Week 8 Flashcards
Companies must do more than just create customer value.
Companies must do more than just create customer value.
They must also use promotional tools to communicate
value clearly and persuasively through an integrated
marketing communication approach
Integrated Marketing communications
The new marketing
communications
landscape
The shifting marketing
communications model
The need for integrated
marketing
communications
The new marketing
communications
landscape
- Changing consumer attitudes
- Marketing strategies
- Communications technology
The shifting marketing
communications model
- Decline of mass/traditional media
- Narrowcasting
- Personalisation & engagement
- Interactive digital media
The need for integrated
marketing
communications
• Cross media touch points / brand contact
• Delivering a clear and consistent message and image
across channels
Consumers are changing
Changing consumer attitudes and behaviour better informed and more communication empowerment due to the
internet.
Marketing strategies are changing
• Mass markets have fragmented
• Build closer relationships with customers
in more narrowly defined micro markets.
Digital technology is causing changes
• Communications technology changing the
way communication occurs between companies and their customers
The shifting marketing communications model
Decline of mass/traditional media in favour for a broad
selection of more specialised and highly targeted media
to reach smaller customer segments with personalised,
interactive messages.
– Personalisation & engagement
– Interactive digital media
– Broadcasting to Narrowcasting
The need for integrated
marketing communications
In the consumer’s mind: • Messages from different media and promotional approaches all become part of single message. • Cross media touch points / brand contact • Delivering a clear and consistent message and image across channels
The promotion mix
A company’s total promotion mix also called its marketing communications mix
The promotion mix is a blend of
- Advertising
- Public Relations
- Sales Promotion
- Personal Selling
- Direct & Digital Marketing
Advertising
Any paid form of presentation and promotion of
ideas, goods or services by an identified sponsor.
Advertising includes
- Television
- Outdoor
- Radio
- Internet
Advertising advantages
• Broad geographic reach • Relatively low cost per exposure • Creative & expressive formats • Useful for creating awareness and long term image • Can trigger quick sales
Advertising disadvantages
• Lacks persuasive power / impersonal • One-way communication • High cost of main advertising media (eg TV)
Advertising Process
Setting advertising objectives
Setting the advertising
budget
Developing the advertising
strategy
Evaluating advertising
campaigns
Setting advertising objectives
• A specific task to be accomplished with a specific target
audience during a specific period of time.
• Advertising objectives should be based on past
decisions about:
– The target market
– Positioning
– The marketing program
Advertising
Classifications & Objectives
Informative advertising
Persuasive advertising
Reminder advertising
Informative advertising
• Extensively used to introduce a new brand or new
category
• Aim is to create primary demand
Persuasive advertising
• Important as competition increases
• Aim is to persuade consumers of a product or brand’s
merits
• Often executed as comparative advertising, also known
as ‘attack advertising’
• Objective is to build selective demand
Reminder advertising
- Important for mature products
- Aim is often to move consumers into action
- Also used to strengthen brand relationships
Advertising:
Setting the advertising budget
Common methods for setting the budget:
affordable method
Percentage of sales method
Competitive parity method
Objective & task method
affordable method
Set the budget at the level
they think they can afford
(Revenue – Expenses)
Percentage of sales method
% of current or forecasted
sales, or budget % of the unit
sales price
Competitive parity method
Setting budgets to match
competitor outlays
Objective & task method
Sets promotional budget
based on what the company
wants to accomplish with the
promotion
PC affordable method
Small businesses often use this
method
Ignores the effect of promotion on sales; and places promotion last as a priority Leads to uncertain annual promotional budgets Can result in underspending
PC Percentage of sales method
Simple to use
Helps management think about the
relationships between promotion spending,
selling price and profit
Views sales as a cause of promotion, rather than a result. Brands with stronger sales can afford bigger budgets Based on availability of funds rather than opportunities
PC Competitive parity method
Two thoughts: Competitive budgets can represent collective wisdom of the industry Spending what competitors spend help prevent promotional wars.
Both thoughts are invalid:
Companies vary and each has their own
promotional needs
No evidence that it prevents competitor wars
PC Objective & task method
Forces management to spell out its
assumptions about the relationship
between dollars spent and promotional
results.
Most difficult of all methods to use
Difficult to determine which task will deliver
which objective
Advertising strategy consists of two interdependent elements:
Message strategy
Media strategy
Message strategy
• What is to be communicated?
Media strategy
- How will you reach consumers?
- Which media platforms?
- When will you communicate?
- How frequently will you repeat the message?
Creating the advertising message
1. Break through the clutter 2. Merging advertising and entertainment 3. Message strategy
Breaking through the clutter
• Breaking through the clutter • Today’s advertising messages must be better planned, more imaginative, more entertaining, more emotionally engaging.
Advertising: Creating the advertising message
Merging Advertising & Entertainment
- “Advertainment”: videos, shows, infomercials
* Branded entertainment: product placement
Creating the advertising message
Message Strategy
Message Strategy
• Creative Concept - “The BIG Idea”
• Customer benefits, brand positioning and value
proposition
• Meaningful, believable & distinctive
Advertising:
Main execution styles
Photo in favourites 17/9
Main Advertising Appeals:
Consumer-generated content
• Incorporate the voice of the customer into brand messages and generate greater customer engagement. • Make customers an everyday part of the brand conversation. • Produce new creative ideas and fresh perspectives on the brand from consumers.
Key decision in media strategy are:
• Reach, frequency and impact
• Selection of main media types and specific media
vehicles
• Media timing decisions.
Reach
The percentage of people in the target market who are exposed to the ad campaign during a given period of time
Frequency
A measure of how many times the average person in the target market is exposed to the message
Impact
The qualitative
value of a message
exposure through a
given medium
When considering specific media vehicles, consider
the following:
- Media exposure
- Media cost per thousand (CPM) people reached
- Media Target audience
- Media quality (environment)
Media selection (types and vehicles)
Photo in favourites 17/9
Timing – 3 types of patterns
Seasonal
Continuity
Pulsing
Seasonal
Advertising to follow the seasonal pattern, to oppose the seasonal pattern or to be the same all year
Continuity
Scheduling ads evenly within a given period.
Pulsing
Scheduling ads unevenly over a given time period
Measuring advertising effectiveness
• Return of advertising investment
Return of advertising investment is the net return
divided by the costs of the advertising investment.
Advertisers should measure two advertising effects:
Communications effects
Sales & profits effects
Communications effects
How well is the advertising
communicating the desired
message?
Sales & profits effects
Is the message translating into
the desired sales response?
Measuring advertising effectiveness calculation
Photo in favourites 17/9
Promotion mix strategies
Marketers can choose from two basic promotion mix strategies:
Push
Pull
companies use some combination of both push and pull.
Push
Directs marketing activities (primarily personal selling and trade promotion) towards channel members to induce them to carry the product and to promote it to final consumers.
Pull
Directs marketing activities (primarily
advertising and consumer promotion)
towards final consumers to induce them
to buy the product
