IMC_final

Promoting Products Using Promoting Products Using Interactive and Integrated Interactive and Integrated Marketing CommunicationsMarketing Communications

Promotion Mix/ Promotion Mix/ Marketing Marketing

Communication Communication MixMix

15 - 3

Objectives• Know the tools of the marketing Know the tools of the marketing

communications mix.(Promotion Mix)communications mix.(Promotion Mix)

• Learn the steps in developing effective Learn the steps in developing effective marketing communications.marketing communications.

• Understand methods for setting Understand methods for setting promotional budgets and the factors that promotional budgets and the factors that affect the design of the promotion mix.affect the design of the promotion mix.

• Advertising Decisions.Advertising Decisions.

• Sales promotion tool.Sales promotion tool.

• Public Relations Tools.Public Relations Tools.

• Personal SellingPersonal Selling

15 - 4

Akai TVsAkai TVs Airtel and Hutch (Now Vodafone)Airtel and Hutch (Now Vodafone)FevicolFevicol BingoBingoHaldiram’sHaldiram’sWhat types of promotion mix What types of promotion mix

have these companies used to have these companies used to promote their products?promote their products?

Case Study

15 - 5

Definition• Marketing Communications Mix ( Promotion Marketing Communications Mix ( Promotion

Mix)Mix)

A company’s total marketing A company’s total marketing communication program is called communication program is called as “ as “ Promotion MixPromotion Mix””

Promotion MixPromotion Mix Consists of specific Consists of specific mix of advertising, personal selling, mix of advertising, personal selling, sales promotion, and public sales promotion, and public relations tools that the company relations tools that the company uses to pursue its advertising and uses to pursue its advertising and marketing objectives.marketing objectives.

15 - 6

• Integrated Marketing Integrated Marketing CommunicationsCommunications The concept under which a company The concept under which a company

carefully integrates and coordinates carefully integrates and coordinates its many communications channels its many communications channels to deliver a clear, consistent, and to deliver a clear, consistent, and compelling message about the compelling message about the organization and its products.organization and its products.

IMC implementation often requires IMC implementation often requires the hiring of a the hiring of a MarCom manager.MarCom manager.

Integrated Marketing Communications (IMC)

Change & Promotion Mix

• Definition- Promotion• Promotion Mix• Integrated Marketing

Communication (IMC)• Change

Technology Build Relationships Interactivity

Factors That Affect

The Promotion MixType of Product

Stage in the Product Life CycleTarget Market CharacteristicsActions of CompetitorsAvailable Funds

Components of Integrated MarketingAdvertising

Corporate Communication

Crisis Communication

E-CommerceEvent MarketingInternal

Communication

Issues Management

MarketingMultimediaPublic RelationsSales PromotionStrategic PlanningWeb Design

Objectives of Integrated MarketingBuild Brand Equity

Provide InformationManage Demand &

Build SalesDifferentiate ProductsInfluence Perceptions,

Attitudes, & Buyer Behavior

Total Direct Advertising

Expenditures

$104.3

$142.1 $153.0$164.1

$213.3

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

1992 1996 1997 1998 2002*

In billionsIn billions

*Projected*ProjectedSource: Source: The Direct Marketing Association

Figure 16.3 Advertising Expenditure by Figure 16.3 Advertising Expenditure by MediaMedia

Advertising Today

• Persuasive Communication

• Infomercials

• Internet

• Global Advertising

Internet Advertising

Will reach $22 billion in the U.S. The rest of world will spend $10.8

billion. $27 billion (10% of all U.S. ad

spending) will be siphoned from traditional media

Hardest hit: newspapers and direct mail

Source: Source: CIO Web Business, 10/1/1999

Steps in Personal SellingProspect/QualifyProspect/QualifyProspect/QualifyProspect/Qualify

PreapproachPreapproachPreapproachPreapproach

ApproachApproachApproachApproach

PresentatioPresentationn

PresentatioPresentationn

ObjectionsObjectionsObjectionsObjections

CloseCloseCloseClose

Follow-upFollow-upFollow-upFollow-up

Public Relations

Steps

• Listen

• Change/Develop

• Inform

PublicityFreeMore Effective

Than AdBelievableNo ControlNo Repetition

Sales Promotion• Internal & External

• Sampling

• Word-Of-Mouth

• Viral Marketing/Swag

• Technology

• Testimonials

Tips on Issuing Coupons

Coupons can be used as a “Thank you for buying” or a “Stop and try us.”

The value must be enough to attract customers.

Use coupon promotions sparingly.

Get professional help to get maximum exposure.

Color-code your coupons for different groups that use them.

Top Celebrity Endorsers

Celebrity Product(s)

Top Sports Endorsers

Athlete

Endorsements

Source:Source: Fortune Magazine

Promotional Strategies

Push StrategyPush Strategy

Pull StrategyPull Strategy

PromotioPromotionn

DistributionDistribution

Retail Retail StoreStore

CustomerCustomer

PromotioPromotionn

Building IMC

IMCIMC

Gather Data & Gather Data & Maintain Maintain DatabaseDatabaseRespond Quickly To Respond Quickly To Adjust Policies & Adjust Policies & ProceduresProcedures

Provide Provide Accessible Accessible InformationInformation

Characteristics of Objectives

Concrete, Measurable Communication TasksConcrete, Measurable Communication Tasks

Well-Defined Target AudienceWell-Defined Target Audience

Have an Existing Benchmark MeasureHave an Existing Benchmark Measure

Specify Degree of Change SoughtSpecify Degree of Change Sought

Specific Time PeriodSpecific Time Period

Good Objectives Should Include:Good Objectives Should Include:

15 - 24

• Communications efforts should be Communications efforts should be viewed from the perspective of viewed from the perspective of managing customer relationships over managing customer relationships over time.time.

• The communication process begins The communication process begins with an audit of all potential contacts.with an audit of all potential contacts.

• Effective communication requires Effective communication requires knowledge of how communication knowledge of how communication works.works.

The Communication Process

Noise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise Noise

Noise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise NoiseNoise Noise Noise Noise Noise Noise

MediaMedia

SenderSender

EncodingEncoding

MessageMessage

DecodingDecoding

ReceiverReceiver

ResponseResponse

FeedbackFeedback

The Communication ProcessThe Communication Process

17-26

Steps in Developing Effective Communications

Step 1. Identifying the Target Audience

Step 2. Determining the Communication Objectives

Step 3. Designing a Message

Step 4. Choosing Media

Step 5. Selecting the Message Source

Step 6: Collecting Feedback

Steps in Developing EffectiveCommunicationSteps in Developing EffectiveCommunication

Step 1. Identifying the Target AudienceStep 1. Identifying the Target Audience

Step 2. Determining the Communication ObjectivesBuyer Readiness Stages

Step 2. Determining the Communication ObjectivesBuyer Readiness Stages

PurchasePurchase

Conviction

Preference

Liking

Knowledge

Awareness

15 - 28

• Step 1:Step 1: Identifying the Target Audience Identifying the Target Audience Affects decisions related to what, how, Affects decisions related to what, how,

when, and where message will be said, when, and where message will be said, as well as who will say itas well as who will say it

• Step 2:Step 2: Determining Communication Determining Communication ObjectivesObjectives Six buyer readiness stagesSix buyer readiness stages

Developing Effective Communication

15 - 29

• Step 3:Step 3: Designing a Message Designing a Message AIDA framework guides message designAIDA framework guides message design Message content Message content contains contains appeals or themes appeals or themes

designed to produce desired results these are designed to produce desired results these are ::

Rational AppealsRational Appeals: Audience’s self interest. : Audience’s self interest. Economy (Price), Quality, Value, Features Economy (Price), Quality, Value, Features and Benefits of the productsand Benefits of the products

Emotional Appeals: Emotional Appeals: attempts to stir up attempts to stir up either positive or negative emotions to that either positive or negative emotions to that can motivate purchase.can motivate purchase.

– Love, pride, joy, humor, fear, guilt, shame E.g. Love, pride, joy, humor, fear, guilt, shame E.g. Crack creame.Crack creame.

Moral Appeals: Moral Appeals: are directed to audience’s are directed to audience’s sense of what is “Right” and “Proper” . E.g. sense of what is “Right” and “Proper” . E.g. For some social cause: clean envt. EtcFor some social cause: clean envt. Etc..

30

LO3

Advertising AppealsProfit

Health

Love or romance

Fear

Admiration

Convenience

Fun and pleasure

Vanity and egotism

Environmental Consciousness

Product saves, makes, or protects money

Appeals to body-conscious or health seekers

Used in selling cosmetics and perfumes

Social embarrassment, old age, losing health

Reason for use of celebrity spokespeople

Used for fast foods and microwave foods

Key to advertising vacations, beer, parks

Used for expensive or conspicuous items

Centers around environmental protection

Step 3. Designing a MessageStep 3. Designing a Message

Steps in Developing EffectiveCommunication

Steps in Developing EffectiveCommunication

AttentionAttention InterestInterest DesireDesire

Message ContentRational Appeals

Emotional AppealsMoral Appeals

Message StructureDraw Conclusions

Argument TypeArgument Order

Message FormatHeadline, Copy, Color,

Words, & Sounds,Body Language

ActionAction

15 - 32

• Step 3:Step 3: Designing a Message Designing a Message Message Structure: Key decisions are Message Structure: Key decisions are

required with respect to three message required with respect to three message structure issues:structure issues:

Whether or not to draw a conclusionWhether or not to draw a conclusion One-sided vs. two-sided argumentOne-sided vs. two-sided argument Order of argument presentationOrder of argument presentation

Message Format: Design, layout, copy, color, Message Format: Design, layout, copy, color, shape, movement, words, sounds, voice, shape, movement, words, sounds, voice, body language, dress, etc.body language, dress, etc.


15 - 33

• Step 4: Step 4: Choosing MediaChoosing Media Personal communication channelsPersonal communication channels

Includes face-to-face, phone, mail, and Includes face-to-face, phone, mail, and Internet chat communicationsInternet chat communications

Word-of-mouth influence is often criticalWord-of-mouth influence is often critical Buzz marketing cultivates opinion leadersBuzz marketing cultivates opinion leaders

Nonpersonal communication channelsNonpersonal communication channels Includes media, atmosphere, and eventsIncludes media, atmosphere, and events


15 - 34

• Step 5: Step 5: Selecting the Message SourceSelecting the Message Source Highly credible sources are more persuasiveHighly credible sources are more persuasive A poor spokesperson can tarnish a brandA poor spokesperson can tarnish a brand

• Step 6:Step 6: Collecting Feedback Collecting Feedback Recognition, recall, and behavioral measures Recognition, recall, and behavioral measures

are assessedare assessed May suggest changes in product/promotionMay suggest changes in product/promotion


Budgeting Decisions

Two major decisionsTwo major decisions

• Establishing the size of the Establishing the size of the budgetbudget

• Allocating the budgetAllocating the budget

Budgeting decisions involve determining how much money will be spent on advertising and promotion each year and how the monies will be allocated

Top Management Sets the Spending Limit

The Promotion Budget Is Set to Stay Within the Spending Limit

Top-Down Budgeting

Top-Down Approaches

The Affordable MethodThe Affordable Method What we have to spare. What's left to spend.What we have to spare. What's left to spend.

Arbitrary Allocation MethodArbitrary Allocation Method No system. Seemed like a good idea at the No system. Seemed like a good idea at the

time.time.

Percentage of Sales MethodPercentage of Sales Method Set percentage of sales or amount per unit.Set percentage of sales or amount per unit.

Competitive Parity MethodCompetitive Parity Method Match competitor or industry average Match competitor or industry average

spending.spending.

Return on Investment MethodReturn on Investment Method Spending is treated as a capital investment.Spending is treated as a capital investment.

Percentage-of-SalesMethod

Affordable Method

Competitive-Parity

Method

Objective-and-TaskMethod

Setting the Total Promotion BudgetSetting the Total Promotion Budget

15 - 39

• Setting the Total Promotional BudgetSetting the Total Promotional Budget Objective-and-Task MethodObjective-and-Task Method

Specific objectives are definedSpecific objectives are defined Tasks required to achieve Tasks required to achieve objectives are objectives are determined determined

Costs of performing tasks are Costs of performing tasks are estimated, then estimated, then summed to create the summed to create the promotional budgetpromotional budget

17-40

Response Hierarchy Models

15 - 41

• Setting the Overall Promotion Setting the Overall Promotion MixMix Determined by the Determined by the nature of nature of

each promotion tooleach promotion tool and the and the selected selected promotion mix strategypromotion mix strategy

Setting the Promotional Budget

and Mix

15 - 42

Setting the Promotional Budget and Mix

• AdvertisingAdvertising• Personal SellingPersonal Selling

• Sales PromotionSales Promotion

• Public RelationsPublic Relations

• Direct MarketingDirect Marketing

• Reaches large, Reaches large, geographically dispersed geographically dispersed audiences, often with audiences, often with high frequencyhigh frequency

• Low cost per exposure, Low cost per exposure, though overall costs are though overall costs are highhigh

• Consumers perceive Consumers perceive advertised goods as more advertised goods as more legitimatelegitimate

• Dramatizes Dramatizes company/brandcompany/brand

• Builds brand image; may Builds brand image; may stimulate short-term salesstimulate short-term sales

• Impersonal; one-way Impersonal; one-way communicationcommunication

Promotion Promotion ToolsTools

15 - 43


• AdvertisingAdvertising

•Personal Personal SellingSelling




• Most effective tool for Most effective tool for building buyers’ building buyers’ preferences, preferences, convictions, and convictions, and actionsactions

• Personal interaction Personal interaction allows for feedback allows for feedback and adjustmentsand adjustments

• Relationship-orientedRelationship-oriented

• Buyers are more Buyers are more attentiveattentive

• Sales force represents Sales force represents a long-term a long-term commitmentcommitment

• Most expensive of the Most expensive of the promotional toolspromotional tools


15 - 44




•Sales Sales PromotionPromotion



• May be targeted at the May be targeted at the trade or ultimate trade or ultimate consumerconsumer

• Makes use of a variety of Makes use of a variety of formats: premiums, formats: premiums, coupons, contests, etc.coupons, contests, etc.

• Attracts attention, offers Attracts attention, offers strong purchase strong purchase incentives, dramatizes incentives, dramatizes offers, boosts sagging offers, boosts sagging salessales

• Stimulates quick Stimulates quick responseresponse

• Short-livedShort-lived• Not effective at building Not effective at building

long-term brand long-term brand preferencespreferences


15 - 45



• Personal Personal SellingSelling

• Sales Sales PromotionPromotion

• Public Public RelationsRelations

• Direct Direct MarketingMarketing

• Highly credibleHighly credible

• Many forms: news Many forms: news stories, news stories, news features, events and features, events and sponsorships, etc.sponsorships, etc.

• Reaches many Reaches many prospects missed via prospects missed via other forms of other forms of promotionpromotion

• Dramatizes company Dramatizes company or benefitsor benefits

• Often the most Often the most underused element underused element in the promotional in the promotional mixmix


15 - 46






• Direct Direct MarketingMarketing

( If IMC is referred)( If IMC is referred)

• Many forms: Many forms: Telephone Telephone marketing, direct marketing, direct mail, online mail, online marketing, etc.marketing, etc.

• Four distinctive Four distinctive characteristics:characteristics: NonpublicNonpublic ImmediateImmediate CustomizedCustomized InteractiveInteractive

• Well-suited to Well-suited to highly targeted highly targeted marketing effortsmarketing efforts


15 - 47

• Promotion Mix StrategiesPromotion Mix Strategies Push strategyPush strategy:: trade promotions trade promotions

and personal selling efforts push the and personal selling efforts push the product through the distribution product through the distribution channels.channels.

Pull strategy:Pull strategy: producers use producers use advertising and consumer sales advertising and consumer sales promotions to generate strong promotions to generate strong consumer demand for products.consumer demand for products.


15 - 48

• Checklist:Checklist: Integrating the Promotion Integrating the Promotion MixMix Analyze trends (internal and external)Analyze trends (internal and external) Audit communications spendingAudit communications spending Identify all points of contactIdentify all points of contact Team up in communications planningTeam up in communications planning Make all communication elements Make all communication elements

compatiblecompatible Create performance measuresCreate performance measures Appoint an IMC managerAppoint an IMC manager

15 - 49

• Advertising and Sales PromotionAdvertising and Sales Promotion Avoid false and deceptive Avoid false and deceptive

advertisingadvertising

Trade promotions can not favor Trade promotions can not favor certain customers over otherscertain customers over others

Use advertising to promote socially Use advertising to promote socially responsible programs and actionsresponsible programs and actions

Socially Responsible Communications

15 - 50

• Personal SellingPersonal Selling Salespeople must follow the rules of Salespeople must follow the rules of

“fair competition”“fair competition” Three day cooling-off rule protects Three day cooling-off rule protects

ultimate consumers from high ultimate consumers from high pressure tacticspressure tactics

Business-to-business sellingBusiness-to-business selling Bribery, industrial espionage, and Bribery, industrial espionage, and

making false and disparaging making false and disparaging statements about a competitor are statements about a competitor are forbiddenforbidden

Advertising Decisions

15 - 51

Advertising Decisions

15 - 52

What is Advertising?• Any form of Nonpersonal presentation Any form of Nonpersonal presentation

and promotion of ideas, goods, or and promotion of ideas, goods, or services by an identified sponsor.services by an identified sponsor.

• U.S. advertisers spend in excess of U.S. advertisers spend in excess of $175 billion each year.$175 billion each year.

• Advertising is used by:Advertising is used by: Business firms,Business firms, Nonprofit organizations,Nonprofit organizations, Professionals,Professionals, Social Agencies. Social Agencies.

Inverted Pyramid of Communications Effects

90% Awareness

70% Knowledge

40% Liking

25% Preference

20% Trial

5% UseC

onative

Cognitive

Affective

Advertising and Movement Toward Action

ConativeRealm of motives.Ads stimulate or direct desires.

AffectiveRealm of emotions.Ads change attitudes and feelings

CognitiveRealm of thoughts.Ads provide information and facts.

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

Point of purchaseRetail store ads, Deals“Last-chance” offersPrice appeals, Testimonials

Competitive adsArgumentative copy

“Image” copyStatus, glamour appeals

AnnouncementsDescriptive copyClassified adsSlogans, jingles, skywritingTeaser campaigns

Related behavioral Dimensions

Movement toward purchase

Types of promotions and advertising at each step

Major Decisions in Advertising

Objectives SettingObjectives Setting

Budget DecisionsBudget Decisions

Message DecisionsMessage Decisions

Campaign EvaluationCampaign Evaluation

Media DecisionsMedia Decisions

Informative AdvertisingBuild Primary Demand

Informative AdvertisingBuild Primary Demand

Setting Objectives

Persuasive AdvertisingBuild Selective Demand

Persuasive AdvertisingBuild Selective Demand

Comparison Advertising

Compares One Brand to Another

Comparison Advertising

Compares One Brand to Another

Advertising Objectives• Specific Communication Task

• Accomplished with a Specific Target Audience • During a Specific Period of Time

Reminder AdvertisingKeeps Consumers Thinking

About a Product.

Reminder AdvertisingKeeps Consumers Thinking

About a Product.

The DAGMAR ApproachRecognition that communication effects are the logical basis for

advertising goals and objectives against which success or failure

should be measured.DDefineefine

AAdvertisingdvertising

GGoals foroals for

MMeasuringeasuring

AAdvertisingdvertising

RResultsesults

The DAGMAR Approach• An advertising goal is a An advertising goal is a

communication task that is communication task that is specific and measurable.specific and measurable.

• The communication task has four The communication task has four stages:stages: AwarenessAwareness ComprehensionComprehension ConvictionConviction ActionAction

Setting the Advertising Budget

Stage in the Product Life Cycle

Stage in the Product Life Cycle

Competition and Clutter

Competition and Clutter

Market Share

Market Share

Advertising Frequency

Advertising Frequency

ProductDifferentiation

ProductDifferentiation

Factors in Setting the Advertising

Budget

Advertising Budget Methods

Affordable, Percentage of Sales, Competitive-Parity and Objective-and-Task

61

LOI

Top Ten Leaders by U.S.Advertising Spending

Top Ten Leaders by U.S.Advertising Spending

Plan a Message StrategyGeneral Message to Be Communicated to Customers

Plan a Message StrategyGeneral Message to Be Communicated to Customers

Advertising StrategyCreating Advertising Messages

Advertising StrategyCreating Advertising Messages

Develop a Message Focus on

Customer Benefits

Develop a Message Focus on

Customer Benefits Creative Concept“Big Idea”

Visualization or PhraseCombination of Both

Creative Concept“Big Idea”

Visualization or PhraseCombination of Both Advertising Appeals

MeaningfulBelievableDistinctive

Advertising AppealsMeaningfulBelievableDistinctive

Message Execution

TypicalMessage

ExecutionStyles

TypicalMessage

ExecutionStyles

TestimonialEvidence

TestimonialEvidence Slice of LifeSlice of Life

ScientificEvidence

ScientificEvidence LifestyleLifestyle

TechnicalExpertise

TechnicalExpertise FantasyFantasy

MusicalMusical

PersonalitySymbol

PersonalitySymbol

Mood orImage

Mood orImage

Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest.

Selecting Advertising Media

Step 1. Decide on Reach, Frequency, and Impact

Step 1. Decide on Reach, Frequency, and Impact

Step 2. Choosing Among Major Media TypesMedia Habits of Target Consumers

Nature of the ProductType of Message

Cost

Step 2. Choosing Among Major Media TypesMedia Habits of Target Consumers

Nature of the ProductType of Message

Cost

Step 3. Selecting Specific Media VehiclesSpecific Media Within a Given Type, i.e. Magazines.Must Balance Media Cost Against Media Factors:

Audience Quality & Attention, Editorial Quality

Step 3. Selecting Specific Media VehiclesSpecific Media Within a Given Type, i.e. Magazines.Must Balance Media Cost Against Media Factors:

Audience Quality & Attention, Editorial Quality

Step 4. Deciding on Media TimingScheduling of Advertising Over the Course of a Year

Pattern of Ads: Continuity or Pulsing

Step 4. Deciding on Media TimingScheduling of Advertising Over the Course of a Year

Pattern of Ads: Continuity or Pulsing

65

Chap. 15 Marketing 7e

Lamb Hair McDaniel

©2004 South-Western/Thomson

Learning

Media Selection Considerations

Cost perCost perContactContact

Cost perCost perContactContact

ReachReachReachReach

FrequencyFrequencyFrequencyFrequency

AudienceAudienceSelectivitySelectivityAudienceAudienceSelectivitySelectivity

The cost of reaching one member of the target market.

The cost of reaching one member of the target market.

The number of target consumers exposed to a commercial at least

once during a time period.

The number of target consumers exposed to a commercial at least

once during a time period.

The number of times an individual is exposed to a message during a time

period.

The number of times an individual is exposed to a message during a time

period.

The ability of an advertising medium to reach a precisely defined market.

The ability of an advertising medium to reach a precisely defined market.

66

Alternative Media

Ads in MoviesAds in Movies

Interactive KiosksInteractive Kiosks

Computer Screen SaversComputer

Screen Savers

Shopping CartsShopping Carts

DVDsDVDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads

Advertising EvaluationAdvertising Evaluation

Communication Effects

Is the Ad Communicating Well?

Communication Effects

Is the Ad Communicating Well?

Advertising Program EvaluationAdvertising Program Evaluation

Sales Effects

Is the Ad Increasing Sales?

Sales Effects

Is the Ad Increasing Sales?

15 - 68

Advertising Evaluation: It should evaluate both the 1)Communication Effect: It includes Copy Testing- tells whether the ad is communicating well. It can be Pretesting (Direct Rating, Portfolio Test & Laboratory Test) and Post Testing ( Recall Test and recognition Test).2)Measuring the Sales Effect: What sales are caused by an ad that increases brand awareness by 20% and brand preference by 10%?. Difficult but can know the sales effect by comparing past sales with past ad Expenditure.

Ways to Handle AdvertisingWays to Handle Advertising

Sales Departments inSmall Companies

Sales Departments inSmall Companies

Advertising Agency

Firm that Assists Companiesin Planning, Preparing,

Implementing and Evaluating Their

AdvertisingPrograms.

Advertising Agency

Firm that Assists Companiesin Planning, Preparing,

Implementing and Evaluating Their

AdvertisingPrograms.

Advertising Departments in Larger Companies

Advertising Departments in Larger Companies

70


Lamb Hair McDaniel


Learning

Major Types of Advertising

InstitutionalAdvertisingInstitutionalAdvertising

ProductAdvertising

ProductAdvertising

Designed to enhance a company’s image rather than promote a

particular product.

Designed to enhance a company’s image rather than promote a

particular product.

Designed to tout the benefits of a specific good or service.

Designed to tout the benefits of a specific good or service.

71


Lamb Hair McDaniel


Learning

Major Types of AdvertisingEnhance

corporation’s identityEnhance

corporation’s identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductProductAdvertisingAdvertising

ProductProductAdvertisingAdvertising

InstitutionalInstitutionalAdvertisingAdvertisingInstitutionalInstitutionalAdvertisingAdvertising

Advocacy advertisingAdvocacy advertising

72


Lamb Hair McDaniel


Learning

Product Advertising

PioneeringPioneeringPioneeringPioneering• Stimulates primary demand for

new product or category.• Used in the PLC introductory stage.

CompetitiveCompetitiveCompetitiveCompetitive• Influence demand for brand in the

growth phase of the PLC. • Often uses emotional appeal.

ComparativeComparativeComparativeComparative• Compares two or more competing

brands’ product attributes. • Used if growth is sluggish, or if

competition is strong.

International Advertising DecisionsInternational Advertising Decisions

Adaptation of Global Advertising

Adaptation of Global Advertising

Advertising Media Costs & Availability

Advertising Media Costs & Availability

Regulation of Advertising Practices

Regulation of Advertising Practices

© 2005 McGraw-Hill Ryerson Limited

Setting Objectives Using the Communications Effects Pyramid

Figure 4-5Figure 4-5

Sales Promotion

15 - 75

What is Sales Promotion?What is Sales Promotion?• Mass communication technique that offers Mass communication technique that offers

short-term incentives to encourage purchase or short-term incentives to encourage purchase or sales of a goods or service.sales of a goods or service.

1) Consumer Promotion, 2)Trade Promotion and 1) Consumer Promotion, 2)Trade Promotion and 3)Sales force Promotion ( Three Target groups)3)Sales force Promotion ( Three Target groups)

• Rapid growth in the industry has been achieved Rapid growth in the industry has been achieved because:because: Product managers are facing more pressure Product managers are facing more pressure

to increase their current sales,to increase their current sales, Companies face more competition,Companies face more competition, Advertising efficiency has declined,Advertising efficiency has declined, Consumers have become more deal oriented.Consumers have become more deal oriented.

Point-of-PurchaseDisplays

Point-of-PurchaseDisplays

Consumer - Promotion Tools

PremiumsPremiums

Price PacksPrice Packs

Cash RefundsCash Refunds

CouponsCoupons

SamplesSamples

Short-Term Incentives to Encourage Purchase or Sales of a Product or Service.

Consumer-Promotion Objectives

Consumer-Promotion Tools

Patronage Rewards

Patronage Rewards

GamesGames

SweepstakesSweepstakes

ContestsContests

AdvertisingSpecialties

AdvertisingSpecialtiesPatronage Rewards

Entice Consumers to Try a New Product

Entice Consumers to Try a New Product

Lure Customers AwayFrom Competitors’ Products

Lure Customers AwayFrom Competitors’ Products

Get Consumers to “Load Up’on a Mature Product

Get Consumers to “Load Up’on a Mature Product

Hold & Reward Loyal Customers

Hold & Reward Loyal Customers

Consumer Relationship Building

Consumer Relationship Building

Specialty Advertising

Items

Specialty Advertising

Items

Trade - Promotion ToolsTrade - Promotion Tools

ContestsContests

Free GoodsFree Goods

Buy-BackGuarantees

Buy-BackGuarantees

AllowancesAllowances

Price-OffsPrice-Offs

Short-Term Incentives That are Directed to Retailers and Wholesalers.

Trade-Promotion Objectives

Trade-Promotion Tools

Patronage Rewards

Patronage Rewards

Push MoneyPush Money

DiscountsDiscounts

PremiumsPremiums

Displays

Persuade Retailers or Wholesalers to Carry a Brand

Persuade Retailers or Wholesalers to Carry a Brand

Give a Brand Shelf SpaceGive a Brand Shelf Space

Promote a Brand in Advertising

Promote a Brand in Advertising

Push a Brand to ConsumersPush a Brand to Consumers

Business - Promotion ToolsBusiness - Promotion Tools

Short-Term Incentives That are Directed to Industrial Customers.

Business-Promotion Objectives

Business-Promotion Tools

Generate Business LeadsGenerate Business Leads

Stimulate PurchasesStimulate Purchases

Reward CustomersReward Customers

Motivate SalespeopleMotivate Salespeople

ConventionsConventions

Trade ShowsTrade Shows

Sales ContestsSales Contests

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Sales-force Promotion :

Bonuses, Contest and Rallies.“ Best salesman of the Year Award” “ Trip to Europe or US for best performers”.

Decide on the Size of the IncentiveDecide on the Size of the Incentive

Set Conditions for ParticipationSet Conditions for Participation

Evaluate the ProgramEvaluate the Program

Determine How to Promote andDistribute the Promotion Program Determine How to Promote and

Distribute the Promotion Program

Determine the Length of the ProgramDetermine the Length of the Program

Developing the Sales Promotion Program Developing the Sales Promotion Program

Public Relations

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What is Public Relations?• Building good relations with the company’s Building good relations with the company’s

various publics by obtaining favorable various publics by obtaining favorable publicity, building up a good “corporate publicity, building up a good “corporate image” and handling or heading off image” and handling or heading off unfavorable rumors, stories and events.unfavorable rumors, stories and events.

• Major functions are:Major functions are: Press Relations Press Relations Product PublicityProduct Publicity Public AffairsPublic Affairs LobbyingLobbying Investor RelationsInvestor Relations DevelopmentDevelopment

PUBLIC RELATIONS

DefinitionDefinition““Public Relations in the management Public Relations in the management

function which evaluates public attitudes, function which evaluates public attitudes, identifies the policies and procedures of an identifies the policies and procedures of an

individual or an organization to with the individual or an organization to with the public Definition cont.public Definition cont.

interest, and executes a program of action interest, and executes a program of action to earn public understanding and to earn public understanding and acceptance.”acceptance.”

American Association of Advertising American Association of Advertising AgenciesAgencies

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Company’s Various Publics

•Financial Publics: Banks, Investment houses..•Government Publics: Govt. Laws.•Media Publics: Newspapers, Magazines ..•Citizen-action Publics: Envt. Groups etc.•Local Publics: Neighborhood, Community organizations.•General Publics: Public Image of co.•Internal Publics: employees and others.

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Learning

Public Relations

Evaluates public attitudes

Evaluates public attitudes

Identifies issues of public concern

Identifies issues of public concern

Executes programs to gain public acceptance

Executes programs to gain public acceptance

The Role of The Role of Public RelationsPublic Relations

The Role of The Role of Public RelationsPublic Relations

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Learning

Functions of Public Relations

Press Relations Press Relations Press Relations Press Relations

Product PublicityProduct PublicityProduct PublicityProduct Publicity

Corporate CommunicationCorporate CommunicationCorporate CommunicationCorporate Communication

Public AffairsPublic AffairsPublic AffairsPublic Affairs

LobbyingLobbyingLobbyingLobbying

Employee and Investor RelationsEmployee and Investor RelationsEmployee and Investor RelationsEmployee and Investor Relations

Crisis ManagementCrisis ManagementCrisis ManagementCrisis Management

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SpecialEvents

SpecialEvents

Written MaterialsWritten

Materials

Corporate Identity Materials

Corporate Identity Materials SpeechesSpeeches

NewsNews

AudiovisualMaterials

AudiovisualMaterials

Major Public Relations ToolsMajor Public Relations Tools

Public Service

Activities

Public Service

Activities

Web SiteWeb Site

Click to add titleClick to add title

Setting Public Relations ObjectivesSetting Public Relations Objectives

Choosing the Public Relations Messages and Vehicles

Choosing the Public Relations Messages and Vehicles

Implementing the Public Relations PlanImplementing the Public Relations Plan

Evaluating Public Relations ResultsEvaluating Public Relations Results

Major Public Relations DecisionsMajor Public Relations Decisions

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Marketing Debate What is the biggest obstacle to marketing communications program?Take a position:1. The biggest obstacle to effective promotionmix is a lack of agency coordinationacross communication units.1. 2. The biggest obstacle to effective promotionmix is a lack of understanding as to how to optimally design and evaluate suchprograms.

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Marketing Discussion

Pick a Brand and go to the Web site.Locate as many forms of

communication as you can find. Conduct an informal communications

audit. What do you notice? Howconsistent are the different

communications?

Personal Selling

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The Nature of Personal Selling• Most salespeople are well-Most salespeople are well-

educated, well-trained professionals educated, well-trained professionals who work to build and maintain who work to build and maintain long-term customer relationships.long-term customer relationships.

• The term salesperson covers a wide The term salesperson covers a wide range of positions:range of positions: Order takerOrder taker: Department store clerk: Department store clerk Order getterOrder getter: Creative selling in : Creative selling in

different environmentsdifferent environments

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The Role of the Sales Force

• Personal selling is a paid, personal form of Personal selling is a paid, personal form of promotion.promotion.

• Involves two-way personal communication Involves two-way personal communication between salespeople and individual between salespeople and individual customers.customers.

• Salespeople:Salespeople: Probe customers to learn about problemsProbe customers to learn about problems Adjust marketing offers to fit special needsAdjust marketing offers to fit special needs Negotiate terms of salesNegotiate terms of sales Build long-term personal relationshipsBuild long-term personal relationships

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The Role of the Sales Force

Sales Force serves as critical link between company and its customers

They represent the company to the customers

They represent the customers to the company

Goal =Customer Satisfaction and Company Profit

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Major Steps in Sales Force Management

Figure 13.1

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Step 1: Sales Force Structure

Territorial: Salesperson assigned to exclusive area and sells full line of

products

Product: Sales force sells only certain product lines

Customer: Sales force organizes along customer or industry lines

Complex: Combination of several types of structures

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Inside Sales Force

• Conduct business from their Conduct business from their offices via telephone or visits offices via telephone or visits from perspective buyers.from perspective buyers.

• Includes:Includes: Technical support peopleTechnical support people Sales assistantsSales assistants TelemarketersTelemarketers

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Step 2: Recruiting and Selecting Salespeople

• Key talents of salespeople:Key talents of salespeople: Intrinsic motivationIntrinsic motivation Disciplined work styleDisciplined work style Ability to close a saleAbility to close a sale Ability to build relationships with Ability to build relationships with

customerscustomers

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Recruiting Salespeople• RecommendationRecommendation

s from current s from current sales forcesales force

• Employment Employment agenciesagencies

• Classified adsClassified ads

• Web searches

• University and college students

• Recruit from other companies

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Step3: Sales Force Training Goals

Learn about and identify with the company.

Learn about the company’s products.

Learn customers’ and competitors’ characteristics.

Learn how to make effective presentations.

Learn field procedures and responsibilities.

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Step4 : Compensating Salespeople

• Fixed amount: Fixed amount: Salary Salary

• Variable amount:Variable amount: Commissions or bonusesCommissions or bonuses

• Expenses:Expenses: Repays for job-related expendituresRepays for job-related expenditures

• Fringe benefits:Fringe benefits: Vacations, sick leave, pension, etc.Vacations, sick leave, pension, etc.

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Step 5: Supervising Salespeople

• DirectingDirecting Salespeople Salespeople Help them identify customers and Help them identify customers and

set call norms.set call norms. Specify time to be spent Specify time to be spent

prospectingprospectingAnnual call planAnnual call planTime-and-duty analysisTime-and-duty analysisSales force automation systemsSales force automation systems

How Salespeople Spend Their Time

Supervising Salespeople

• MotivatingMotivating Salespeople Salespeople Organizational climateOrganizational climate Sales quotasSales quotas Positive incentives:Positive incentives:

Sales meetingsSales meetingsSales contestsSales contestsRecognition and honorsRecognition and honorsCash awards, trips, profit sharingCash awards, trips, profit sharing

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Sales Force IncentivesMany companies offer cash, trips, or merchandise as incentives.

Marriott suggests that companies reward outstanding sales performers by letting them “spread their wings and reenergize” at fabulous Marriott resorts worldwide.

Steps in Effective Selling

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Major Steps in Effective Selling

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The Personal Selling Process

ProspectingThe salesperson identifies qualified

potential customers

Pre-approachThe salesperson learns as much as possible about a

prospective customer before making a sales call

ApproachThe salesperson meets the customer for

the first timePresentation

The salesperson tells the “product story” to the buyer, highlighting customer

benefits

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The Personal Selling Process

Handling ObjectionsThe salesperson seeks out, clarifies, and overcomes customer objections to buying

ClosingThe salesperson asks the customer for an

order

Follow-upThe salesperson follows up after the sale

to ensure customer satisfaction and repeat business

Ambush Marketing

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What is Ambush Marketing?

• Generally defined as:Generally defined as:• marketing and promotional marketing and promotional

activities that:activities that: seek an association with a seek an association with a

sponsored eventsponsored eventwithout the authorization or consent without the authorization or consent

of the organizer of the event or of the organizer of the event or sponsor, andsponsor, and

without paying the requisite feewithout paying the requisite fee

ambush marketing?• Goal:Goal:

to misappropriate or capitalize on the to misappropriate or capitalize on the

goodwill and popularity of the sponsored goodwill and popularity of the sponsored

eventevent

intentionally confuse the public into intentionally confuse the public into

thinking that the ambush marketer is the thinking that the ambush marketer is the

official sponsor of the eventofficial sponsor of the event

to deflect some attention away from the to deflect some attention away from the

competing sponsorscompeting sponsors

to reduce the effectiveness of their to reduce the effectiveness of their

communication while also undermining the communication while also undermining the

value and the quality of the sponsorship value and the quality of the sponsorship

opportunity that was soldopportunity that was sold

Ambush Marketing?• The result:The result:

consumers may be confused as to who is consumers may be confused as to who is the official sponsor of the eventthe official sponsor of the event

ambush marketing may impact negatively ambush marketing may impact negatively on sponsorship rightson sponsorship rights

• Therefore:Therefore: sponsors seek some guarantee from the sponsors seek some guarantee from the

organizer of the event that offenders will be organizer of the event that offenders will be pursued (in the sponsorship agreement)pursued (in the sponsorship agreement)

Forms ambush marketing

• Simultaneous promotions (for example: Simultaneous promotions (for example: sample/free product distribution at sample/free product distribution at sponsored event, billboard advertising sponsored event, billboard advertising or flying blimp with advertiser’s mark or flying blimp with advertiser’s mark over venue)over venue)

• Purchase of sub-category rights (for Purchase of sub-category rights (for example: broadcast rights purchased example: broadcast rights purchased from a TV network from marketers who from a TV network from marketers who are not official sponsors of the event for are not official sponsors of the event for the duration of the sponsored event)the duration of the sponsored event)

Direct Marketing

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Direct Marketing• Direct marketing consists of Direct marketing consists of

direct connections with carefully direct connections with carefully targeted individual consumers to targeted individual consumers to both obtain an immediate both obtain an immediate response and cultivate lasting response and cultivate lasting customer relationships. customer relationships.

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The New Direct-Marketing Model

• Some firms use direct marketing as Some firms use direct marketing as a a supplementalsupplemental medium. medium.

• For many companies, direct For many companies, direct marketing constitutes a marketing constitutes a new and new and complete modelcomplete model for doing business. for doing business.

• Some firms employ the direct model Some firms employ the direct model as their as their onlyonly approach. approach.

• Some see this as the new marketing Some see this as the new marketing model of the next millennium.model of the next millennium.

Benefits of Direct Marketing

• Benefits to Benefits to BuyersBuyers:: ConvenientConvenient Easy to useEasy to use PrivatePrivate Ready access to products Ready access to products

and informationand information Immediate and interactiveImmediate and interactive

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Benefits of Direct Marketing• Benefits to Benefits to SellersSellers::

Powerful tool for building Powerful tool for building customer relationshipscustomer relationships

Can target small groups or Can target small groups or individualsindividuals

Can tailor offers to individual Can tailor offers to individual needsneeds

Can be timed to reach prospects at Can be timed to reach prospects at just the right momentjust the right moment

Gives access to buyers they could Gives access to buyers they could not reach through other channelsnot reach through other channels

Offers a low-cost, efficient way to Offers a low-cost, efficient way to reach marketsreach markets

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Customer Databases

• An organized collection of comprehensive An organized collection of comprehensive data about individual customers or data about individual customers or prospects, including geographic, prospects, including geographic, demographic, psychographic, and behavioral demographic, psychographic, and behavioral data. data.

• Databases can be used to identify prospects, Databases can be used to identify prospects, tailor products, and maintain customer tailor products, and maintain customer relationshipsrelationships

• Database marketing requires substantial Database marketing requires substantial investment in hardware, software, personnelinvestment in hardware, software, personnel

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Forms of Direct Marketing

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Direct-Mail Marketing

• Involves sending an offer, Involves sending an offer, announcement, reminder, or other announcement, reminder, or other item to a person at a particular item to a person at a particular address.address.

• Accounts for a high proportion of Accounts for a high proportion of direct-marketing sales.direct-marketing sales.

• Permits high Permits high target-market selectivity.target-market selectivity.

• Personal and flexible.Personal and flexible.

• Easy to measure results.Easy to measure results.

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Catalog Marketing

• With the Internet, more and more With the Internet, more and more catalogs going electronic.catalogs going electronic.

• Print catalogs still the primary Print catalogs still the primary medium.medium.

• Harder to attract new customers Harder to attract new customers with Internet catalogs.with Internet catalogs.

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Direct-Response TV Marketing

Direct-Response Advertising

Infomercials

Home Shopping Channels

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Integrated Direct-Marketing

The use of carefully coordinated multiple-media, multiple-stage campaigns.

IMC_final

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