Chapter 11: Communicating Customer Value: Advertisinf And Public Relations

Question 1

What is the promotion mix?

Answer 1

The specific blend of advertising, public relations, personal selling, sales promotion and direct marketing tools that the company uses to persuasively communicate customer value and build customer relationships.

Question 2

What is advertising?

Answer 2

Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

Question 3

What is sales promotion?

Answer 3

Short-term incentives to encourage the purchase or sale of a product or service.

Question 4

What is personal selling?

Answer 4

Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.

Question 5

What is public relations?

Answer 5

Building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories or events.

Question 6

What is direct and digital marketing?

Answer 6

Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

Question 7

The new marketing communications landscape.

Answer 7

. Consumers are changing
. Marketing strategies are changing
. Communications technology is changing

Question 8

What is integrated marketing communications (IMC)?

Answer 8

Careful integration of a company’s many channels to deliver a clear, consistent and compelling message about the organisation and its brands.

This is necessary because customers are bombarded with company messages from all directions, hence why more companies are using the IMC approach.

Question 9

Explain the nature of advertising.

Answer 9

Can reach masses of geographically dispersed buyer at low cost per exposure, and it enables the seller to repeat the message many times.

Because of advertising’s public nature, consumers tend to view advertised product as more legitimate.

Very expressive - allows company to dramatise its products through the use of visuals, print, sound and colour.

Can be used to build up a long-term image for a product

Can trigger quick sales (eg. When weekend specials are advertised)

However, it is impersonal and cannot be as directly persuasive as company salespeople

Can carry on only a one-way communication with the audience, audience does not feel that it has to pay attention or respond.

Can be very costly

Question 10

Explain the nature of personal selling.

Answer 10

Most effective for building up buyers’ preferences, convictions and actions.

Involves personal interactions between two or more people, so each person can observe the other’s needs and characteristics and make quick adjustments.

Effective salesperson keeps customer interests at heart in order to build a long-term relationship by solving customer problems.m

Buyer usually feels a greater need to listen and respond

Come at a cost - salesforce requires a longer-term commitment than advertising does

Most expensive promotion tool

Question 11

Explain the nature of sales promotion.

Answer 11

Include a wide assortment of tools - coupons, cents-off deals, premiums and others.

They attract consumer attention, offer strong incentives to purchase, and can be used to dramatise product offers and to boost sagging sales.

Sale promotion invite and reward quick response.

Sales promotion says ‘buy it now’

Effect are often short-lived, not as effective as advertising and personal selling I’m building long-run brand preference and customer relationships.

Question 12

Explain the nature of public relations.

Answer 12

Public relations is very believable - news stories, features, sponsorships and events seem more real and believable to readers than ads do.

PR can also reach many prospects who avoid salespeople and advertisements - the message gets to buyers as ‘news’, rather than as a sales-directed communication.

PR can dramatise a company or product.

Question 13

Explain the nature of direct and digital marketing.

Answer 13

There are many forms of direct marketing - direct mail and catalogues, online marketing, telephone marketing and others - they all share four distinctive characteristics.

DM is less public: the message is normally directed to a specific person
DM is immediate and customised: messages can be prepared very quickly and can be tailored to appeal to specific consumers
DM is interactive: it allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response

Thus, DM is well suited to highly targeted marketing efforts and to building one-to-one customer relationships.

Question 14

What are the two basis promotion mix strategies?

Answer 14

Push promotion/strategy and pull promotion/strategy.

Question 15

What is push strategy?

Answer 15

A promotional strategy using the salesforce and trade promotions to push the product through marketing channels to final consumers. The producer promotes the product to channel members, who in turn promote it to final consumers.

Primarily personal selling and trade promotion.

Question 16

What is pull strategy?

Answer 16

The producer directs its marketing activities (primarily advertising and consumer promotion) towards final consumers to induce them to buy the product.

Question 17

What are the four important decisions that must be made when developing and advertising program?

Answer 17

. Setting advertising objectives
. Setting the advertising budget
. Developing advertising strategies
. And evaluating advertising campaigns.

Question 18

What is an advertising objective?

Answer 18

A specific communication task to be accomplished with a specific target audience during a specific period of time.

Advertising objectives can be classified by primary purpose - whether the aim is to inform, persuade or remind.

Question 19

What is an advertising budget?

Answer 19

The dollars and other resources allocated to a product or company advertising program.

There are four common methods used to set the total budget for advertising: 
. the affordable methods, 
. the percentage-of-sales methods, 
. the competitive-parity method 
. and the objective-and-task method.

Question 20

Advertising budget: affordable method.

Answer 20

The promotion budget is set at the level the company can afford.

Question 21

Advertising budget: percentage of sales method.

Answer 21

Promotion budget is set at a certain percentage of current or forecasted sales.

Question 22

Advertising budget: competitive parity method.

Answer 22

Promotion budget is set to match competitors’ outlays.

Question 23

Advertising budget: objective and task method.

Answer 23

Promotion budget is set by defining specific objectives and determine the promotional tasks required to achieve these objectives.

The budgets is set to cover the costs of these tasks.

Question 24

What is advertising strategy?

Answer 24

It consists of two main elements: creating advertising messages and selecting advertising media.

Question 25

Creating advertising message.

Answer 25

No matter how big the budgets, advertising can only succeed if they gain enough attention and communicate well.

Good advertising messages are especially important today - due to cluttered advertising environment.

It is important to break through the clutter, merge advertising and entertainment, plan a message strategy, have good execution and even have consumer-generated messages.

Question 26

What is the first step in creating effective advertising messages?

Answer 26

Plan a message strategy.

This begins with identifying customer benefits that can be used as advertising appeals.

Them a creative concept must be develop a creative concept - a ‘bid idea’ that will bring the message strategy to life in a distinctive and memorable way.

Question 27

Why is message execution so important?

Answer 27

Because the big ideas has to be executed in a way that will capture the target markets attention and interest.

An messaged can be presented in different execution styles (the approach, style, tome, words and format chosen for executing the message). Eg. Slice of life, lifestyle, fantasy, musical, testimonial evidence or endorsement, scientific expertise, personality symbol, etc.

Question 28

What is advertising media?

Answer 28

The vehicles through which advertising messages are delivered to their intended audiences.

The main steps in advertising media selection are:
. Deciding on reach, frequency and impact
. Choosing amount major media types (TV, Internet, newspapers, direct mail, magazines, radio, outdoor - pros and cons for each)
. Selecting specific media vehicles
. Deciding on media timing

Question 29

Evaluating advertising effectiveness and return on advertising investment.

Answer 29

Return on advertising investment - the net return on advertising investment divided by the costs of the advertising investment

Advertisers should regularly evaluate two types of advertising results: the communication effects (tells use whether message being communicated well), and the sales and profit effects (harder to measure).

Question 30

What is public relations?

Answer 30

This is another major mass-promotion tool - involves building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories and events.

Question 31

What is publicity?

Answer 31

Activities to promote a company, or its products, by obtaining coverage in media not paid for by the sponsor.

Question 32

What are the main public relations tools?

Answer 32

. News 
. Speeches
. Special events
. Written materials 
. Audiovisual materials
. Corporate identity materials 
. Public service activities