Marketing Communications: Paragon Software Ltd - Essay Example

?Running head:  MARKETING COMMUNICATIONS Insert       Insert Grade Insert 14 January Outline Introduction Capabilitiesof advertising Limitations of advertising Recommendations Conclusion Marketing Communications: ‘Paragon Software Ltd’ Introduction In order for an organization to be successful in sales, it has to create awareness of its products to the potential customers. In addition, organizations can reach their potential customers through several channels. Marketing communication is one of many tools via which an organization can market its products, ands this may be in the form of advertising, direct marketing, trade shows, seminars, websites, public relations, and sales promotions among others. Marketing communications involve creating a message that is used in the marketing tools. Baker, Graham and Harker (1998, p.348) indicate that, marketing communication comprises of promotional activities for a product or service. In addition, marketing communication communicates the benefits of a service or product, and as a result, a consumer is able to weigh the options and choose wisely. Paragon Software Limited has been experiencing a decline in sales, which has promoted the CEO to implement an advertisement campaign worth ?100,000 on trade publications. However, as the company’s sales director, I feel there is need to change our marketing communication strategy, as advertising alone cannot generate sales. The following report will explain the capabilities and limitations of advertisement as a marketing communication vehicle. Recommendations on how advertisement and other communication tools can be employed in order to increase sales will be discussed as well. The Capabilities and Limitations of Advertising as a Marketing Communications Vehicle Capabilities Advertising is one of the marketing communication tools, reaching geographically dispersed public. According to Shimp (2008, p.7), a company can advertise its product or service through the media in television, magazines, newspapers, or radio; and online via internet or emails. Advertising is therefore a tool used to pass a message across the public. A good advertisement will probably attract a huge number of audiences, and therefore increase sales. First, advertisement enables the brand name to be well known among consumers; indeed, organizations practically advertise their products for several reasons - increasing their sales, meeting certain target, and attracting more customers among other reasons. The continuous repetition of a company’s product may create trust from the audiences. Generally, marketing effectiveness is dependent on communications effectiveness. A market is comprised of information flows. The manner in which a buyer perceives the seller’s market offers is heavily influenced by the amount and kind of information he or she has about the product offering, and the reaction to that information. Marketing relies heavily on information flows between the seller and the potential buyer; as a result, the market is filled with many organizations that use marketing communications. Therefore, marketing communication is probably the most preferred form of marketing activity that affects everyday life. Advertising is cost effective, since it reaches many audiences; nevertheless, advertising involves huge spending. According to Frankenberger and Graham (2004, p.18), advertising is capable of creating an asset through influencing the organization’s future cash flows, and as a result, guaranteeing benefits in the future. Therefore, despite the high expenditures on advertising, the possibility of future high earnings is high. Needless to say, persuasive advertisement builds an image for an organization, and as a result, increasing sales simultaneously. Quinn (2012) adds that, advertising in a daily or weekly newspaper is beneficial, as it targets different types of customers in a section related to an organization’s operations. In addition, newspapers can be reviewed after some period, and as a result, a potential customer may lay his eyes on a company’s advertisement. Frankenberger and Graham (2004, p.21) add that, advertisement can increase an organization’s market share through creating awareness of a company and its products. The authors further add that, the demand for goods and services is caused by awareness, and therefore, a company’s effort to advertise increases awareness and attracts more customers. The main aim of advertising is to increase market value and company’s returns. Frankenberger and Graham (2004, p.29) emphasize that, managers who invest in advertising stand at an advantage because they create future revenues for the firm. As a result, they express a positive image to the investors; value creation is also achieved through advertising. Billboards are some of the tools used in advertising, which are mostly placed along busy streets, acting as a guarantee that the public will definitely see them while traveling. In addition, a billboard advertisement can be placed where an organization feels it has an impact on the public. Therefore, billboards can be placed in areas where reaching people is challenging or where such people do not have easy access of internet or newspapers. Paragon Software Limited can improve its sale through advertising by concentrating on gaming software, which can attract a vast majority of the public. Children around the world rely on games as a hobby or form of entertainment; therefore, many potential buyers are likely to be parents who can purchase this software as gift. In addition, other businesses are likely to be attracted by the gaming software; however, they are in search of potential sellers like Paragon Software Limited. In addition, advertisement may be in various forms, therefore giving the company many options to choose from depending on its budget and affordability. Trade publication advertising (N.d) adds that, trade publications enables an organization to reach and influence potential customers before the research on other competitors. Therefore, advertising improves the sales of a product, as it may alter the public’s attitude, forcing them to change their habits and adapt to the advertised products. Limitations Advertising is one of the tools of marketing communications, which creates awareness of goods and services of a company to the public. However, can the use of advertising alone increase sales? Mass media advertising is not always effective in generating sales mainly because the newspapers are not always engaging. Placing an advertisement on a trade publication or newspaper does not guarantee immediate sales increase. Advertisements must be continuous in order to attract the attention of the audiences, and as a result, the company may be forced to invest heavily on advertisement that may not guarantee return on sales. According to Shimp (2008, p.367), magazine is not intrusive, as the public may control their exposure to magazine advertisements. Needless to say, advertising varies from trade publications to television and radio advertising. According to Pride, Hughes and Kapoor (2011, p.453), radio advertising is limited to visual presentation, whilst trade publications and newspapers have a short life span, and expensive as well. In addition, advertising of products leads to high expenditures, forcing advertising company to increase the prices of these goods to cover for the advertising expenses. In this case, the rival competitors of Paragon Software Limited may decide to invest heavily on advertising, utilizing all forms of advertising compared to Paragon that only uses trade publications. Recommendations The Paragon Software Limited marketing communications strategy needs to be revised for the company to survive. Focusing on advertising alone cannot guarantee sales increase. Other forms of marketing communication tools can be employed together with advertising, for instance, direct marketing. According to Tsuji, Bennet and Leigh (2009, p.512), brand awareness is very important, since it affects the customers decisions; therefore, advertising may assist the customers to minimize their decision efforts. However, when advertising is used in isolation, it may not guarantee sales generation, and as a result, direct marketing is necessary in promoting sales in this company. Direct marketing, as a marketing communication tool, involves direct mail, direct response advertising, telemarketing, and email marketing. It provides a wide range of benefits, which enable a company to engage directly with its audience. According to Rwabutoga (N.d, p.351), direct mail enables a company to decide on which type of audience it wishes to send its message. The customer may also purchase the product immediately. Paragon Software Limited can directly target its audience via phone, internet, mail, or personal visit. It may also combine advertising, sales promotion, personal selling and public relations, and as a result, encouraging continuous purchasing of a product. Paragon software Limited will be in a position to develop one on one relationship with its customers because of direct communication. In addition, when using direct mail in direct marketing, control, coverage, response, selectivity, and flexibility are achieved. Gaming software would be more marketable if the company is in a position to interact with its audience through direct marketing. As a result, customers will be confident about the product they are about to purchase, since they have all the information needed. Flexible targeting is achieved through direct marketing. A company is able to communicate directly with isolated markets that increase the success rate. Direct marketing is also cost effective compared to advertising; here, once a customer is acquired, a company can benefit form repeat sales. Management is easier through direct marketing, while control and accountability are easily achieved. This is because a company is able to know how many customers it has interacted with, and as a result, the conversation rates are easily calculated. Paragon Software Limited can benefit through direct marketing in a number of ways; first, the continuous interaction with consumers enables the company to receive continuous request for gaming software (King, 1929, p.336). As a result, the company’s sales increase significantly. Direct marketing will also create diversification, which will enable the company meet the demand of consumers. Direct marketing will enable Paragon Software Limited create healthy relationships with its customers, and as a result, repeat purchasing will be evident, hence increasing sales of gaming software. Another advantage of direct marketing is that it can be used for any geographic target. Baverstock (2008, p.95) emphasizes on the cost effectiveness of direct marketing. Personal communication to customers about a product increases the probability of a consumer purchasing it. Perfect timing of the sales message is possible through direct marketing; for instance, the Paragon Software Limited can time the pick season for gaming software, thus being at a competitive advantage. Sales promotion is another marketing communication tool, which affects consumer’s behavior and generates profits. Paragon Software Limited can introduce sales promotions via promoting price discrimination. The company may offer special sales, coupons, and discounts with an aim of attracting customers. Schultz, Robinson and Petrison (1998, p.33) argue that, sales promotion is effective especially when integrated with other marketing tools such as advertising. When conducting sales promotion, the main aim should be increasing purchasing; therefore, sales promotion via discounts is a form of advertising of a company. Paragon Limited can attract more customers through price discounts, who may also end up shopping regularly. Repeat purchases are some of the boosters of sales for a business, thus, the ability for accompany to encourage repeat purchases acts as an advantage over its competitors. Sales promotion enables a company to provide customers with relevant information, which aids in decision-making. This is beneficial when communicating to customers who are less familiar with the company’s products. Therefore, paragon software limited should consider integrating other marketing communication tool such as sale promotion and direct marketing in order to boost their sales. Using advertising in isolation does not guarantee a competitive advantage over competitors, which is the key to sales generating capabilities. Conclusions Paragon Software Limited has been experiencing a decline in sales over the past two years; thus, the CEO has chosen advertising as the main tool of marketing communication. He believes that it will yield to increase of sales. From the research above it is obvious that advertising can generate to sale increase. However, it involves many expenses but it does not guarantee 100% sales increase. Therefore, there is need to employ direct marketing and sales promotion as marketing tools. Generally, direct market enables personal interaction with customers; this creates customers confidence in a product and repeat purchases are evident. In addition, the healthy relationships created between the customers and the company guarantees frequent purchases as well. Sales promotion can be in the form of discounts, coupons, and special sales, and as a result, it is easier to lure customers with the discounted price. Therefore, the company attains a competitive advantage over its competitors; hence, they are capable of increasing their sales. Reference List Baker, M. Graham, P. and Harker, D., 1998. Marketing: managerial foundations. Macmillan Education AU Publisher. Baverstock, A., 2008. How to Market Books: The Essential Guide to Maximizing Profit and Exploiting All Channels to Market. London: Kogan Page Publishers. Frankenberger, K., & Graham, R., 2004. The value of advertising. Should Firms Increase Advertising Expenditures During Recessions? American association of advertising agencies publication. (Online). Available at: http://www.premierguitar.com/About/pdf/Value_of_Advertising.pdf (accessed 15 February 2012). King, C., 1929. Farm relief. Ayer Publishing. Pride, W., Hughes, R., & Kapoor, J., 2011. Business Authors. 11th edition. OH: Cengage Learning Publisher. Quinn, R., 2012. Newspaper advertising. Articles. Mediabids.com. Trade Publication http://www.newspaperadvertising.com/articles/art15.html (accessed 15 February 2012). Rwabutoga, G., N.D. Comprehensive Commerce. East African Publishers. Shimp, T., 2008. Advertising, promotion, and other aspects of integrated marketing communications. Edition 8. OH: Cengage Learning Publisher. Schultz, D., Robinson, W., & Petrison, L., 1998. Sales promotion essentials: the 10 basic sales promotion techniques-- and how to use them. Third Edition. NY: McGraw-Hill Professional Publisher. Tsuji, Y., Bennet, G., & Leigh, J., 2009. Investigating Factors Affecting Brand, Awareness of Virtual Advertising. Journal of Sport Management, 23, 511-544. (Online). Available at: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=5&hid=24&sid=7b45470d-dc3f-4cf5-bcab-a6bbe1de1d96%40sessionmgr12 (accessed 15 February 2012). Trade Publication Advertising. N.d. What your website cannot do: find prospects before they find your competitors. (Online). Available at: http://www.rappadvertising.com/TradePublicationAdvertising.asp (accessed 15 February 2012). Read More