets a discount or a gift instead.
(Smith and Zook, 2012, p. 275)
Affiliate marketing extends the reach of a brand´s sales potential through a form of
multi-level marketing online (see Figure 10-1). Affiliates generate sales on a commissiononly
basis (commission range from 5 per cent to 30 per cent). Affiliate partners usually
have access to specific communities or target markets. The affiliates basically refer visitors
to the brand´s website, and every time the referred visitors buy the brand the affiliate gets
paid a commission. The affiliates use banners ads (usually supplied by the brand). E-mail
and PPC ad campaigns. (Smith and Zook, 2012, p. 275)
Image 15: The principle of affiliate marketing
Source: Full service digital company Starmedia [online]. [cit. 7th August 2017]. Available at: https://www.stark-
media.com/blog/why-you-should-offer-an-affiliate-marketing-program/
Alternative forms of marketing communications in digital era
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Some brands like to have their own affiliate networks (for example the company Amazon),
it could be called as In-house affiliate programmes. Many major brands list their
affiliate programmes on their websites under “Affiliate programme” or “Partner programme”,
which gives a full explanation of how it works, including log-in, commission
payments and so on. On the other hand Affiliate network programme is a collection of
companies that have affiliate programmes but are managed by one company. A lot of companies
want to affiliate programmes but they do not want to manage them (commissions,
payments and queries), which can be costly in terms of time, money and systems. (Smith
and Zook, 2012, p. 276)
The relatively risk-free concept is straightforward: (Smith and Zook, 2012, p. 275 - 276)
• Affiliate networks generate traffic to the client´s website via banner ads, PPC and e-
mail.
• Affiliate networks track this traffic closely (via tracking codes) and supply reports.
• Commission is paid against whatever the agreed goals are: traffic, leads or enquiries,
or actual sales. If sales conversions are the goal and no sales are generated then no
commission is paid.
• The only investment a marketer needs is 1) the copy about the company or products
to attract affiliates and 2) the banner adverts for affiliates to use on their sites.
Affiliate marketing is frequently overlooked by advertisers. While search engines, email,
and website syndication capture much of the attention of online retailers, affiliate
marketing carries a much lower profile. Still, affiliates continue to play a significant role in
e-retailers' marketing strategies. In today ´s fast-paced, electronic world, affiliate marketing
is a great tool for business.
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10.8Case studies of selected alternative forms in marketing
communications
The new trends as guerrilla marketing, viral marketing60
, product placement61
, green
marketing62
, green washing63
, experiential marketing64,65
, content marketing66
, affiliate
marketing were used to show some examples from practice.
10.8.1 GUERRILLA MARKETING
AXE: Axe Body Spray uses custom stickers attached to the classic “exit man” signs that
are so commonplace in establishments everywhere. The added stickers create a story about
the familiar exit man – and to think all this time we thought he was escaping from a fire!67
TINDER: Tinder grew from 5,000 to 15,000 users by seeding college parties. Tinder’s
early marketing strategy is very elaborate (and controversial), but the basic idea is that they
personally invited friends to download the app, then visited the best “party colleges” and
got attractive, influential figures on board, and the app took off.68
UBER: In 2013, Uber partnered with Cheezburger and ASPCA for an Uber Kittens
promotion, where Uber drivers delivered kittens to users in participating cities. These kittens
were delivered to users who then had 15 minutes to play with the kittens. The best
part? These kittens were also up for adoption. And Uber has already helped 30 kittens get
adopted so far. A win-win for everyone around.69
UNICEF: UNICEF Finland needed a campaign to raise awareness for children’s rights
and their welfare but wanted to so with minimum expenditure. To provoke and create
discussion, they placed 14 baby strollers across major cities in Finland that played the sound
of a crying baby. They placed the following message inside each stroller: “Thank you for
60
Viral marketing case studies teach sharing skills. [online]. [cit. 21st May 2014]. Available at: http://barn-
raisersllc.com/2012/10/6-viral-social-media-case-studies-marketers-listen/
61
Product placement as an effective marketing strategy. [online]. [cit. 21st May 2014]. Available at:
http://research-methodology.net/product-placement-and-brand-placement/
62
ibrandstudio [online]. [cit. 16th August 2017]. Available at: http://ibrandstudio.com/articles/starbucks-
green-marketing-campaign
63
Businesspundit [online]. [cit. 16th August 2017]. Available at: http://www.businesspundit.com/the-top-
25-greenwashed-products-in-america/
64
Marketing [online]. [cit.16th August 2017]. Available at: https://blog.hubspot.com/marketing/best-experi-
ential-marketing-campaigns
65
Econsultancy [online]. [cit.16th August 2017]. Available at: https://econsultancy.com/blog/66908-10-
inspiring-experiential-marketing-examples
66
Sales force blog [online]. [cit. 17th August 2017]. Available at: https://www.sales-
force.com/blog/2015/12/30-genius-content-marketing-examples-2015.html
67
Wordstream: 20+ Jaw-Dropping Guerrilla Marketing Examples. [online]. [cit. 26th August 2017]. Available
at: http://www.wordstream.com/blog/ws/2014/09/22/guerrilla-marketing-examples
68
Referralcandy: Guerrilla Marketing Tactics – 18 Top Case Studies and Examples (Updated!) [online].
[cit. 27st August 2017]. Available at: https://www.referralcandy.com/blog/guerrilla-marketing-tactics/
69
Referralcandy: Guerrilla Marketing Tactics – 18 Top Case Studies and Examples (Updated!) [online].
[cit. 27st August 2017]. Available at: https://www.referralcandy.com/blog/guerrilla-marketing-tactics/
Alternative forms of marketing communications in digital era
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caring, we hope there is more people like you. UNICEF - Be a mom for a moment.” The
campaign generated a huge response; it was reported on all media channels and reached
more than 80 % of the population within 2 days.70
FRONTLINE: Pet brand Frontline needed an affordable yet effective campaign to promote
their range of de-ticking products. Agency Saatchi & Saatchi were behind this campaign
which saw a typical image of a family dog sprawled across the floors of 3 of the
business shopping centres in Indonesia. The idea was simple; we are made to associate busy
shoppers walking across the 225 sq m image with those wretched fleas on our beloved pets.
The memorable ad clearly illustrates the brand’s message and product offering and in turn
got more attention than any of the brand’s previous pricey campaigns.71
IKEA: IKEA has been known for their creative and original marketing initiatives for
some time now but their 2006 campaign “Everyday Fabulous” really stands out. The idea
for the campaign was to improve the foundations of society by making everyday life that
little bit better and more comfortable. IKEA toured the streets of Manhattan and Paris and
used their products to decorate several settings such as windows on trains with curtains and
bus stops with sofas and pillows. By placing their decorative items in plain sight across the
city, IKEA cleverly increased their brand awareness.72
VOLKSWAGEN: In 2010, car giant Volkswagen created a campaign called ‘Speed up
your life’ with the slogan ‘What are you driven by?’ to promote their brand. The strategy
was to make every day mundane activities like taking public transport, speedier and more
fun by creating a ‘Fast Lane’. So what did they do? They turned the staircase at a subway
station into a slide, an ordinary lift into a rocket ship and supermarket trolleys into skateboards.
The innovative and entertaining campaign was certainly memorable with the ads
going viral.73
10.8.2 VIRAL MARKETING
CHRISTIAN DIOR: As viral marketing has evolved, it has been integrated with mass
marketing. In May 2012, Christian Dior released a YouTube video called ‘Secret Garden –
Versailles’, supported on the brand’s Facebook page, Twitter profile and magazine, DiorMag.
to generate awareness for the Fall collection. A ‘Making of’ video issued 10 days
70
Marketing-logic: 5 Fantastic Examples of Guerilla Marketing Campaigns [online]. [cit. 26th August
2017]. Available at: http://www.marketing-logic.com/marketing/5-fantastic-examples-of-guerilla-marke-
ting-campaigns/
71
Marketing-logic: 5 Fantastic Examples of Guerilla Marketing Campaigns [online]. [cit. 26th August
2017]. Available at: http://www.marketing-logic.com/marketing/5-fantastic-examples-of-guerilla-marke-
ting-campaigns/
72
Marketing-logic: 5 Fantastic Examples of Guerilla Marketing Campaigns [online]. [cit. 26th August
2017]. Available at: http://www.marketing-logic.com/marketing/5-fantastic-examples-of-guerilla-marke-
ting-campaigns/
73
Marketing-logic: 5 Fantastic Examples of Guerilla Marketing Campaigns [online]. [cit. 26th August
2017]. Available at: http://www.marketing-logic.com/marketing/5-fantastic-examples-of-guerilla-marke-
ting-campaigns/
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later with similar social media support. The 1st video received 17,000,000+ views; the
follow up video received 5,000,000+; social network enrollment experienced a huge increase;
all for a marginal investment relative to traditional marketing.
FORD FIESTA: Selects 100 socially vibrant individuals who are provided with the
European version of the Ford Fiesta 18 months prior to it being manufactured and released
in the USA. These socially media aware fanatics are encouraged to share their experience
with the Ford Fiesta over the 6 months on their Blogs, Twitter, Facebook, Flickr and
YouTube channels. The effort generates 11,000,000 social media impressions; 11,000 videos
uploaded, 13,000 photos posted and 50,000 “hand raisers” or “leads” who want more
information; 97% did not currently own a Ford.
OLD SPICE: “The Man Your Man Could Smell Like” featuring Isaiah Mustafa attracted
19,000,000+ views to date across all platforms according to Visible Measures. Perhaps
more interesting is the level of engagement demonstrated by the number of responses the
video received within the first 24 hours compared to other historic videos.
TOYOTA: Toyota in the UK put together a social media marketing program that saw
two bloggers attempting a 500-mile road trip in a Toyota iQ, all on a single tank of petrol.
The trip would take the two drivers to 18 UK cities and every step of the journey would be
shared through social media. It resulted in 64 blogs, including Wired, the New York Times
and Treehugger reporting the attempt. Toyota reaching a potential audience of over 105
million readers worldwide. It reached a possible 3.7 million in the UK alone. Traffic to the
Toyota iQ blog increased by more than 212 %.
EVIAN: Evian found great success with its Roller Babies campaign, which is the mostviewed
viral advertisement of all time. The video consists of computer-animated babies
doing a rollerskating routine to The Sugarhill Gang’s “Rapper’s Delight.” The video has
been viewed nearly 70 million times to date. The content of the video is only tangentially
related to the Evian brand. The babies perform their routine after a title card indicates that
drinking Evian water would make you feel as young and energetic as those babies. This is
one of the best viral marketing campaign examples because despite the video’s massive
popularity, Evian’s sales actually dropped drastically. This illustrates the difference
between a viral video and a successful ad campaign. Just because millions of people watched
the Roller Babies video does not mean that those people proceeded to go out and buy
bottled water. People are amused by the rollerskating babies but do not necessarily connect
that imagery to the Evian brand. It is possible that the target audience for a video of animated
babies is not the same demographic of people who would ever by Evian water under
any circumstances. The footage of the babies was no more relevant to Evian than it would
have been to any brand.74
74
Rebelgrowth: The Best Viral Marketing Examples [online]. [cit. 25th August 2017]. Available at:
http://rebelgrowth.com/viral-marketing-examples
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VOLVO: Jean-Claude Van Damme’s epic video doing the splits on two reversing
Volvo trucks amazed everyone when it was released in 2013. Who’d have thought a truck
video could secure over 76.4M views.75
PEPSI: A hilarious “Pepsi Max Test Drive Prank” to promote their ‘zero calorie cola in
disguise’ by disguising Jeff Gordon and taking a poor unsuspecting car salesman on the
test drive of his life. The video has over 43.3M views on YouTube and there have been
various follow up videos.76
DOVE: It had a lot of travel in Spain. The campaign shows real women from different
parts of the world like San Francisco, Shanghai, Delhi, London and Sao Paulo reflecting
on their own attractiveness. What Dove did was to place signs with the adjectives of “normal”
and “pretty” on the doors to stores and shopping centres in their cities. In order to
enter, the women had to choose which door to enter, according to how they saw and considered
themselves. And the protagonists explain their feelings when facing that decision and
the reflection on how they perceive themselves. This campaign has a more defined insight,
that is, a deep consumer motivation about the product. Dove gets with this message that
people capture, internalize and understand, a revealed “truth”. And all this is achieved with
a very original experience.77
QUESTIONS
1. What is the name of PR activity, which aims to persuade opinion leaders about
public attitudes to a particular topic?
a) Astroturfing.
b) Green marketing.
c) Publicity.
2. How is called the form of advertisement, where branded goods or services are
placed in a context usually devoid of ads, such as movies, music videos?
a) Wild posting.
b) Product placement.
c) Sensation marketing.
75
Branded3: The top viral marketing campaigns of all time [online]. [cit. 25th August 2017]. Available at:
https://www.branded3.com/blog/the-top-10-viral-marketing-campaigns-of-all-time/
76
Branded3: The top viral marketing campaigns of all time [online]. [cit. 25th August 2017]. Available at:
https://www.branded3.com/blog/the-top-10-viral-marketing-campaigns-of-all-time/
77
Marketingcatalyzers: 5 Examples of Viral Marketing [online]. [cit. 25th August 2017]. Available at:
https://www.marketingcatalyzers.com/magazine/en/2017/03/20/5-examples-of-viral-marketing/
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3. Advertising strategy in which low-cost unconventional means are utilized to convey
or promote a product or an idea is called:
a) Experiential marketing.
b) Green marketing.
c) Guerrilla marketing.
4. Consumers who prefer to purchase green products even though they might be
more expensive fall into:
a) GPEC category.
b) LOHAS category.
c) GEVES category.
5. An insurance company might ask a football club to encourage its members to
buy its credit card. Each time a football fan buys a card, the club gets a commission
and the member gets a discount or a gift instead. Which one from alternative
forms of marketing communication is it?
a) Affiliate marketing.
b) Content marketing.
c) Experiential marketing.
SUMMARY OF THE CHAPTER
After reading the chapter 10 the students are able to define guerrilla marketing, viral
marketing, product placement, green marketing. They should also be able to explain, what
the experiential, content or affiliate marketing is.
The objective of guerrilla marketing is to create a unique, engaging and thought-provoking
concept to generate buzz, and consequently turn viral. Viral marketing, viral advertising,
or marketing buzz are buzzwords referring to marketing techniques that use pre-existing
social networks to produce increases in brand awareness or to achieve other marketing
objectives (such as product sales) through self-replicating viral processes, analogous to the
spread of viruses or computer viruses. It can be delivered by word of mouth or enhanced
by the network effects of the Internet. In a broader sense, green marketing refers to a specific
type of marketing based on the principles of traditional marketing but with a focus on
organic products. Experiential marketing is commonly linked with engagement marketing.
Alternative forms of marketing communications in digital era
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It is a marketing strategy that focuses directly on consumers and encourages them to participate
in brand development. Content marketing is the process of using different types of
content, such as commentary, reports, blogs, videos, slides, and methodologies in different
formats, either to build the brand or to attract, acquire, or engage target audiences. Affiliate
marketing is a type of performance-based marketing in which a business rewards one or
more affiliates for each visitor or customer brought by the affiliate´s own marketing efforts.
ANSWERS
1a, 2b, 3c, 4b, 5a
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11 MARKETING COMMUNICATION PLANNING AND MA-
NAGING
QUICK OVERVIEW OF THE CHAPTER
The eleventh chapter aims to acquaint the students with marketing communication planning
and managing. Marketing communication mix is created to meet the particular marketing
and communication objectives. The aim of the creation of the marketing communication
mix is to find the optimal combination of various means of communication and their
use in a manner that corresponds to the market situation. The use of individual communication
mix elements also depends on the type of product and type of market, i.e. whether
the market B2C or B2B market is. The product life cycle also plays a crucial role.
First of all, it is important to know all stages of marketing communication campaign
planning in this order: situational analysis, targeting and target groups, budget, strategy of
marketing communication mix, coordination and integration, implementation and checking
of marketing communication campaign results according to defined objectives and target
groups.
GOALS OF THE CHAPTER
1. To describe the steps of marketing communication campaign creation, which concerns
situational analysis, targeting and target groups, budget, strategy of marketing
communication mix, coordination and integration, implementation and checking of
marketing communication campaign results according to defined objectives and target
groups.
2. To get acquainted with the concept of signmaking.
3. To focus on basic media concepts.
KEY WORDS OF THE CHAPTER
situational analysis, targeting and target groups, budget, strategy of marketing communication
mix, coordination and integration, implementation and checking of marketing
communication, communication campaign, communication agency, signmaking, DAGMAR
model, SMART, push and pull marketing communication strategy
comm
Marketing communication planning and managing
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There are many different approaches to building a marketing plan or, more specifically,
a marketing communications plan. There is no single common approach, but there are essential
elements that every marketing communication process must have.
The process of marketing communication campaign preparation consists of the
following seven steps: (Matušínská and Stoklasa, 2013)
1. Situation analysis
2. The objectives and target groups setting
3. Budgeting
4. Marketing communication mix strategy (strategy selection, marketing communication
mix elements, medial mix)
5. Marketing communications coordination and integration
6. Marketing communications implementation
7. The checking of marketing communication campaign results according to defined objectives
and target groups
11.1Situation analysis
Situation analysis involves researching the current environment into which the marketing
communications will fit. The situation analysis results serve as the basis for marketing
communication planning.
Situation analysis includes external and internal analysis. Internal conditions can be
partly influenced and controllable by the company. Analysis of internal environment
describes the internal situation (excellent product and good positioning, more recognizable
and memorable brand, loyal customers, tradition, sufficient financial resources for marketing
communication activities, participate in fundraising projects, successful communication
campaigns in the past, etc.). External conditions cannot be influenced and controllable
by the company. External environment strongly influences the form of company marketing
communication (product and communication activities of competitors, the legislative environment
in marketing communications and ethical codes of professional associations, the
popularity and use of media in the area, local customs, quantity and quality of communication
agencies, etc.).
11.2Objectives and target group setting
After analysing the situation through secondary and primary sources, the next step is to
define the objectives and target groups.
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11.3Objectives setting
Clearly there is a need to define objectives. Objectives are particularly important as they
are often used to brief external bodies such as advertising agencies. They would then develop
a creative campaign based on these objectives. Generally, all objectives need to be set
out in SMART terminology (specific, measurable, achievable, realistic, time specific).
(Fill, 2011)
Ideally objectives should be quantified in term of success of failure criteria. Timescales
should also be set. Clearly defined objectives make the management task of control much
easier. Drawing up objectives for the first time is a difficult task. In future years, the previous
year´s objectives and corresponding results will help to make the planning job a little
easier, as everyone has a better idea of what is realistic and what is not. Establishing clear
objectives is necessary to give a focus to the organization or division. Clear objectives also
give direction to subsequent creative efforts. Some marketing managers and agencies break
objectives into many different types. Two basic types of objectives are examined here:
marketing and communication objectives. (Smith and Zook, 2012)
Typical marketing objectives refer to sales, market share, distribution penetration,
launching a number of new products, and so on. For example, marketing objectives might
be: (Smith and Zook, 2012, p. 233-234)
• To increase unit sales of product/brand X by 10 per cent over the next 12 months.
• To increase market share by 5 per cent over the next 12 months.
• To generate 500 new enquiries each month.
• To increase distribution penetration from 25 per cent to 50 per cent within 12
months.
• To establish a network of distributors covering Germany, France, The Netherlands
and Italy during the first six months, followed by Switzerland, Austria, Belgium and
Luxembourg in the second six months.
Communication objectives typically refer to how the communications should affect
the mind of the target audience, e.g. generate awareness, attitudes, interest or trial. Again,
these tend to be most useful when quantified. DAGMAR (defining advertising goals for
measuring advertising response) and AIDA (attention, interest, desire, action) provide
yardsticks for communications objectives by trying to separate the various mental stages a
buyer goes through before buying. The mental stages suggested by DAGMAR and AIDA
can be seen in Table 18.
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Table 18: The models DAGMAR and AIDA
DAGMAR AIDA
Unawareness X
Awareness Attention
Comprehension Interest
Conviction Desire
Action Action
Source: Smith and Zook (2012, p. 234)
Here are some examples of communications objectives: (Smith and Zook, 2012, p. 233-
234)
• To increase awareness from 35 per cent to 50 per cent within eight weeks of the
campaign launch among 25- to 45-year-old ABC1 women.
• To position the service as the friendliest on the market within a 12-month period
among 70 per cent of heavy chocolate users.
• To maintain brand X as the preferred brand of photocopiers among at least 50 per
cent of current UK buyers in companies with 1,000-plus employees.
• To include Bulgarian wines in the repertoire of possible wine purchases among 20
per cent of ABC1 wine buyers within 12 months.
• To announce a sale and create 70 per cent awareness one day before the sale starts.
11.4Target groups setting
The success of communication campaigns depends on a clear definition of the target
group. It may be current or potential users of the product or brand, individuals or groups
deciding about purchase, etc. Their detailed characterization is an essential prerequisite for
further progress, i.e. to determine what, how, when and where we will communicate. Characteristics
of the target group can be described on the basis of segmentation criteria. The
issue of segmentation, targeting and positioning has been described in Chapter 2.
It is often talked about the marketing potential of specific target groups such as the elderly,
women, children, future parents, singles, etc.
11.5Budgeting
It is often said that “money oils the wheels of business” and business communications
are no different, ultimately being dependent on finance. There are several ways that a
communication budget can be formulated. One common approach is simply to match the
competition and spend approximately the same as any rivals. (Drummond and Ensor, 2005)
Having decided the overall plan for the promotional campaign, the marketer needs to
decide what the organisation can afford. The level of noise from advertising clutter means
that (unless the creative people are very creative indeed) companies must spend a certain
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minimum amount to be heard at all, so there is likely to be a minimum level below which
there is no point in spending any money at all. Table 19 illustrates some methods for setting
the budgets with their advantages and disadvantages. In the real world, marketers usually
adopt a combination strategy, using several of the below methods.
Table 19: Promotional budgeting methods
METHOD EXPLANATION ADVANTAGES DISADVANTAGES
Objective and
task method
Identify the objectives
to be achieved, then determine
the cost and effort
required to achieve
those objectives.
Has a logical basis,
and if carried out correctly
will achieve the
firm´s strategic goals.
Difficult to calculate
the necessary spend
to achieve the objective.
Time-consuming
and expensive in
terms of market re-
search.
Per cent of sales
method
The planner simply allows
a fixed percentage
of the company´s sales
to be used for promotion.
This promotional
budget increases as
sales go up, and decreases
a sales go
down. A very common
method of budgeting.
Simple to calculate,
also ensures that, if
sales drop off, costs
also drop.
Is based on the false
premise that sales
cause promotion, rather
than promotion
causing sales. Logically,
if sale fall promotion
expenditure
should be increased to
bring the customers
back in.
Comparative parity
method
The marketer matches
expenditure to that of
the competitors. Thus
the firm does not lose
ground if a competing
firm increases its
budget.
Ensures that the firm
remains on a par with
the competitors, and
does not waste ex-
penditure.
Takes no account of
changes in the market,
or opportunities
that might arise. I tis
not customer-orientated,
in other words.
Marginal ap-
proach
Marketer only spends
up to the point where
any further spending
would not generate
enough extra business
to justify the outlay.
This method would
maximise profit since
no excess spending
would result.
Extremely difficult to
calculate, given the
changing nature of
markets.
All-you-can-afford
method
The marketer spends
whatever money can be
spared from other activities.
Often used by
small businesses when
starting out.
Company cannot become
over-committed
or run into trouble by
relying on sales
which do not, in the
end, materialise.
Again, bears no relationships
to the state
of the marketplace.
Also relies on the
marketer being able
to persuade other departments
within the
firms to give up expenditure
on their
own pet projects.
Source: Blythe (2003, p. 39)
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11.6Marketing communication mix strategy
Strategy summarizes “how we get there” – how the objectives will be achieved. Strategy
drives tactics in the same direction. Strategy summarizes tactics. Communications strategy
helps to harmonize and integrate all of the tactical communications tools. (Smith and Zook,
2012) The strategy of marketing communication mix includes the choice of communication
strategy, the choice of marketing communication mix specific elements and in the case of
the use of advertising the right medial mix must be chosen.
Marketing communication strategy formulating
The business terms push and pull originated in logistic and supply chain management,
but are also widely used in marketing – marketing communication. A push–pull system in
business describes the movement of a product or information between two subjects. On
markets the consumers usually "pull" the goods or information they demand for their needs,
while the suppliers “push” them toward the consumers. (Matušínská and Stoklasa, 2013)
Push strategy involves promoting heavily to the members of the distribution channels, i.e. to
wholesalers, retailers and agents on the assumption that they will, in turn, promote heavily to the
end consumers. In this way the products are pushed through the distribution channel.
Pull strategy involves promoting heavily to end users and consumers to create a demand
that will pull the products through the distribution channels.
Push strategies tend to place the emphasis on personal selling and sales promotion, whereas
pull strategies tend to place the emphasis on mass advertising. The two strategies are
not mutually exclusive, but rather represent opposite ends of a spectrum, most campaigns
contain elements of both. (Blythe, 2003, p. 37)
11.7Selection of marketing communication mix elements
It is necessary to choose the appropriate combination of the marketing communication
mix elements due to previous steps in the strategic marketing communications planning.
Above all, it will depend especially on the type of product, marketing and communication
objectives, target group, financial resources, marketing strategy of the company, etc.
11.8Media selection
There is the use of advertising in most cases if the communication campaign is aimed at
the final consumers (B2C market). So the media selection should be very carefully considered
and chosen. The proper medial mix is a guarantee of communication campaign
success.
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Some principal media types, serving as independent channels for above the line advertising
are (see Table 20): (Kaftan, 2001, p. 231)
• The press (the news press, magazines) where the messages can appear in the form
of bordered advertisements or as classified line ads, financial reports and other economic
or technical information in national and regional newspapers and periodicals
or in “trade and technical” journals. Advertisements are sometimes printed loosely
and special leaflets (flyers, inserts) are enclosed inside a publication.
• Television which presents TV commercials in an informative and entertaining manner,
full of catch-phrases, catchy tunes etc. Advertisements can also appear on teletexts
or cable and satellite TV.
• Out-of-door posters which appear in the form of roadside stationary billboards or
on means of transport (painted posters on trams and buses).
• In-door advertising located in public covered territory (trains, planes, public transport,
shopping centers, consulting rooms, etc.).
• Cinema advertising which has for some time been on the decline due to competition
from TV and video. However, this type of advertising is now being revitalized at
multiscreen complexes which have started offering a variety of film packages and
use other attractions to lure back cinemagoers.
• Radio which only provides sound, but some audiences can be better reached throughout
the day by this means of advertising.
• Internet, mobile phone and ambient media (nontraditional media).
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Table 20: Basic advertising media (advantages versus disadvantages)
Medium + Reasons for using Reasons for not using
TV
Realism – sight, sound, movement,
repetition, regional zoning, entertain-
ing
Poor selectivity, detail often missed,
high costs long lead times, highly regulated
content, inflexible
Radio
Widespread use, active, local targeting,
relatively inexpensive, can involve
listeners
No visual content, often used only as
background,small audiences,lowpres-
tige
Out-door Low cost, localized, easily changed Low-attention capacity, limited segmentation
possible, vulnerable to vandalism,
poor image
News press Relatively inexpensive, short lead
time, wide reach, good for technical
detail
Passive, reproduction of photos maybe
poor, no dynamics
Magazines
Quality of reproduction provides high
impact, longevity, can associate a
brand with cultural icons among a
mass audience
Visual only, long lead times, do not
foster a relationship
Cinema High impact, captive audience Expensive, lacks detail
Internet
Inexpensive presence, active, allows
movement, sound and colour to attract,
fast information provision, can
have a sales facility
No national coverage, limited access
and not relevant for goods as perfume
and food
Mobile
phone
Good targeting, interaction, high flexibility,
low costs, high comfort for the
users, simply measurability, a database
building
Annoying, loss of users´ privacy
Word-of-
mouth
(opinion
leaders)
Doesn´t cost anything (usually because
it is not invested in)
A failure can be very costly to reputation
and purchases
Non-tradi-
tional
Abilitytodraw attention,it doesn´t annoy
customers for the present (it is
something new)
It could beunethical andillegal insome
cases.
Source: own formation according to Blythe (2003 p. 33-34)
The concept Signmaking is significant in the field of outdoor advertising. This word is
then used for the all advertising industry involving the physical production whose output is
some promotional element: signboard, billboards, neon signs, lettering or graphics on the
cars or shop windows.
The Signmaking includes:
• Light and non-illuminated advertising (hoods - decorative boards over the entrance,
signs, banners, signs, logos).
• Guidance systems and pictograms.
• Portable and mobile advertising (printing on cars, trains, planes, portable stands,
etc.).
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Basic medial terms
Some media indicators have been mentioned in the text of the communication objectives,
there are additional important media terms (Vysekalová and Mikeš, 2007; Levens,
2012):
• Advertising intermediary - there is a difference between the media and intermediary.
Media are communication channels which broadcast commercial message
(print, TV, radio, Internet, etc.), intermediaries are already specific types (channels)
of media (television - Nova, ČT, Prima, BBC, etc.).
• Body copy is a written persuasive commercial text in printed advertisements (magazines,
newspapers, billboards, leaflets, Web page, etc.). It's all the words. The
main text found in printed Ads.
• Classical media such as print, out-door, TV, radio.
• Cold media can influence receivers´ emotions to a limited extent (newspapers, magazines,
billboards, leaflets, etc.).
• CPT (cost per thousand) is a metric that calculates the cost for any media vehicle to
deliver one thousand impressions among a group of target customers.
• Digital media includes electronic media such as e-mail, Web advertising, and Web
sites.
• Electronic media such as TV, Internet, radio, etc.
• Gross Rating Points (GRPs) are a way for planners to approximate the impact of
media decisions and are the product of reach multiplied by frequency.
• Hot media can influence receivers´ emotions (TV, radio, cinema).
• Medial planning involves the creation of a media plan, which is a document that
describes how an advertiser plans to spend its media budget to reach its objectives.
• Medial plans – specify the types and amounts of media to be used, the timing of
media, ant the geographic concentration (national, regional, or local).
• Prime time is the daypart (a block of a day's programming schedule) with the most
viewers and is generally where television networks and local stations reach much of
their advertising revenues. The term prime time is often defined in terms of a fixed
time period – for example, from 19:00 to 22:00 (Central and Mountain Time) or
20:00 to 23:00 (Eastern and Pacific Time) (7 p.m. to 10 p.m. or 8 p.m. to 11 p.m.).
• Ratings are the percentage of the total available audience watching a TV show or
tuned in to a radio program.
• Reach is a measure of the number of people who could potentially receive an ad
through a particular media vehicle.
• Teleshopping is an infomercial form of television commercial, which generally
includes a phone number or website. Long-form infomercials are typically between
15 and (more commonly) 30 minutes in length. This phenomenon started in the United
States, where infomercials were typically shown overnight (usually 2:00 a.m. to
6:00 a.m.), outside of peak prime time hours for commercial broadcasters.
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• Zapping is the practice of quickly scanning through different television channels or
radio frequencies to find something interesting to watch or listen to. Modern viewers,
who may have cable or satellite services beaming down dozens if not hundreds or
thousands of channels, are frequently channel surfing. It is common for people to
scan channels when commercial broadcasters switch from a show over to running
advertisements.
11.9Marketing communications coordination and integration
At this stage, all activities are identified and coordinated. Then it must be determined
who will perform the task (own marketing department/communication agency) including
the establishment of a timetable.
There are many types of communication agencies, including advertising, sales promotion,
direct mail, PR, corporate identity design, web design and more. Some call themselves
agencies and others, consultancies. Regardless of title, the barriers created by the separate
disciplines are falling. Corporate identity design consultants´ services are spreading into
advertising campaigns (to launch the new identities), sales promotion consultants are tempted
into direct mail, as this communications tool requires a constant flow of incentives,
premiums and sales promotions, advertising agencies are dropping the word “advertising”
and PR consultants are dropping “PR, as these terms restrict them from developing and
delivering the integrated marketing communications services their clients require. The overall
approach by, and structures of, advertising agencies is changing. Most agencies have
moved their total focus beyond the one-way “tell” medium of traditional broadcasting, with
its limited levels of interactive responsiveness. These agencies are now integrating more
closely with the “responsive disciplines”, such as direct mail, sales promotions and social
media. Moving from “tell campaigns” to “listening campaigns” requires a constant customer
dialogue nurtured and integrated across many media. (Smith and Zook, 2012)
As “ad agencies” are by far the biggest type of agency, TV consumption is still going
up and offline budgets are still far greater than online budgets (across the board), “advertising
agencies” will be used here (despite their restructuring into new forms of agency). The
larger ad agencies offer a full service, including creative, research and planning, media
planning and buying, and production and now social media planning. Some full service
agencies also have departments specializing in forecasting, market intelligence and
business planning, together with support services for the advertising campaign, including
point-of-sale design, sales literature, sales conferences and other below-the-line activities
such as sales promotion, PR and direct mail. The agency, like any other business, also has
other departments that are of little interest to the client, such as accounting and finance,
personnel, administration, etc. (see Table 21).
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Table 21: Aspects of various types of communication agencies
Aspect Full services Specialist services In-house
Management
and control
Easier, since it is all
under one roof
More work (coordi-
nation)
Total control, but
more work involved
Security Limited risk – sensitive
information is
shared with agency
More risk – more
people have access
to information
Minimal risk – no
outsiders
Speed/response Reasonably good Possible problems
if `a la carte =
more coordination
Fast, since all decision
makers are
available
Cost Expensive, high overheads,
but lower media
costs with agency
buying power
Cheaper, fewer
overheads
Cheaper, but less
media buying
power
Fresh views Yes Yes No
Expertise Yes (jack of all
trades, master of
none?)
Yes (fill in gaps in
client´s skills)
No (lack of specialized
knowledge)
Stress Less pressure/work-
load
Delegate some
workload
More stress – more
work
Source: Smith and Zook (2012, p. 183)
Advertisers can choose to use only their own in-house staff to run a campaign. Do-it –
yourself or in-house advertising also varies, as some advertisers prefer to contract out some
of their requirements to specialist services such as a specialist media scheduling and buying
agency known as a „media independent“. Similarly, the creative work can be put out to a
„hot shop“ or „creative shop“. Saatchi & Saatchi started as a creative shop. Alternatively,
the advertiser can go `a la carte by picking and choosing separate agencies with specialist
services for different parts of the process, e.g. using four different agencies for the research,
creative, production and media planning/buying stages. There are other types of specialist
agencies that focus on a particular industry sector.
A recent discrete development in the `a la carte option is the agreement of a large, wellknown,
full-service advertising agency to subcontract the large agency´s creative services
to a small communications consultancy on an ad hoc basis. This may last only as long as
the agency has spare capacity or is searching for extra revenue. Some clients demand that
their full-service agencies work alongside the client´s separate choice of media independents.
Some full-service agencies get only a portion of the full job. A recession can force
some clients to cut back their own in-house advertising department and operate a less costly
and more flexible and hoc project arrangement with various agencies. (Smith and Zook
2012)
11.10Marketing communications implementation
This stage is the planned communication activities putting into practice.
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11.11The checking of marketing communication campaign results
according to defined objectives and target groups
The planning process is completed when feedback is provided. Not only should information
regarding the overall outcome of a campaign be considered but so should individual
aspects of the activity. This feedback is vitally important because it provides information
for the next context analysis, which anchors subsequent campaigns. Information bed back
in a formal and systematic manner constitutes an opportunity for companies to learn from
their previous campaign activities, a point often overlooked and neglected. The issue of
measuring of marketing communication campaigns effectiveness is discussed in the chapter
No. 12.
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 11. Keep in mind
that only one answer is correct! The correct answers can be found at the end of this
chapter.
1. SMART means that the objective within marketing communication campaign
planning shoul be:
a) Special, measurable, achievable, realistic, time specific
b) Specific, measurable, achievable, realistic, time specific
c) Strategic, measurable, achievable, realistic, time specific
2. The stages of model DAGMAR are:
a) Attention, Interest, Desire, Action
b) Unawareness, Awareness, Comprehension, Conviction, Action
c) Unawareness, Attention, Comprehension, Conviction, Action, Feedback
3. The aim of push strategy is:
a) To promote heavily to the members of the distribution channels, i.e. to wholesalers,
retailers and agents on the assumption that they will, in turn, promote heavily to the
end consumers. In this way the products are pushed through the distribution channel.
b) Is to promote heavily to end users and consumers to create a demand that will pull
the products through the distribution channels. Promotional items that are distributed
to customers as a part of loyalty programs.
c) To support heavily own sales man to promote products to final customers.
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4. Signmaking could be predominantly included in:
a) Outdoor advertising
b) Merchandising
c) Cooperative advertising
5. Prime time is:
a) The part of day from 3 PM to 6PM with the most viewers (listeners), the price for
commercials is the highest.
b) The part of day with the highest number of present shoppers in the shops.
c) The part of day with the most viewers (listeners), the price for commercials is the
highest.
SUMMARY OF THE CHAPTER
The fourth chapter aimed to acquaint the students with the issues of marketing communication
planning and managing. After reading and study the chapter 11 students should
be able to name in proper order and to describe individual stages of the marketing communication
planning process. This process includes: situational analysis, targeting and target
groups, budget, strategy of marketing communication mix, coordination and integration,
implementation and checking of marketing communication campaign results according to
defined objectives and target groups. Knowledge, for example as situation analysis, targeting,
marketing communication mix and so on, is the part of previsous chapters or another
marketing subjects. New knowledge can be seen in marketing communication strategies
(similar to distribution strategies), medial terms and media selection. The following and
related Chapter 12 will deal with the marketing communication efficiency testing.
Pay great attention to the problematics of two different types of marketing communication
strategies because sometimes it could be confusing for students. First, it is important
to determine the type of market (B2C or B2B), then to identify the marketing communication
tools. In practice, the most common situation is when push and pull communication
strategy is combined and used toghether.
ANSWERS
1b, 2b, 3a, 4a, 5c
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12 MARKETING COMMUNICATION EFFICIENCY TES-
TING
QUICK OVERVIEW OF THE CHAPTER
The twelfth chapter aims to acquaint the students with marketing communication efficiency
testing. Marketing communication campaigns are often evaluated only for the commercial
success - sales increase. But is it the only goal that the company has? It certainly
isn’t. Other goals may be to increase brand awareness, enhance image or a complete change
in the perceived image, creating a new category of wants and needs, changing attitudes to
the brand or product, etc. When assessing the impact of the campaign, it is important to
take into account the characteristics of the target groups, which can significantly affect
communicated message. The role of research for marketing communications is on the one
hand to ensure effective use of individual communication forms and on the other to determine
the effectiveness of their use. Research results are then used for planning of further
marketing communications, for evaluation of overall communication strategy, and for use
of different communication tools.
First of all, it is important to know two basic indicators of communication campaign –
reach and impact, then to get knowledge of basic research methods and approaches. It is
recognized primary versus secondary marketing research and quantitative and qualitative
marketing research. In the area of marketing communication the great use of qualitative
methods with the impact on psychology can be seen more and more. This chapter also
provide knowledge related to marketing research process and contemporary psycho-physiological
methods.
GOALS OF THE CHAPTER
1. To determine the basic assumptions and indicators of communication campaign.
2. To classify research of marketing communications from a time perspective.
3. To provide basic methods and techniques in marketing communication research.
4. Focus on selected methods and techniques in qualitative research.
5. To describe briefly marketing research process.
6. To mention contemporary psycho-physiological methods that can be used in marketing
communication research.
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KEY WORDS OF THE CHAPTER
impact, reach, quantitative and qualitative research, secondary and primary research,
questioning, observation, experiment, pre-tests, interim tests, post-test, and tracking studies,
EEG, fMRI, GSR, facial EMG, ET
Research should facilitate the translation of how will people behave, because from the
perspective of measuring efficiency, it is not so important what people say but what they
do. In terms of short-term and long-term it may be a different question. In the short term
(tactical) perspective, we ask: have people registered our campaign? Have they connected
it with the brand? Changed their opinion about the brand? What did the campaign tell them?
Have we targeted the right group? The long term (strategic) point of view we are interested
in: Whether and how the campaign helps build a brand? Campaign is in line with the overall
corporate strategy?
In essence, it measures the quantitative and qualitative indicators of the effectiveness of
marketing communications. Quantitative measurements can be divided into two large
groups according to whether they measure the reach or impact of communication campaigns.
(Vysekalová, Herzmann and Cír, 2004, p. 14)
Table 22: Indicators of marketing communications reach
Marketing communications reach
Number (proportion) of persons
that encountered/met
communication



Demonstrates the potential
effect of marketing
communicationsUsually found out only in the
target group
Source: Vysekalová, Herzmann and Cír (2004, p. 14)
In practice, the reach of a campaign is mainly measured through the media indicators
(mentioned in the chapter on marketing communications planning). Its measurement is mainly
dedicated to communication and media agencies. These include rating, share, net reach,
GRP, etc. The reach of marketing communications in the use of media can be relatively
easily and accurately measured, even though it is a very costly affair. The annual cost of
the Media Project, which measures the reach of newspapers, magazines and radio stations,
is about CZK 20 million. However, the reach is not our main goal because we don’t just
want the sheer amount of people to see our communication, we want to actually change
their consumer behaviour, i.e. impact.
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Table 23: Marketing communications impact
Marketing communications impact
Number (proportion) of people
who remember communication



It expresses the effect of
communication
Changes in attitudes and behaviour
as a result of marketing
communications
Usually found out only in the
target group
Source: Vysekalová, Herzmann and Cír (2004, p. 105)
Both groups of indicators are in fact complementary, together they create a vivid picture
of the action of individual campaigns and the entire communication process. To a certain
extent, they are mutually conditional – there is no impact without the reach. At the same
time a large reach does not guarantee the desired impact, there are even counterproductive
campaigns. Also the correct targeting of communication campaign is very important. (Vysekalová,
Herzmann and Cír, 2004, p. 15)
When it comes to measuring the impact of advertising campaigns, two types of indicators
are used in practice. Some are oriented on the ad itself (direct indicators), the second
group focuses on measuring the impact of advertising on consumer attitudes and consumer
behaviour, specifically to achieve change in attitudes and behaviour (indirect indicators).
(Vysekalová, Herzmann and Cír, 2004, p. 15)
The group of direct indicators includes six kinds of indicators that can be primarily obtained
through questioning without much difficulty, these are:
• Knowledge of ads (ad awareness) - plays the key role among direct indicators, from
which it is easy to derive an overall evaluation of marketing communications. This
is based on the assumption that the person not knowing the ad may be affected only
indirectly (through public opinion). In practice, it usually detects spontaneous knowledge,
therefore whether people can remember a particular advertisement spontaneously,
"without help". It also monitors whether the ad was placed in the first place
(TOM - top of mind - the first to come to mind) or, if it was in the first two or three
places (the so-called TOP BOX). After testing spontaneous knowledge, we usually
test knowledge induced, "with help". Advertising can be recalled in the survey verbally,
visually, or by an audio-visual presentation of a product concerned. Percentage
of people who can remember an ad with help is usually higher than the percentage
of those who remember it spontaneously.
• Recognition of ads (ad recognition) - we are testing what part of the target group
connects properly the significant element of an ad (music, actors, environment, etc.)
with the brand or product that is presented in this advertisement.
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• Remembering or retrofitting ads (ad recall) – we are testing which features of the
advertisements for a certain class of brands or products respondents recall. We are
testing in particular to what extent the consumers remember our advertisement characteristics
compared to ads of competing companies.
• Slickness of advertising (ad likes / dislikes) - this indicator is important from the
viewpoint of the human emotions. Therefore, figuring out what people like and
dislike about our advertising, although this in itself does not necessarily mean effect
on attitudes or behaviour.
• Understanding advertising (ad comprehension) - this indicator is designed to detect
to what extent and what part of the target group understands communication, eventually
individual benefits that the advertising communicates about the brand and product.
We are therefore finding out the rational aspects of an advertising campaign
influencing the action.
• Credibility of advertisement (ad credibility) – we are testing which part of the target
group trusts the communication, but also the extent to which respondents identify
themselves with the contents communicated, with the people and action included in
the advertising. It is important to determine what is the frequency of certain opinions,
feelings and attitudes, and subjective interpretation of the elements of the ad.
In terms of measuring the impact of marketing communication on consumer attitudes
and consumer behaviour - indirect indicators, marketing communications generally seeks
to change and shift in five dimensions (Vysekalová, Herzmann and Cír, 2004, p. 18):
• Changes in brand or product awareness (brand awareness, product awareness).
• Differentiation of brand/product from the competition.
• Changes of the image and perception of brand personality or product providers
(brand image/brand personality).
• Changing attitudes to the brand or product (brand attitude, product attitude).
• Changes in consumer behaviour.
12.1Marketing communication research according to time
To test the communication campaigns in terms of time we use the pre-tests, interim
tests, post-test, and tracking studies.
Marketing research results can help communications agency in the preparation of the
campaign, and to verify the effectiveness of the selected arguments over the rational and
the emotional acceptance of the campaign, to a deeper understanding of the target group.
These are the results of the pre-test. In pre-tests we apply both qualitative and quantitative
techniques. The most commonly used qualitative are group discussions and individual exploration,
supplemented by various projective, boolean and scaling procedures. (Vysekalová,
Herzmann and Cír, 2004, p. 56)
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Tests conducted during the campaign validate its adoption by target groups and enable
potential to make the necessary corrections during the campaign. (Vysekalová, Herzmann
and Cír, 2004, p. 56)
Each evaluation of the communication campaign should be a mini study of current attitudes
and positions of the target group as compared to the initial situation. It should predict
the strength and direction of changes induced by the campaign in relation to the brand.
People have both emotional and rational relationships to brands, so we must collect the
feelings that inspire the brand, and how they are perceived (positioning). In regards to the
post-test, we are conducting the test in order to know where the brand is in a given point in
time, and in order to identify changes that have occurred. Tests used after the campaign
ended (post-tests) are thus finding its reach, whether it was properly targeted, analyse information
and motivational impact and are an important starting point for planning future
campaigns. (Vysekalová, Herzmann and Cír, 2004, p. 56)
Important role in terms of monitoring the development, progress and impact of communication
campaigns have long-term research - tracking studies. We are tracking the brand
awareness and purchase intentions. Usually it's a long-term, quantitative research, which
continuously calculates the results of a series of communication campaigns (including competitors)
to the knowledge of brands or products, and attitudes and their changes on the
basis of this communication, as well as effects on shopping and consumer behaviour. On
the Czech market, such studies are available especially for food and non-alcoholic drinks,
beer, cosmetics, OTC drugs and dietary supplements, banking and insurance, telecommunications
and the internet as well as print and electronic media. In other sectors, companies
must rely primarily on individual surveys related to their individual campaigns. (Vysekalová,
Herzmann and Cír, 2004, p. 56)
12.2Marketing research
Marketing research is the process of defining a marketing problem and opportunity, systematically
collecting and analysing information, and recommending actions to improve an
organization´s marketing activities. (Berkowitz, Kerin and Rudelius, 1989, p. 143)
Depending on the situation facing a company, particularly the resources allocated to
marketing research, there are three ways of carrying out marketing research, described
below. (Drummond and Ensor, 2005, p. 60-61)
Undertake the work in-house
This is an option in the case of small scale research projects or where an organization is
large enough and employs specialist marketing staff.
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Employ a fieldwork agency
Even for an organization with specialist market research staff that can design a questionnaire
and coordinate a survey they may find that, for a large survey, they don´t have the
resources to actually carry out all the interviews. In this situation they can employ a specialist
fieldwork agency who will undertake the interview then hand back the data for the
organization to analyse. Many marketing research agencies will offer fieldwork administration
as one of a range of services they offer clients.
Employ a marketing research agency
Another option available to an organization is to contract out all aspects of the research
project to an outside agency. The agency then would complete all the stages of the research
project. In order for this approach to work successfully there has to be very clear communication
between the client and the agency about the objectives of the research.
Basic types of marketing research
Marketing research falls into two major categories: continuous and ad hoc research.
(Drummond and Ensor, 2005, p. 51-52)
Continuous research involves collecting information from external sources on a continuous
basis. Reports are produced on a regular basis, normally either monthly, quarterly or
annually. This type of data allows an organization to consistently compare trends over time.
The key types of continuous research that organizations employ are consumer panels, television
viewership panels, marketing databases, retail audits, customer relationship management
systems and websites audits.
Consumer panels are formed by recruiting large numbers of households, which provide
information on their purchases over time. The most usual method of data collection is the
use of diaries, which panel members fill in with details of purchases and return to the survey
organization on a weekly basis. However, an innovation is in the use of data terminals and
barcode readers, which allow panel members to scan their purchases at home allowing the
data to be sent electronically. By using the same households over a period of time, measures
of brand loyalty and switching can be achieved, together with a demographic profile of the
type of person who buys particular brands.
Retail audits are a second type of continuous research. By gaining the cooperation of
retail outlets (supermarkets) sales of brands can be measured by means of laser scans of
barcodes on packaging, which are read at the checkout. Although brand loyalty and switching
cannot be measured, retail audits can provide accurate assessment of sales achieved
by store.
Television viewership panels measure audience sizes minute by minute. Commercial
breaks can be allocated ratings points (the proportion of the target audience watching),
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which are the currency by which television advertising is bought and judged. Viewership
information is recorded on online meters. The meter records whether the TV set is on/off,
which channel is being watched and, by means of a hand console, who is watching. The
meter automatically sends the data to the survey organization on the daily basis.
Marketing databases mean that companies collect data on customers on an ongoing
basis. The data are stored on marketing databases, which contain each customer´s name,
address, telephone number, past transactions and, sometimes, demographic and lifestyle
data. Information on the types of purchase, frequency of purchase, purchase value and responsiveness
to promotional offers may be held. Retailers are encouraging the collection
of such data by introducing loyalty card schemes. The card, which is swiped through the
cash machine at the checkout, contains information about the cardholder, such as name and
address, so that purchasing data including expenditure per visit, types of brands purchased,
how often the customer shops and when, and at which branch, can be linked to individuals.
Customer relationship management systems is term for the methodologies, technologies
and e-commerce capabilities used by companies to manage customer relationships. A
potential problem with the growth of marketing databases is that separate ones are created
in different departments of the company. This fragmented approach can lead to problems
when, for example, a customer transaction is recorded on one but not the other database.
Issues like this have led to the development of customer relationship management systems,
where a single database is created from customer information to inform all staff who deal
with customers.
Website analysis can allow the assessment of current performance of a site and identify
key areas for improvement. Continuous data can also be provided by analysing consumers´
use of websites. Measurements of the areas of the site most frequently visited, how long
each visitor spends seeking out information, which products are purchased and the payment
method used can be made. Other measurements include how well the site loads on browsers,
how well it downloads, whether it ranks within the top three pages on major search
engines and the number of sites to which it is linked.
Ad hoc research is employed when an organization wishes to gain information when
making a nonstandard or one-off decision. This could occur during the development of a
new product, advertising development, corporate image surveys and customer satisfaction
surveys. The findings of this type of research are usually presented as a formal report. As
a result many managers associate this type of research as the main activity of a market
research department. Although specialist one-off research reports may look impressive it is
important not to underestimate the usefulness of the data produced through continuous re-
search.
Ad hoc surveys are either custom-designed or omnibus studies. Custom-designed studies
are based on the specific needs of the client. The research design is based on the research
brief given to the marketing research agency or internal marketing researcher. Because
they are tailor-made, such surveys can be expensive. The alternative is to use an
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omnibus survey in which space is bought on questionnaires for face-to-face or telephone
interviews. The interview may cover many topics as the questionnaire space is bought by a
number of clients who benefit from cost sharing. Usually the type of information sought is
relatively simple (e.g. awareness levels and ownership data). Often the survey will be based
on demographically balanced samples of 1000-2000 adults.
12.3Research methods
Secondary, often called desk research, and primary research are the two main categories
of research data.
12.3.1 SECONDARY RESEARCH
Secondary data is information that is already available as it has been collected, and in
some cases analysed, by other parties for reasons other than for use in the research project
that is currently being undertaken. This type of data may be external information or it may
be internally available within the organization. Normally, the first stage of any research
project would be to search for secondary data before undertaking any primary research.
Before using secondary data the researcher has to evaluate its relevance and reliability to
the research project being undertaken. Secondary data can be obtained from a number of
sources (see Table 24). (Drummond and Ensor, 2005, p.52)
Table 24: Selected sources of secondary research data
Information do-
main
Information source
External
Newspapers Trade association reports
Books Commercial research agencies
Academic journals Directories and indexes
Conference proceedings Government statistics and reports
Company reports Etc.
Internal
Sales reports Stock records
Payment records Etc.
Research reports
Source: Drummond and Ensor (2005, p. 54)
12.3.2 PRIMARY RESEARCH
Secondary research may have provided some useful data but it is likely that there will
be gaps in this information which an organization will need to fill by undertaking some
primary research. Primary research, sometimes referred to as field research, involves the
organization directly undertaking, or commissioning a research company to specifically
undertake a piece of research. A range of approaches to carrying out primary research is
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available to an organization. These research methods fall into two key categories, qualitative
and quantitative. (Drummond and Ensor, 2005, p. 53-57)
Primary qualitative research
Qualitative research at a basic level could be described as the collection, analysis and
interpretation of data obtained by studying the behaviour and language displayed by individuals
in a particular situation. The key aim of qualitative research is to provide a rich
insight into the perceptions, attitudes and motivations of consumers. Unlike quantitative
research, qualitative techniques do not provide large sets of numerated data that can be
statistically tested for their reliability and validity. However, qualitative techniques do provide
highly sophisticated and subtle insights into the phenomena being studied. A number
of techniques are available to the researcher in undertaking a qualitative study. Each will
now be discussed in detail below.
• Depth interviews: This is a popular method of qualitative research and involves
structured or semi-structured interviews that are normally around an hour long. The
interviews are generally confidential in nature, undertaken face to face and respondents
are encouraged to talk openly about the topic under discussion. The interview
would normally be audio recorded so that a full transcript can be typed after the
session has ended. The advantage of a depth interview is that the respondent is not
influenced by other individuals, as can happen in focus groups. This type of interview
also allows a deeper discussion to take place on a particular topic. The key
disadvantage is that normally a series of interviews with a range of individuals would
need to be undertaken and that can be a costly process, both in terms of time and
money. The choice of the individuals to interview will be based on their fit with the
consumer profile for a particular product or service.
• Focus group discussions: Focus groups are made up of six to eight respondents
who undertake an unstructured or semi-structured discussion facilitated by the researcher
who acts as moderator. These discussions have traditionally taken place
face to face although Internet discussions are becoming more common. Once again
the discussion is audio recorded and sometimes videoed. The researcher normally
has a list of issues, relating to the overall focus of the research, that they wish to have
discussed by the group, but the aim is to give as much freedom to the group as possible
in order that they can discuss the issues that they deem to be important. A variety
of creative stimuli materials are used within these groups, including cartoons,
pictures, words and brand maps. One of the most common types is the collage or
mood board, which is made up from scrap art taken from a wide variety of magazines
and newspapers. It is used to explore variety of themes, such as user lifestyles,
occasion usage and so on (see figure below the text). Analysis of these discussions
should allow a researcher to identify the beliefs, attitudes, motivations, behaviours
and preferences of the respondents and thereby gain a detailed understanding of the
organization´s consumers.
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• Expert consultation: Although much qualitative research is focused on the actual
consumer, an alternative approach is to interview individuals with relevant expert
knowledge. Various types of expert can be found in the academic community, financial
services or the specialist press. Although they may not be a direct consumer of
a particular product or service, they can be a rich source of specialist background
knowledge. Experts may also be able to provide a valuable perspective on possible
future developments in a product or service area.
• Observation: Observation is a qualitative technique that finds its roots in the social
anthropological approach of studying a society over periods of months or years.
Consumer researchers employ a similar approach in taking detailed observations of
consumers, however, normally their observations are taken over relatively shorter
periods of time. This technique can be employed to find out how consumers behave
in a particular retail store, allowing the researcher to build up a picture of what
factors may be affecting customers´ purchase decisions. A number of observation
methods can be employed including direct observation by the researcher, video recording
and electronic monitoring of traffic in supermarket aisles.
Image 16: Simple mood board showing different eating experiences and occasions
Source: Smith and Zook (2012, p. 145)
Consumers (respondents) are not always able and willing to express themselves freely.
They are not always honest in their responses. They suffer from all sorts of biases (social
desirability) or they might be simply reluctant to disclose, for fear of embarrassment or
retribution. A class of techniques known as “projective techniques”, provide a way how to
gain the responses in the case of mentioned situations. These techniques encourage or enable
participant to spontaneously express thoughts and feelings without any fear of repercussions
such as embarrassment or retribution. Projective techniques have their roots in
psychoanalysis, developed by Sigmund Freud in 1900s. His giant contribution was to point
out the existence of the unconscious. In the 1940s, Ernest Ditcher imported this idea into
marketing research and established what was then called “motivation research”. Contemporary
qualitative research now realises the limitation of motivation research and has evolved
to capture only the best its qualities. (Ang, 2015, p. 46-47)
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According to Ang (2015, p. 47) there are five different kinds of projective techniques,
which can be used either singly or in combination:
• Association (words and pictures association, thought or speech bubble completion,
metaphor elicitation and obituary writing).
• Completion (sentence completion, for example: Porsche drivers are…… I think
solar energy is …..).
• Construction (projective questioning, stereotype imagery and shopping list com-
pletion).
• Expression (psychodrama and role-playing).
• Choice or ordering (timelines and ordering by degree of intensity).
Primary quantitative research
Quantitative research focuses on gathering data that is quantifiable and some would argue,
therefore unlike qualitative research in that it is less open to interpretation. Quantitative
data includes information available through secondary sources, such as, market size,
market share, sales figures (see Table 13-4). However, not all information is available
through these sources and in that case primary research has to be undertaken. In these circumstances
the majority of organizations will collect quantitative data through questionnaire-based
surveys.
There are a number of approaches available to a researcher in carrying out a survey.
These are:
• Face to face interviews: In the case of a survey, a structured interview is undertaken
employing a standard questionnaire that is administered to every respondent in the
same way. Therefore the wording, layout and order of the questions is rigorously
adhered to by the interviewer. This approach means that a large number of respondents
can be interviewed in a relatively short period of time. The questionnaire is
designed in such a way that the respondent has to make a choice from a limited
number of prescribed answers to any specific question. Once the survey is complete
a statistical analysis of the respondent´s replies is undertaken based on a numeric
coding of each of the prescribed answers contained on the questionnaire. It is therefore
critical that the questionnaire is designed and tested in such a way as to ensure
that the respondents actually interpret the questions being asked in a manner consistent
with the researcher´s intentions and the respondents´ answers are not overly
constrained by the limited range of answers from which they are allowed to make a
choice. A weakness of this approach can therefore be an inappropriately designed
questionnaire.
• Telephone interviews: Telephone interviews are less expensive than some other
methods and provide a mechanism to collect information quickly. Participation is
more likely if a limited amount on information is sought from the respondent. However,
there are problems with this approach. Most respondents would be reluctant to
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supply personal details to an unknown researcher over the phone. The sample is likely
to show some bias as only individuals listed in a telephone directory can be
contacted. The sample may be further biased by only including those individuals
who actually respond.
• Postal surveys: Postal questionnaires offer the advantage of speed, extensive distribution
and relative inexpense and can be used for any size of sample. Where respondents
can be ensured of anonymity these methods can produce candid replies, eliminating
the potential of bias associated with surveys undertaken using personal interviews.
However, there are a number of problems linked with this method. Postal
surveys often have quite high non-response rates, especially with longer questionnaires.
There can also be a problem with ambiguity, unless very straightforward
questions are asked, or questions are framed in such a way that they offer respondents
the choice between highly polarized positions.
• Electronic surveys: The questionnaire can be circulated by e-mail. This provides a
very low cost method of disseminating a survey. This approach has the added advantage
that it can be more interactive than a traditional mail survey. Prompts on the
questionnaire can provide the respondents with detailed clarification on particular
points. However, there are some disadvantages with Internet surveys. The results
may be skewed by the fact that Internet users are generally found among more affluent
consumers and in younger age groups. The fact that an individual´s e-mail
address is attached to any returned e-mail questionnaire destroys their anonymity
and therefore created reservations about the reliability of their responses on personal
issues.
Table 25: The essential differences between qualitative and quantitative research
Qualitative research Quantitative research
Focus Verbal data Numerical data
Research purpose and out-
come
Rich, in-depth insights Broad generalizations
Research means Focus groups or depth inter-
views
Structured questionnaires
Operation High flexibilityindata collec-
tion
Low flexibility in data collec-
tion
Data capture Audio recording requiring
post-coding
Pre-coded response categories
on structured question-
naire
Sampling Small samples Large samples
Analysis
Content analysis of respondent
statements from audio re-
cording
Statistical analysis of precoded
responses from a structured
questionnaire
Reporting
Underlying themes illustrated
by quotes from respondents,
summary statements
Statistical, e.g. percentages,
tables, graphs, statistical inferences
and estimates
Source: Jobber (2010, p. 246)
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12.4Stages in the marketing research process
In undertaking research project there are a number of distinct stages that should be
followed, as outlined on Image 17. Each of these stages will be discussed.
Image 17: The market research process
Source: own formation according to Kozel (2006, p. 71)
12.5Psycho-physiological methods of marketing communication
testing
There are many methods and each has its strengths and weaknesses. The following text
discusses five psycho-physiological methods used in marketing communication, especially
advertising: (Ang, 2015, p. 335-336)
• Electroencephalography (EEG): One psycho-physiological method that is increasing
popular is electroencephalography. The brain is made up of millions of brain
cells called neurons. Neurochemical changes in these cells can be detected in minute
electrical activities. EEG detects changes in their firing activity across the scalp, by
wearing an EEG cap and using hardware that can amplify these signals.
• Functional magnetic resonance imaging (fMRI): This method relies on changes
that take place in the metabolic process of the brain when someone watches an ad.
One version of fMRI relies on the changes in the oxygenated blood flow to the local
area of the brain when that area is active. This is detected by looking for changes in
the magnetic properties in the area.
• Galvanic skin response (GSR): It measures the arousal state of a person. Since our
skin is a good conductor of electric current, it is possible to assess how well a small
electric current is being conducted between two electrodes on the skin, usually measured
at the fingertips of palm. Since our sweat glands are directly connected to our
nervous system, any changes in our arousal level are quickly registered in our sweat
glands, which then influence the conductance level of the skin – the greater the arousal,
the greater the electrical conductance between the two electrodes.
Preparatory stage
• The problem, research objectives
and hypotheses definition
• Orientation analysis of situation
• The research plan development
Stage of realization
• The data collection
• The data processing and ana-
lysis
• The data interpretation
• The final research report cre-
ation
Stage of realization
• The data collection
• The data processing and ana-
lysis
• The data interpretation
• The final research report cre-
ation
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• Facial coding and facial electromyography (facial EMG): Facial coding involves
examining the facial expressions of persons in order to gauge how they are feeling
as they watch the ad. Using a scheme called the “Facial Coding Action System”,
researchers can deduce which of the six basic emotions a person is feeling. By analysing
which facial muscles are contracting simultaneously, it is possible to detect
which of the six basic emotions of joy, sadness, surprise, anger, disgust and fear a
viewer is experiencing.
• Eye-tracking (ET): Research shows that our eyes do not move smoothly over a
scene but rather dart around. At points of interest in a scene, our eyes stop for a
fraction of a second (about 200-300 millisecond) as they take in the information.
Such fixations can be aggregated across people to obtain heat maps. It is an objective
way of assessing which parts of the ad are creating interest, on the assumption that
we look at what we are interested in.
Each of these methods have their pros and cons. Although psycho-physiological methods
have many advantages, they can also suffer from difficulties in interpretation. Each
psycho-physiological method has its own limitations, but some market research companies
are combining different methods to compensate for them. Of course, more than one method
can be used in combination.
QUESTIONS
Now it is time to test your acquired knowledge from Chapter 12. Keep in mind that
only one answer is correct! The correct answers can be found at the end of this chap-
ter.
1. External data from secondary research does not include:
a) Goverment statistics
b) Sales reports
c) Newspapers
2. Typical characteristics of focus group are:
a) Qualitative research, six to eight respondents, the researcher who acts as moderator,
the discussion is recorded.
b) Qualitative research, twenty to thirty respondents, the researcher who acts as moderator,
the discussion is recorded.
c) Quantitative research, six to eight respondents, the researcher who acts as moderator,
the discussion is recorded.
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3. The projective techniques include:
a) Association
b) Questioning via telephone
c) Functional magnetic resonance imaging
4. Preparatory stage of marketing research does not include:
a) Orientation analysis of situation
b) Hypotheses defining
c) Data collection
5. Facial coding in marketing communication research is:
a) Identification of customers entering the shops – the part of loyalty programs.
b) Examining the facial expressions of persons in order to gauge how they are feeling
as they watch the advertising in general.
c) Examining the facial expressions of persons in order to gauge how they are feeling
as they watch the advertising on TV.
SUMMARY OF THE CHAPTER
The twelfth chapter aimed to acquaint the students with the issues of marketing communication
efficiency testing. After reading and study the chapter 12 students should be able
to know the difference of impact and reach as the output of marketing communication campaign,
to name and describe the stages of marketing research. Then to be able to determine
the basic research methods and approaches according to time, number of respondents, research
techniques, research intention and so on. The specific methods from the area of psychology
should be also taken into account.
Pay great attention to the problematics of qualitative research methods because today
effective communication campaign must be reasonably informative, creative, timely and
targeted, done through the use of corresponding media. Effective communication campaign
has to perform a variety of tasks, both short and long term. The companies today do not
only ask: How many customers buy or do not buy product? But they want to know also
reasons, customers´feelings and requirements in detail in order to customize the marketing
communications in the best way.
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ANSWERS
1b, 2a, 3a, 4c, 5b
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SUMMARY OF THE STUDY TEXT
The issue of marketing communication is very extensive. The aim of this study text is
not to present an exhaustive overview of all the approaches of dynamically evolving marketing
communication but rather to describe the basics of marketing communication on the
consumer market (B2C). The study text is dived into well-arranged 12 chapters. Within the
first two chapters, the basis of marketing communication are presented. Chapters 3 to 9
describe the elements of the marketing communication mix (advertising, sales promotion,
personal selling, public relations, direct marketing, sponsorship and online marketing
communication). In chapter 10 the student was acquainted with current trends in marketing
communication. Chapters 11 and 12 included tools and phases how to plan and organize
marketing communication and then how to measure its performance.
An important rule is the interconnection of all the elements and tools of marketing
communication that the company is ready to use (integrated marketing communication).
New media (ambient media and social networks) should be also implemented, because if
communication is fresh and interesting to the customers (receivers), it will enable them to
absorb the message in a way that they will like.
Marketing communications is a rapidly evolving field. New media concepts, communication
techniques, legislative limitations, new non-traditional media and so on come to
existence daily. It is therefore necessary to update continuously the acquired knowledge
from this study material thanks to sef-study and search for new knowledge in this area. At
the same time, the area of marketing communication represents a great opinion diversity,
when many marketing communication issues are not exactly defined and can be the subject
of mutual discussions.
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OVERVIEW OF AVAILABLE ICONS
Study time Goals of the chapter
Key words Don’t forget to rest
Study guide Text guide
Quick preview Summary
Tutorials Definition
To remember Case study
Solved task Theorem
Check question Correspondence task
Answers Questions
Independent task Other sources
For interested persons Task to be considered
Název: MARKETING COMMUNICATION
Autor: Ing. Kateřina Matušínská, Ph.D., Ing. Veronika Braciníková
Vydavatel: Slezská univerzita v Opavě
Obchodně podnikatelská fakulta v Karviné
Určeno: studentům SU OPF Karviná
Počet stran: 219
Tato publikace neprošla jazykovou úpravou.