Chapter12: Engaging Customers And Communicating Customer Value: Advertising And Public Relations

Question 1

Promotion mix

Answer 1

A company’s total promotion mix consists of tools that the company uses to engage customers, persuasively communicate customer value, and build customer relationships.

A promotion mix, or marketing communications mix, is a specific blend of promotion tools: advertising, sales promotion, personal selling, public relations, direct and digital marketing.

Question 2

Advertising

Answer 2

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

Question 3

Sales promotion

Answer 3

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

Question 4

Personal selling

Answer 4

Personal customer interactions by the firm’s sales force for the purpose of engaging customers, making sales, and building customer relationships.

Question 5

Public relations (PR)

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, and events.

Question 6

Direct and digital marketing

Answer 6

Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

Question 7

New marketing communications model

Answer 7

Factors changing the face of today’s marketing communications:

1. Changing consumers: consumers are better informed and more communications empowered.
2. Changing marketing strategies: as mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programs designed to engage customers and build customer relationships in more narrowly defined micro markets.
3. Advancements in digital technology: more and more, large advertisers are moving toward a “digital-first” approach to building their brands.

Marketers reach smaller consumer segments in interactive and engaging ways.

Mix of traditional mass media and a wide array of online, mobile, and social media.

Content marketing managers create, inspire, and share brand messages and conversations.

Question 8

Nature of the promotion tools

Answer 8

1. Advertising: reaches masses of buyers at a low cost per exposure, builds a long-term image for a product, can trigger quick sales, has a public nature and is viewed as legitimate, very expressive, impersonal and lacks the direct persuasiveness of salespeople.
2. Personal selling: personal interaction between two or more people, allows all kinds of customer relationships to spring up, buyer feels a greater need to listen and respond, most expensive promotion tool.
3. Sales promotion: wide assortment of tools with unique qualities, attracts attention and offers incentives to purchase, used to dramatize product offers and boost sales, invites and rewards quick response but has short-lived effects.
4. Public relations: very believable to readers, can dramatize a company or product, reaches many prospects, effective and economical when well thought out.
5. Direct and digital marketing: more targeted and interactive, immediate and personalized.

Question 9

Push promotion strategy

Answer 9

In a push strategy, the company “pushes” the product to resellers, which in turn “push” it to consumers.

Producer (producer marketing activities: personal selling, trade promotion, other) —> retailers and wholesalers (reseller marketing activities: personal selling, advertising, sales promotion, other) —> consumers.

Question 10

Pull promotion strategy

Answer 10

In a pull strategy, the company promotes directly to final consumers, creating a demand vacuum that “pulls” the product through the channel. Most companies use come combination of push and pull.

Producer <— (demand) retailers and wholesalers <— (demand) consumers.

Producer —> (producer marketing activities (advertising, sales promotion, online and social media, other) consumers.

Question 11

Major advertising decisions

Answer 11

Objectives settings (communication objectives, sales objectives) —>
Budget decisions (affordable approach, percent of sales, competitive parity, objective and task) —>
Message decisions (message strategy, message execution) &
Media decisions (impact and engagement, major media types, specific media vehicles, media timing) —>
Advertising evaluation (communication impact, sales and profit impact, return on advertising).

Question 12

Possible advertising objectives

Answer 12

Informative advertising
- communicating customer value: suggesting new uses for a product.
- building a brand and company image: informing the market of a price change.
- telling the market about a new product: describing available services and support.
- explaining how a product works: correcting false impressions.

Persuasive advertising
- building a brand preference: persuading customers to purchase now.
- encouraging switching to a brand: creating customer engagement.
- changing customer perceptions of product value: building brand community.

Reminder advertising
- maintaining customer relationships: reminding consumers where to buy the product.
- reminding consumers that the product may be needed in the near future: keeping the brand in a customer’s mind during off-seasons.

Question 13

Methods of setting the advertising budget

Answer 13

Affordable method
Percentage-of-sales method
Competitive-parity method
Objective-and-task method

Question 14

Advertising strategy

Answer 14

Accomplishes the company’s advertising objectives.
Major advertising strategy elements:
- create advertising messages
- selecting advertising media

Question 15

Creating the advertising message and brand content

Answer 15

1. Breaking through the clutter.
2. Merging advertising and entertainment: aims to make ads so entertaining that people want to watch them.
3. Message and content strategy: the general message that will be communicated to consumers.
4. Message execution: creating concept (or big idea) that will bring the message strategy to life in a distinctive and memorable way.
   —> specific appeal (i.e., humour, fear, emotional, rational, etc.) should be meaningful, believable, and distinctive.
   —> execution styles (i.e., slice of life, technical expertise, testimonial, etc.).
5. Consumer-generated content.

Question 16

Selecting advertising media (definition, steps)

Answer 16

Advertising media: vehicles through which advertising messages are delivered to their intended audiences.

Steps in advertising media selection:
- determining reach, frequency, impact, and engagement.
- choosing among major media types.
- selecting specific media vehicles.
- choosing media timing.

Question 17

Profiles of major media types

Answer 17

Medium —> advantages —> limitations

1. Television —> good mass-marketing coverage; low cost per exposure; combines sight, sound, and motion; appealing to the senses —> high absolute costs; high clutter; fleeting exposure; less audience selectivity.
2. Digital, mobile, and social media —> high selectivity; low cost; immediacy; engagement capabilities —> potentially low impact; high audience control of content and exposure.
3. Newspapers —> flexibility; timeliness; good local market coverage; broad acceptability; high believability —> short life; poor reproduction quality; small pass-along audience.
4. Direct mail —> high audience selectivity; flexibility; no ad competition within the same medium; allows personalization —> relatively high cost per exposure; “junk mail” image.
5. Magazines —> high geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life and good pass-along readership —> long ad purchase lead time; high cost; no guarantee of position.
6. Radio —> good local acceptance; high geographic and demographic selectivity; low cost —> audio only; fleeting exposure; low attention (“the half-heard” medium); fragmented audiences.
7. Outdoor —> flexibility; high repeat exposure; low cost; good positional selectivity —> little audience selectivity; creative limitations

Question 18

Evaluating advertising effectiveness and return on advertising investment

Answer 18

Return on advertising investment: net return on advertising investment divided by the costs of the advertising investment.

Advertisers should regularly evaluate:
- communication effects: measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. After an ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, knowledge, and preference.
- sales and profit effects: sales and profit effects of advertising are often harder to measure. One way to measure the sales and profit effects of advertising is to compare past sales and profits with past advertising expenditures. Another way is through experiments.

Question 19

Functions of Public Relations Departments

Answer 19

PR may include any or all or the following functions:

1. Press relations or press agency (creating and placing newsworthy information in the news media to attract attention to a person, product, or service).
2. Product and brand publicity (publicizing specific products and brands).
3. Public affairs (building and maintaining national or local community relationships).
4. Lobbying (building and maintaining relationships with legislators and government officials to influence legislation and regulation).
5. Investor relations (maintaining relationships with shareholders and others in the financial community).
6. Development (working with donors or members of nonprofit organizations to gain financial or volunteer support).

Question 20

Public relations

Answer 20

Promotes products, people ideas, organizations, and nations.

Builds good relations with consumers, investors, the media, and communities.

Rebuilds interest in commodities for trade associations.

Question 21

Role and impact of PR

Answer 21

Strong impact on public awareness at a lower cost than advertising.

Power to engage consumers and make them part of the brand’s story, inject them in daily conversations.

Limited and scattered use.

Powerful brand-building tool.

Question 22

Major public relations tools

Answer 22

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