Page 474 - Foundations of Marketing

Integrated Marketing Communications | Chapter 15 441

Businesses must have sizable promotional budgets to use regional or national advertising.
Companies like Procter & Gamble, Unilever, General Motors, and Coca-Cola are among the
leaders in worldwide media spending. Organizations with extensive promotional resources
generally include more elements in their promotion mixes, but having more promotional dol-
lars to spend does not necessarily mean using more promotional methods. Researchers have
found that resources spent on promotion activities have a positive influence on shareholder
value.
An organization’s promotional objectives and policies also influence the types of promo-
tion selected. If a company’s objective is to create mass awareness of a new convenience good,
such as a breakfast cereal, its promotion mix probably leans heavily toward advertising, sales
promotion, and possibly public relations. If a company hopes to educate consumers about
the features of a durable good, such as a home appliance, its promotion mix may combine a
moderate amount of advertising, possibly some sales promotion designed to attract customers
to retail stores, and a great deal of personal selling, because this method is an efficient way to
inform customers about such products. If a firm’s objective is to produce immediate sales of
nondurable services, the promotion mix will probably stress advertising and sales promotion.
For example, dry cleaners and carpet-cleaning firms are more likely to use advertising with a
coupon or discount rather than personal selling.

Characteristics of the Target Market

Size, geographic distribution, and demographic characteristics of an organization’s tar-
get market help dictate the methods to include in a product’s promotion mix. To some
degree, market size and diversity determine composition of the mix. If the size is limited,
the promotion mix will probably emphasize personal selling, which can be very effective
for reaching small numbers of people. Organizations selling to industrial markets and firms
marketing products through only a few wholesalers frequently make personal selling the
major component of their promotion mixes. When a product’s market consists of millions
of customers, organizations rely on advertising and sales promotion, because these methods
reach masses of people at a low cost per person. When the population density is uneven
around the country, marketers may use regional advertising and target larger markets.

Going Green

Government Cracks Down on Greenwashing

Greenwashing occurs when companies market prod- for labeling plastic bottles as biodegradable, a violation of
ucts as being more eco-friendly than they really are. a California labeling law.
Unfortunately, greenwashing has made it difficult for However, not all claims of greenwashing are so easy
consumers to pinpoint which companies’ claims to trust. to prove. For instance, a company might have a product
One study determined that as many as 95 percent of prod- composed of green materials but that still contains one
ucts marketed as green were guilty of at least one form of environmentally unfriendly component. Should that com-
greenwashing. pany be allowed to advertise itself as green? The FTC has
In the past, the Federal Trade Commission (FTC) released green guidelines to help clear up this uncertainty.
has cracked down on companies whose advertisements These guidelines recommend actions, such as substantiating
were inaccurate. For instance, when several companies green marketing claims with evidence and avoiding ambigu-
advertised rayon products as being made from bamboo, ous terminology. Although these guidelines do not carry the
the FTC sent warning letters to 78 retailers, including force of law, they better enable the FTC to pursue companies
b
Walmart, Kohl’s, and Gap. California sued three companies that violate standards with deceptive marketing practices.

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