5 - Engaging Customers & Communicating Value Flashcards
promotion mix
promotion tools used to communicate customer value & build customer relationships
consists of:
- advertising
- public relations
- personal selling
- sales promotion
- direct + digital marketing tools
advertising
paid form of non-personal presentation + promotion of an idea/good/service by an identified sponsor
nature:
- can reach dispersed masses at relatively low cost
- enables the seller to repeat its message
public relations
involves building good relations with the company’s publics
can be done by:
- obtaining favourable publicity
- building up a good corporate image
- handling with unpleasant rumours/stories
through: press releases, sponsorships, events…
nature: believable form of promotion
personal selling
when a sales representative meets personally with potential client/s for the purpose of transacting a sale
includes:
- sales presentations, trade shows, incentive programs
nature: most effective at building buyer’s preference and relationships
advantages & disadvantages of personal selling
+ high customer attention
+ message is customized = persuasive impact
+ interactive
+ potential for relationship
- high cost
- labour intensive
- limited reach of customers
sales promotion
short term incentives to encourage purchase/sale of a product/service
includes:
- discounts, coupons, premiums, demonstrations…
nature:
- attracts customer attention
- offers strong incentives
direct + digital marketing
engaging directly w/ targeted customers + communities
includes:
direct mail, catalogues, social media, mobile marketing…
nature: immediate, customisable and interactive tool
promotion mix strategies
push strategy - ‘pushing’ product through marketing channels
- pushes product to resellers who then push it to consumers
- marketing activities: personal selling + trade promotions
pull strategy - ‘pulls’ product though the channel
- company promotes directly to consumers which created a demand vacuum - pulling the product
- marketing activities: advertising + consumer promotion
socially responsible regulations - adversing & sales promotion
communicate openly + honestly w/ consumers + resellers
avoid deceptive advertising
avoid bait-and-switch advertising
conform to all state/local regulations
socially responsible regulations - personal selling
follow rules of ‘fair competition’
do not offer bribes
do not attempt to obtain competitors’ trade secrets
do not disparage competitors’ products
integrated marketing communications (IMC)
involves carefully blending the promotion tools carefully into a integrated promotion mix in order to communicate effectively to customers
why is it so important to integrate the promotion mix?
nowadays consumers are bombarded by brand content from a wide range of sources
- conflicting content from these sources can result in confused company images
integrating the promotion mix
ensures that communications efforts occur when, where, and how customers need them
- calls for recognising all customer touch points and ensuring each contact delivers a positive + consistent message
new marketing communications model
- consumers are changing: better informed (don’t rely on marketer supplied info - they can do their own research)
marketing strategies are changing: shifting away from mass marketing into focused marketing programs for closer relationships
advances in digital technology: new ways for companies & customers to communicate
communication process
sender - party sending the message
encoding - process of putting thought into symbols
message - the set of symbols the sender transmits
media - communication channels that the message goes through
decoding - receiver assigns meaning to the symbols
receiver - party receiving the message
response - receiver’s reaction to message
feedback - receiver’s response communicated back to the sender
noise - static/distortion during the communication process -> results in receiver getting wrong message
6 steps involved in developing an effective marketing communication
- identify target audience
- determine communication objectives
- design messages
- choose the media to send the message
- select message sources
- collect feedback
identifying the target audience
- must be clear
- can be current or potential buyers
- will impact how the message will be communicated
determining communication objectives
buyer-readiness stages (leading up to purchase)
- awareness
- knowledge
- liking
- preference
- conviction
- purchase
designing the messages
AIDA model
A - attention = grab attention
I - interest - hold interest
D - desire = arouse desire
A - action = obtain action
message content
3 types of appeals:
- rational (relates to audience’s self interest)
- emotional (stir up emotions to motivate a purchase)
- moral (directed to audience’s morals)
choosing the media (communication channels)
personal communication (face to face, mail, word of mouth)
non-personal communication (major media)
buzz marketing (cultivating opinion leaders and getting them to spread information) -> opinion leaders (people whose opinions are sought by others)
selecting message sources
impact of message depends on the target’s views on the communicator
collecting feedback
communicator must research the effect the message had on the target audience
- do they remember the message?
- how many times they saw it
- how they feel about the message
- past & present attitudes towards product/company
promotion budget methods
affordable method
percentage of sales method
competitive parity method
objective and task method
affordable method
sets the budget at the level the management thinks the company can afford
start with total revenues;
deduct operating expenses + investments;
devote some portion of remainder to promotion budget
percentage of sales method
sets budget at a certain percentage of current or forecasted sales
- simple
- helps management think about relationship b/w promotion spending and selling price
competitive parity method
sets budget to match the competitors’ spending
- monitor competitors’ advertising and then set their budgets based on the industry average
objective and task method
sets budget by specific promotion objectives and the costs of tasks needed to achieve them
- sum of the costs is the promotion budget
- most logical method
