MASTER’S THESIS
2004:123 CIV
MASTER OF SCIENCE PROGRAMME
Department of Business Administration and Social ScienceDivision of Industrial Marketing and e-Commerce
2004:123 CIV • ISSN: 1402 - 1617 • ISRN: LTU - EX - - 04/123 - - SE
Marketing Communications How is the Process?
A case study of the Swedish National Road Administration (SNRA)
PER ÅKERLUND
ACKNOWLEDGEMENTS
As a result of my first year at the Swedish National Road Administration (SNRA), the idea to write this thesis aroused. Having a break from studding, I worked with marketing research and marketing communications within the area of traffic safety. That first year at the SNRA was special. I think the people at VNtr who welcomed me to the organization already know I am grateful.
Soon, I will receive my master’s degree. This thesis will complete my education at Luleå University of Technology. It depends on the contributions from several people. I would like to show them my appreciation:
Gunnel Johansson (VNi), - You deserve a special thank. For encouraging me to go on with this, as well as your support and our valuable chats along the way. You advised me to get in touch with the following three persons to whom I am grateful. Thank you Eva Tigerström, Christer Hårrskog, and Gunilla Lundberg for your interest as well as your willingness to support and to share your knowledge. I also would like to thank Agneta Hedenblad, Kristina Gisslar, Åsa Ersson, and Ulf Magnusson who gladly helped me along the way. In addition, I would like to thank all the managers who participated with great interest during our interviews.
Thank you Professor Esmail Salehi-Singari at Luleå University of Technology for your supervision. I also would like to thank Assistant Professor Lennart Persson for your valuable help and support.
Last but not least, thank you Theres Larsson for helping me with the focus group.
Luleå, September 2003 Per Åkerlund
ABSTRACT
Since marketing could be relevant for any organization, even those whose primary goal is non-economic and especially those who undertake a customer-oriented approach, this master’s thesis will focus on one of its elements: Promotions or marketing communications.
The research problem has been formulated as follows:
The purpose of this study is to make an assessment of the marketing communications process of a non-profit organization.
The frame of reference, based on a literature review of performed research within the area, will guide this research. The marketing communications process defined involves a message sender and a message receiver. It involves the three major concerns of WHOM to reach, WHAT to say and HOW it should be done. Further, it includes the planning and development of communications. Above all: It includes the connection to the overall strategic direction of the entire organization.
To explore and to describe the marketing communications process of a non-profit organization from a managerial perspective, a case study has been conducted at a large Swedish governmental agency – the Swedish National Road Administration (SNRA).
Managers of information and communication, working centrally as well as regionally, have been interviewed. To explore the process from the receiver’s perspective, a pilot study has been conducted. A focus group with eleven young people was conducted in the city of Luleå.
Their perception of the SNRA was explored, as well as how it communicates with young people. In order to answer the second research question, how the process of other non-profit organizations is different, the Swedish Customs was interviewed. In addition, the planning and development procedure of the Climate campaign was assessed. The government and the Swedish Environmental protection Agency commission it.
The findings of this study indicates that the sender of marketing communications, in this case the SNRA, has internal problems as well as problems related to the receiver or target audience. Internally, it is sometimes hard to get hold of the overall picture of what is being communicated. Furthermore, the target audience becomes a second priority when internal assigners must be pleased. Even though things are perceived to improve, the SNRA does not succeed in targeting their segments consistently. The concerns of WHAT, and HOW, rather than WHOM, seem to dominate decision-making. The logical central steps in communications planning, described in theory, are not generally performed that logically by the SNRA. On the other hand, the planning procedure of the Climate campaign makes an example of how it should be performed. Concerning how marketing communications connects to the overall strategic direction, the SNRA has a corporate mission and corporate objectives that can set direction. However, too many managers ask for the main thread.
According to this study, there is a gap between corporate strategies and marketing communications. A marketing strategy does not even exist. It might be on its way and all managers welcome its main elements: segmentation, targeting and positioning.
The managerial implications suggested from this study do not just involve managers of communication and information. It involves all mangers responsible for carrying out the mission of the SNRA, and especially those responsible for coordinating the marketing mix:
the products, the services and the values the SNRA offers. The improvements of the marketing communications process will not only benefit marketing communication.
TABLE OF CONTENT
1. PROBLEM AREA ... 6
1.1 INTRODUCTION... 6
1.2 GENERAL BACKGROUND... 7
1.3 BACKGROUND OF THE SWEDISH NATIONAL ROAD ADMINISTRATION... 9
1.3 DEVELOPED PROBLEM AREA... 10
2. LITERATURE REVIEW... 13
2.1 NON-PROFIT- AND PUBLIC SECTOR ORGANIZATIONS... 13
2.1.1 Marketing for non-profit- and public sector organizations ... 14
2.1.2 Customer-orientation ... 15
2.1.4 Levels of strategies and the corporate, marketing and communication hierarchy ... 16
2.1.5 Corporate strategy ... 18
2.2 MARKETING STRATEGY... 19
2.2.1 Market Segmentation... 19
2.2.2 Target marketing ... 22
2.2.3 Market positioning ... 23
2.2.4 The marketing plan- or program... 24
2.3. MARKETING COMMUNICATIONS... 25
2.3.1 The marketing communication process... 25
2.3.2 Marketing communications strategy and planning ... 28
2.3.3 Target audience identification ... 31
2.3.4 Determining the marketing communications objectives ... 32
2.3.5 Designing the message ... 33
2.3.6 Selection of communication channels ... 34
2.3.7 Determining the budget ... 35
2.3.8 Deciding on the media-mix ... 36
2.3.9 Measure the communication’s results... 37
3. RESEARCH QUESTIONS AND CONCEPTUAL FRAMEWORK... 38
3.1 RESEARCH PROBLEM AND RESEARCH QUESTIONS... 38
3.1.1 Research problem... 38
3.1.2 Research question one... 39
3.1.3 Research question two... 39
3.1.3 Research question three ... 40
3.2 CONCEPTUAL FRAMEWORK... 40
4. RESEARCH METHODOLOGY ... 43
4.1 INTRODUCTION... 43
4.2 RESEARCH APPROACH... 43
4.3 RESEARCH STRATEGY... 44
4.3.1 Case study ... 44
4.3.2 Case study design ... 44
4.3.3 Case selection... 45
4.3.4 Pilot studies ... 45
4.4. RESEARCH METHODS... 46
4.4.1 Data collection ... 46
4.4.2 Data Analysis ... 48
4.5 QUALITY CRITERIA... 50
4.5.1 Construct validity ... 50
4.5.2 Internal validity ... 50
4.5.3 External validity ... 50
4.5.4 Reliability ... 50
5. EMPIRICAL PRESENTATION ... 51
5.1 INTERVIEWS WITH COMMUNICATION AND INFORMATION MANAGERS OF THE SNRA 51 5.1.1 The background of the managers and their departments... 51
5.1.2 The perception of the marketing communications process of the SNRA... 52
5.1.3 Communication with young people ... 55
5.1.4 The concerns of WHOM, WHAT, and HOW ... 57
5.1.5 Communications planning and development: One important example from each manager ... 60
5.1 6. Communications planning and development: The SUV scenario ... 63
5.1.7 Identifying the target audience... 65
5.1.8 Determining objectives... 66
5.1.9 Designing the message ... 67
5.1.10 Determining the budget ... 68
5.1.11 Deciding on the media mix... 69
5.1.12 Measuring the results ... 70
5.1.13 Connection to overall strategic direction: Strategic communications... 71
5.1.14 Connection to overall strategic direction: Corporate strategy... 72
5.1.15 Connection to overall strategic direction: Marketing strategy... 72
5.1.16 Connection to overall strategic direction: Strategic planning approach ... 73
5.1.17 Suggestions on improvement from the managers... 75
5.2 A FOCUS GROUP WITH YOUNG PEOPLE... 76
5.2.1 The background of the members ... 76
5.2.2 The relationship with the SNRA: how is it imaged?... 77
5.2.3 The SNRA hallmarks compared to its image... 79
5.2.4 How is the communication of the SNRA?... 80
5.2.5 The SNRA vision: We make the good journey possible... 83
5.2.6 Sport Utility Vehicle (SUV) ... 84
5.2.7 The participation in a focus group ... 85
5.3 INTERVIEW WITH THE SWEDISH CUSTOMS... 86
5.3.1 The perception of the marketing communications process of the Swedish Customs ... 86
5.4 THE PLANNING AND DEVELOPMENT OF THE CLIMATE CAMPAIGN... 88
5.4.1 Target audience identification ... 88
5.4.2 Deciding on communication objectives... 88
5.4.3 The communications platform ... 89
5.4.4 The campaign design and development ... 89
5.4.5 Communication results... 90
5.4.6 Integrated communication... 90
6. ANALYSIS... 91
6.1 THE MARKETING COMMUNICATIONS PROCESS OF THE SNRA ... 91
6.1.1 Analyzing the perceptions of the communications process ... 91
6.1.2 Analyzing the concerns of WHOM, WHAT, and HOW ... 92
6.1.3 Analyzing communications planning and development ... 93
6.1.4 Analyzing the connection to overall strategic direction... 97
6.2 ANALYZING THE FOCUS GROUP... 100
6.3 ANALYZING THE SWEDISH CUSTOMS... 102
6.4 ANALYZING THE CLIMATE CAMPAIGN... 103
7. CONCLUSIONS AND IMPLICATIONS... 105
7.1 CONCLUSIONS... 105
7.1.1 Research question one: How is the marketing communications process of the SNRA? ... 105
7.1.2 Research question two: How is it different form the ones of other non-profit organizations? ... 106
7.1.3 Research question three: In what way the marketing communications process could be improved? ... 107
7.1.4 Overall conclusion concerning the research problem ... 108
7.2 MANAGERIAL IMPLICATIONS... 108
REFERENCES ... 110
APPENDIX A: Interview guide in English APPENDIX B: Interview guide in Swedish
APPENDIX C: Focus group discussion guide in English APPENDIX D: Focus group discussion guide in Swedish
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1. PROBLEM AREA
The first chapter introduces the problem area, the marketing communications process, and continues with a background description. It ends with the developed problem area, focusing on the problems that motivate this research.
1.1 Introduction
Over the years, marketing has had difficulties in gaining acceptance in a number of non-profit organizations. One hindrance was the view that marketing really was not necessary. (Kotler et al, 1991). Today top companies recognize the primacy of customer orientation. The customer orientation works back from an appraisal of what customers want to how production and resources can be organized to meet these wants. (Doyle, 1998). Most organizations are not highly customer-centered, even if they want to. It is only when management realizes that it is the customer who truly determines the long-run success of any strategy that the non-profit organization can join the ranks of the sophisticated customer-centered marketing strategists typically found in the private sector. They begin with the customer and the customer's needs and wants. (Kotler et al, 1991).
Despite the differences that exist between for-profit- and non-profit organizations, marketing procedures relevant to profit-oriented companies can also be applied to non-profit organizations. Target marketing, differentiation, and marketing mix decisions need to be made. (Jobber, 1998). The single most important stage in the strategic marketing planning process is determining the organization's core marketing strategy. (Kotler et al, 1991). All marketing strategy is built on segmentation, targeting and positioning. (Kotler, 2003).
Doyle (1998) defines the marketing mix as a set of marketing decisions that management make to implement their positioning strategy and achieve its objectives. Typically described as the 4 P’s- Product, Price, Place and Promotions, where marketing communications is a term used to replace promotions according to them and therefore another way of describing one of the key areas of marketing. (Picton et al, 2001).
Most companies use outside agencies to help implement their marketing communications but managers cannot abdicate their responsibilities for communications. The decisions are too important and too costly for top management not to be involved. (Doyle, 1998). Everything about an organization – its products, employees, facilities, and actions – communicates something. (Kotler et al, 1991).
Kotler (2003) presents a new view of communications as an interactive dialogue between the company and its customers. Companies must ask not only “How can we reach our customers?” but also, “How can our customers reach us?” Schramm’s concept of the communications process is the foundation of our understanding of the marketing communications process. It includes a message sender, a message receiver, the message, and the media. (Picton et al, 2001). Smith et al (1997) suggests that the whole communications model can be applied to the marketing communications process. It is then both about the planning and encoding of marketing communications, but also about the strategic direction of the whole business. Whatever the reasons for deciding to use marketing communications, they must reflect the overall objectives of the organization as well as the immediate needs of the marketer to communicate with a market.
Hence, the marketing communications process is the basis for this thesis.
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1.2 General background
The so-called non-profit sector is surprisingly large. (Kotler et al, 1991). It includes all these organizations whose primary goal is non-economic, for example to provide education, to alleviate hunger or to supply public services. Non-profit organizations attempt to achieve some other objective than profit. (Jobber, 1998). According to Doyle (1998), Blois’ definition is useful: “A non-profit organization is an organization whose prime goal is non-economic.
However, in pursuit of that goal it may undertake profit-making activities”. Any profits made are transferred into their real mission, for example alleviating poverty, protect membership’s interests or some other worthy goal. According to Kotler et al (1991) two broad kinds of non- profits can be distinguished. On the one hand, there are non-governmental or “third-sector”
non-profits. On the other hand, there are publicly owned governmental agencies. According to Doyle (1998) a public sector organizations is one which is controlled by and responsible to a government body rather than to shareholders or members. They account for well over half the service sector in most countries.
In Journal of marketing (1978) Rothschild raises the question, What difference does it make from a marketing management standpoint to be involved in activities surrounding exchanges other than those where the consumer makes economic sacrifices for economic benefits? A landmark article that reveals the uniqueness of non-profit marketing according to Kotler et al (1991) who states that marketing is no longer considered a radical approach to solving the problems of public and non-profit organizations. The American Marketing Association (2003) defines marketing: “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” Wells et al (2000) define an exchange as
“the act of trading a desired product or service for something of value in return.” The key feature of the marketing definition according to Kotler et al (1991) is that it focuses on exchanges. Marketers are in the profession of creating, building, and maintaining exchanges.
When returning to the definition of non-profit organizations and their uniqueness Kotler et al (1991) explains, “what makes them unique is their concentration on exchanges involving non- monetary costs on the one hand and social and psychological benefits on the other.
Non-profits can be defined legally but it is more crucial to understand the organization’s environment and the specific marketing activities that constitute its mission. Jobber (1998) presents a number of characteristics of non-profit marketing that distinguish it from that conducted by profit-oriented marketing organizations, such as conflicting goals, multiple publics and the subject to public scrutiny. These will be discussed further in the literature review. What is more important for the proceeding of this thesis is that despite the differences that exist between for-profit- and non-profit organizations, authorities in marketing such as Kotler et al (1991), Jobber (1998) and Doyle (1998) agree about marketing procedures relevant to profit-oriented companies can also be applied to non-profit organizations. The single most important stage in the strategic marketing planning process is determining the organization’s core marketing strategy. (Kotler et al, 1991). This perspective will have a major impact on this thesis.
Marketing can only be successful if it tailors the organization’s offering to customer needs and wants. (Kotler et al, 1991). According to Doyle (1998), today top companies recognize the primacy of customer orientation. The customer orientation works back from an appraisal of what customers want to how production and resources can be organized to meet these wants. According to Kotler et al (1991) various names are used interchangeably to describe customers, such as consumers, clients and buyers. The appropriate term is elusive in some
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cases. Customers represent the marketer’s primary public. A public is a distinct group of people, organizations, or both whose actual needs must in some sense be served. Antonides et al (1998) defines a need: “A need is the lack of something necessary for survival or well being”. Needs are general and should be distinguished from wants. A want is defined as, “the particular form of consumption chosen to satisfy a need”.
When professionals in non-profit organizations ask themselves how fare they can really go in adapting customer orientation and fear that such an approach, taken to the extreme, would go to “please the masses”, Kotler et al (1991) explains: “marketing is a sub area of management”.
Management must decide which objective and goals marketing can help achieve and how.
According to Doyle (1998) strategic planning is the process of determining objectives (what you want to accomplish), deciding on strategies (how to accomplish objectives), and implementing tactics (which make the plan come to life). Smith et al (1997) presents a hierarchy of strategies, further described in the literature review, where the corporate strategy on top is linked to the marketing strategy and the marketing communications strategy. A marketing communications strategy cannot exist in isolation from a marketing strategy, which in turn is directly linked to corporate strategy. It is a simple strong relationship. Ideally the development of a marketing communications strategy proceeds after a proper consideration of both corporate and marketing strategy.
As a main component of the corporate strategy, more and more organizations now write mission statements that seek to describe the purpose of the business and its essential characters. A mission statement can motivate the employees and provide a share sense of purpose among them, give a sense of direction, and identify major policies which define how customers and other key stakeholders should be treated. In contrast to the mission statement, which is broad and visionary, the company’s objectives should be specific, quantifiable and cover a defined time frame. (Doyle, 1998).
All marketing strategy is built on segmentation, targeting and positioning. A company discovers different needs and groups in the market place, target those needs and groups that it can satisfy in a superior way, and then positions its offerings so that the target market recognizes the company’s distinctive offering and image. (Kotler, 2003). Each of these important steps will be described carefully in the literature review.
To implement the organization’s positioning strategy and achieve its objectives one or several marketing plans-or programs are developed to take care of each market segment. (Doyle, 1998). These programs consist of numerous decisions on the mix of marketing to be used.
According to Kotler (2003), MacCarthy classified the tools of the marketing mix into four broad groups that he called the 4 Ps of marketing: Product, Price, Place and Promotion.
Lauterborn (1990) suggested that the seller’s four Ps corresponds to the customer’s four Cs:
Customer solution, Customer cost, Convenience, and Communication.
According to (Picton et al, 2001) the term promotions is often replaced by the term marketing communications, another way of describing one of the key areas of marketing. They define it as “all the promotional elements of the marketing mix which involve the communications between the target audience on all matters that affect marketing performance.” Wells et al (2000) agree about it being an element in the marketing mix, the final element to be exact, and define it as “persuasive communication designed to send marketing-related messages to a selective target audience.” Picton et al (2001) define the concept target audience by describing it as “Those individuals or groups that are identified as having a direct or indirect effect on
9 business performance, and are selected to receive marketing communications. Doyle (1998) gives several reasons why managers want to communicate with their audiences. They might want to inform, to persuade, to create an image or to reinforce the perception of their organization. Marketing communications normally covers personal selling, media advertising, direct response marketing, sales promotion and public relations. Picton et al (2001) refers to these activities or tools as the marketing communications mix.
The ultimate objective of marketing is to influence behavior. Concerning non-profit organizations every contact it has with its many publics directly or indirectly is an occasion for influence according to Kotler et al (1991) and he points out the role of communications to influence behaviors by writing:
“In the vast majority of non-profit marketing strategies, influencing behavior is largely a matter of communication. It is a matter of informing the target audiences about the alternatives for action, the positive consequences of choosing a particular one, and motivations for acting (and often continuing to act) in a particular way”.
1.3 Background of the Swedish National Road Administration
In the year 2003 one of the largest governmental agencies in Sweden, The Swedish National Road Administration (SNRA), undergoes radical changes. With the new vision as a foundation, “We make the good journey possible” a customer-centered organization takes shape. The new mission statement is formulated as follows: “With focus on people, the Swedish national Road Administration creates opportunities for efficient, safe and environmentally sound transports for individuals and the business community alike”.
From now on, The SNRA will be organized to support their two main processes: Personal traveling and Commercial traffic. Within each main process the SNRA has segmented their customers and defined strategic customer groups. Customers within Personal traveling have been divided into five groups according to different phases in life, whereas customers within Commercial traffic have been divided according to their type of business. Fundamental for the workforce of the SNRA is to capture customer needs, to improve conditions for transportation, to supply transportation possibilities and to support during the journey. (VV 88380, 2nd edition)
Commissioned by the Swedish government, The SNRA has an overall goal of transport policy according to the Swedish Parliament’s decision in 1998. It is to ensure a socio-economically efficient transport system that is sustainable in the long term for individuals and the business community throughout the country. This goal is divided into six sub-goals concerning an assessable transport system, high transport quality, positive regional development, a safe traffic, a good environment, and an equal opportunity road transport system between men and women.
The SNRA’s long-term objective concerning road traffic safety is the Vision Zero goal. On October 9, 1997 the Road Traffic Safety Bill founded on "Vision Zero" was passed by a large majority in the Swedish Parliament.The long-term goal for road traffic safety is for nobody to be killed or seriously injured as a result of traffic accidents. The design and operation of the road transport system should be brought into line with the requirements that this goal entails.
(VV 2003:48E).
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In the annual report from 2002 Ingemar Skogö, general director of the SNRA, tells us that approximately 0.2 billion US dollars were spent on the road infrastructure to improve traffic safety. 279 km totally of median separated roads were built, free from traffic in the opposite direction. This solution is unique for Sweden. But, the infrastructure improvements must be supported by actions to advance attitudes and behaviors in order to reach the objective of less than 270 dead people in 2007. (VV 2003:35)
During the fall 2002 the SNRA was responsible for a large seatbelt campaign including mass communication. The objectives were to increase the use of seatbelts and make people more aware of raised fines for not using seatbelts. It is known that if a seatbelt is used properly, the risk to die or to be seriously injured is reduced by 50%. An increase in the use of seatbelts has considerable affects regarding traffic safety. It implies that human lives will be saved. How much is a human life worth?
1.3 Developed problem area
Most marketing communications is ineffective states Doyle (1998). Customers are bombarded with so many messages and promotional stimuli that most communications are wasted. A former head of Unilever, Lord Leverhulme, once said: “Half my advertising is wasted – but I do not know which half”. Most communications are not seen by customers, or, if seen, are not noticed. Of the small percentages that are noticed, many are misunderstood or perceived by customers in a distorted fashion.
Fundamental to the understanding of marketing communications is an understanding of the marketing communications process according to Picton et al (2001) who states that Schramm’s concept of the communications process is the foundation of our understanding of the marketing communications process. His model from 1960 includes a message sender, a message, and a message receiver. According to Smith et al (1997) communication is the act of sending information from the mind of one person to the mind of another person. This is easy to define. There is a sender and a receiver, and a message passing from one to the other. In practice, however, communication is a very complex activity. If the audience does not pick up the message sent out, no communication takes place. The effort and expense has been wasted.
Unfortunately, wasted communication is a major problem in marketing. (Doyle, 2003).
Kotler (2003) presents a communication model with nine elements. Apart from the four elements presented by Schramm that he calls major communication parties (sender and receiver) and major communication tools (message and media), he presents five additional elements that he calls major communications functions: encoding, decoding, response and feedback. The last element is noise: random and competing messages that may interfere with the intended communication. Doyle (1998) presents a similar model and explains that the sender must encode the message so that the receiver can decode it. The audience may then respond in some way and the sender can obtain feedback: information about the receiver’s response.
Smith et al (1997) suggests that the whole communications model can be applied to the marketing communications process. It is then both about the planning and encoding of marketing communications, but also about the strategic direction of the whole business. It was earlier suggested that the marketing communications strategy ideally should be developed after a proper consideration of both corporate- and marketing strategy. His models are discussed further in the literature review and have a strong influence on this thesis.
11 According to Dahlén et al (2003) managers can avoid simple mistakes, which are way too common, if they are aware of the major concerns in marketing communications. These are:
the target audience (whom are we trying to reach?), the message (what do we want to say to them?), and the channel (how are we going to say it?). In a similar way Wells et al (2000) presents three basic elements that he calls the heart of an advertising strategy.
While advertising strategies are common, as well as marketing strategies, marketing communications strategies are uncommon. When defining marketing communications strategies there is a big problem. Because, no one knows much about them and few appears to use them according to Smith et al (1997). These marketing strategies that should integrate and drive all the communication tools in a single purposeful direction. Smith et al defines a marketing communications strategy: “Determines the message or sequence of messages which should be shared with a specific target audience through the optimum communications mix.”
What happens when interaction with the customer is fragmented, asks Dwyer et al (2002).
The customer gets annoyed because different parts of the company don’t know what the others are saying. Customers feel like they are talking to many different companies instead of one, which is not the way to build a relationship. The answer to this problem according to them is Integrated Marketing Communications (IMC), which they describe as: “strategic, two way communication targeted to specific customers and their needs, all coordinated through a variety of medias.” According to Wells et al (2000) companies that use IMC can use marketing communications messages to create synergy, which means that each individual message has more impact working jointly to promote a product than it would working on its own.
Dwyer et al (2002) calls IMC strategic in the sense that the content and delivery of all messages are the result of an overall plan. The result is that messages across all communication channels work together to create the appropriate position and result in the right action. The IMC strategic planning process by Dwyer et al (2002) is presented in the next chapter, as well as the eight steps for developing effective marketing communications presented by Kotler (2003).
To conclude, Picton et al (2001) suggests that an understanding of marketing communications needs understanding of the marketing communications process, which in turn are based on the theories of the communications process. Then, Smith et al (1997) suggests that the whole communications model can be applied to the marketing communications process, and include not only the encoding and planning of marketing communications but also the strategic direction of the whole company. That is why this thesis did not concentrate on marketing communications right away.
Let us return to the Swedish National Road Administration. The Director of Information at the SNRA head office, Gunilla Lundberg, explains about one of their biggest problems concerning marketing communications. To often, they feel that there is a gap between the content that the SNRA communicates and the content that it really should communicate in order to gain their target customer’s attention and make it possible to influence their behavior.
The perception is that some of their target customers, especially young people, view the SNRA’s communication totally different than it is intended. The customers have certain expectation, while the SNRA most of the times has higher expectations. As a government agency and as an authority they want something, while the customers want something else.
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They are aware of that they need to improve their knowledge about their customer’s needs and wants. Their dilemma is illustrated in figure 1.1.
Figure 1.1: Communication dilemma Source: Personal within the SNRA
To find the needs of customers in a market, it is necessary to undertake marketing research according to Doyle (1998). But is marketing research the only solution to the SNRA’s problem? Will marketing research be enough to make the communications activities less complex if there are lack of understanding about the communications process, the way marketing communications should be properly planned and how it should relate to the whole organizations corporate and marketing strategy?
It is time to formulate the research problem of this thesis:
The purpose of this thesis is to make an assessment of the marketing communications process of a non-profit organization.
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2. LITERATURE REVIEW
The following chapter gives an overview of research conducted about non-profit- and public sector organizations, customer orientation, strategic marketing and marketing communications. It consists of three parts. The first one begins with a discussion about non- profit- and public sector organizations in general and continues with a discussion about marketing for such organizations and customer orientation. It ends with a presentation of a hierarchy between corporate, marketing and marketing communications strategies. The second one describes the elements of strategic marketing. The third part presents theories about the communication process and its elements. It continues with strategic marketing communications, where models for marketing communications strategic planning and effective development are described.
2.1 Non-profit- and public sector organizations
Defining these organizations is not easy, since many non-profit organizations engage in activities that are clearly intended to make a profit. The distinction is that these profit-making activities are not their primary goal and any profits made are transferred into their real mission, which is alleviating poverty, protecting its membership’s interests or some other worthy goal. Blois’ definition is useful according to Doyle (1998): “a non profit-organization is an organization whose primary goal is non-economic. However, in pursuit of that goal it may undertake profit-making activities. Jobber (1998) agrees that their primary goal is non- economic, for example to provide education (schools and universities) to supply health-care (hospitals) and public services (local authorities) and states that non-profit organizations attempt to achieve some other objective than profit. This does not mean that they are uninterested in income, but their worth and standing is not depending on the profits they generate. Kotler et al (1991) explains that although non-profit organizations seek to influence exchanges for money and goods and services just like for-profit organizations, what makes them unique is their concentration on exchanges involving non-monetary costs on the one hand and social and psychological benefits on the other. Some authors and several reporting agencies distinguish between two broad kinds of non-profits. On the one hand publicly owned governmental agencies. On the other hand there are nongovernmental or “third-sector” non- profits. (Kotler et al, 1991). Doyle makes a distinction between private non-profit- and public sector organizations.
According to Doyle (1998) a public sector organization is one which is controlled by and responsible to a government body rather than to shareholders or members. Again such a definition is not watertight, since many public sector institutions engage in profit-making activities and rely on a mixture of financing from government, consumers and voluntary contributions from donors. Some public sector organizations the government would like to see making a surplus; others are inherently non-revenue generating. Chapman et al (1998) explain that the term public sector is usually used as a way of referring collectively to those institutions that a society considers necessary for the basic well being of its members. These institutions are founded and funded by the State, in the interest of the State and, through the State, in the interest of its citizens.
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2.1.1 Marketing for non-profit- and public sector organizations
Marketing is not just something that an organization such as Procter and Gamble or Pepsi- Cola does. It is something non-profits do and something we do daily in our individual personal lives. (Kotler et al, 1991). The American Marketing Association (2003) defines it:
“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” Wells et al (2000) define an exchange as “the act of trading a desired product or service for something of value in return.” The key feature of the marketing definition according to Kotler et al (1991) is that it focuses on exchanges. Marketers are in the profession of creating, building, and maintaining exchanges. Exchanges only take place when a target audience member takes an action; the ultimate objective of marketing is to influence behavior. Marketing’s objectives are not ultimately either to educate or to change values or attitudes. It may seek to do so as a means of influencing behavior.
In Journal of marketing (1978) Rothschild raises the question, What difference does it make from a marketing management standpoint to be involved in activities surrounding exchanges other than those where the consumer makes economic sacrifices for economic benefits? A landmark article that reveals the uniqueness of non-profit marketing according to Kotler et al (1991) who states that marketing is no longer considered a radical approach to solving the problems of public and non-profit organizations.
Jobber (1998) presents a number of characteristics of non-profit marketing that distinguish it from that conducted by profit-oriented marketing organizations:
• Education v. meeting current needs
Some non-profit organizations see their role as not only meeting current needs of their customers but also educating them in new ideas and issues, cultural development, and social awareness. These goals may be at conflict with maximizing revenue or audience figures.
• Multiple publics
Most non-profit organizations serve several groups or publics. There are two broad groups.
One of them is a donor, who may be individuals, companies or government bodies. The other one is a client, who includes audiences, patients and beneficiaries. They need is to satisfy both donors and clients, complicating the marketing task.
• Measurement of success and conflicting objectives
For profit-oriented organizations success is measured ultimately on profitability. For non- profits organizations measuring success is not so easy. A combination of factors to measure success can lead to conflict and decision-making is therefore complex in non-profit organizations.
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• Public scrutiny
While all organizations are subject to public scrutiny, public sector organizations are never far from the public’s attention. The reason is that they are publicly funded from taxes. This gives them extra newsworthiness, as all taxpayers are interested in how their money is being spent.
They have to be particularly careful that they do not become involved in controversy, which can result in bad publicity.
The starting point for a consideration of strategic marketing in a non-profit organization according to Kotler et al (1991) is a clear perception and understanding of the unique environment in which they operate. It is crucial to understand the organization’s environment and the specific marketing activities that constitute its mission. The major factors affecting the organizations environment are (1) whether it is a donative or commercial organization, (2) whether its performance are subject to public scrutiny, (3) whether marketing is perceived to be undesirable, (4) whether the organization is largely volunteer, and (5) whether marketing is judged by non-marketing standards. The missions of non-profit organizations differ depending on the type of demand they seek to influence and the type of activity they are engaged in. The organization’s activities can be defined in terms of key concepts of exchange.
On the one hand, target customers are asked to “pay” economic costs; sacrifice old ideas, values, and views of the world; sacrifice old patterns of behavior; or sacrifice time and energy. In return, they can expect products or services, social or psychological benefits or some combination of these.
Despite the difference that exists between for-profit- and non-profit organizations, marketing procedures relevant to profit-oriented companies can also be applied to non-profit organizations. Target marketing, differentiation, and marketing mix decisions need to be made. (Jobber, 1998). The single most important stage in the strategic marketing planning process is determining the organization’s core marketing strategy. (Kotler et al, 1991).
2.1.2 Customer-orientation
Today top companies recognize the primacy of customer orientation. The customer orientation works back from an appraisal of what customers want to how production and resources can be organized to meet these wants. (Doyle, 1998). “A customer-centered organization is one that makes very effort to sense, serve, and satisfy the needs and wants of its clients and publics within the constraints of its budget.” (Kotler et al, 1991). Most organizations are not highly customer-centered. They fall into one of three groups. The first group would like to be more customer-centered but lacks the needed resources or power over employees. A second group of organizations is not customer-centered simply because it prefers to concentrate on things other than customer satisfaction. Finally there are always a few organizations that intentionally act unresponsively to the publics they are supposed to serve.
It has been argued, Kotler et al (1991) begins that marketing can only be successful if it tailors the organization’s offering to customer needs and wants. But many professional in non-profit organizations fear that such an approach, taken to the extreme, would goes to “please the masses”. They feel that their basic mission will be compromised. Ultimately, we view marketing’s role as one of supporting the organizations in achieving its goals. It does this best by devising strategies that start with the customer and not with the organization. But note that marketing is designated as a means to achieve the organization’s goal. Marketing is a sub area of management. It is not necessarily at the top of the organization. Clearly and importantly,
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top management has a responsibility to decide what role it will allocate to marketing.
Management must decide which goals marketing can help achieve and how.
Defining the customer
Picton et al (2001) defines customer as “the people who buy goods and services”. They define consumers as “the people who literally use or consume the goods and services. Sometimes customers and consumers are the same people but often they are not. As an example parents buy toys to their children who uses them.
Customers represent the marketer’s primary public according to Kotler et al (1991). A public is a distinct group of people, organizations, or both whose actual needs must in some sense be served. Various names are used interchangeably to describe customers, such as consumers, clients and buyers. The appropriate term is elusive in some cases.
Customer’s needs and wants
According to Antonides et al (1998) a need results from experiencing a shortage. The experience from a need motivates someone to remove this shortage. Thus, needs are motivating and should be distinguished from wants. Needs are general, and defined: “A need is the lack of something necessary for survival or well-being.” A want on the other hand, is defined as “the particular form of consumption chosen to satisfy a need.” Michael et al (1996) describes a want as one manifestation of a need.
2.1.4 Levels of strategies and the corporate, marketing and communication hierarchy
Most companies will not have a single strategic plan, but they will have a number of integrated strategies set at different levels. (Doyle, 1998). Strategic planning is the process of determining objectives (what you want to accomplish), deciding on strategies (how to accomplish objectives), and implementing the tactics (which make the plan come to life.) This process occurs within a specified timeframe. (Wells et al 2000). Three major levels of strategy dominate most large organizations according to Hutt et al (2001):
1) Corporate strategy 2) Business-level strategy 3) Functional strategy
Wells et al (2000) describes business strategic planning as a three-tiered process. It starts with a business strategic plan, then it moves on to functional plans such as a marketing plan or a financial plan, and ends with specific plans for the functions. For marketing then, the business might have specific plans for advertising or product development. (Wells et al, 2000).
According to Smith et al (1997) marketing communications strategy cannot exist in isolation from marketing strategy, which in turn is directly linked to corporate strategy. The simple strong relationship is shown in figure 2.1:
17 Figure 2.1: The three levels of strategy
Source: Smith et al (1997), p. 104
The system called “Management by objectives” became extremely popular in the 1960s and the 1970s and is still in use today. The principle of the system is that individual manager’s objectives have to be linked into corporate objectives in a direct and distinct way. At each level it is possible to consider the two elements of objectives and strategy. Objectives are the end result and strategies are the means of achieving the objectives. This linkage into a hierarchy of objectives is shown in figure 2.2:
Figure 2.2: The planning hierarchy Source: Smith et al (1997), p. 106
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2.1.5 Corporate strategy
At the top of the hierarchy of strategic plans is the corporate plan, according to Doyle (1998), who conclude that a corporate strategy consist of:
1. Corporate mission 2. Corporate objectives
3. Identification of Strategic business units (SBUs) 4. Resource allocation
5. Exploring of synergies 6. Corporate development
According to Kotler (2003) all corporate headquarters undertake four planning activities:
1. Defining the corporate mission
2. Establishing strategic business units (SBUs) 3. Assigning resources to each SBU
4. Planning new businesses, downsizing, or terminating older businesses.
The corporate mission
An organization exists to accomplish something: to make cars, lend money, provide night’s lodging, and so on according to Kotler (2003). Its specific mission or purpose is usually clear when the business starts. Over time the mission may change, to take advantage of new opportunities or respond to new market conditions. To define its mission, the company should address the questions: What is our business? Who is the customer? What is of value to customers? What will our business be? What should our business be? Although these questions sounds simple, Kotler (2003) states that these are among the most difficult the company will answer. As a main component of the corporate strategy, more and more organizations now write mission statements that seek to describe the purpose of the business and its essential characters. A mission statement can motivate the employees and provide a share sense of purpose among them, give a sense of direction, and identify major policies which define how customers and other key stakeholders should be treated. (Doyle, 1998).
Mission statements are at their best when they are guided by a vision, an almost “impossible dream” that provides a direction for the company for the next 10 to 20 years.
Corporate objectives
In contrast to the mission statement, which is broad and visionary, the company’s objectives should be specific, quantifiable and cover a defined time frame. They can be top-down, whereby headquarters defines what it wants and then tells each of the business units what they need to contribute to the total goal. In others, they are bottom-up, whereby the corporate objectives are simply an aggregation of what the business units decide they will achieve.
More generally it is an interactive process. (Doyle, 1998).
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2.2 Marketing strategy
All marketing strategy is built on segmentation, targeting and positioning. A company discovers different needs and groups in the market place, targets those needs and groups that it can satisfy in a superior way, and then positions its offerings so that the target market recognizes the company’s distinctive offering and image. (Kotler, 2003). Marketing has two distinct meanings according to Doyle (1998). The first, and most important, is a philosophy for the whole business. It defines the primary goal of everyone in the organization as meeting the needs of customers. The second meaning of marketing is a distinct set of activities and tasks, which constitute marketing planning and decision-making. These marketing decisions and plans center around market segmentation, target marketing, market positioning and market planning. Figure 2.3 describes the main steps:
Figure 2.3: Marketing strategy Source: Doyle (1998) p. 65
2.2.1 Market Segmentation
A market consists of customers with similar needs. But customers in a market are never homogeneous. They differ in the benefits wanted, the amount they are willing or able to pay for, the media they see and the quantities they buy. (Doyle, 1998). Very few products or services can satisfy all customers in a market. Not all customers want or are prepared to pay for the same things. To implement the marketing concept and successfully satisfy customer needs, different product and service offerings must be made to the diverse customer groups that typically comprise a market. The technique used to get a hold of the diverse nature of markets is called market segmentation, defined as: “The identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy.” (Jobber, 1998) A market segment is a customer group within the market that has special characteristics for the determination of a marketing
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strategy. Doyle (1998). According to Jobber (1998), the objective is to identify groups of customers with similar requirements so that they can be served effectively while being of sufficient size for the products or services to be supplied efficiently. Usually, particularly in consumer markets, it is not possible to create a marketing mix that satisfies every individual’s requirements exactly. Market segmentation, by grouping together customers with similar needs, provides a commercial viable method of serving these customers.
Bases for segmentation
Doyle (1998) asks the question, how should managers segment their markets so that tailored strategies can be developed? He presents two variables: needs and profilers. Customer needs are the basic criteria for segmenting a market. The market will want to form segments made up of customers whose needs are homogeneous – who are seeking the same benefits – and so are likely to respond similarity to a particular marketing offer and strategy. The second types of segmentation variables, profilers, are descriptive measurable customer characteristics such as industry, geographic location, nationality, age and income. In general these variables are complementary to each other. Kotler (2003) presents a need-based segmenting approach, where customer are grouped into segments based on similar needs and benefits sought by customer in solving particular consumption problems. For each needs-based segment, a determination of which demographics, lifestyles or usage behaviors make the segment distinct and identifiable (actionable) is made.
Finding the need
The problem with this need or benefit segmentation is that, to analyze these segments and communicate to them, the marketer has to know who these people are: their profiles or customer characteristics. To find the needs of customers in a market, it is necessary to undertake marketing research. This will normally consist first of informal interviews and focus groups to identify what benefits customers seek and the extent of differences among them in their expectations. The next step will normally be administering a formal questionnaire to a large sample of customers to quantify these differences in requirements.
(Doyle, 1998). Schiffman et al (1997) describes the procedure to develop a segmentation strategy for coffee. A qualitative study might be undertaken first to gather ideas about consumer needs, motivations, perceptions, benefits sought, and attitudes. This might be done through a series of focus groups conducted in several areas of the country. This phase of the research should result in tentative generalizations about the consumer’s preferences concerning the offer. A quantitative study might then be conducted to attach “hard” numbers to the findings that emerged from the focus groups. The first-phase study should have provided sufficient insights to develop a research design and to launch directly into a large- scale survey.
Consumer market segmentation
There are a variety of statistical techniques, such as cluster analysis, to help in choosing the best variables for segmenting the market. The survey questionnaire should have collected data on both the needs sought and the characteristics of respondents and now the differences can be linked. Doyle (1998) and Kotler (2003) present four major segmentation variables for consumer markets: geographic, demographic, psychographic and behavioral variables. Doyle (1998) agrees about the following variables to be most common in consumer market segmentation:
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• Geographic
- Region of the country - Urban or rural area
• Demographic
- Age, sex, family size - Income, occupation - Religion, race, nationality
• Psychographic - Social class - Lifestyle type - Personality type
• Behavioral
- Product usage: light, medium, heavy user - Brand loyalty: none, medium, high - Type of user: occasions
Organizational market segmentation
The process of segmentation in industrial and other organizational markets is analogous to that employed in consumer markets. First management have to segment the market by benefits sought, then they have to describe the characteristics of these customers. (Doyle, 1998). The organizational market can be segmented on several factors broadly classified into two major categories: macro segmentation and micro segmentation. (Jobber, 1998).
• Macro segmentation - Organizational size - Type of industry - Geographic location
• Micro segmentation - Choice criteria
- Decision-making unit structure - Decision-making process - Buy class
- Purchasing organization - Organizational innovativeness
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Criteria for segmentation
Not all segmentation is useful. To be useful, market segments must meet the following criteria according to Kotler (2003):
• Measurable: The size, purchasing power, and characteristics of the segments can be measured.
• Substantial: The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program.
• Accessible: The segments can be effectively reached and served.
• Differentiable: The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs.
• Actionable: Effective programs can be formulated for attracting and serving the segments.
To be a strategic tool, segmentation should meet five criteria. (Doyle, 1998). These are similar to those presented by Kotler (2003).
2.2.2 Target marketing
Once the organization has identified its market-segment opportunities, it has to decide how many and which ones to target. (Kotler, 2003). Market segmentation is a means to an end:
target marketing. This is the choice of specific segments to serve and is a key element in marketing strategy. The organization needs to evaluate segments and decide which ones to serve. (Jobber, 1998). Marketers segment the market in order to target one or more of these segment with tailored, specialized offerings.
Evaluating segments
In evaluating different market segments, the firm must look at two factors: The segment’s overall attractiveness and the company’s objectives and resources. Does a segment have characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk? Does investigating in the segment make sense given the firm’s objectives, competences, and resources? Some attractive segments may not mesh with the company’s long run objectives. (Kotler, 2003).
Targeting strategies
Having evaluated different segments, the organization should consider different target marketing strategies. (Kotler, 2003). Among several strategies, Doyle (1998) and Jobber (1998) agrees about the following three different strategies:
• Undifferentiated marketing:
The company decides to develop a single marketing mix for the whole market. This absence of segmentation is called undifferentiated marketing. (Jobber, 1998). Here the firm ignores actual or potential differences among segments and targets one offer to the entire market. (Doyle, 1998) Occasionally, a market will show no strong differences in customer characteristics that have implications for marketing strategy. Alternatively the cost in developing a separate marketing mix for separate segments may outweigh the potential gains of meeting customer needs more exactly. Unfortunately this strategy can
23 occur by default. For example, companies who lack a marketing orientation may practice undifferentiated marketing through lack of customer knowledge.
• Differentiated marketing
When marketing segmentation reveals several potential targets, specific marketing mixes can be developed to appeal to all or some of the segments. This is called differentiated marketing. (Jobber, 1998). As with undifferentiated marketers, differentiators seek to compete across the majority of the market, but here they do so with different offers. They develop different products and marketing programs for each segment of the market.
(Doyle, 1998).
• Focused marketing
The identification of several segments in a market does not imply that a company should serve all of them. When a company develops a single marketing mix aimed at one target market (niche) it is practicing focused marketing. (Jobber, 1998). The company does not aim to compete in the majority of the market, but rather specializes in one segment, or a small number of segments.
2.2.3 Market positioning
After market segmentation and target market selection, the next step in developing an effective marketing strategy is to clearly position a product or service offering in the market place. (Jobber, 1998). It has been shown how a business can offer superior value by strategies that can add value or reduce costs. The third way to enhance its competitiveness is through positioning itself more effectively. Position strategy is the choice of target market segments, which determines where the business competes, and the choice of differential advantage, which dictates how it competes. (Doyle, 1998). Jobber (1998) agrees when telling us that positioning is the choice of:
• Target market: where we want to compete
• Differential advantage: how we wish to compete
Kotler (2003) defines positioning as, “The act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.”
Creating a differential advantage
Jobber (1998) explains briefly that creating a differential advantage involves using the marketing mix to create something special for the customer. Product differentiation may result from added features, which give customers benefits that rivals cannot match. Promotional differentiation may stem from unique, valued images created by advertising. A landmark book by Ries et al (1982), according to Jobber (1998), suggested that marketers are involved in a battle for the minds of target customers. According to Jobber (1998) successful positioning is often associated with products and services possessing favorable connotations in the minds of customers.
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Keys to successful positioning
Jobber (1998) presents four keys to successful positioning:
1. Clarity: The positioning idea must be clear in terms of both target market and differential advantage. Complicated positioning statements are unlikely to be remembered.
2. Consistency: People are bombarded with messages daily. To break through this noise a consistent message is required otherwise confusion will arise.
3. Credibility: The differential advantage that is chosen must be credible in the minds of the target customer.
4. Competitiveness: The differential advantage should have a competitive edge. It should offer something of value to the customer that the competition is failing to supply.
2.2.4 The marketing plan- or program
The marketer’s task is to build a marketing program or plan to achieve the company’s desired objectives. The marketing program consists of numerous decisions on the mix of marketing tools to use. The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. (Kotler, 2003). Doyle defines the marketing mix as a set of marketing decisions that management make to implement their positioning strategy and achieve its objectives. These have popularly been termed the four Ps: product, price, promotion, and place (e.g. distribution). Picton et al (2001) define the marketing mix, “Range of marketing activities/ tools that an organization combines and implements to generate a response from the target audience.” Typically described as the 4 P’s- Product, Price, Place and Promotions, where marketing communications is a term used to replace promotions according to them and therefore another way of describing one of the key areas of marketing. According to Kotler (2003) MacCarthy classified the tools of the marketing mix into four broad groups that he called the four Ps of marketing.
Note that the four Ps represent the seller’s view of the marketing tools available for deliver a customer benefit. Lauterborn (1990) suggested that the sellers four Ps corresponds to the customers’ four Cs.
Four Ps Four Cs
Product Customer solution
Price Customer cost Place Convenience
Promotion Communication
Winning companies will be those that can meet customer needs economically and conveniently and with effective communication. (Kotler, 2003).
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2.3. Marketing communications
Picton et al (2001) defines marketing communications as “all the promotional elements of the marketing mix which involve the communications between an organization and its target audiences on all matters that affect marketing performance.” the concept target audience is defined by describing it as “Those individuals or groups that are identified as having a direct or indirect effect on business performance, and are selected to receive marketing communications. Wells et al (2000) agree about it being an element in the marketing mix, the final element to be exact, and define it as “persuasive communication designed to send marketing-related messages to a selective target audience.” According to Doyle (1998) there are several reasons why managers want to communicate to markets and audiences:
• Inform
• Persuade
• Image creation
• Reinforcement
The marketing communications mix
Marketing communications normally covers personal selling, media advertising, direct response marketing, sales promotion and public relations. (Doyle, 1998). The range of activities/ tools available to an organization to communicate with its target audience is called the marketing communications mix. (Picton et al, 2000). According to Kotler (2003) the marketing communications mix consists of five major modes of communication:
1) Advertising: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.
2) Sales promotion: A variety of short-term incentives to encourage trial or purchase of a product or service.
3) Public relations and publicity: A variety of programs designed to promote or protect a company’s image or its individual products.
4) Personal selling: Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.
5) Direct and interactive marketing: Use of mail, telephone, fax, e-mails, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects.
2.3.1 The marketing communication process
Fundamental to the understanding of marketing communications is an understanding of the marketing communications process. Schramm’s concept of the communications process is the foundation of our understanding of marketing communications. (Picton et al, 2001). Smith et al (1997) presents the most basic communication model presented by Schramm in 1955 which identifies three components:
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1) A sender of message 2) A receiver of a message
3) A message passing from a sender to a receiver
Communication is the act of sending information from the mind of one person to the mind of another person. This is easy to define. There is a sender and a receiver, and a message passing from one to the other. In practice, however, communication is a very complex activity. (Smith et al, 1997). Picton et al (2000) uses a model presented by Schramm in 1960, extended to four elements by adding the media. That is the vehicles or channels used to communicate the message without there can be no communication. Media can take many different forms.
Kotler (2003) presents a new view of communications as an interactive dialogue between the company and its customers. Companies must ask not only “How can we reach our customers?” but also, “How can our customers reach us?”
The communication process by Doyle
Doyle (1998) defines the communication process as “the transmission and receipt of a message”. Two parties have to be involved: the sender and the audience. If the audience does not pick up the message sent out, no communication takes place.
The communication process starts with a sender who wants to communicate a message to an audience. The sender has to put the intended message into words, pictures or symbols that can be transmitted. This is technically called encoding. The encoded message is then transmitted through a medium. If the audience receives the message, it is then interpreted (or decoded).
The audience may then respond in some way. Finally, there is feedback, which is the information that the sender obtains about the audience’s response. The process is illustrated in figure 2.2:
Figure 2.2: The communications process Source: Doyle (1998) p.252
The communication process by Kotler
Kotler (2003) presents a communication model with nine elements. Two represents the major parties in a communication- sender and receiver. Two represents the major communication tools- message and media. Four represents major communication functions- encoding, decoding, response and feedback. The last element in the system is noise (random and
