Topic 10 Communicating customer value. Objectives Introducing various promotion mix tools Examining...
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Transcript of Topic 10 Communicating customer value. Objectives Introducing various promotion mix tools Examining...
Topic 10 Communicating customer value
Objectives
• Introducing various promotion mix tools• Examining the rapidly changing communication
environment and the need for integrated marketing communication
• Discussing the steps in developing marketing communications
AdvertisingAdvertising
Personal SellingPersonal Selling
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Sales Promotion Short-term Incentives to Encourage Trial or Purchase.
Public Relations
Direct Marketing Direct Communications With Individuals to Obtain an Immediate Response.
Protect and/or Promote Company’s Image/products.
Personal Presentations.
The Marketing Communications Mix
New marketing communications landscape(1)
• Consumers are changing– Better informed and more communications empowered– Seek out information on their own; exchange brand-
related information; or even create their own marketing messages
New marketing communications landscape(2)
• Marketing strategies are changing– As mass markets have fragmented, marketers are shifting
away from mass marketing.– Developing focused marketing programs designed to build
closer relationships with customers in more narrowly defined micro-markets.
Integrated marketing communication (IMC)
• Carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.– Touch point (where the customer may encounter the
company and its brands)
Think about all the ways you interact with companies such as Nike
Elements in the Communication Process
SENDERSENDER
NoiseNoise
Communication process• Sender: the party sending the message to another party• Encoding: the process of putting though into symbolic form • Message: the set of symbols that the sender transmits• Media: the communication channels through which the message moves
from sender to receiver• Decoding: the process by which the receiver assigns meaning to the
symbols encoded by the sender• Receiver: the party receiving the message sent by another party• Response: the reactions of the receiver after being exposed to the message• Feedback: the part of the receiver’s response communicated back to the
sender• Noise: the unplanned static or distortion during the communication
process, which results in the receiver’s getting a different message than the one the sender sent.
Elements in the Communication Process
SENDERSENDER
NoiseNoise
Case study: McDonald’s “I’m lovin’ it” campaign
• Sender: McDonald’s• Encoding: McDonald’s advertising agency assembles words,
sounds, and illustrations into an ad. That will convey the intended message.
• Message: the actual McDonald’s ad• Media: television and the specific television programs that
McDonald’s selects
Case study McDonald’s “I’m lovin’ it” campaign
Case study: McDonald’s “I’m lovin’ it” campaign
• Receiver: the customer who watches the McDonald’s ad.• Decoding: a consumer watches the McDonald’s ad And interprets the
words and images it contains.• Response: any of hundreds of possible responses, such as the consumer
likes McDonald’s better, is more likely to eat at McDonald’s next time, hums the “I’m lovin’ it” jingle, or does nothing
• Feedback: McDonald’s research shows that consumers are struck by and remember the ad, or consumers write
• Noise: the consumer it distracted while watching the commercial misses its key points
Steps in developing effective marketing communications
Step 1. Identifying the Target AudienceStep 1. Identifying the Target Audience
PurchasePurchase
Conviction
Preference
Liking
Knowledge
Awareness
Step 2. Determining the Communication ObjectivesBuyer Readiness Stages
Step 2. Determining the Communication ObjectivesBuyer Readiness Stages
Step 3. Designing the MessageStep 3. Designing the Message
What to say?
How to say?
Rational appeals: relate to the audience’s self-interest. They show that the product will produce the desired benefits.
Emotional appeals: stir up either negative or positive emotions that can motivate purchase.
e.g. love , joy, humor, fear and guilty
Moral appeals: direct the audience’s sense of what is “right” and “proper”.
Step 4. Select Communications ChannelStep 4. Select Communications Channel
Non-personal CommunicationChannels
Major media, atmospheres, events
Personal CommunicationChannels
Face to face, on the phone, through mail or e-mail, internet ”chat”Controlled by company Vs. WOM influence
Step 5. selecting the message sourceStep 5. selecting the message source
Step 6. collecting feedbackStep 6. collecting feedback
CompetitiveParity
Setting the promotion budget to match
competitors’ outlays
Objective & TaskDeveloping the budget by (1)defining specific objectives; (2) determining the tasks that must be performed to achieve these objectives and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.
AffordableSetting the promotion
budget at the level management thinks the
company can afford.
% Of SalesSetting the promotion budget at a percentage of current or
forecasted sales
Setting the total promotion budget
Decide on Communications MixDecide on Communications Mix
AdvertisingPublic, Pervasive, Expressive, Impersonal
AdvertisingPublic, Pervasive, Expressive, Impersonal
Sales PromotionCommunication, Incentive, Invitation
Sales PromotionCommunication, Incentive, Invitation
Public Relations & PublicityCredibility, Surprise, Dramatization
Public Relations & PublicityCredibility, Surprise, Dramatization
Personal SellingPersonal Confrontation, Cultivation, Response
Personal SellingPersonal Confrontation, Cultivation, Response
Direct MarketingNonpublic, Customized, Up-to-Date, Interactive
Direct MarketingNonpublic, Customized, Up-to-Date, Interactive
Product Life-Cycle Stage
Type of Product/ Market
Push vs. Pull Strategy
Buyer/ Readiness
Stage
Factors in developing promotion mix strategies
Push Versus Pull Strategy
Producer
Producer
Interme-diaries
Producer Marketingactivities
End users
Reseller Marketingactivities
Demand Interme-diaries
Demand
Push Strategy
Pull Strategy
End users
Producer Marketing activities
Demand
Objectives SettingObjectives Setting
Budget DecisionsBudget Decisions
Message DecisionsMessage Decisions Media DecisionsMedia Decisions
Campaign EvaluationCampaign Evaluation
Major decisions in advertising
Informative AdvertisingBuild Primary Demand
Informative AdvertisingBuild Primary Demand
Persuasive AdvertisingBuild Selective DemandPersuasive AdvertisingBuild Selective Demand
Comparison AdvertisingCompares One Brand to Another
Comparison AdvertisingCompares One Brand to Another
Reminder AdvertisingKeeps Consumers Thinking
About a Product.
Reminder AdvertisingKeeps Consumers Thinking
About a Product.
Advertising Objectives
• Specific Communication Task • Accomplished with a Specific Target Audience • During a Specific Period of Time
Advertising Budget Factors
Stage in the Product Life Cycle
Market Share &Consumer Base
Competition &Clutter
AdvertisingFrequency
ProductSubstitutability
Profiles of Major Media TypesProfiles of Major Media Types
NewspapersAdvantages: Flexibility, timeliness; good local market coverage;
broad acceptance, high believability
Limitations: Short life; poor reproduction quality; smallpass-along audience
TelevisionAdvantages: Combines sight, sound, motion; high attention; high reach; appealing to senses
Limitations: High absolute costs; high clutter; fleeting exposure;less audience selectivity
Direct MailAdvantages: Audience selectivity; flexibility, no ad compe-
tition within same medium; allows personalization
Limitations: Relative high cost; “junk mail” image
RadioAdvantages: Mass use; high geographic and demographic
selectivity; low cost
Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences
MagazinesAdvantages: High geographic and demographic selectivity;
credibility and prestige; high-quality reproduction;long life; good pass-along readership
Limitations: Long ad purchase lead time; waste circulation; no guarantee of position
OutdoorAdvantages: Flexibility; high repeat exposure; low cost; low message competition
Limitations: Little audience selectivity; creative limitations
Profiles of Major Media TypesProfiles of Major Media Types
TypicalMessageExecution
Styles
TypicalMessageExecution
Styles
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.
Advertising strategy message execution
Advertising Evaluation
Advertising Program EvaluationAdvertising Program Evaluation
Communication Effects
Is the Ad Communicating Well?
Communication Effects
Is the Ad Communicating Well?
Sales Effects
Is the Ad Increasing Sales?
Sales Effects
Is the Ad Increasing Sales?
Why the increase in Sales Promotion?
• Growing retailer power• Declining brand loyalty• Increased promotional sensitivity• Brand proliferation• Fragmentation of consumer market• Short-term focus• Increased managerial accountability• Competition• Clutter
Channels of Sales Promotions
MANUFACTURER
RETAILER
TradeTradePromotionsPromotions
CONSUMER
ConsumerConsumerPromotionsPromotions
Push
PushPullRetailRetail
PromotionsPromotions
Consumer-Promotion Objectives Consumer-Promotion Tools
Point-of-PurchaseDisplays
Point-of-PurchaseDisplays
PremiumsPremiums
Price PacksPrice Packs
Cash RefundsCash Refunds
CouponsCoupons
SamplesSamples
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
Consumer promotion
“Deal Proneness,”Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997
• Examination of “deal proneness” among consumers in a supermarket setting
• Surveys & Grocery Receipts used• Eight types of deals:
– Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon
““Deal Proneness,”Deal Proneness,”Liechtenstein, Burton, Liechtenstein, Burton, & Netemeyer& Netemeyer
““Deal Proneness,”Deal Proneness,”Liechtenstein, Burton, Liechtenstein, Burton, & Netemeyer& Netemeyer
Cluster analysis yielded two interpretable Cluster analysis yielded two interpretable results:results:
49%49% are “deal prone,” are “deal prone,” 51%51% not not 24%24% High “Deal prone,” High “Deal prone,” 50%50%
intermediate, intermediate, 26%26% deal insensitive deal insensitive ““Deal-proneness” a generalized Deal-proneness” a generalized
construct - (crosses type of promotion)construct - (crosses type of promotion) Younger & Less educated more likely to Younger & Less educated more likely to
be deal pronebe deal prone
Trade-Promotion ObjectivesTrade-Promotion Tools
Specialty Advertising
Items
Specialty Advertising
ItemsContestsContests
Free GoodsFree Goods
Buy-BackGuarantees
Buy-BackGuarantees
AllowancesAllowances
Price-OffsPrice-Offs
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
Trade Promotions
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
Business-to-Business Promotion
SpecialEvents
SpecialEvents
Written MaterialsWritten
Materials
Corporate Identity
Materials
Corporate Identity
Materials
SpeechesSpeeches
NewsNews
AudiovisualMaterials
AudiovisualMaterials
Public Service
Activities
Public Service
Activities
Web SiteWeb Site
Major public relation tools