Marketing Communication - Promotions vs Advertising

Marketing communication mix decision is one of the most important decisions the marketer has to take to finally sell his product. The communication creates awareness about the product and persuades the customer to use it.

There are different forms of communication: Direct marketing, Public Relations, Promotions, Personal Selling and Advertising. Today newer and newer forms of communication are getting invented day-by-day by marketers to reach to their customers in a better way and before the competition. Experiential marketing was also developed as a result.

Direct marketing is the type of marketing technique in which the targets are made aware of the product personally, by the marketer through direct e-mail, calls, fax, catalog, voice mail etc. It is an interactive kind of marketing. Dell and Amway have championed the concept of direct marketing.

Personal Selling is the outgrown form of Direct Marketing. In this form the marketer personally meets the customer to create awareness. The sales team makes demonstrations and sales presentations to the customers. They also conduct fair and trade shows for the targets. In Business-to-Business market, most of the selling occurs through Personal Selling.

Public Relation is basically an image building exercise. The main idea of this exercise is to garner goodwill and a favorable corporate image. This could be done through number of activities like getting press write favorably of the product and the corporate identity, lobbying, sponsorships, corporate communication etc.

Eg Harley Davidson sponsors various HOG (Harley owner Group) activities and its rallies.

Promotion is the technique to encourage trial and usage of the product. It is an incentive based system. It includes techniques such as free samples, coupons, refund, price-off offers, usage patronage schemes etc. But these techniques can help the firm in increasing the sales and market share just in the short term. In the long term it is not effective.

Advertisement is the most common form of communication technique used nowadays. It is the most impersonal form of communication. Advertisements in newspapers, magazines, media, billboards, sign-posts, motion pictures, point of purchase materials, all are considered forms of advertising. Although the ads are targeted to a particular segment, it is viewed by the mass. Hence it loses its relevance. Today customers are bombarded with thousands of advertisement daily. It is getting difficult for marketers to cut through the clutter of ads and advertise their product. Hence they have started using other techniques to get noticed by the target.

Above the line Marketing Vs Below the line Marketing

Above the line (ATL) is a conventional advertising technique which comprises of media like TV, Radio, Outdoor advertisements, web & internet banner ads. ATL way of advertising is impersonal to the customers. It's used in a case when company is mass marketing & number of target customers is very huge. ATL creates awareness about the advertised product/ service but it's a costly proposition.

On the other hand, Below the line (BTL) advertisements are very targeted to specific customers. BTL media includes direct mail, sponsoring events, public relations, giving coupons which can be redeemed later, use of freebies in promoting products & organizing meaningful events.

Few reasons which have made company to go for below the line advertisements are as follows:

• Advertisement Clutter: In today's world, customer is bombarded with information with various ads & hence many of marketing messages get lost in this clutter of ads. BTL method help to break the clutter & being very targeted, there is high response rate from customer.
• Cheap in comparison to ATL: BTL advertisements are dirt-cheap if you compare it with conventional media like TV, Radio.

Examples to show how Indian companies are leveraging the power of BTL promotions:

1. Companies like Coke, FMCG sponsor college fest for targeting young college goers. This kind of associations enhances the brand equity for the firm & it's very cheap in comparison to traditional Above the Line advertisements.
2. MBA coaching institutes like IMS, Career Launcher & Time promotes their centers by enticing students with free tests. They also hold informative workshops to create awareness among students.
3. Companies like "Make my trip", "Club Mahindra" promotes their brands by setting up a kiosk in center of a mall. This may include a person posing as a dummy tourist enjoying sunbath in sand.
4. Times Of India organizes various events in Delhi to promote their brand name. The events canvass from Sudoku to Marathon races, Celebrations at festival time like Diwali, New Year etc. All of these kind of events create positive associations for Times of India.
5. Another example of BTL advertising is NIKE - an athlete dressed up in NIKE sportswear could be seen jogging on the elevated treadmill for whole day on National Highway, Delhi.
6. Now a days, producers use BTL techniques to promote their movies. Recently, it has been championed by movies like Om Shanti Om & Saawariya when producers partnered with companies like - retail chains, TV channels, Entertainment channels, Mobile handsets and news channel.

Now a days, marketers have understood the efficiency & effectiveness of Below the Line marketing tools. But, now the challenge is to integrate BTL tools with ATL advertisement tools.

Points of difference & Points of Parity

Points of difference are the attributes or the benefits associated with the brand that consumers’ positively evaluate and believe that they cannot find the same attributes in the competitive brand.


Marketers have generally focused on the points of difference in the products. They have differentiated in terms of positioning, promotion, distribution channel and the basic product itself. But most of this differentiation occurs in the customer’s mind. Creating points of difference is a great challenge. These points of difference and strong association in consumer’s mind create a brand.

The differentiation that marketers resort to can be meaningful or it can be meaningless also. Meaningless differentiation can be seen prominently in many low involvement products like chocolates, chewing gums etc. Menthos (Dimag ki batti Jalaye), Polo (Mint with a hole). Coke and Pepsi are hard to distinguish from each other in a blind folded test. The marketers have meaninglessly differentiated in terms of taste and consumers on seeing the labels have these differences in their mind. KitKat and Perk, both of them are wafer chocolates. KitKat differentiated itself from perk with its unique brand ritual.

Points of parity are the necessary attributes or the benefits associated with the product that is same across all the offerings in the same category of products. In simple terms points of parity are the necessary conditions for existence the product.

The points of parity should also be taken care of by the marketers as it is the basic requirement of the product. Even if it is not the basic requirement of the product or service, customers’ expect it to be included in bundle with the product or service that they get.

Example- In a hotel providing a room with a bed and an attached bath is the basic product. But customer’s expect fresh bed-sheet, clean towels etc as part of the package of renting the room. Every hotel offers that. Hence it forms the point of parity.

A Marketing Attitude for Indian Movies.

Can hype created due to Marketing could be a reason for an Indian movie success!! Although many of movie buffs wouldn't agree with this argument but this is been the trend recently. Take the example of recently launched movies - Om Shanti Om & Saawaria. Crores have been spent over the marketing of both most-awaited bollywood releases. Leave content apart, marketing has ensured that both movies will be hits on the first day of screening. Market dynamics of movie business has been changed. Now success of movie depends upon the crowd pulled by movie within first three days & clever marketing makes sure that producer makes money during those three days.

There are a number of people involved in this chain, just like a retail chain - from manufacturing to retail of goods. In movie business, producers create the end-product for the consumer, but they seldom market that product directly to the consumer. They market their story to investors and distributors. Distributors market to exhibitors, retailers and sub-distributors. The theater exhibitors, retailers, store clerks, and Internet strategists market to the end consumers. And additionally, some consumers even market to other consumers – their family, friends and co-workers.

Both the movies have been launched on occasion of Diwali. Fight won't be only in between both movies but also be between rival retail chains, television makers, broadcasters and mobile phone makers associated with the movies. So, this would be a kind of off-screen fight between both movies.

The reason for going this kind of synergy is win-win situation for both sides. On movie part, this kind of associations would lead to increased visibility for the movie & hence would create a "buzz" for the movie. For marketers of Apparels, mobile phone makers, television makers & retail chains, this provides a new avenue for promoting their products. The reason being that "Movies can deliver as many eyeballs as cricket” & hence value for money.

A brief comparison for promotion activities for Om Shanti Om & Saawaria:

	OSO	Saawaria
Retail Chain	Pantaloon	Shopper's Stop
Mobile Handsets	Sony Ericsson	Nokia
Music Channels	Channel[V]	MTV
Entertainment Channels	Sony	Star TV
News Channel	CNN IBN	NDTV 24/7
Cosmetics	Future Group Cosmetic	Maybelline – L’Oreal India

So, war would happen not only on screen but also off-screen.

But this kind of strategy has its own pit-falls. What would happen if movie bombs badly just like a new product launch!!

• On part of producer of the movie, that would be a set back in terms of profit. But, thats a part & parcel of movie business where success rate is really low. At the end of every year, we have only handful of movies which can be classified as successful. So, on a whole failure of movie wouldn't affect producer in long run since people don't remember bad movies & will again watch the producer's next movie also.

• On part of other partners (as listed in above table), if movie bombs then it won't augur well for their brands. Repercussions would be large as this will lower down the confidence of people in their brand.
  

So, pros & cons should be analyzed in proper frame before going for this kind of decision.

Effect of Outsourcing on Brand Equity

What is a Brand Equity??

A brand is a name or symbol used to identify the source of a product. Branding is an important decision since it differentiates one's product, given there is almost no difference in the functional features of product. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as brand equity.

Business process outsourcing (BPO) is now part of everyday life, from IT to HR to call centers within big companies. What has interested me is how outsourcing impacts a company's reputation and brand, both with customers and with employees!!

Few things need to be considered in respect of repercussions of Outsourcing on the Brand Equity of Company's name:

• There needs to be employee buy-in when essential functions are outsourced, especially those that touch customers:

Employee should be in sync with the company's decision of outsourcing. This is of utmost importance for those people who are in direct contact with customer. Employees need to take responsibility for the actions of the outsourcing agent, if some goof up happens. For e.g. an airline has outsourced their baggage facility. One customer experienced certain issues with the baggage handling. Person complains to the customer care executive. But customer care executive shows apathetic attitude towards the problem since company has outsourced the facility. He has not been educated about the repercussions of this kind of outsourcing issue on his Company's image.
Mother company has to take each & every responsibility associated with the outsourcing results - whether good or bad.

• Outsourced employees need to understand and live up to the values of the organization:

Outsource employees need to be act as a partner to maximize the benefit proposition for the mother organization. The service provided by the outsourcing agency should be a customized one & increase the value proposition for organization. Mother organization should form stringent systems & quality rules for achieving the optimum results. The parameter for testing outsourcing results should be communicated to the outsourcing agency beforehand, rather doing damage control later on.
This concept was pioneered by organizations like Nike, Reebok etc. They outsourced their manufacturing facility & utilized their expertise of branding to maximize the profits.

Other more evident example could be from HR. A company recruits a person who is in sync with the organization's value & culture. So, a outsourced recruiting agency first comprehend the values desired by organizations & then find suitable candidates accordingly.

• Precautions for misuse of IP (Intellectual Property) rights:

If a function involving intellectual property rights is outsourced then it may risk the copying by imitators. So, the most important thing in any outsourcing is establishment of a long-term relationship between both parties. One should not cut corners to get any undue advantage, at the expense of other party.


So, there is pros and cons associated with outsourcing. Positives could be -

1. Firm can concentrate on core competencies.
2. Low cost advantage.
3. Specialized service from an outsourcing agency.

But, negatives could outweigh the positives since outsourcing, at times, exposes the poverty of the brand & all the good associations of brand can go down the drain.

So, as far as outsourcing is concerned -"Handle With Care." :-)