C HAPTER 12 Communicating Customer Value: Advertising, Sales Promotion, and Public Relations

Copyright 2007, Prentice-Hall Inc.12-2  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. Roadmap: Previewing the Concepts

Copyright 2007, Prentice-Hall Inc.12-3 The Agency  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 NYC.  Agency philosophy: “Anything and everything is an ad.” The Tactics  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. CP + B – An Unusual Success Story

Copyright 2007, Prentice-Hall Inc.12-4 The Marketing Communications (Promotion) Mix Advertising Public Relations Sales Promotion Personal Selling Direct Marketing

Copyright 2007, Prentice-Hall Inc.12-5  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 Changing Communications Landscape

Copyright 2007, Prentice-Hall Inc.12-6  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. Integrated Marketing Communications

Copyright 2007, Prentice-Hall Inc.12-7 Figure 12-1 Integrated Marketing Communications

Copyright 2007, Prentice-Hall Inc.12-8 Integrated Marketing Communications  Begins by recognizing all contact points where the customer may encounter the company or its brand.  Seeks to deliver a clear and positive message via each contact.  Ties together messages and images in consistent fashion.  Target audience(s) must be identified.  Creates an integrated communication program which focuses on encouraging behavioral responses.  Helps the firm to manage customer relationships over time.

Copyright 2007, Prentice-Hall Inc.12-9 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.

Copyright 2007, Prentice-Hall Inc Personal Selling  Involves personal interaction between two or more people.  Allows relationship building.  Most effective way for preferences, convictions, and actions to be influenced.  Most expensive promotion tool; requires long-term commitment.

Copyright 2007, Prentice-Hall Inc Sales Promotion  Wide assortment of tools.  Attracts consumer attention.  Offers strong incentives to buy.  Invites and rewards quick consumer response.  Effects are short-lived.

Copyright 2007, Prentice-Hall Inc 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.

Copyright 2007, Prentice-Hall Inc Direct Marketing  Many forms that share four primary characteristics: –Nonpublic –Immediate –Customized –Interactive  Well suited to highly targeted marketing. Direct mail is one form of direct marketing.

Copyright 2007, Prentice-Hall Inc Figure 12-2 Push Vs. Pull Promotion Strategy

Copyright 2007, Prentice-Hall Inc Figure 12-3 Major Decisions in Advertising

Copyright 2007, Prentice-Hall Inc Setting Advertising Objectives  Advertising Objective: –Specific communication task to be accomplished with a specific target audience during a specific period of time.  Classified by Purpose: –Inform –Persuade –Remind

Copyright 2007, Prentice-Hall Inc Fulfilling Objectives Outdoor advertising (billboard, transit, etc.) is often used for reminder purposes. Print ads can fulfill this objective as well. Which of the ads above is/are attempting to remind consumers, versus inform or persuade? Marketing in Action

Copyright 2007, Prentice-Hall Inc Setting the Advertising Budget  Affordable method  Percentage-of-sales method  Competitive-parity method  Objective-and-task method

Copyright 2007, Prentice-Hall Inc  Consists of two major elements: –Creating advertising messages  Message strategy & message execution must break through the clutter. –Selecting advertising media  Set reach, frequency, and impact goals.  Choose among major media types.  Select specific media vehicles.  Decide on media timing. Developing Advertising Strategy

Copyright 2007, Prentice-Hall Inc The Message Strategy  Identify customer benefits.  Develop compelling creative concept— the “Big Idea.”  Advertising appeals should be meaningful, believable, and distinctive. Angela Talley of DDB Worldwide explains how advertising people learn to think like consumers when developing the message strategy. Video Snippet

Copyright 2007, Prentice-Hall Inc Message Execution  Technical Expertise  Scientific Evidence  Testimonial or Endorsement  Slice of Life  Lifestyle  Fantasy  Mood or Image  Musical  Personality Symbol

Copyright 2007, Prentice-Hall Inc Celebrity Endorsements Celebrity endorsements have been at the heart of the “ Got Milk?” milk mustache campaign for years. Marketing in Action

Copyright 2007, Prentice-Hall Inc Humorous Advertising Appeals Humorous advertising tones are being used in the marketing of many products, including dictionaries. Marketing in Action

Copyright 2007, Prentice-Hall Inc Message Execution  Choose a tone.  Use memorable, attention-getting words.  Choose correct format elements. –Illustration –Headline –Copy Absolut print ads attract attention through choice of illustration and headline.

Copyright 2007, Prentice-Hall Inc Setting Media Objectives  Reach –Percentage of people exposed to ad.  Frequency –Number of times a person is exposed to advertisement.  Media Impact –The qualitative value of a message exposure through a given medium.

Copyright 2007, Prentice-Hall Inc Choosing Media Type & Vehicles  Media Type: –consider the medium’s impact, message effectiveness, and cost.  Media Vehicles: –Specific media within each general media type  Factors to Consider: –Cost –Audience quality –Audience attention –Editorial quality

Copyright 2007, Prentice-Hall Inc Alternative Media Marketing in Action Can you think of any other examples?

Copyright 2007, Prentice-Hall Inc The Summit Combo unit offers the convenience of a refrigerator, freezer, and microwave combined into a single, compact, energy-efficient unit. The product is targeted towards people in college residence halls, assisted-living facilities, government offices, and business offices. What media categories and vehicles would you use to reach these targets? Can you think of some alternative media that might be useful as well? Let’s Talk!

Copyright 2007, Prentice-Hall Inc  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 Deciding on Media Timing

Copyright 2007, Prentice-Hall Inc Evaluating Advertising  Advertising accountability is becoming increasingly important to firms.  Evaluating advertising effectiveness involves: –Measuring the communication effects of an ad— “Copy Testing”  Is the proper message being communicated? –Measuring the sales and profit effects of an ad.  Is the ad increasing sales?

Copyright 2007, Prentice-Hall Inc Other Advertising Considerations  Organization of Ad Function –Small companies –Large companies –Advertising agency  International Advertising Issues –Standardization vs. adaptation. –Costs and media availability vary by country. –Advertising practices are regulated differently in each country. An example of standardized advertising

Copyright 2007, Prentice-Hall Inc Sales Promotion Sales promotion consists of short- term incentives to encourage the purchase of sales of a product or service. The idea behind sales promotion is to generate immediate sales.

Copyright 2007, Prentice-Hall Inc Pull-Oriented Sales Promotions Pull-oriented sales promotions are those that target the ultimate consumer and encourage consumers to prefer a particular brand to competitive offerings. Contests and coupons are two examples of pull- oriented sales promotions. Marketing in Action

Copyright 2007, Prentice-Hall Inc  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 Rapid Growth of Sales Promotion

Copyright 2007, Prentice-Hall Inc Consumer Promotion Objectives  Objectives for Consumer Sales Promotions: –Increase short-term sales. –Help build long-term customer relationships.  Many tools exist that can help in accomplishing these objectives.

Copyright 2007, Prentice-Hall Inc Consumer Sales Promotion Tools  Coupons: provide a discount off the purchase price of the product when redeemed.  Cash Refunds: offer a refund of part of the purchase price after the item has been bought.  Price Packs: offer savings off the regular price of the product; marked on the package.  Samples: offer a trial amount of the product.  Premiums: goods offered for free or at a low price as an incentive to buy.  Advertising Specialties: useful items imprinted with the name or logo of the advertiser which are given as gifts to consumers.

Copyright 2007, Prentice-Hall Inc Consumer Sales Promotion Tools  Patronage Rewards: cash or other awards offered for regular use of a brand.  POP Displays: include signs and displays that exist at the point-of-sale.  Demonstrations: food or product in-store sampling.  Contests: entries are judged by a panel who selects the winner.  Sweepstakes: names are submitted for a random drawing.  Games: game pieces are given for each purchase. Some win instantly; others must fit a game pattern.

Copyright 2007, Prentice-Hall Inc Point-of-purchase displays can draw attention to the brand and stimulate impulse buys. Why do you think many retailers resist using POP displays? Let’s Talk!

Copyright 2007, Prentice-Hall Inc  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. Trade Promotion

Copyright 2007, Prentice-Hall Inc  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. Business Promotion

Copyright 2007, Prentice-Hall Inc  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 Developing the Sales Promotion Program

Copyright 2007, Prentice-Hall Inc Trade Shows The International Consumer Electronics trade show attracts over 20,000 exhibitors and over 130,000 visitors. Marketing in Action

Copyright 2007, Prentice-Hall Inc 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: –Includes press relations or press agency, product publicity, public affairs, lobbying, investor relations and development.

Copyright 2007, Prentice-Hall Inc  Audiovisual materials  Corporate identity materials  Public service activities  Company Web site  News  Speeches  Special events  Buzz marketing  Mobile marketing  Written materials Public Relations Tools

Copyright 2007, Prentice-Hall Inc Public Relations Scholastic sponsored low-cost sleepovers, games, and costume contests which effectively promoted the release of the sixth Harry Potter book. Marketing in Action

Copyright 2007, Prentice-Hall Inc  Define the three steps of target marketing: market segmentation, market targeting, and market positioning.  List and discuss the major bases for segmenting consumer and business markets.  Explain how companies identify attractive market segments and choose a target marketing strategy.  Discuss how companies position their products for maximum competitive advantage in the marketplace. Rest Area: Reviewing the Concepts