Lecture Principles of Marketing - Chapter 12: Communicating customer value

In this chapter you will learn: The promotion mix, integrated marketing communications, a view of the communications process, steps in developing effective marketing communication, setting the total promotion budget and mix, socially responsible marketing communication.

Chapter Twelve Communicating Customer Value: Advertising, Sales Promotion, and Public Relations Roadmap: Previewing the Concepts Discuss the process and advantages of integrated marketing communications Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix Describe and discuss the major decisions involved in developing an advertising program Explain how sales promotion campaigns are developed and implemented Explain how companies use public relations to communicate with their publics Copyright 2007, Prentice Hall, Inc 12-2 Case Study CP + B:  An Unusual Success Story The Agency The Tactics  Has recently won both multiple creative awards and several major advertising accounts  Located in South Beach, FL, far removed from mainstay agencies on Madison Avenue in NY  Agency philosophy: “Anything and everything is an ad.”  Heavy focus on guerilla tactics, unconventional uses of media, and holistic marketing strategies while TV is used only sparingly  Street level research helps develop creative appeals  Tries to start a consumer movement behind the brand, and campaigns go well beyond advertising The Marketing Communications (Promotion) Mix      Advertising Sales Promotion Public Relations Personal Selling Direct Marketing New Communications Realities  Mass markets have fragmented, leading to a shift away from mass marketing  Improvements in information technology are speeding movement toward segmented marketing  These factors have shifted the marketing communications model – Less broadcasting – More narrow casting Integrated Marketing Communications  Using IMC, the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands – Several factors influence the choice of promotional tools Advertising  Can reach masses of geographically dispersed buyers  Can repeat a message many times  Is impersonal, one-way communication  Can be very costly for some media types Personal Selling  Involves personal interaction between two or more people  Most effective tool at building preferences, convictions and actions  Allows relationship building  Most expensive promotion tool; requires long-term commitment Sales Promotion Wide assortment of tools Attracts consumer attention Offers strong incentives to buy Invites and rewards quick consumer response  Effects are short-lived     Public Relations  Very believable  Reaches people who avoid salespeople and ads  Can dramatize a company or product  Tends to be used as an afterthought  Planned use can be effective and economical Deciding on Media Timing  Must decide how to schedule the advertising over the course of a year – Follow seasonal pattern – Oppose seasonal pattern – Same coverage all year  Choose the pattern of the ads – Continuity – Pulsing Evaluating Advertising  Measure the communication effects of an ad—“Copy Testing”  Measure the sales effects of an ad – Is the ad increasing sales? Other Advertising Considerations  Organization of Ad Function – Small companies – Large companies – Advertising agency  International Advertising Issues Sales Promotion  Sales promotion consists of short-term incentives to encourage the purchase or sales of a product or service  The idea behind sales promotion is to generate immediate sales Rapid Growth of Sales Promotion  Sales promotion can take the form of consumer, business, trade, or sales force promotions  Rapid growth in the industry has been achieved because: – Product managers are facing more pressure to increase their current sales – Companies face more competition – Advertising efficiency has declined – Consumers have become more deal oriented Consumer Promotion  Objectives: – Increase short-term sales – Help build long-term market share  Many tools exist which can help to achieve these objectives Consumer Sales Promotion Tools       Samples Coupons Cash refunds Price packs Premiums Advertising Specialties  Patronage rewards  Point-of-purchase displays  Demonstrations  Contests  Sweepstakes  Games Trade Promotion  Objectives: – Persuade resellers to carry a brand – Give a brand shelf space – Promote brand in advertising – Push brand to customers  Tools: – Discounts, allowances, free goods, push money, specialty advertising items Business Promotion  Objectives: – Generate business leads – Stimulate purchases – Reward customers – Motivate salespeople  Tools: – Conventions, trade shows, sales contests, and many of the same tools used for consumer or trade promotions Developing the Sales Promotion Program  Decide on the size of the incentive  Set conditions for participation  Decide how to promote and distribute the promotion program  Decide the length of the program  Evaluate the program Public Relations  Public Relations – building good relations with the firm’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events Public Relations Functions       Press relations or press agency Product publicity Public affairs Lobbying Investor relations Development Public Relations Role & Impact  May strongly impact public awareness at a lower cost than advertising  Results can be spectacular  Beginning to play an increasingly important brand-building role Public Relations Tools       News Speeches Special events Buzz marketing Mobile marketing Written materials  Audiovisual materials  Corporate identity materials  Public service activities  Company Web site Rest Stop: Reviewing the Concepts Discuss the process and advantages of integrated marketing communications Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix Describe and discuss the major decisions involved in developing an advertising program Explain how sales promotion campaigns are developed and implemented Explain how companies use public relations to communicate with their publics Copyright 2007, Prentice Hall, Inc 12-38 ... specific period of time  Classified by Purpose: – Inform – Persuade – Compare – Remind Setting the Advertising Budget     Affordable method Percentage -of- sales method Competitive-parity method... long-term commitment Sales Promotion Wide assortment of tools Attracts consumer attention Offers strong incentives to buy Invites and rewards quick consumer response  Effects are short-lived... promotion consists of short-term incentives to encourage the purchase or sales of a product or service  The idea behind sales promotion is to generate immediate sales Rapid Growth of Sales Promotion