Gilbert A. Churchill, Jr. J. Paul Peter Chapter 17 Managing Marketing Communications Marketing

Primary Tasks of Communication INFORMING During the introduction stage of the PLC Explain the purpose & benefits of the product REMINDING During the growth stage of the PLC Convenience the customer to buy company’s brand over the competition PERSUADING During the maturity stage of the PLC Used to trigger memory (brand specific) Target Audience Slide 17-1

Some Strategic Goals of Marketing Communications Slide 17-2 Table 17.1 Strategic Goal Create awareness Build positive images Build channel relationships Description Inform markets about products, brands, stores or organizations. Develop positive evaluations in people’s minds about products, brands, stores or organizations. Identify prospects Find out the names, addresses and possible needs of potential buyers. Increase cooperation among channel members. Create value for customers, satisfy their wants and needs, and earn their loyalty. Retain customers

The Communication Process Slide 17-3 Figure 17.1 Source Transmits Message via Medium Receiver Provides Feedback to Source Receiver Decodes Message Source Encodes Message Noise

The AIDA Model Slide 17-4 Figure 17.2 Action DesireInterest Attention Marketing Communications

The Communications Mix Slide 17-5 AdvertisingPersonal Service Publicity Sales Promotion

Comparing the Elements of the Communications Mix Slide 17-6 Message can be Customized for each Customer Considered an Unbiased Source Long Term, Ongoing Activity Marketer Control Over Message Communications Mode Short Term Focus Cost per Contact Overall Cost Personal Selling Sales Promotion AdvertisingPublicity Two-WayOne-Way LowVaries HighNo Direct Cost YesNo YesNo Yes No Yes No HighVaries LowNo Direct Cost Medium-HighHigh Low

When Elements of Communication Mix (Promotion) Are Most Useful Advertising Personal Selling Sales Promotion Public Relations Not effective Very effective Somewhat effective AttentionInterestDesire Effectiveness Action Slide 17-7

Managing Communications Strategy Slide 17-8 Set Communications Objectives Select the Communications Mix Set Communications Budgeting Implementation and Control

Factors that Affect the Communication Mix Push–and–Pull Strategies Push - suppliers promote to intermediaries Pull - suppliers promote to ultimate consumer Nature of the Product Industrial products are expensive, complex, customized Consumers products depend upon costs and risks Stage in the Product Life Cycle Early - advertising & publicity Later - sales promotions Target Market Characteristics Widely scattered markets Highly informed buyers Type of Buying Decision Routine - advertising Complex - personal selling Available Funds Lack of money - publicity, commission based personal selling Plenty of money - advertising $ $ $ Slide 17-9

Two Marketing Communications Approaches Slide Figure 17.3 End Users ResellersProducer Resellers End Users Marketing Communications Request Products Producer Marketing Communications Push Strategy Pull Strategy

Methods for Setting Communications Budgets Slide 17-11a Table 17.3 Method Percentage of sales AdvantageDisadvantage Simple to use Budgeting based on expected sales implies communications can’t improve sales performance Fixed sum per unit Marketer likely to benefit from increasing the budget during times of rising sales Decreasing the communications budget during periods of falling sales could be disastrous in some cases Competition- based Takes into account competitors’ activities Amounts budgeted will be reasonable if competitors are budgeting effectively Can be difficult to get competitors’ budget information Can lead to ever-increasing communications budgets Assumes competitors have the same objectives

Methods for Setting Communications Budgets Slide 17-11b Table 17.3 Method All you can afford AdvantageDisadvantage Takes into account limited resources May stimulate creativity in making funds work hard Doesn’t consider marketing objectives Borrowing may be worthwhile to fund some communications strategies Objective and task Based on achieving communications objectives Focusing on objectives uses funds most efficiently No basis for setting priorities among objectives Treats all objectives as equally worthy of funding Hard to estimate what will it cost to achieve a particular objective

Evaluating the Effectiveness of Marketing Communications Slide Sales Changes Marketing Research Sales Changes Why it Happened What Happened ? ?

Regulation of Communication Self-Regulation - complaints National Advertising Division (NAD) of BBB National Advertising Review Board (NARB) Federal Regulation - deceptive & misrepresentation Federal Trade Commission (FTC) Slide 17-13