SEM 14.1 T 1.
TOPIC 1 ADVERTISING AND MARKETING COMMUNICATION.
By the end of this topic, you will be able to:
1. Explain the marketing communication concept and the elements within;
2. Recognise the elements in marketing communications;
3. Observe advertising concepts and their relationship in marketing communications; and
4. Identify advertising communication models and how they differ from other communication models.
LEARNING OUTCOMES
1.1 MARKETING COMMUNICATIONS
Generally, human communication is divided into various types: individual
communication, group communication, organisation communication, inter-
cultural communication, inter-racial communication and mass communication.
Communication is an important area in the field of marketing, and as a subject of
research. For successful marketing, more people or staff should be involved in
the communication process either within or outside the organisation because
every organisation needs to handle different target audiences, or in this context,
the target market.
1.1.1 Marketing Communication Concept
Marketing communications is similar to promotion. Actually, ‘marketing
Communication’ is regarded as a new term compared with the term ‘promotion’,
and marketing experts now tend to use the term 'marketing communications' to
avoid confusion with the word 'promotion'.
The term 'promotion' is always linked to sales promotion, which is one of the
aspects of real promotional activities represented by marketing communications.
This means marketing communications not only involve sales promotion and
advertising, but also public relations, personal selling and other elements in the
marketing communication mix. So, marketing mix is regarded as the stepping
stone to marketing whereas marketing communication mix is regarded as the key
to marketing communications.
SELF-CHECK 1.1
The challenge in marketing communications is how to convey the correct message in an efficient way to the audience at the right place and time. Think about the meaning of:
The right message
The efficient way
The real audience
The right place
The accurate time
Another term related to marketing communications is corporate Communications. Blauw E. in Pickton & Broderick defines corporate communications as integrated approach to all communication produced by an organisation directed at all relevant target groups.
Van Riel, in the same book, defines it as communication with three forms management communication, organisation communication and marketing communication (see Figure 1.1).
Management communications is defined by Van Riel as the most important form among the three and it involves communication between the manager and the internal audience as well as the external audience. Organisation communications involves different types of communication activities and this includes internal communications, corporate advertising, public relations and other corporate-level types of communication. Marketing communications involves communication that supports the sale of products and services. This means marketing communications also involves corporate communication, because the image and perception of the organisation have a great impact on its products and services.
Figure 1.1: Description of corporate communications by Van Riel
(Pickton & Broderick, 2005)
1.1.2 Marketing Mix
Marketing mix is also known as the 4Ps. The term and classification were
introduced by E. Jerome McCarthy; however, the term marketing mix was
conceptualised by Neil Borden from Harvard Business School in 1948 and
became popular after he mentioned it in his speech during a function organised
by the American Marketing Association in 1953.
Marketing mix is analogised as a ‘recipe’ that contains different elements to
produce a product that satisfies the customer when it is blended or mixed
correctly. These elements are described by Borden as comprising 12 subjects:
Product planning
Price determination
Branding
Advertising
Promotion
Packaging
Display
Personal selling
Distribution channel
Physical handling
Service
Facts analysis
Borden shortened the list, by summarising it into four elements, namely Product,
Price Determination, Place Determination and Promotion · are also known as
the 4Ps. One of the ‘P’s is promotion related to marketing communications. See
Figure 1.2:
Thus, marketing communications can be summarised as all the elements of
promotion which involve communication between an organisation and the
target audience on issues related to marketing coverage.
Figure 1.2: Elements of marketing mix or 4Ps introduced by Neil Borden
There are researchers who further shortened part of Borden’s list to Promotion,
which covers Branding, Advertising, Packaging, Display and Personal Selling.
However, Borden’s list excludes other elements of promotion, such as Public
Relations, which is regarded as important in marketing communications. This
has resulted in researchers including it in their list.
1.1.3 Marketing Communication Mix
Marketing communication mix is also known as ‘promotion mix’. According to
Crosier (1990), both terms contain the same idea in the context of the 4Ps.
Although ‘marketing communications’ carries a wider meaning than
‘promotion’, their general meaning is the same.
Up till now, the easiest way to classify marketing communication mix is through
the four elements proposed by various marketing experts such as DeLozier
(1976), Kotler et.al. (1999), Crosier (1990), Shimp (1997) and Belch & Belch (1995).
They suggested four elements as below:
Advertising;
Public Relations;
Personal Selling; and
Sales Promotion.
Marketing communications refers to all the elements of promotion in the
marketing mix that involve communication between the organisation and
the target audience on all the subjects dealing with marketing performance.
Figure 1.3: Classification of marketing communication mix
Based on Figure 1.3, the different types of marketing communication activities
are separated from each other and are regarded as individual categories and
classified as independent activities. However, the real situation is not like this.
There is an important link between one category and another or between one
activity and another. For example, there are activities that overlap between
public relations and advertising. Branding, for instance, is not confined to public
relations. Similarly, corporate advertising or advertorials are not merely forms of
advertising.
Try to think what categories activities such as commerce fair, sales exhibition and
telemarketing fall under. What about business talks and sales gatherings with tea
breaks?
Figure 1.4: The overlapping of marketing communication mix
So, it can be said that Figure 1.4 is more suitable and realistic because activities
overlap. Branding, corporate advertising and product placement are advertising
activities that overlap with public relations.
Exhibitions, merchandising and trade sales are sales promotion activities that
overlap with personal selling.
In the same way, event management, lobbying, public-worker relationships are
categorised as public relations activities that overlap with personal selling. Sales
promotion activities that overlap with advertising are direct response advertising
and direct mail incentives.
1.2 ADVERTISING
Advertising is a main element in marketing communications. The other elements,
as elaborated earlier, are public relations, personal selling and sales promotion.
Each of the elements have different and special activities focusing on
communication.
1.2.1 Advertising Concept
Advertising started a long time ago and has become one of the important and
prevalent activities in promotion or marketing communications. However,
advertising should be distinguished from other marketing communication
activities. Below are the definitions of advertising given by a few authors.
Table 1.1: Definition of Advertising
Definition of Advertising Source
Any paid form of non-personal presentation and
promotion of ideas, goods or services by an identified
sponsor.
Kotler et al. (1999)
Paid non-personal communication from an identified sponsor using mass media
to persuade or influence an audience.
Wells et al. (1992)
Combines the definition given by American Marketing Association and Gilson-
Berkman as below:
“Non-personal communication or information that is usually paid for and usually
persuasive in nature about products, services or ideas by identified sponsors
through various media”.
Bovee & Arens
(1982)
From the definitions above, we can conclude that advertising has these
characteristics:
Ć Non-personal communication
Ć Paid communication
Ć Persuasive communication
Ć Product, service or idea communication
Ć Identified sponsor
Ć Usage of mass media
1.2.2 Advertising Communications
As one of the areas of communication, advertising is different from the other
types of communication because it has more specific characteristics, especially in
the source of the message, quality of message and the use of media.
The source of advertising communications consists of a few stages as explained
in the advertising communication model (Topic 1.1.3). Advertised messages are
conveyed in different forms, either verbally or audio-visually, depending on the
media used.
These media are both traditional and non-traditional. Traditional media are the
main media in print and electronic form. Most of the external media are in
printed form, but in recent times many print media are employing electronic
elements. Non-traditional media consist of other forms such as balloons,
calendars, business cards, souvenirs, clothes, matchboxes and whatever items
that can be distributed to the target market.
Advertising is regarded as very important in marketing communications because
the expenses involved are higher than other forms of advertising. Although the
other elements need to be chosen and combined effectively with it, the
advertising element is important because of a few basic considerations:
Ć Wide coverage with the ability to reach the mass audience because the mass
media used tend to cover a wide geographical area either locally or
internationally.
Ć With more accurate targeting, it can reach selective audiences. This happens
when there are more media and the content as well as the target audience are
more specific.
Ć Low unit cost because the cost borne will remain the same, especially the
fixed cost even though the audience has increased.
Ć Economical, effective and efficient in reaching the mass audience. Effective in
brand maintenance and brand development.
Advertising is an area of marketing communications because it is used as a
tool to convey marketing messages.
1.2.3 Advertising Communication Model
Advertising is one of the knowledge disciplines in the field of mass
communications or media studies. The advertising field has developed until it
has become one of the knowledge disciplines that interest many communications
and marketing scholars. Therefore, a few theories and communication models
have been proposed to simplify the research work and analyse the advertising
practice academically.
One of the models is the Advertising Communication Process Model proposed
by Barbara Stern based on basic communication models. Stern sees advertising as
a type of structured text but not an informal speech. ThatÊs why her model shows
that the sources, messages and receivers have different dimensions. Some of
these dimensions exist in the real world while the rest exist in different reality
stages.
In the oral communication model, the source consists of the individual who
conveys the message to other individuals or a group of individuals. In
advertising, the situation is rather complex because the real source is not the
person who conveys the message. If it isn’t, then who is the source or the actual
communicator?
The real source is the sponsor, the party officially responsible for the
communication and who has a message to convey to the audience. Therefore, the
Stern model can be featured as in Figure 1.5 below.
Figure 1.5: The Stern advertising communication process model
The model shows that the advertising communications source has three stages,
which are the sponsor in stage one, the author in stage two and the persona in
stage three.
Ć The sponsor is the advertiser that usually consists of a company or an
organisation. They have certain messages to convey.
Ć The author is the source or person who produces the message as instructed
by the sponsor.
Ć The persona is the source who conveys the message. The spokesperson is
used to convey the message. They loans their voice and personality for the
purpose. For the consumer, this is the source that represents the company,
which is the sponsor. However, the discourse or message conveyed is
produced by the author for advertising purposes.
Based on Figure 1.5, the communication path from the sponsor to the audience is
long and winding, which is through the author (copywriter) to the persona
(actor, announcer and demonstrator). This means the source in advertising
communication has at least three tiers, which are the sponsor, author and
persona.
The message from the source is conveyed in different literary forms to the
different levels of consumers. These are the special strategies planned to ensure
that the aim of the communication is achieved.
There are also different categories of source receivers, which Stern has divided
into external consumers, sponsored consumers and real consumers. External
consumers are the potential group that is identified during the production
process of the advertisement.
Apart from that, there are sponsors who consist of decision makers in an
organisation or company that sponsors the advertisement. They are also
categorised into the advertisement message receiver group because as the
financial decision-makers and advertising campaign verifiers, they have to
evaluate the advertisement and make certain responses that affect the fate of the
advertisement.
1.3 OTHER ELEMENTS OF MARKETING COMMUNICATIONS
As stated earlier, marketing communications covers various elements namely:
Ć Public relations;
Ć Personal selling;
Ć Sales promotion; and
Ć Advertising.
The subtitle below will elaborate on those elements but excludes the topic
‘advertising’ which was discussed earlier.
1.3.1 Public Relations Marketing
What is the difference between advertising campaigns and public relations
marketing?
To answer the question, we need to first look at the meaning of public relations.
According to the Public Relations Institute of the United Kingdom, public
relations is the planned and sustained effort to establish and maintain goodwill
and mutual understanding between the organisation and its publics.
According to Tom Duncan (2005), the list of responsibilities and functions of the
public relations department is as follows (Figure 1.6):
Figure 1.6: Responsibilities and functions of the public relations department
according to Tom Duncan (2005)
Public relations is the communication activity aimed at forming an
understanding between the organisation and the audience, where the
audience consists of interested parties such as the customer, supplier,
shareholder, staff and so on.
Therefore, ‘public relations’ is definitely a concept, a profession, a management
function and a practice with the main aim to form an understanding and a good
relationship between the organisation and interested parties.
To foster a good relationship, the organisation needs to perform different types of
public relations activities as shown in Table 1.2. The table also shows the civilians
or public that becomes its audience.
Table 1.2: Activity and Audience of Public Relations
Activity Description Publicity
Communication programme, product promotion and branding to target the
customer and target audience.
Differs from advertising, and the identity of the person organising the publicity
function usually will not be revealed, and this increases the credibility because it
will appear as though the journalist or commentator prepares it.
Media Relations
Activity to disseminate information about the organisation
to the media.
Activity to foster a good relationship with the media such as
the journalist and the chief editor.
Corporate Communication
Programme that focuses on corporate identity, reputation
management and strategic counselling for higher
management.
Worker Relationship
Internal communication programme to provide workers and staff with
information.
Investor Relationship
Information programme for the community of investors:
investors, analysts and financial papers.
Crisis Management
General plan to handle the company reaction in the event of a disaster.
In these cases, public relations certainly cannot be separated from marketing.
This is because public relations have an important function in carrying out the
promotion.
There are many public relations functions that overlap with marketing functions
even though they have independent functions. At the same time, some of the
functions are related. Some of them also support each other to accomplish the
objectives of public relations and marketing. The overlapping area mentioned by
the marketing and public relations experts is known as marketing public
relations. Table 1.3 below shows the definition of marketing public relations.
Table 1.3: Definition of Marketing Public Relations
Definition of Marketing Public Relations Source
The marketing oriented aspect of public relations. The
narrow aspect of public relations involving an organisation’s
interaction with consumers and other public regarding
marketing matters.
Shimp T.A. in (Pickton & Broderick 2005)
The process of planning, implementing and evaluating the
programme that encourages purchase and customer
satisfaction via trusted information communication to
accommodate the company and organisation according to
the need, demand, care and interests of the customers.
Harris in (Pickton & Broderick 2005)
Based on the comprehensive scope covered by marketing public relations, it is
apparent that different types of activities can be used for marketing
communication campaigns.
Those activities include media release, media conference, media relationship and
entertainment as well as publicity functions. Table 1.4 illustrates the diversity of
these activities.
Table 1.4: Special Activities of Marketing Public Relations
Special Activity Description Media release Information provided by the media in the
form of press release, video release, media pack and other documents.
Media conference
A function that invites journalists and media editors so that they can provide
coverage on the programme or product being launched.
Media relations Long-term good relationship fostered by publicity officers, PA
agents and media experts with journalists and editors.
Publicity functions and stunt.
Special activity to catch the public’s attention; it is called a stunt if it is
extraordinary or spectacular such as flying with a balloon carrying the company’s
logo to celebrate the organisation’s anniversary.
Lobby Activity to gain a good reputation among the authorities in a company, an
organisation or a leader.
Promotional item
All forms and types of items used in the marketing public relations campaigns.
Advertorial Paid advertisement but its presentation make it appear as an editorial
subject to increase the credibility of the information in it.
Sponsor and contribution
Fund contribution for an activity carried out by an individual or organisation. The
aim may be altruistic but normally it is expected to achieve marketing or corporate
objectives.
Corporate identity item
Covers all types of company stationery or sign boards that have the logo, symbol
and colour of the company. These become an important part of marketing
communications.
Company website.
Promotional activities via the Internet that provide information on the
organisation.
Corporate publication
Publication produced by the organisation for its publics such as workers,
shareholders and customers.
Publication work done either by the organisation itself or external publishers given
the task. Some of the important types of corporate publications are internal
magazines and customer magazines published in various forms such as amphlets,
bulletins and glossy magazines.
The annual report is another important type of corporate publication while
corporate video is in audio-visual form.
Exclusive Marketing public relations activities cover as much media as possible but
sometimes an organisation decides to offer the exclusive rights of a piece of news
to specified media.
This increases the possibility of the news becoming the headline if it is suitable for
the target audience of the media.
Interview and photography session
One of the functions of marketing public relations is to provide a spokesperson or
representative for the organisation to interview or to provide a commentary,
performance and photography session. This enables the view of the organisation to
be presentated in an effective way.
Speech The representative or spokesperson of the organisation will give a speech
during a conference, industrial meeting, business party, public function and so on.
The speech is written by the public relations staff and the speech transcripts will be
distributed to the media as part of the media release.
As shown above, there are many types of marketing public relations activities.
These activities are carried out either externally or internally.
If they are carried out externally, the organisation needs to use the agency’s
service to complement the campaigns implemented internally.
Based on the activities above, the media release is the most basic marketing
public relations. The purpose of the media release is to catch the editorÊs
attention so that they will insert it into the media.
The main media used are the press release, radio and television. A media release
may be in the form of a simple press release but it can also be a complete media
pack. It includes information, photographs, video and audio tape, CD as well as
DVD. The Internet, web page, bulletin board and e-mail are used to produce the
release besides the traditional media mentioned earlier.
A media conference is a function to which reporters, journalists and editors are
invited. Usually, the press conference is held together with another important
ceremony or function. During the press conference, the reporter will usually be
given a media kit or press kit, which is a packet of information containing many
different items such as the function’s programme book, background information,
speech, history, pictures and all kinds of information needed about the
programme or product.
The different types of promotional items may be used appropriately in the
marketing public relations campaign. These items are:
Ć Corporate video;
Ć Newsletter;
Ć Magazine;
Ć Brochure; and
Ć Direct mail.
1.3.2 Direct Marketing Communications
One type of sales promotion is direct marketing.
It uses many media to offer something to the customer so that he/she is
encouraged to react directly. One of the important ways to respond is through
direct mail.
Direct marketing can also involve personal selling between individuals or via
telemarketing. It is clear that direct marketing is not only in the form of direct
mail but all kinds of potential direct media such as Internet communication,
telephone communication, and radio and television advertising.
Interactivity is important in direct marketing. This means there is a two-way
communication between an organisation and its prospect. Both can initiate their
communication. That’s why direct marketing is equivalent to direct response
marketing.
Direct marketing is a marketing communication system that stresses on
direct response from the audience.
ACTIVITY 1.1
An advertorial is a type of advertisement that resembles the editorial subject. The
Advertising Practice Code in certain countries demand that there should be a notice
saying it is an advertorial to avoid deception.
1. Give your opinion on what types of deception may take place?
2. In Malaysia, is there a notice stating that it is an advertorial?
3. Find an advertorial in the newspaper and elaborate on its characteristics.
4. Discuss: An advertorial is actually an advertisement, not a public relations item.
Basically, direct marketing is frequently used to encourage customers to make
their decisions, such as test driving, product tasting, showroom visiting and so
on, but many direct marketing activities are done to form a transaction. This
means that encouraging the customer to take action is important in direct
marketing.
Direct marketing usually uses offers and incentives to encourage reactions from
the customers. The offers promise visual or non-visual gifts by the company as a
reward for a customer's response.
Among the different types of offers are:
Ć Special price (for instance 20% discount),
Ć Purchasing term (for instance instalment),
Ć Guarantee (for instance five years guarantee) and others that involve
delivery, premium and image.
Incentive is also a type of offer. It can be a gift for a prompt response, loyalty
schemes that reward points for product redemption or other forms of incentives.
The important mechanism formed to enhance direct marketing is care lines such
as telephone, fax and e-mail. The audience can react directly through that
mechanism.
1.3.3 Personal Selling
However, some activities in personal selling overlap with sales exhibition
promotion, trade and merchandising sales, which include all kinds of activities to
ensure that the product is obtained easily and displayed clearly and attractively
at the place of sale. Usually, the roles of the salesperson can be split into two
which are:
Ć Service selling: Service selling obtains its sales from the existing customers.
Ć Developmental selling: Developmental selling turns prospects into
customers.
Personal selling is a promotional activity that excludes advertising, public
relations and sales promotion.
Figure 1.7: The two roles of the salesperson
Wilson K. J. in his article entitled Managing the industrial salesforce of the 1990s
in the Journal of Marketing 1993 (Pickton & Broderick 2005) stated that the daily
activity of a salesperson is no longer merely selling.
The new roles include:
Ć Partner
Ć Purchasing/selling team coordinator
Ć Customer service provider
Ć Information collector
Ć Analyst and market planner
Ć Sales forecaster
Ć Market cost analyst
Ć Technologist
Personal selling is an important component of marketing communications
specifically in external public activities and communication because it is flexible
and influential. The reason is that personal selling is not merely selling because it
is capable of maintaining customers, fostering a good relationship and projecting
a good image.
1.3.4 Trade Exhibition
Some of the trade exhibitions are places where the buyer and the seller meet.
There are also some exhibitions that are merely promotional tools without any
selling and purchasing activities.
No matter what the purpose, trade exhibition is only a transitory way to display,
introduce or sell the product. Normally, it is held with a special theme or in a
certain product category or for a certain audience group.
The two important areas in marketing communication covered by trade
exhibitions are activities related to:
Ć Selling and
Ć Activities related to promotion.
The type of trade exhibition held is different. There are small exhibitions carried
out in the shop itself; some are held in conjunction with a grand conference and
some are similar to international exhibitions with a lot of participation.
For the audience, some exhibitions are open to the public while some are
specifically for registered participants only or by invitation from the organiser.
In marketing communication, trade exhibition is an area that is not given much
focus but in terms of expenses, it involves large amounts of money and is carried
out by organisations mainly in their own form, from small exhibitions to grand
exhibitions held internationally.
This is because exhibition is regarded as an influential activity for the company to
convey a message to a large group face-to- face, while the cost is lower compared
with hiring a salesperson to do it directly.
In a research by Shipley et al. in year 1993 (in Pickton & Broderick 2005), it is
stated that the reasons to hold trade exhibitions are:
Ć Meeting new customers
Ć Strengthening the company’s image
Ć Interacting with customers
Ć Promoting existing products
Trade exhibition is a place to feature and demonstrate the product to
prospective customers.
Ć Launching new products
Ć Identifying competitor’s strategy
Ć Strengthening staff’s morale
Ć Interacting with suppliers
Ć Researching the market generally
Ć Taking purchasing order
Ć Meeting new publishers face-to- face
1.4 ADVERTISER AS COMMUNICATION SOURCE
Besides the message and media, another important component of marketing
communication is the advertiser itself. Advertisers are companies that serve as
the basic source of marketing communication messages, specifically advertising.
From the perspective of the advertising agency, these companies are clients who
provide the source message. They consist of the marketer, producer and
advertiser of all sorts of products, services or ideas. These companies comprise
government or private agency, business organisation or non-profit body.
Small companies may not afford costly marketing communication activities.
However, there are many alternatives for them in the advertising field. They can
use cheaper channels such as the phone directory, flyer, notice or sign board.
They may also use the local media with a smaller distribution and focus on
specific local areas only.
Big companies have larger annual provisions to enable them to place
advertisements in the different media and carry out public relations, sales
promotion and personal selling programmes. On the contrary, small companies
may not be able to spend consistently, but only according to their ability at
certain times only.
1.4.1 Advertising Company
According to Table 1.5, the main advertisers in Malaysia are telecommunications
companies, specifically Maxis, Telekom Malaysia Berhad, DiGi Telecommunications
and Celcom. The telecommunications industry has
developed significantly in recent years. Many of the telecommunications
companies are new but they have shown high performances in their promotional
activities.
For instance, Maxis only started its commercial operations in 1995 but it has
become a household name in the portable communications field and is the largest
company in this field in Malaysia.
Similarly, DiGi Telecommunications started its operations since 1995 and Celcom
was initially corporatised in 1998. These four large telecommunications
companies spent RM207 millions in 2002 and that accounted for 6% of the entire
advertising expenditure.
This was followed by food and beverage companies such as Unilever, Nestle and
Procter & Gamble. Unilever, which started with the name Lever Brothers in 1947
in a factory in Bangsar, has become a well-known name, Its factory, which is
worth RM12 millions through the production of margarine and soap, was
regarded as the biggest factory at the time. It is said that its machine can pack 124
pieces of soaps a minute. With its new name, Unilever (M) Holdings, in 1994, it is
famous for its Lipton®, Planta® and Wall’s® ice cream brands as well as the
brands of body care and cleansing products such as Lux®, Pond’s®, Dove®,
Hazeline®, Sunsilk®, Breeze®, Vim® and Jif®.
Another important group of advertisers are cigarette companies consisting of
British American Tobacco and JTI Trading Sdn. Bhd. Although cigarettes are not
an important product in advertising, these cigarette companies still spend a large
amount of money on advertising activities.
British American Tobacco Malaysia was established in November 1999 via the
merging of big cigarette companies Rothmans of Pall Mall (Malaysia) Berhad and
Malaysian Tobacco Company Bhd (MTC). The company manufactures, imports
and markets cigarettes under brands such as Dunhill, Kent, Pall Mall, Peter
Stuyvesant, Benson & Hedges and Perilly’s.
JTI Trading is a company corporatised in Malaysia which markets cigarette
products for the brands Salem, Winston, Mild Seven, Camel and More. Under the
JTI Group, companies such as Salem Power Station hold the licence of a network
of music shops, and companies such as Salem Holidays promote the tourism
service. Eagle Collection promotes clothes and men’s fashion under the brand
Winston, and Salem Cool Planet promotes entertainment services and products.
In the 1980s, the scenario was quite different, where tobacco products superseded
other products. In 1985, the top two advertising companies were Rothmans and
Malayan Tobacco, followed by Nestle and Malaysian Airlines.
Table 1.5: Main Advertisers in 2002
No Advertiser RM ,000
1 Maxis 73,273
2 Telekom (M) Bhd 66,567
3 Unilever Malaysia 50,259
4 British-American Tobacco 47,656
5 Nestle 44,025
6 Petronas 42,812
7 Procter & Gamble 37,844
8 DiGi Telecommunications Sdn. Bhd. 36,187
9 JT International Trading Sdn. Bhd. 31,984
10 Celcom 31,459
Source: Media Guide/AC Nielsen AdEx Report
1.4.2 Advertisement Expenditure Trend
Based on Table 1.6, advertisement expenditure in Malaysia has increased since
1990 from RM818.2 millions to RM3.4 millions in 2002. This is an increase of more
than 300% in 12 years time.
However, the increase was not consistent but fluctuated based on certain factors.
The highest increase was during the early years of the decade and the end of the
decade, when each had increased more than 24%. However, in 1998, there was a
significant drop of 17%, but this was the only decrease for the whole decade.
Table 1.6: Advertising Expenditure 1980-2002
Year Expenditure
(RM Million)
% Difference
1980 226 33.0
1984 401 77.4
1988 451 12.5
1990 818.2 81.4
1991 1016.3 24.2
1992 1128.0 11.0
1993 1440.8 27.7
1994 1673.9 16.2
1995 2022.0 20.8
1996 2413.5 19.4
1997 2631.6 9.0
1998 2178.6 -17.3
1999 2474.0 13.6
2000 3078.3 24.4
2001 3157.0 3.1
2002 3448.5 9.2
Source: SRM AdEx, Media Guide/AC Nielsen AdEx Report
Based on the media division, it is clear that a major part of advertising went to
the newspapers, followed by television, magazines, radio and the rest.
The newspaper channel controlled more than 60% of the share in the first three
years of the decade. The expenditure of RM360,000,000 in 1990 shot up to RM2.2
billions in 2002. The newspaper channel showed an increase from 40% in 1990 to
50% in 1993 and 60% at the beginning of 2000. It increased gradually, reaching
63% of the total advertising expenditure in 2002.
Television was the second most important media, covering 27% of the share in
2002 even though it has declined from 44% in 1990. During the decade, the
revenue percentage for television decreased consistently.
Despite this, , the actual figure for television expenditure increased yearly except
for 1998, when there was a decrease from RM780,224,000 to RM699,539,000 and
in 2001, from RM936,000,000 the previous year to RM878,000,000.
Magazines were in third place, capturing about five percent in 2002 and in the
past 10 years, between four and six percent. The highest percentage was in 1992
with around 10% and the lowest was four percent in 1999 and 2000.
Radio was in the fourth place with four percent in 2002 from a mere one percent
in 1990. For film and video, their shares were in the 0.4% range recently while
post advertising was slightly higher, with about 0.8%.
Table 1.7: Advertising Expenditure According to Media, 1990-2000 (Â000)
Year/
Media Magazine TV Radio Newspaper Video Film Post
1990 54.1 358.6 7.8 360.1 5.8 na na
1991 88.6 410.4 21.0 440.0 9.8 na na
1992 112.8 446.9 26.7 478.8 12.5 na na
1993 88.0 482.2 32.8 765.7 10.2 na na
1994 105.2 528.2 42.1 909.7 9.5 na na
1995 117.5 653.8 59.3 1,129.0 11.4 7.1 na
1996 121.5 772.4 71.5 1,407.8 10.2 7.4 na
1997 136.9 780.2 84.2 1,587.2 10.2 9.3 20.9
1998 111.3 699.5 65.5 1,261.3 9.7 10.7 20.6
1999 104.1 771.4 80.1 1,470.8 10.9 9.7 22.1
2000 131.2 935.7 102.0 1,866.2 9.4 9.7 24.2
2001 182.4 878.4 119.7 1,936.4 na 11.4 26.0
2002 158.1 921.8 144.1 2,186.5 na 9.7 28.3
Source: Media Guide/AC Nielsen AdEx Report
Table 1.8: Expenditure Percentage According to Main Media, 1990-2002
Year/Media Magazine TV Radio Newspaper
1990 7 44 1 44
1991 9 40 2 43
1992 10 39 2 42
1993 6 33 2 53
1994 6 32 3 54
1995 6 32 3 56
1996 5 32 3 58
1997 5 30 3 60
1998 5 32 3 58
1999 4 31 3 59
2000 4 30 3 61
2001 6 28 4 61
2002 5 27 4 63
Source: Media Guide/AC Nielsen AdEx Report
ACTIVITY 1.2
Based on Media Guide or other references, state the statistics of advertising
expenditure of the various industries or main companies. State also the media
usage in terms of advertising expenditure provisions.
What is the advertising expenditure and media usage.
What is the main media and what is the main media less focused on?
What is the advertising expenditure trend for the past five years?
Why is that so?
Advertising
Creative Boutique
Direct Marketing
Full Service Agency
Internal Agency
Marketing Communications
Media Kit
Media Release
Publicity
Stunt
SELF ASSESSMENT 1
1. What is marketing mix?
2. What is marketing communication mix?
3. Why is publicity more credible than advertising?
4. As an important element in marketing communication, advertising is the
choice because of some important factors. State all the factors.
5. What are the important tasks of a personal salesperson?
SELF ASSESSMENT 2
1. Think about some of the strengths of public relations or the other marketing
communication elements.
2. Draw and elaborate on the Stern model of advertising communication.
3. Apply the Stern advertising communication model to a special television
advertising campaign.
4. Identify and explain a type of special lobby that may be carried out by the
organisations below:
Workers Association, Tobacco Manufacturers Association, Parent-Teacher
Association.
5. Explain the similarities and differences between advertising and one of the
other marketing communication elements.
Reff
Arens, W. F. (2006). Contemporary advertising. (10th ed.). New York: McGraw-
Hill Irwin.
Duncan, T. (2006). Advertising and IMC. New York: McGraw-Hill Irwin.
Pickton, D. & Broderick, A. (2005). Integrated marketing communication.
London: Prentice Hall.
Varey, R. J. (2002). Marketing communication: Principles and practice. New York:
Routledge.
TOPIC 1 ADVERTISING AND MARKETING COMMUNICATION.
By the end of this topic, you will be able to:
1. Explain the marketing communication concept and the elements within;
2. Recognise the elements in marketing communications;
3. Observe advertising concepts and their relationship in marketing communications; and
4. Identify advertising communication models and how they differ from other communication models.
LEARNING OUTCOMES
1.1 MARKETING COMMUNICATIONS
Generally, human communication is divided into various types: individual
communication, group communication, organisation communication, inter-
cultural communication, inter-racial communication and mass communication.
Communication is an important area in the field of marketing, and as a subject of
research. For successful marketing, more people or staff should be involved in
the communication process either within or outside the organisation because
every organisation needs to handle different target audiences, or in this context,
the target market.
1.1.1 Marketing Communication Concept
Marketing communications is similar to promotion. Actually, ‘marketing
Communication’ is regarded as a new term compared with the term ‘promotion’,
and marketing experts now tend to use the term 'marketing communications' to
avoid confusion with the word 'promotion'.
The term 'promotion' is always linked to sales promotion, which is one of the
aspects of real promotional activities represented by marketing communications.
This means marketing communications not only involve sales promotion and
advertising, but also public relations, personal selling and other elements in the
marketing communication mix. So, marketing mix is regarded as the stepping
stone to marketing whereas marketing communication mix is regarded as the key
to marketing communications.
SELF-CHECK 1.1
The challenge in marketing communications is how to convey the correct message in an efficient way to the audience at the right place and time. Think about the meaning of:
The right message
The efficient way
The real audience
The right place
The accurate time
Another term related to marketing communications is corporate Communications. Blauw E. in Pickton & Broderick defines corporate communications as integrated approach to all communication produced by an organisation directed at all relevant target groups.
Van Riel, in the same book, defines it as communication with three forms management communication, organisation communication and marketing communication (see Figure 1.1).
Management communications is defined by Van Riel as the most important form among the three and it involves communication between the manager and the internal audience as well as the external audience. Organisation communications involves different types of communication activities and this includes internal communications, corporate advertising, public relations and other corporate-level types of communication. Marketing communications involves communication that supports the sale of products and services. This means marketing communications also involves corporate communication, because the image and perception of the organisation have a great impact on its products and services.
Figure 1.1: Description of corporate communications by Van Riel
(Pickton & Broderick, 2005)
1.1.2 Marketing Mix
Marketing mix is also known as the 4Ps. The term and classification were
introduced by E. Jerome McCarthy; however, the term marketing mix was
conceptualised by Neil Borden from Harvard Business School in 1948 and
became popular after he mentioned it in his speech during a function organised
by the American Marketing Association in 1953.
Marketing mix is analogised as a ‘recipe’ that contains different elements to
produce a product that satisfies the customer when it is blended or mixed
correctly. These elements are described by Borden as comprising 12 subjects:
Product planning
Price determination
Branding
Advertising
Promotion
Packaging
Display
Personal selling
Distribution channel
Physical handling
Service
Facts analysis
Borden shortened the list, by summarising it into four elements, namely Product,
Price Determination, Place Determination and Promotion · are also known as
the 4Ps. One of the ‘P’s is promotion related to marketing communications. See
Figure 1.2:
Thus, marketing communications can be summarised as all the elements of
promotion which involve communication between an organisation and the
target audience on issues related to marketing coverage.
Figure 1.2: Elements of marketing mix or 4Ps introduced by Neil Borden
There are researchers who further shortened part of Borden’s list to Promotion,
which covers Branding, Advertising, Packaging, Display and Personal Selling.
However, Borden’s list excludes other elements of promotion, such as Public
Relations, which is regarded as important in marketing communications. This
has resulted in researchers including it in their list.
1.1.3 Marketing Communication Mix
Marketing communication mix is also known as ‘promotion mix’. According to
Crosier (1990), both terms contain the same idea in the context of the 4Ps.
Although ‘marketing communications’ carries a wider meaning than
‘promotion’, their general meaning is the same.
Up till now, the easiest way to classify marketing communication mix is through
the four elements proposed by various marketing experts such as DeLozier
(1976), Kotler et.al. (1999), Crosier (1990), Shimp (1997) and Belch & Belch (1995).
They suggested four elements as below:
Advertising;
Public Relations;
Personal Selling; and
Sales Promotion.
Marketing communications refers to all the elements of promotion in the
marketing mix that involve communication between the organisation and
the target audience on all the subjects dealing with marketing performance.
Figure 1.3: Classification of marketing communication mix
Based on Figure 1.3, the different types of marketing communication activities
are separated from each other and are regarded as individual categories and
classified as independent activities. However, the real situation is not like this.
There is an important link between one category and another or between one
activity and another. For example, there are activities that overlap between
public relations and advertising. Branding, for instance, is not confined to public
relations. Similarly, corporate advertising or advertorials are not merely forms of
advertising.
Try to think what categories activities such as commerce fair, sales exhibition and
telemarketing fall under. What about business talks and sales gatherings with tea
breaks?
Figure 1.4: The overlapping of marketing communication mix
So, it can be said that Figure 1.4 is more suitable and realistic because activities
overlap. Branding, corporate advertising and product placement are advertising
activities that overlap with public relations.
Exhibitions, merchandising and trade sales are sales promotion activities that
overlap with personal selling.
In the same way, event management, lobbying, public-worker relationships are
categorised as public relations activities that overlap with personal selling. Sales
promotion activities that overlap with advertising are direct response advertising
and direct mail incentives.
1.2 ADVERTISING
Advertising is a main element in marketing communications. The other elements,
as elaborated earlier, are public relations, personal selling and sales promotion.
Each of the elements have different and special activities focusing on
communication.
1.2.1 Advertising Concept
Advertising started a long time ago and has become one of the important and
prevalent activities in promotion or marketing communications. However,
advertising should be distinguished from other marketing communication
activities. Below are the definitions of advertising given by a few authors.
Table 1.1: Definition of Advertising
Definition of Advertising Source
Any paid form of non-personal presentation and
promotion of ideas, goods or services by an identified
sponsor.
Kotler et al. (1999)
Paid non-personal communication from an identified sponsor using mass media
to persuade or influence an audience.
Wells et al. (1992)
Combines the definition given by American Marketing Association and Gilson-
Berkman as below:
“Non-personal communication or information that is usually paid for and usually
persuasive in nature about products, services or ideas by identified sponsors
through various media”.
Bovee & Arens
(1982)
From the definitions above, we can conclude that advertising has these
characteristics:
Ć Non-personal communication
Ć Paid communication
Ć Persuasive communication
Ć Product, service or idea communication
Ć Identified sponsor
Ć Usage of mass media
1.2.2 Advertising Communications
As one of the areas of communication, advertising is different from the other
types of communication because it has more specific characteristics, especially in
the source of the message, quality of message and the use of media.
The source of advertising communications consists of a few stages as explained
in the advertising communication model (Topic 1.1.3). Advertised messages are
conveyed in different forms, either verbally or audio-visually, depending on the
media used.
These media are both traditional and non-traditional. Traditional media are the
main media in print and electronic form. Most of the external media are in
printed form, but in recent times many print media are employing electronic
elements. Non-traditional media consist of other forms such as balloons,
calendars, business cards, souvenirs, clothes, matchboxes and whatever items
that can be distributed to the target market.
Advertising is regarded as very important in marketing communications because
the expenses involved are higher than other forms of advertising. Although the
other elements need to be chosen and combined effectively with it, the
advertising element is important because of a few basic considerations:
Ć Wide coverage with the ability to reach the mass audience because the mass
media used tend to cover a wide geographical area either locally or
internationally.
Ć With more accurate targeting, it can reach selective audiences. This happens
when there are more media and the content as well as the target audience are
more specific.
Ć Low unit cost because the cost borne will remain the same, especially the
fixed cost even though the audience has increased.
Ć Economical, effective and efficient in reaching the mass audience. Effective in
brand maintenance and brand development.
Advertising is an area of marketing communications because it is used as a
tool to convey marketing messages.
1.2.3 Advertising Communication Model
Advertising is one of the knowledge disciplines in the field of mass
communications or media studies. The advertising field has developed until it
has become one of the knowledge disciplines that interest many communications
and marketing scholars. Therefore, a few theories and communication models
have been proposed to simplify the research work and analyse the advertising
practice academically.
One of the models is the Advertising Communication Process Model proposed
by Barbara Stern based on basic communication models. Stern sees advertising as
a type of structured text but not an informal speech. ThatÊs why her model shows
that the sources, messages and receivers have different dimensions. Some of
these dimensions exist in the real world while the rest exist in different reality
stages.
In the oral communication model, the source consists of the individual who
conveys the message to other individuals or a group of individuals. In
advertising, the situation is rather complex because the real source is not the
person who conveys the message. If it isn’t, then who is the source or the actual
communicator?
The real source is the sponsor, the party officially responsible for the
communication and who has a message to convey to the audience. Therefore, the
Stern model can be featured as in Figure 1.5 below.
Figure 1.5: The Stern advertising communication process model
The model shows that the advertising communications source has three stages,
which are the sponsor in stage one, the author in stage two and the persona in
stage three.
Ć The sponsor is the advertiser that usually consists of a company or an
organisation. They have certain messages to convey.
Ć The author is the source or person who produces the message as instructed
by the sponsor.
Ć The persona is the source who conveys the message. The spokesperson is
used to convey the message. They loans their voice and personality for the
purpose. For the consumer, this is the source that represents the company,
which is the sponsor. However, the discourse or message conveyed is
produced by the author for advertising purposes.
Based on Figure 1.5, the communication path from the sponsor to the audience is
long and winding, which is through the author (copywriter) to the persona
(actor, announcer and demonstrator). This means the source in advertising
communication has at least three tiers, which are the sponsor, author and
persona.
The message from the source is conveyed in different literary forms to the
different levels of consumers. These are the special strategies planned to ensure
that the aim of the communication is achieved.
There are also different categories of source receivers, which Stern has divided
into external consumers, sponsored consumers and real consumers. External
consumers are the potential group that is identified during the production
process of the advertisement.
Apart from that, there are sponsors who consist of decision makers in an
organisation or company that sponsors the advertisement. They are also
categorised into the advertisement message receiver group because as the
financial decision-makers and advertising campaign verifiers, they have to
evaluate the advertisement and make certain responses that affect the fate of the
advertisement.
1.3 OTHER ELEMENTS OF MARKETING COMMUNICATIONS
As stated earlier, marketing communications covers various elements namely:
Ć Public relations;
Ć Personal selling;
Ć Sales promotion; and
Ć Advertising.
The subtitle below will elaborate on those elements but excludes the topic
‘advertising’ which was discussed earlier.
1.3.1 Public Relations Marketing
What is the difference between advertising campaigns and public relations
marketing?
To answer the question, we need to first look at the meaning of public relations.
According to the Public Relations Institute of the United Kingdom, public
relations is the planned and sustained effort to establish and maintain goodwill
and mutual understanding between the organisation and its publics.
According to Tom Duncan (2005), the list of responsibilities and functions of the
public relations department is as follows (Figure 1.6):
Figure 1.6: Responsibilities and functions of the public relations department
according to Tom Duncan (2005)
Public relations is the communication activity aimed at forming an
understanding between the organisation and the audience, where the
audience consists of interested parties such as the customer, supplier,
shareholder, staff and so on.
Therefore, ‘public relations’ is definitely a concept, a profession, a management
function and a practice with the main aim to form an understanding and a good
relationship between the organisation and interested parties.
To foster a good relationship, the organisation needs to perform different types of
public relations activities as shown in Table 1.2. The table also shows the civilians
or public that becomes its audience.
Table 1.2: Activity and Audience of Public Relations
Activity Description Publicity
Communication programme, product promotion and branding to target the
customer and target audience.
Differs from advertising, and the identity of the person organising the publicity
function usually will not be revealed, and this increases the credibility because it
will appear as though the journalist or commentator prepares it.
Media Relations
Activity to disseminate information about the organisation
to the media.
Activity to foster a good relationship with the media such as
the journalist and the chief editor.
Corporate Communication
Programme that focuses on corporate identity, reputation
management and strategic counselling for higher
management.
Worker Relationship
Internal communication programme to provide workers and staff with
information.
Investor Relationship
Information programme for the community of investors:
investors, analysts and financial papers.
Crisis Management
General plan to handle the company reaction in the event of a disaster.
In these cases, public relations certainly cannot be separated from marketing.
This is because public relations have an important function in carrying out the
promotion.
There are many public relations functions that overlap with marketing functions
even though they have independent functions. At the same time, some of the
functions are related. Some of them also support each other to accomplish the
objectives of public relations and marketing. The overlapping area mentioned by
the marketing and public relations experts is known as marketing public
relations. Table 1.3 below shows the definition of marketing public relations.
Table 1.3: Definition of Marketing Public Relations
Definition of Marketing Public Relations Source
The marketing oriented aspect of public relations. The
narrow aspect of public relations involving an organisation’s
interaction with consumers and other public regarding
marketing matters.
Shimp T.A. in (Pickton & Broderick 2005)
The process of planning, implementing and evaluating the
programme that encourages purchase and customer
satisfaction via trusted information communication to
accommodate the company and organisation according to
the need, demand, care and interests of the customers.
Harris in (Pickton & Broderick 2005)
Based on the comprehensive scope covered by marketing public relations, it is
apparent that different types of activities can be used for marketing
communication campaigns.
Those activities include media release, media conference, media relationship and
entertainment as well as publicity functions. Table 1.4 illustrates the diversity of
these activities.
Table 1.4: Special Activities of Marketing Public Relations
Special Activity Description Media release Information provided by the media in the
form of press release, video release, media pack and other documents.
Media conference
A function that invites journalists and media editors so that they can provide
coverage on the programme or product being launched.
Media relations Long-term good relationship fostered by publicity officers, PA
agents and media experts with journalists and editors.
Publicity functions and stunt.
Special activity to catch the public’s attention; it is called a stunt if it is
extraordinary or spectacular such as flying with a balloon carrying the company’s
logo to celebrate the organisation’s anniversary.
Lobby Activity to gain a good reputation among the authorities in a company, an
organisation or a leader.
Promotional item
All forms and types of items used in the marketing public relations campaigns.
Advertorial Paid advertisement but its presentation make it appear as an editorial
subject to increase the credibility of the information in it.
Sponsor and contribution
Fund contribution for an activity carried out by an individual or organisation. The
aim may be altruistic but normally it is expected to achieve marketing or corporate
objectives.
Corporate identity item
Covers all types of company stationery or sign boards that have the logo, symbol
and colour of the company. These become an important part of marketing
communications.
Company website.
Promotional activities via the Internet that provide information on the
organisation.
Corporate publication
Publication produced by the organisation for its publics such as workers,
shareholders and customers.
Publication work done either by the organisation itself or external publishers given
the task. Some of the important types of corporate publications are internal
magazines and customer magazines published in various forms such as amphlets,
bulletins and glossy magazines.
The annual report is another important type of corporate publication while
corporate video is in audio-visual form.
Exclusive Marketing public relations activities cover as much media as possible but
sometimes an organisation decides to offer the exclusive rights of a piece of news
to specified media.
This increases the possibility of the news becoming the headline if it is suitable for
the target audience of the media.
Interview and photography session
One of the functions of marketing public relations is to provide a spokesperson or
representative for the organisation to interview or to provide a commentary,
performance and photography session. This enables the view of the organisation to
be presentated in an effective way.
Speech The representative or spokesperson of the organisation will give a speech
during a conference, industrial meeting, business party, public function and so on.
The speech is written by the public relations staff and the speech transcripts will be
distributed to the media as part of the media release.
As shown above, there are many types of marketing public relations activities.
These activities are carried out either externally or internally.
If they are carried out externally, the organisation needs to use the agency’s
service to complement the campaigns implemented internally.
Based on the activities above, the media release is the most basic marketing
public relations. The purpose of the media release is to catch the editorÊs
attention so that they will insert it into the media.
The main media used are the press release, radio and television. A media release
may be in the form of a simple press release but it can also be a complete media
pack. It includes information, photographs, video and audio tape, CD as well as
DVD. The Internet, web page, bulletin board and e-mail are used to produce the
release besides the traditional media mentioned earlier.
A media conference is a function to which reporters, journalists and editors are
invited. Usually, the press conference is held together with another important
ceremony or function. During the press conference, the reporter will usually be
given a media kit or press kit, which is a packet of information containing many
different items such as the function’s programme book, background information,
speech, history, pictures and all kinds of information needed about the
programme or product.
The different types of promotional items may be used appropriately in the
marketing public relations campaign. These items are:
Ć Corporate video;
Ć Newsletter;
Ć Magazine;
Ć Brochure; and
Ć Direct mail.
1.3.2 Direct Marketing Communications
One type of sales promotion is direct marketing.
It uses many media to offer something to the customer so that he/she is
encouraged to react directly. One of the important ways to respond is through
direct mail.
Direct marketing can also involve personal selling between individuals or via
telemarketing. It is clear that direct marketing is not only in the form of direct
mail but all kinds of potential direct media such as Internet communication,
telephone communication, and radio and television advertising.
Interactivity is important in direct marketing. This means there is a two-way
communication between an organisation and its prospect. Both can initiate their
communication. That’s why direct marketing is equivalent to direct response
marketing.
Direct marketing is a marketing communication system that stresses on
direct response from the audience.
ACTIVITY 1.1
An advertorial is a type of advertisement that resembles the editorial subject. The
Advertising Practice Code in certain countries demand that there should be a notice
saying it is an advertorial to avoid deception.
1. Give your opinion on what types of deception may take place?
2. In Malaysia, is there a notice stating that it is an advertorial?
3. Find an advertorial in the newspaper and elaborate on its characteristics.
4. Discuss: An advertorial is actually an advertisement, not a public relations item.
Basically, direct marketing is frequently used to encourage customers to make
their decisions, such as test driving, product tasting, showroom visiting and so
on, but many direct marketing activities are done to form a transaction. This
means that encouraging the customer to take action is important in direct
marketing.
Direct marketing usually uses offers and incentives to encourage reactions from
the customers. The offers promise visual or non-visual gifts by the company as a
reward for a customer's response.
Among the different types of offers are:
Ć Special price (for instance 20% discount),
Ć Purchasing term (for instance instalment),
Ć Guarantee (for instance five years guarantee) and others that involve
delivery, premium and image.
Incentive is also a type of offer. It can be a gift for a prompt response, loyalty
schemes that reward points for product redemption or other forms of incentives.
The important mechanism formed to enhance direct marketing is care lines such
as telephone, fax and e-mail. The audience can react directly through that
mechanism.
1.3.3 Personal Selling
However, some activities in personal selling overlap with sales exhibition
promotion, trade and merchandising sales, which include all kinds of activities to
ensure that the product is obtained easily and displayed clearly and attractively
at the place of sale. Usually, the roles of the salesperson can be split into two
which are:
Ć Service selling: Service selling obtains its sales from the existing customers.
Ć Developmental selling: Developmental selling turns prospects into
customers.
Personal selling is a promotional activity that excludes advertising, public
relations and sales promotion.
Figure 1.7: The two roles of the salesperson
Wilson K. J. in his article entitled Managing the industrial salesforce of the 1990s
in the Journal of Marketing 1993 (Pickton & Broderick 2005) stated that the daily
activity of a salesperson is no longer merely selling.
The new roles include:
Ć Partner
Ć Purchasing/selling team coordinator
Ć Customer service provider
Ć Information collector
Ć Analyst and market planner
Ć Sales forecaster
Ć Market cost analyst
Ć Technologist
Personal selling is an important component of marketing communications
specifically in external public activities and communication because it is flexible
and influential. The reason is that personal selling is not merely selling because it
is capable of maintaining customers, fostering a good relationship and projecting
a good image.
1.3.4 Trade Exhibition
Some of the trade exhibitions are places where the buyer and the seller meet.
There are also some exhibitions that are merely promotional tools without any
selling and purchasing activities.
No matter what the purpose, trade exhibition is only a transitory way to display,
introduce or sell the product. Normally, it is held with a special theme or in a
certain product category or for a certain audience group.
The two important areas in marketing communication covered by trade
exhibitions are activities related to:
Ć Selling and
Ć Activities related to promotion.
The type of trade exhibition held is different. There are small exhibitions carried
out in the shop itself; some are held in conjunction with a grand conference and
some are similar to international exhibitions with a lot of participation.
For the audience, some exhibitions are open to the public while some are
specifically for registered participants only or by invitation from the organiser.
In marketing communication, trade exhibition is an area that is not given much
focus but in terms of expenses, it involves large amounts of money and is carried
out by organisations mainly in their own form, from small exhibitions to grand
exhibitions held internationally.
This is because exhibition is regarded as an influential activity for the company to
convey a message to a large group face-to- face, while the cost is lower compared
with hiring a salesperson to do it directly.
In a research by Shipley et al. in year 1993 (in Pickton & Broderick 2005), it is
stated that the reasons to hold trade exhibitions are:
Ć Meeting new customers
Ć Strengthening the company’s image
Ć Interacting with customers
Ć Promoting existing products
Trade exhibition is a place to feature and demonstrate the product to
prospective customers.
Ć Launching new products
Ć Identifying competitor’s strategy
Ć Strengthening staff’s morale
Ć Interacting with suppliers
Ć Researching the market generally
Ć Taking purchasing order
Ć Meeting new publishers face-to- face
1.4 ADVERTISER AS COMMUNICATION SOURCE
Besides the message and media, another important component of marketing
communication is the advertiser itself. Advertisers are companies that serve as
the basic source of marketing communication messages, specifically advertising.
From the perspective of the advertising agency, these companies are clients who
provide the source message. They consist of the marketer, producer and
advertiser of all sorts of products, services or ideas. These companies comprise
government or private agency, business organisation or non-profit body.
Small companies may not afford costly marketing communication activities.
However, there are many alternatives for them in the advertising field. They can
use cheaper channels such as the phone directory, flyer, notice or sign board.
They may also use the local media with a smaller distribution and focus on
specific local areas only.
Big companies have larger annual provisions to enable them to place
advertisements in the different media and carry out public relations, sales
promotion and personal selling programmes. On the contrary, small companies
may not be able to spend consistently, but only according to their ability at
certain times only.
1.4.1 Advertising Company
According to Table 1.5, the main advertisers in Malaysia are telecommunications
companies, specifically Maxis, Telekom Malaysia Berhad, DiGi Telecommunications
and Celcom. The telecommunications industry has
developed significantly in recent years. Many of the telecommunications
companies are new but they have shown high performances in their promotional
activities.
For instance, Maxis only started its commercial operations in 1995 but it has
become a household name in the portable communications field and is the largest
company in this field in Malaysia.
Similarly, DiGi Telecommunications started its operations since 1995 and Celcom
was initially corporatised in 1998. These four large telecommunications
companies spent RM207 millions in 2002 and that accounted for 6% of the entire
advertising expenditure.
This was followed by food and beverage companies such as Unilever, Nestle and
Procter & Gamble. Unilever, which started with the name Lever Brothers in 1947
in a factory in Bangsar, has become a well-known name, Its factory, which is
worth RM12 millions through the production of margarine and soap, was
regarded as the biggest factory at the time. It is said that its machine can pack 124
pieces of soaps a minute. With its new name, Unilever (M) Holdings, in 1994, it is
famous for its Lipton®, Planta® and Wall’s® ice cream brands as well as the
brands of body care and cleansing products such as Lux®, Pond’s®, Dove®,
Hazeline®, Sunsilk®, Breeze®, Vim® and Jif®.
Another important group of advertisers are cigarette companies consisting of
British American Tobacco and JTI Trading Sdn. Bhd. Although cigarettes are not
an important product in advertising, these cigarette companies still spend a large
amount of money on advertising activities.
British American Tobacco Malaysia was established in November 1999 via the
merging of big cigarette companies Rothmans of Pall Mall (Malaysia) Berhad and
Malaysian Tobacco Company Bhd (MTC). The company manufactures, imports
and markets cigarettes under brands such as Dunhill, Kent, Pall Mall, Peter
Stuyvesant, Benson & Hedges and Perilly’s.
JTI Trading is a company corporatised in Malaysia which markets cigarette
products for the brands Salem, Winston, Mild Seven, Camel and More. Under the
JTI Group, companies such as Salem Power Station hold the licence of a network
of music shops, and companies such as Salem Holidays promote the tourism
service. Eagle Collection promotes clothes and men’s fashion under the brand
Winston, and Salem Cool Planet promotes entertainment services and products.
In the 1980s, the scenario was quite different, where tobacco products superseded
other products. In 1985, the top two advertising companies were Rothmans and
Malayan Tobacco, followed by Nestle and Malaysian Airlines.
Table 1.5: Main Advertisers in 2002
No Advertiser RM ,000
1 Maxis 73,273
2 Telekom (M) Bhd 66,567
3 Unilever Malaysia 50,259
4 British-American Tobacco 47,656
5 Nestle 44,025
6 Petronas 42,812
7 Procter & Gamble 37,844
8 DiGi Telecommunications Sdn. Bhd. 36,187
9 JT International Trading Sdn. Bhd. 31,984
10 Celcom 31,459
Source: Media Guide/AC Nielsen AdEx Report
1.4.2 Advertisement Expenditure Trend
Based on Table 1.6, advertisement expenditure in Malaysia has increased since
1990 from RM818.2 millions to RM3.4 millions in 2002. This is an increase of more
than 300% in 12 years time.
However, the increase was not consistent but fluctuated based on certain factors.
The highest increase was during the early years of the decade and the end of the
decade, when each had increased more than 24%. However, in 1998, there was a
significant drop of 17%, but this was the only decrease for the whole decade.
Table 1.6: Advertising Expenditure 1980-2002
Year Expenditure
(RM Million)
% Difference
1980 226 33.0
1984 401 77.4
1988 451 12.5
1990 818.2 81.4
1991 1016.3 24.2
1992 1128.0 11.0
1993 1440.8 27.7
1994 1673.9 16.2
1995 2022.0 20.8
1996 2413.5 19.4
1997 2631.6 9.0
1998 2178.6 -17.3
1999 2474.0 13.6
2000 3078.3 24.4
2001 3157.0 3.1
2002 3448.5 9.2
Source: SRM AdEx, Media Guide/AC Nielsen AdEx Report
Based on the media division, it is clear that a major part of advertising went to
the newspapers, followed by television, magazines, radio and the rest.
The newspaper channel controlled more than 60% of the share in the first three
years of the decade. The expenditure of RM360,000,000 in 1990 shot up to RM2.2
billions in 2002. The newspaper channel showed an increase from 40% in 1990 to
50% in 1993 and 60% at the beginning of 2000. It increased gradually, reaching
63% of the total advertising expenditure in 2002.
Television was the second most important media, covering 27% of the share in
2002 even though it has declined from 44% in 1990. During the decade, the
revenue percentage for television decreased consistently.
Despite this, , the actual figure for television expenditure increased yearly except
for 1998, when there was a decrease from RM780,224,000 to RM699,539,000 and
in 2001, from RM936,000,000 the previous year to RM878,000,000.
Magazines were in third place, capturing about five percent in 2002 and in the
past 10 years, between four and six percent. The highest percentage was in 1992
with around 10% and the lowest was four percent in 1999 and 2000.
Radio was in the fourth place with four percent in 2002 from a mere one percent
in 1990. For film and video, their shares were in the 0.4% range recently while
post advertising was slightly higher, with about 0.8%.
Table 1.7: Advertising Expenditure According to Media, 1990-2000 (Â000)
Year/
Media Magazine TV Radio Newspaper Video Film Post
1990 54.1 358.6 7.8 360.1 5.8 na na
1991 88.6 410.4 21.0 440.0 9.8 na na
1992 112.8 446.9 26.7 478.8 12.5 na na
1993 88.0 482.2 32.8 765.7 10.2 na na
1994 105.2 528.2 42.1 909.7 9.5 na na
1995 117.5 653.8 59.3 1,129.0 11.4 7.1 na
1996 121.5 772.4 71.5 1,407.8 10.2 7.4 na
1997 136.9 780.2 84.2 1,587.2 10.2 9.3 20.9
1998 111.3 699.5 65.5 1,261.3 9.7 10.7 20.6
1999 104.1 771.4 80.1 1,470.8 10.9 9.7 22.1
2000 131.2 935.7 102.0 1,866.2 9.4 9.7 24.2
2001 182.4 878.4 119.7 1,936.4 na 11.4 26.0
2002 158.1 921.8 144.1 2,186.5 na 9.7 28.3
Source: Media Guide/AC Nielsen AdEx Report
Table 1.8: Expenditure Percentage According to Main Media, 1990-2002
Year/Media Magazine TV Radio Newspaper
1990 7 44 1 44
1991 9 40 2 43
1992 10 39 2 42
1993 6 33 2 53
1994 6 32 3 54
1995 6 32 3 56
1996 5 32 3 58
1997 5 30 3 60
1998 5 32 3 58
1999 4 31 3 59
2000 4 30 3 61
2001 6 28 4 61
2002 5 27 4 63
Source: Media Guide/AC Nielsen AdEx Report
ACTIVITY 1.2
Based on Media Guide or other references, state the statistics of advertising
expenditure of the various industries or main companies. State also the media
usage in terms of advertising expenditure provisions.
What is the advertising expenditure and media usage.
What is the main media and what is the main media less focused on?
What is the advertising expenditure trend for the past five years?
Why is that so?
Advertising
Creative Boutique
Direct Marketing
Full Service Agency
Internal Agency
Marketing Communications
Media Kit
Media Release
Publicity
Stunt
SELF ASSESSMENT 1
1. What is marketing mix?
2. What is marketing communication mix?
3. Why is publicity more credible than advertising?
4. As an important element in marketing communication, advertising is the
choice because of some important factors. State all the factors.
5. What are the important tasks of a personal salesperson?
SELF ASSESSMENT 2
1. Think about some of the strengths of public relations or the other marketing
communication elements.
2. Draw and elaborate on the Stern model of advertising communication.
3. Apply the Stern advertising communication model to a special television
advertising campaign.
4. Identify and explain a type of special lobby that may be carried out by the
organisations below:
Workers Association, Tobacco Manufacturers Association, Parent-Teacher
Association.
5. Explain the similarities and differences between advertising and one of the
other marketing communication elements.
Reff
Arens, W. F. (2006). Contemporary advertising. (10th ed.). New York: McGraw-
Hill Irwin.
Duncan, T. (2006). Advertising and IMC. New York: McGraw-Hill Irwin.
Pickton, D. & Broderick, A. (2005). Integrated marketing communication.
London: Prentice Hall.
Varey, R. J. (2002). Marketing communication: Principles and practice. New York:
Routledge.
