Module 5 Notes
Module 5 Notes
Module 5 Notes
The Marketing Communications (Promotion) Mix Your marketing plan will be executed by using the tactical elements of the Marketing Communications, or Promotions Mix. Promotional Mix The elements of the marketing communications mix
Def: the Marketing Communications Mix is the specific mix of advertising, personal selling, sales promotion, public relations, and direct marketing a company uses to pursue its advertising and marketing objectives. Definitions: Advertising - Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Personal selling - Personal presentation by the firms sales force for the purpose of making sales and building customer relationships. Sales promotion - Short-term incentives to encourage the purchase or sale of a product or service. Public relations - Building good relationships with the companys various publics by obtaining favorable publicity, building up a good "corporate image", and handling or heading off unfavorable rumors, stories, and events.
Direct marketing - Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. Setting the Promotion Mix When deciding how to properly utilize the marketing communications mix to meet your marketing objectives, it is important to consider the relative strengths and weaknesses of each component of the mix. Further, you must always define your total budget first (generally defined in the Marketing and/or Business Plan) and then decide upon the best way to leverage the different elements of the mix to maximize the return on your investment. You will balance the various parts of the mix to not only create an integrated approach to your marketing communications but you must also devote enough resources for each component to be successful. Here are some things to keep in mind: Definition of advertising Reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term sales; Impersonal, one-way communication; Expensive Definition of personal selling Most effective tool for building buyers preferences, convictions, and actions; Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools Definition of sales promotion May be targeted at the trade or ultimate consumer; Makes use of a variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand preferences Definition of public relations Highly credible; Very believable; Many forms: news stories, news features, events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion; Dramatizes company or product; Often the most under used element in the promotional mix; Relatively inexpensive (certainly not 'free' as many people think--there are costs involved) Definition of direct marketing Many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts
Integrated Marketing Communications Definition: A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation.
Integrated Marketing Communications (IMC), according to The American Marketing Association, is a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time. Marketing Power Dictionary Integrated marketing communication can be defined as a holistic approach to promote buying and selling in the digital economy. This concept includes many online and offline marketing channels. Online marketing channels include any e-marketing campaigns or programs, from search engine optimization (SEO), pay-per-click, affiliate, email, banner to latest web related channels for webinar, blog, RSS, podcast, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail order, public relations, industry analyst relations billboard, radio, and television.accordingly company develops integreted marketing communication programme involving all the elements of promrtion mix, which is price, place, product, and promotion. Integrated marketing communication can be defined as a holistic approach to promote buying and selling in the digital economy. This concept includes many online and offline marketing channels. Online marketing channels include any e-marketing campaigns or programs, from pay-per-click, affiliate, email, banner to latest web related channels , blog, and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail order, public relations, industry analyst relations billboard, radio, and television Integrated Marketing Communications is a simple concept. It ensures that all forms of communications and messages are carefully linked together. At its most basic level, Integrated Marketing Communications, or IMC, as we'll call it, means integrating all the promotional tools, so that they work together in harmony.
Promotion is one of the Ps in the marketing mix. Promotions has its own mix of communications tools. All of these communications tools work better if they work together in harmony rather than in isolation. Their sum is greater than their parts - providing they speak consistently with one voice all the time, every time. A planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and
7 main shifts
1. From media advertising to multiple forms of communication (including promotions, product placements, mailers...) 2. From mass media to more specialized media, which are centered around specific target audiences. 3. From a manufacturer-dominated market to a retailer-dominated market. The market control has transferred into the consumer's hands. 4. From general-focus advertising and marketing to data-based marketing. 5. From low agency accountability to greater agency accountability. Agencies now play a larger role in advertising than ever before. 6. From traditional compensation to performance-based compensation. This encourages people to do better because they are rewarded for the increase sales or benefits they cause to the company. 7. From limited Internet access to widespread Internet availability. This means that people can not only have 24/7 access to what they want, but that advertisers can also target potential buyers just as much..
AIDA model {Hierarchy of Consumer Response or Four Stage Model (developed in 1920s)}
AIDA is an acronym used in marketing that describes a common list of events that are very often undergone when a person is selling a product or service:
A - Attention (Awareness): attract the attention of the customer. I - Interest: raise customer interest by focusing on and demonstrating advantages and benefits (instead of focusing on features, as in traditional advertising)[1]. D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs. A - Action: lead customers towards taking action and/or purchasing.
S - Satisfaction - satisfy the customer so they become a repeat customer and give referrals to a product. The model says attract attention, gain interest, arouse desire and result in action.
In 1961, Lavidge and Steiner published a paper in the Journal of Marketing entitled, A Model for Predictive Measurements of Advertising Effectiveness. Like Colley, they suggested that advertising effectiveness should be measured in terms of movement up the hierarchy rather than solely on its ability to evoke action in the consumer. In addition, they created a new model of the hierarchy itself which took into account models from the field of psychology which attempted to describe learning itself as a process. The model described three distinct phases of learning which occur in the following order: 1) cognitive, 2) affective, and 3) conative. The three phases correspond roughly to the categories 1) thinking, 2) feeling, and 3) doing. Lavidge and Steiner broke each category into two corresponding mini-stages and presented a model of the hierarchy with the following ordered phases: Awareness, Knowledge, Liking, Preference, Conviction, and Purchase. Lavidge and Steiner's model required the consumer to pass through all six of the stages, in the given order, before reaching the final stage (Action). They did, however, qualify their theory to address common criticisms of older hierarchy models. In doing so, they stipulated the following:
The stages are not necessarily equidistant. It is possible to move up several steps simultaneously. The greater the psychological/economic commitment, the longer it takes to move upward on the hierarchy, and visa-versa.
While Lavidge and Steiner's work was widely regarded as a breakthrough in the field of advertising theory, Kristian Palda, a respected theorist and researcher, raised several questions concerning the relationship between the cognitive, affective, and conative stages in the new model. Through research and experimentation, Palda made the following points:
There is no evidence that changes in awareness precede rather than follow a purchase. It is unclear whether attitude is a mechanism which effects behavior. Attitude change may follow behavior, rather than precede it. "Intention to buy" does not equal "Action".
Palda's work can be seen as anticipatory of the "Challenge-Defense" period which followed in the development of the theory.
DAGMAR MODEL
Another model called DAGMAR has now increasingly become more popular and comprehensive than AIDA. DAGMAR steps are more defined and easy to apply. Term DAGMAR is an acronym for Defining Advertising Goals for Measured Advertising Results. According to DAGMAR, a sale must carry a potential customer through four stages: I. Awareness II. Comprehension III. Conviction IV. Action Suppose you are having a service or product and your customer knows nothing about the product. As your client is unaware of the product, the first step is to make him aware of your product by posting advertisement regarding your product on respective websites. Comprehension is the second step of DAGMAR. Try to know the answers to these following questions. a) What is your product about? b) What are products potential features and benefits of product? c) What will your customer get from your product? And how? Answers to all these questions will help you to get a potential customer. Next stage is conviction and this is very important. Convince your customer by telling him the benefits of your product. After convincing, your next step starts i.e. action, which is not controlled by you. You have to depend on the customer. However, your previous actions will have a major role to play. If you have been able to convince, the customer ad have answered him satisfactorily and then you will definitely be the winner of the day.
DEVELOPING AND MANAGING AN ADVERTISING PROGRAM Advertising is called direct communication with customers According to Phillip Kotler: advertising is the paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Mission: It states the objectives of the advertising. It also includes the sales goals of the company. Money: It gives an idea that how much money should be spent by the company for the advertisement. Factors to be considered for this are stage of product life cycle, market share and consumer base, competition, advertisement frequency and product substitutability. Message: Message includes what message should be spent in advertisement. It includes message generation, message evaluation and selection, message execution and social responsibility review. Media: It includes which media should be used for the advertisement. It also includes reach, frequency, impact of the advertisement. It also contains major media types, media vehicles, media timing and geographical media allocation. Measurement: it is nothing but evaluation of the results. It measures communication impact and sales impact by an advertisement. SETTING THE OBJECTIVES 1) Informative advertising : The prime objective of the advertising is to inform the existing and potential customers about the product. 2) Persuasive advertising: It aims to create liking preference, conviction and purchase of a product or service. Persuasion will create demand of the product. 3) Reminder advertising: It aims to simulate repeat purchase of products and services. This will remind the customers that the product may be needed in the near future. 4) Reinforcement advertising: It aims to convince current purchases that they made the right choice.
DECIDING ON THE ADVERTISING BUDGET. After determining advertising objectives the company next sets its advertising budget for each product. Specific factors that should be considered when setting the advertising budget. 1) Stage in the product life cycle: New products typically need large advertising Budgets to build awareness and to gain consumer trial. Mature brands usually require lower budgets as the ratio to sales. 2) Market share and consumer base: High market share brands usually needs more advertising spending as a person of sales than do low market share brands. Building the market or taking share from competitor requires larger advertising spending than does simply maintaining current share. 3) Competition and clutter : In a market with many competitors and high advertising spending, a brand must advertise more heavily to be notices above the noise in the market. 4) advertising frequency: when many repetitions are needed to present the brands message to consumers, the advertising budget must be larger. 5) Product substitutability: A brand that closely resembles other brands in its product class requires heavy advertising to set it apart. When the product differs greatly from competitors, advertising can be used to point out the differences to consumers. DEVELOPING THE ADVERTISING CAMPAIGN In designing and evaluating an ad campaign, it is important to distinguish the message strategy or positioning of an ad from its creative strategy. Message generation and evaluation A large advertising budget does not guarantee a successful advertising campaign. No matter how big the budget, advertising can succeed only if commercials gain attention and communicate well. Todays advertising messages must be better planned, more imaginative, more entertaining and more rewarding to consumers to gain and hold attention. Creative strategy will play an increasingly important role in advertising success. Effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Advertising appeals should have three characteristics: +Meaningful, Believable and Distinctive
Creative Development and Execution The impact of the message depends not only on what is said but also on how it is said. Any message can be presented in different execution styles. Message execution can be decisive. They can be following advertising medium for execution: Television Ads: It is generally acknowledge as the most powerful advertising medium. Properly designed and executed TV ads can improve brand equity and affect sales and profits. Print Ads: It offer a stark contrast to broadcast media. In general there are two main print media: Magazines and Newspaper. Radio Ads: It is cheaper than television. Radio listening is expected to increase significantly over the coming years. Radio Ads can be extremely creative. Creative devices can tap into the listeners imagination to create powerfully relevant and popular images. Film Ads: India is the largest producer of films in the world. Many local firms use this medium to advertise their products and services as this minimizes the spillage and the wastage of advertisement money. SOCIAL RESPONSIBILITY REVIEW: Advertiser and their agencies must be sure advertising does not over step social and legal norms. Public policy makers have developed a substantial body of lows and regulations to govern advertising. DECIDING ON MEDIA AND MEASURING EFFECTIVENESS: After choosing the message, the advertisers next task is to chose media to carry it. Major steps in media selection are as under: 1) Deciding on reach, frequency, and impact: Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average percent in the target market is exposed to the message. The advertiser must also decide on the desired media impact-the qualitative value of a message exposure through a given medium.
2) Choosing among major media types: The major media types are newspapers, televisions, direct mail, radio, magazines, outdoor and online. The media habits of the target consumers will affect media choice. Advertisers look for media that reach target consumers effectively. Different types of messages may require different media. Cost is another major factor in media choice. The media planner looks at the total cost of using a medium. Media impact an cost must be reexamined regularly. As a result, advertisers are increasingly turning to alternative media, ranging from cable television and outdoor advertising to parking meters and shopping cards. 3) Selecting specific vehicles: The media planner now must chose the best media vehicles and specific media within each general media type, media planners must complete the cost per thousand percents reached by a vehicle. The media planners must also consider the cost of producing ads for different media. Whereas, newspaper ads may cost very little to produce flashy television ads may cost millions. 4) Deciding on media timing and allocation: The advertiser must also decide how to schedule the advertising over the course of a year. The firm can vary its advertising to follow the seasonal pattern, or to be the same all year. Most firms do some seasonal advertising. The advertiser has to chose the pattern of the ads. The idea is to advertise heavily for a short period to build awareness that carries over to the next advertising period. EVALUATING ADVERTISING EFFECTIVENESS: Good planning and control of advertising depend on measures of advertising effectiveness. Most advertisers try to measure the communication effect of an ad-that is, its potential effect on awareness, knowledge, or preferences. Communication-Effect Research: It seeks to determine whether an ad is communicating effectively. There are three major methods of pre testing. CONSUMER FEEDBACK METHOD: Ask the consumers for their reactions to a proposed ad. PORTFOLIO TEST: It ask consumers to view or listen to a portfolio of advertisements. Consumers are than asked to recall all the ads on their contains, aided or unaided by the interviewer. LABORATORY TEST: It use equipment to measure physiological reactions like heartbeat, blood pressure, perspiration to an ad; or consumers may be ask to turn a knob to indicate their moment to moment liking or interest while viewing sequence material.
Sales Effect Research: Advertisings sales effect is generally harder to measure than its communication effects. Sales are influenced by many factors such as features, price and availability as well as competitors actions. Formula for measuring the sales impact of advertising: 1.) Share of Expenditure 2.) Share of voice 3.) Share of Mind and Heart 4.) Share of Market
SALES PROMOTION Sales Promotion consists of short-term incentives to encourage purchase or sales of the product or service. Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now. Sales promotion includes tools for: + Consumer promotion + Trade Promotion + Business and Sales- force promotion. OBJECTIVES Sales promotion tools vary in their specific objectives. Sales promotions should be consumer relationship building. They should help to reinforce the products position and build long-term relationships with consumers. Even price promotions can be designed to help build customer relationships. MAJOR DECISIONS In using sales promotion, a company must establish its objectives, select the tools, develop the program, pretest the program, implement and control it, and evaluate the results. ESTABLISHING OBJECTIVES Sales promotion objectives are derived from broader promotion objectives, which are derived from more basic marketing objectives developed for the product. For consumers, objectives include encouraging purchase of larger-sized units, and long term brand equity effects. For the sales force, objectives include encouraging support of a new product or model, encouraging more prospecting, and stimulating off season sales.
SELECTING CONSUMER PROMOTION TOOLS The main consumer promotion tools include samples, coupons, cash refunds, premiums, advertising specialties, patronage rewards, point of purchase, displays and demonstrations and contests, sweepstakes and games. SELECTING CONSUMER PROMOTION TOOLS More sales promotions are directed to retailers and wholesalers than to consumers. Trade promotion can persuade retailers or wholesalers to carry a brand, to give it shelf space, to promote it in advertising, and push it to consumers. Manufacturers use several trade promotion tools. Many tools are used for consumer promotions contests, premiums, displays can also be used as trade promotions. Or the manufacturer may offer a straight discount off the list price on each case purchased during a stated period of time. Dealers can use the discount for immediate profit, for advertising or for price reductions to their customers. Manufacturers also offer an allowance in return for the retailers agreement to feature the manufacturers products in some way. Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size. SELECTING BUSINESS AND SALES FORCE PROMOTION TOOLS Companies spend large amounts of money on business and sales force promotion tools. These tools are used to gather business leads, impress and reward customers, and motivate the sales force to greater effort. Companies typically develop budgets for each business promotion tool that remain fairly constant from year to year. DEVELOPING THE PROGRAM In planning sales promotion programs, marketers are increasingly blending several media into a total campaign concept. In deciding to use a particular incentive, marketers have several factors to consider: + size of the incentive + conditions for participation + duration of the promotion + distribution vehicle + timing of the promotion + total sales promotion budget.
PRETESTING, IMPLEMENTING, CONTROLLING, AND EVALUATING THE PROGRAM. Although most sales promotion programs are designed on the basis of experience, pretests can determine if the tools are appropriate, the incentive size optimal, and the presentation method efficient. Consumers can be asked to rate or rank different possible deals, or trial tests can run in limited geographic areas. Marketing managers must prepare implementation and control plans that cover lead time and sell-in time for each individual promotion. Manufacture can evaluate the program using three methods: + sales data + consumer surveys and + experiments. EVENTS AND EXPERIENCES EVENTS OBJECTIVES Marketers report a number of reasons why they sponsor events: 1) to identify with a particular target market or life style 2) to increase awareness of company or product name 3) to create reinforce consumer perceptions of key brand image associations 4) to enhance corporate image dimensions. 5) to create experiences and evoke feelings 6) to express commitment to the community or on social issues. 7) to entertain key clients or reward key employees. 8) to permit merchandising or promotional opportunities. MAJOR DECISIONS Developing successful sponsored events involves choosing the appropriate events; designing the optimal sponsorship program for the event; and measuring the effects of sponsorship. CHOOSING EVENT OPPORTUNITIES Because of the huge amount of money involved and the number of event opportunities that exist, many marketers are becoming much more strategic about the events with which they will get involved and the manner in which they will do so. An ideal event might be one : 1) whose audience closely matches the desired target market 2) that generates much favorable attention 3) that is unique but not encumbered with many sponsors 4) that lends itself to ancillary marketing activities 5) that reflects or enhances the brand or corporate image of the spons
DESIGNING SPONSORSHIP PROGRAMS A sponsor can strategically identify itself at an event in a number of ways, including banners, signs and programs. At least two to three times the amount of the sponsorship expenditure should be spent on related marketing activities. MEASURING SPONSORSHIP ACTIVITIES As with public relations measurement of events is difficult. There are two basic approaches to measuring the effects of sponsorship activities: + the supply side method : it focuses on potential exposure to the brand by assessing the extent of media coverage. + the demand- side method: It focuses on reported exposure from consumer. PUBLIC RELATIONS Public relations is building good relations with the companys various publics by obtaining favorable public, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Public relations departments may perform any or all of the following functions. + Press relations or press agency + Product publicity + public affairs +lobbying + investor relations + development MARKETING PUBLIC RELATIONS MPR, like financial PR and community PR, serves a special constituency, the marketing department. The old name for MPR was publicity. MPR is also effective in blanketing local communities and reaching specific groups. Managers must acquire more skill in using MPR.
MAJOR DECISIONS IN MARKETING In considering when and how to use MPR, management must establish the marketing objectives, choose the PR messages and vehicles, implement the plan carefully, and evaluate the results. The main tools of MPR are described as under : + Publications + Events + Sponsorship + News + Speeches + Public- service activities + Identify Media ESTABLISHING OBJECTIVES MPR can build awareness by placing stories in the media to bring attention to a product, service, person, organization, or idea. It can hold down the promotion cost because MPR costs less than direct- mail and media advertising. MPR is increasingly borrowing the techniques and technology of direct- response marketing to reach target audience members one-on-one. CHOOSING MESSAGES ANS VEHICLES The MPR manager must identify or develop interesting stories about the product. PR ideas include hosting major academic conventions, inviting expert or celebrity speakers, and developing news conferences. Each event is an opportunity to develop a multitude of stories directed at different audiences. IMPLEMENTING THE PLAN AND EVALUATING RESULTS MRPs contribution to the bottom line is difficult to measure, because it is used along with other promotional tools. The three most commonly used measures of MPR effectiveness are number of exposures; awareness, comprehension, or attitude change; and contribution to sales and profits.
PERSONAL SELLING Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale According to American Marketing Association: Personal selling is the personal or impersonal process of assisting or persuading a prospective customer to buy a product or service and to act favourable upon an idea that has commercial significance to the seller Personal Selling Process 1. Prospecting 2. Qualifying the Prospect 3. Approaching 4. Sales Presentation 5. Handling objections 6. Closing the Sales 7. Follow up
What are the advantages of using personal selling as a means of promotion? Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of personal attention The sales message can be customised to meet the needs of the customer The two-way nature of the sales process allows the sales team to respond directly and promptly to customer questions and concerns Personal selling is a good way of getting across large amounts of technical or other complex product information The face-to-face sales meeting gives the sales force chance to demonstrate the product Frequent meetings between sales force and customer provide an opportunity to build good long-term relationships Given that there are many advantages to personal selling, why do more businesses not maintain a direct sales force?
Main disadvantages of using personal selling The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive. In addition to the basic pay package, a business needs to provide incentives to achieve sales (typically this is based on commission and/or bonus arrangements) and the equipment to make sales calls (car, travel and subsistence costs, mobile phone etc). In addition, a sales person can only call on one customer at a time. This is not a costeffective way of reaching a large audience.
Direct marketing
Direct marketing is a sub-discipline and type of marketing. There are two main definitional characteristics which distinguish it from other types of marketing. The first is that it attempts to send its messages directly to consumers, without the use of intervening media. This involves commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses, usually unsolicited. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable, measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising.
Channels for direct marketing Direct mail Telemarketing Email Marketing Broadcast faxing Voicemail Marketing Couponing Direct response television marketing Direct selling Integrated Campaigns