M arket-Based Management, 4 th edition
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Transcript of M arket-Based Management, 4 th edition
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Marketing Communications
and Customer ResponseChapter TenChapter Ten
MMarket-Basedarket-Based Management, 4Management, 4thth editionedition
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Marketing Communications Marketing Communications and Customer Responseand Customer Response
Chapter Ten
– Marketing Communications• Awareness• Frequency• Effectiveness
– Communications Strategies
– Measuring Marketing Communications Effects
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Marketing CommunicationsMarketing Communications
• What is the role of Marketing Communications?
1. To Build Awareness2. To Maintain Awareness3. To Stimulate Action
• What is the Objective of Marketing Communications?– Communicate effectively to target customers
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Advertising Awareness and Advertising Awareness and Message FrequencyMessage Frequency
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Advertising Effectiveness and Advertising Effectiveness and Customer ResponseCustomer Response
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Causes of Poor Customer Causes of Poor Customer ResponseResponse
• Low Levels of Ad Exposure– Poor media selection and/or limited media exposure
• Low Levels of Ad Awareness– Insufficient ad frequency and/or ineffective ad content
• Low Levels of Ad Content Comprehension– Insufficient ad frequency and or ineffective ad content
• Low Intensions to Take Desired Actions– Insufficient ad frequency and/or weak value proposition
• Low Levels of Desired Action– Insufficient ad frequency and/or action not clearly specified
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Building Customer Awareness Building Customer Awareness and Comprehensionand Comprehension
• Media Selection and Customer Awareness– Target Market Reach
• Message Frequency and Customer Awareness– Concentrated vs.
Distributed– Gross Rating Points
• Ad Copy and Customer Response
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Message ReinforcementMessage ReinforcementPulsing Vs. Heavy-Up
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Push vs. Pull Communications Push vs. Pull Communications StrategiesStrategies
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Advertising ElasticityAdvertising Elasticity
• Advertising Elasticity % Change in Sales
% Change in Ad Expense
• Estimating Advertising Elasticity .4 Advertising Elasticity Means?
• Promotional Price Elasticity -1.5 (Normal Elasticity) vs. -6.0 (Price Promotion)
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Advertising Carryover EffectsAdvertising Carryover Effects
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Direct Marketing PromotionsDirect Marketing Promotions
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TakeawaysTakeaways//ReviewReview
• Push vs. Pull Strategies• Advertising Elasticity• Carryover Effects• Direct Marketing Promotions
• Role and Objectives of Marketing Communications
• Advertising Awareness, Frequency, and Response
• Building Awareness• Reasons for Poor Awareness• Message Reinforcement
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Marketing Performance ToolsMarketing Performance Tools
Estimating Ad Effectiveness and Customer Response
Take Action
90% 16.0%
Intend to Act
68% No Action
Comprehend 10% 1.8%
77% No Intension
Awareness 32% 8.4%
54% Not Comprehend
Exposure 23% 7.8%
63%
No Awarness
46% 29.0%
No Exposure
37% 37.0%
100%
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Marketing Performance ToolsMarketing Performance Tools
Estimating Advertising Elasticity
Sales Revenue Performance Advertising Expense Performance Adertising
Before Advertising $200,000 Before Advertising $10,000 Elasiticy
After Advertising $220,000 After Advertising $15,000
% Change in Sales 10.0% % Change in Advertising 50.0% 0.20
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Marketing Performance ToolsMarketing Performance Tools
Estimating Advertising Carry-Over Sales Effect
Advertising Period 0 1 2
Advertising Expense $10,000 $15,000 $10,000
Sales Performance
Without Ad Spending Increase $195,000 $200,000 $205,000
With Ad Spending Increase $220,000 $210,000
Incremental Sales $20,000 $5,000
Estimated Carryover Effect 0.25
Total Incremental Sales $26,667
Carryover Sales (after period 1) $6,667