MKTG301: PRINCIPLES OF MARKETING DEFINITIONS: CHAPTER 18 Communication (1) The process of conveying a message to others, which requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding. (2) Online, the dialogue that unfolds between a website and its users. Source A company or person who has information to convey. Message The information sent by a source to a receiver in the communications process. Channel of Communication The means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver. Receivers Consumers who read, hear, or see the message sent by a source in the communications process. Encoding The process of having the sender transform an abstract idea into a set of symbols. Decoding The process of having the receiver take a set of symbols, the message, and transform them back to an abstract idea. Field of Experience Similar understanding and knowledge; to communicate effectively, a sender and a receiver must have a mutually shared field of experience. Response (1) In behavioral learning, the action taken by a consumer to satisfy a drive. (2) In the feedback loop, the impact the message had on the receiver s knowledge, attitudes, or behaviors. Feedback The communication flow from receiver back to the sender that helps the sender know whether the message was decoded and understood as intended. Noise Extraneous factors that can work against effective communication by distorting a message or the feedback received. Advertising Any paid form of nonpersonal commu-nication about an organization, good, service, or idea by an identified sponsor.
Personal Selling The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person s or group s purchase decision. Public Relations A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services. Publicity A nonpersonal, indirectly paid presentation of an organization, good, or service. Sales Promotion A short-term inducement of value offered to arouse interest in buying a good or service. Direct Marketing Promotional element that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet. Promotional Mix The combination of one or more of the promotional elements a firm uses to communicate with consumers. The promotional elements include: advertising, personal selling, sales promotion, public relations, and direct marketing. Push Strategy Directing the promotional mix to channel members to gain their cooperation in ordering and stocking a product. Pull Strategy Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for the product. Integrated Marketing Communications The concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences. Hierarchy of Effects The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption. Percentage of Sales Budgeting Allocating funds to advertising as a percentage of past or anticipated sales, in terms of either dollars or units sold. Competitive Parity Budgeting Matching the competitors absolute level of spending or the proportion per point of market share. All-You-Can-Afford Budgeting Allocating funds to promotion only after all other budget items are covered.
Objective and Task Budgeting A budgeting approach whereby the company (1) determines its promotion objectives, (2) outlines the tasks to accomplish these objectives, and (3) determines the promotion cost of performing these tasks. Direct Orders The result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase an complete the transaction. Lead Generation The result of a direct marketing offer designed to generate interest in a product or a service, and a request for additional information. Traffic Generation The outcome of a direct marketing offer designed to motivate people to visit a business.
MKTG301: PRINCIPLES OF MARKETING CONCEPT CHECKS: CHAPTER 18 QUESTIONS: CC 1: What are the six elements required for communication to occur? CC 2: Explain the difference between advertising and publicity when both appear on television. CC 3: Which promotional element should be offered only on a short-term basis? CC 4: For consumer products, why is advertising emphasized more than personal selling? CC 5: Explain the differences between a push strategy and a pull strategy. CC 6: What are the characteristics of good promotions objectives? CC 7: What are the weaknesses of the percentage of sales budgeting approach? CC 8: How have advertising agencies changed to facilitate the use of IMC programs? CC 9: What are the three types of responses generated by direct marketing activities? ANSWERS: A 1: Source, receiver, message, channel of communication, encoding, and decoding A 2: Advertising space is paid for; thus the company controls what is said and when. This control does not exist with publicity since the company does not directly pay for the TV coverage. A 3: Sales promotion A 4: There is a large number of buyers. A 5: In a push strategy, promotion is used to move the product through the channel by directing promotional activities at channel members. In a pull strategy, promotion stimulates end user demand to pull the product through the channel. A 6: They should (1) be designed for a well-defined target audience, (2) be measurable, and (3) cover a specified time period.
A 7: It implies that sales cause promotions; may cause a lag in budgets that are based on previous year s figures, e.g. a low sales year would result in low advertising the next year when it should perhaps be higher; fails to consider the importance of promotion and company objectives. A 8: Agencies such as J. Walter Thompson design integrated programs for a company. Although many agencies still have departments such as direct marketing, the trend is clearly toward a long-term perspective in which all forms of promotion are integrated. A 9: Direct orders, lead generation, traffic generation