Catching the Buzz: Promotional Strategy and Integrated Marketing Communication

2 Chapter Objectives Understand the role of marketing communication Understand the communications model List and describe the traditional elements of the promotion mix Explain how word of mouth marketing, buzz marketing, viral marketing, and guerrilla marketing provide effective marketing communication

3 Chapter Objectives (cont’d) Describe integrated marketing communication and its characteristics Explain the important role of database marketing in integrated marketing communication Explain the stages in developing an IMC plan

4 Real People, Real Choices General Motors R* Works (Vince O’Brien) Needed marketing plan supporting Chevy’s commitment to skiing while increasing sales at local dealerships  Option 1: continue ski promotion but better qualify test-drive traffic  Option 2: offer season passes to local ski mountain as purchase incentive for designated SUV  Option 3: scrap ski relationship and look for another platform to promote Chevy’s products

5 Tailoring Marketing Communication to Consumers Promotion: the coordination of marketing communication efforts to influence attitudes or behavior Marketing communication:  Informs  Reminds  Persuades  Builds relationships

6 Tailoring Marketing Communication to Consumers (cont’d) Integrated marketing communication (IMC): process that marketers use to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time to targeted audiences  Consumers see the variety of messages from a firm as a whole.

7 Discussion With an IMC program, firms need to coordinate all marketing communication activities.  What inherent problems do you see in ensuring this coordination?

8 Figure 12.2: The Communication Model

9 The Communication Model Encoding: process of translating an idea into a form of communication Source: organization or individual sending the message Message: the communication in physical form Medium: communication vehicle used to reach members of a target audience FRAM.COM

10 The Communication Model (cont’d) Receiver: individual or organization that intercepts and interprets the message Decoding: process whereby a receiver assigns meaning to a message Noise: anything that interferes with effective communication Feedback: receiver’s reactions to the message

11 Marketing Communication Strategy and Promotion Mix Promotion mix: communication elements the marketer controls Advertising Sales promotion Public relations Personal selling Direct marketing

12 Figure 12.3: Control Continuum

13 Mass Appeals Advertising: Nonpersonal communication from an identified sponsor using mass media

14 Mass Appeals (cont’d) Sales promotion: contests, coupons, and other incentives designed to build interest or encourage product purchase during a specified period Public relations: communication activities that create/maintain a positive image of a firm and its products

15 Personal Appeals Personal selling: direct interaction between a company representative and a customer Direct marketing: efforts to gain a direct response from individual consumers

16 Group Activity/Discussion Traditional promotion elements include advertising, sales promotion, public relations, personal selling and direct marketing. --Which do you feel is most effective for each of the following clients?  1. a cellular phone service provider  2. a hotel  3. a university  4. the manufacturer of a new soft drink

17 Buzz Appeals Buzz: everyday people who help marketing efforts by talking about a product or a company to others Buzz marketing: high-profile entertainment or news that gets people to talk about the brand Viral marketing: entertaining or informative messages designed to be passed along

18 Buzz Appeals (cont’d) Word of mouth (WOM) marketing: activities that give people a reason to talk about the product Guerrilla marketing: activities that “ambush” consumers with promotional content where not expected

19 Discussion Some say buzz marketing is just a craze that will fade in a year or two. --Is it here to stay? --Do you think buzz is effective? Why or why not?

20 Group Activity Your team is a word-of-mouth marketing department for a sports equipment company such as Spalding. Develop ways to create buzz for your company’s products. SPALDING.COM

21 Integrated Marketing Communication (IMC) With IMC, marketing communication programs create and maintain long-term relationships with customers by satisfying their needs. IMC unifies all marketing communication tools to send a consistent, persuasive message.

22 Characteristics of IMC Creates a single unified voice for firm. Begins with the customer. Seeks to develop relationships with customers through one-to-one marketing. Relies on two-way communication.

23 Characteristics of IMC (cont’d) Focuses on stakeholders, not just customers. Generates a continuous stream of communication. Measures results based on actual feedback.

24 IMC and Database Marketing Database marketing: creation of ongoing relationship with a set of customers who have identifiable interest in a product --Customers’ responses become part of ongoing communication process.  Is interactiveBuilds relationships  Locates new customersStimulates cross-selling  Is measurableYields trackable responses

25 Discussion Consumers are concerned that databases invade privacy.  --Do you feel this is a valid concern?  --How can marketers use databases effectively and protect individuals’ rights?

26 Developing the IMC plan (Figure 12.4)

27 Developing the IMC Plan Step 1: Identify target audiences Step 2: Establish communication objectives  Create awareness  Inform the market  Create desire  Encourage purchase and trial  Build loyalty

28 Figure 12.5: The Hierarchy of Effects

29 Step 3: Determine and allocate the marketing communication budget  Determine total promotion budget  Top-down budgeting techniques  Percentage-of-sales  Competitive-parity  Bottom-up  Objective-task

30 Step 3: Determine and allocate the marketing communication budget (continued)  Push strategy: move products through the channel by convincing channel members to offer them  Pull strategy: move products through the channel by building desire among consumers, convincing retailers to respond to demand

31 Step 3: Determine and allocate the marketing communication budget (continued)  Allocate the budget to a specific promotion mix  Organizational factors  Market responsiveness  Market potential  Market size

32 Step 4: Design the promotion mix  Type of appeal  AIDA model: communication goals of attention, interest, desire, and action  Structure of the appeal  Communication channel THEWOMB.COM

33 Step 5: Evaluate the effectiveness of the communication program  Are communication objectives adequately translated into marketing communication that is reaching the right target market?

34 Discussion Some people argue there’s really nothing new about IMC.  What do you think? Why?  Why is the IMC plan superior to conventional advertising?

35 Real People, Real Choices General Motors R* Works (Vince O’Brien) Vince chose option 2: offer season passes to local ski mountain as purchase incentive for designated SUV. Chevrolet has completed its sixth year of this Ski Chevy promotional program, and it’s all smooth going from here! SKICHEVY.COM

36 Marketing in Action Case: You Make the Call What is the decision facing American Express? What factors are important in understanding this decision situation? What are the alternatives? What decision(s) do you recommend? What are some ways to implement your recommendation?

37 Keeping It Real: Fast-Forward to Next Class, Decision Time at BzzAgent Meet Joe Chernov, director of PR at BzzAgent, Inc. Buzz marketers accused of “perpetrating large scale deception upon consumers” The decision: What public relations strategy to use to respond to the criticism?