© 2003 Prentice Hall, Inc14-1 Market Communication

© 2003 Prentice Hall, Inc14-2 Figure 14.1: The Communications Model Source Noise Feedback MessageMedium Receiver encoding decoding

© 2003 Prentice Hall, Inc14-3 Promotion Mix Advertising Sales Promotions Public Relations Personal Selling

© 2003 Prentice Hall, Inc14-4 Figure 14.2: Control Continuum Advertising Sales Promotion Sales Promotion Public Relations Public Relations Personal Selling Personal Selling Word of Mouth Word of Mouth HighLow

© 2003 Prentice Hall, Inc14-5 Appeals Personal appeals allow for direct interaction between a company representative and a customer –personal selling Mass appeals seek to reach many prospective customers at the same time –advertising –sales promotion –public relations

© 2003 Prentice Hall, Inc14-6 Advertising Non-personal communication from an identified sponsor using the mass media –can convey rich and dynamic images –can establish and reinforce brand identity –can communicate factual information –can remind customer to buy

© 2003 Prentice Hall, Inc14-7 Sales Promotion Programs that build interest or encourage purchase of a product through the use of an incentive in a specified time period –coupons –contests –rebates –premiums

© 2003 Prentice Hall, Inc14-8 Publicity and Public Relations Portray an organization and its products positively by influencing the perceptions of various publics –writing press releases –holding special events –conducting and publishing consumer surveys –putting a positive spin on negative news

© 2003 Prentice Hall, Inc14-9 Developing the Promotion Plan Framework for developing, implementing, and controlling the firm’s promotional activities

© 2003 Prentice Hall, Inc14-10 Figure 14.3: Stages in Developing the Promotion Mix

© 2003 Prentice Hall, Inc14-11 Step 1: Establish Promotion Objectives Objectives will change depending on where consumers are on the path to loyalty Some objectives might be –create awareness –inform the market –create desire –encourage trial –build loyalty

© 2003 Prentice Hall, Inc14-12 Figure 14.4: Up the Promotional Road

© 2003 Prentice Hall, Inc14-13 Step 2: Identify Influence on the Promotion Mix Mix must be tailored for each situation –Will company use push or pull strategy? Push means that the company seeks to move its products through the channel by convincing channel members to offer them and entice their customers to select these items Pull means that the company relies on consumers to learn about and express desire for its products

© 2003 Prentice Hall, Inc14-14 Effects of Time and the PLC Introduction phase: push strategy; mix relies heavily on advertising, sales promotions, and public relations Growth phase: heavy advertising with emphasis on differentiation Maturity phase: emphasis on sales promotions to encourage brand switching Decline phase: dramatic reductions in promotional spending

© 2003 Prentice Hall, Inc14-15 Step 3: Determine and Allocate the Total Promotion Budget Top-down budgeting techniques –percentage-of-sales method –competitive parity Bottom-up budgeting technique –objective-task method

© 2003 Prentice Hall, Inc14-16 Step 4: Allocate Budget to Specific Promotion Mix Organizational factors Market potential Market size

© 2003 Prentice Hall, Inc14-17 Step 5: Designing the Promotion Mix Which elements of promotion will be used? What message is to be communicated? –Type of appeal? –Structure of appeal? What communication channels should be employed? What role will advertising, sales promotion, public relations, and selling play?

© 2003 Prentice Hall, Inc14-18 The AIDA Model Attention Interest Desire Action

© 2003 Prentice Hall, Inc14-19 Step 5: Evaluate the Effectiveness of the Promotion Mix Is the plan working? –Measure response to sales promotions –Measure brand awareness, recall, and image before and after ad campaign –Analyze and compare sales performances by territory and sales force –Clip articles appearing in media

© 2003 Prentice Hall, Inc14-20 Interactive Marketing Attention Economy –The amount of information seems infinite; our ability to get it is limited by the time we can spend looking –Interactive media are in the business of buying and selling people’s attention Customized marketing communications yield a measurable response in the form of a purchase or request for more information

© 2003 Prentice Hall, Inc14-21 De-Mass Marketing Companies once focused on mass marketing are increasingly segmenting and customizing promotions for small targets

© 2003 Prentice Hall, Inc14-22 Levels of Interactive Response First-order response: product offer directly yields a transaction Second-order response: product offer results in some form of customer feedback but it isn’t a transaction –request for more information –request NOT to receive more information

© 2003 Prentice Hall, Inc14-23 Database Marketing Critical to interactive marketers as they seek to track responses to messages and develop a dialogue with customers Allows the organization to learn customer preferences, fine-tune and test offerings, build relationships

© 2003 Prentice Hall, Inc14-24 Database Marketing Is interactive Builds relationships Locates new customers Stimulates cross-selling Is measurable Is trackable

© 2003 Prentice Hall, Inc14-25 Putting It All Together Integrated Marketing Communications (IMC) is “a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.”

© 2003 Prentice Hall, Inc14-26 Figure 14.5: The Integrated Communications Perspective

© 2003 Prentice Hall, Inc14-27 MSN Microsoft practices IMC by coordinating print advertising with other elements of its promotional mix.

© 2003 Prentice Hall, Inc14-28 Characteristics of IMC Approach Focus on customer need for communications Reliance on customer database to focus messages Use of consistent messages via diverse communications vehicles Careful planning of message delivery to generate a steady stream of consistent information Use of several elements of the promotional mix

© 2003 Prentice Hall, Inc14-29 Figure 14.6: Integrated Marketing Model

© 2003 Prentice Hall, Inc14-30 The IMC Planning Model Start with a Customer Database Develop Promotional Strategies Implement Specific Promotional Tactics Evaluate IMC Communications –First-order responses –Second-order responses –Attitudes toward brand and firm

© 2003 Prentice Hall, Inc14-31 Barriers to Acceptance of IMC Requires changes in planning and implementation of promotional strategies Puts more weight on promotional aspects other than advertising Requires upper-level management to view other aspects of the marketing mix as part of the communications strategy Requires company-wide commitment Traditional ad agencies may not be equipped to handle a true IMC campaign