Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Introduction to Marketing

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 13 Objectives 1.Appreciate the variety of marketing communications tools, and how they work together to accomplish communication objectives. 2.Understand the nature, importance, and features of integrated marketing communications.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 13 Objectives 3.Describe the concept of brand-equity enhancement and the role of marketing communications in facilitating this objective. 4.Comprehend the factors that determine how different marketing communications elements are effectively combined.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 13 Objectives 5.Discuss the primary decision spheres involved in managing the marketing communications process. 6.Evaluate the nature and function of the major MarCom tools: (a) advertising, (b) sales promotion, (c) public relations, and (d) sponsorship and event marketing.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Integrated Marketing Communications The dramatic changes in the field of marketing communications over the last decade have challenged marketing communicators to use communications methods that will: –Break through the communications clutter in the marketplace –Reach audiences with interesting and persuasive messages –Assure that MarCom investments yield an adequate return on investment

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The Tools of Marketing Communications The MarCom Mix: 1.Personal Selling 2.Advertising 3.Public Relations 4.Sales Promotion 5.Sponsorship Marketing Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The MarCom Mix Objective 1 1.Personal Selling Interaction between salesperson and prospect to sell products such as insurance, automobiles, and real estate.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The MarCom Mix 2.Advertising Informs the end customer or B2B customer about products and brand benefits and ultimately influences brand choice. Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The MarCom Mix 3.Public Relations Garners positive publicity for the company and its brands through news items or editorial comments. Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The MarCom Mix Objective 1 4.Sales Promotion Creates an immediate response from the market. –Trade-oriented sales promotions –Consumer-oriented sales promotions

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The MarCom Mix 5.Sponsorship Marketing Represents an opportunity for a company and its brands to directly target communications toward narrow, but highly desirable, audiences. Associates a brand with a charitable cause, a high profile event, or a cultural affair. Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The Philosophy and Practice of Integrated Marketing Communications Integrated Marketing Communications: A move towards fully integrating all business practices that communicate something about a company’s brands to present or prospective customers. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Integrated Marketing Communications Objective 2 Five Key Aspects of IMC: 1.Start with the customer or prospect 2.Use any form of relevant contact 3.Achieve Synergy 4.Build Relationships 5.Affect Behavior

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. The Philosophy and Practice of Integrated Marketing Communications Key Changes in MarCom from the IMC Thrust: Reduced dependence on mass-media advertising. Increased reliance on highly targeted communication methods. Expanded efforts to assess communications’ return on investment. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Enhancing Brand Equity Brand Equity: A brand possesses equity to the extent that customers are familiar with the brand and have stored in memory favorable, strong, unique brand associations. Brand Equity consists of two forms of knowledge: –Brand Awareness –Brand Image Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Enhancing Brand Equity Brand Awareness: –Brand Recognition –*Brand Recall* (It is this deeper level of awareness, recall, to which marketers aspire) Brand Image: –Can be thought of in terms of the types of associations that come to the consumer’s mind when contemplating a particular brand. Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Determining an Appropriate Mix of IMC Tools Five Factors to Consider: 1.What is the intended market? 2.What objectives must the MarCom initiative achieve? 3.What is the product life-cycle stage? 4.What are competitors doing? 5.What is the available budget for marketing communications? Objective 4

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Managing the MarCom Process Six Primary Areas of Decision Influence: 1.Selecting target markets 2.Establishing objectives 3.Setting budgets 4.Formulating positioning strategies 5.Establishing and implementing message and media strategies 6.Evaluating program effectiveness Objective 5

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Advertising 3 Ways to Add Value to Offerings: 1.Innovating 2.Improving quality 3.Altering consumer perspectives Advertising adds value to brands by influencing consumers’ perceptions. Objective 6A

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Advertising Six Major Activities of Advertising Strategy: 1.Objective setting 2.Budgeting 3.Positioning 4.Planning message strategy 5.Developing media strategy 6.Assessing advertising effectiveness Objective 6A

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Advertising Good or Effective Advertising: Extends from sound marketing strategy Takes the consumer’s view Is persuasive Finds a unique way to break through competitive clutter Never promises more than it can deliver Prevents the creative idea from overwhelming the strategy Objective 6A

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sales Promotion Sales Promotions are the use of any incentive by a manufacturer to induce the trade (wholesalers and retailers) and/or consumers to buy a brand and to encourage the sales force to aggressively sell it. Objective 6B

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sales Promotion Over the last two decades, there has been a shift from Advertising to Sales Promotion. 6 Factors accounting for Shift: 1.Balance of power transfer 2.Increased brand parity and price sensitivity 3.Reduced brand loyalty 4.Splintering of the mass market and reduced media effectiveness 5.Short term orientation and corporate reward structures 6.Trade and consumer responsiveness Objective 6B

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sales Promotion Sales Promotion: Roles and Objectives 1.Facilitating the introduction of new products to the trade. 2.Obtaining trial purchases from consumers. 3.Stimulating sales force enthusiasm for new, improved, or mature brands. 4.Invigorating sales of a mature brand. 5.Increasing on- and off-shelf merchandising space. Objective 6B

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sales Promotion Sales Promotion: Roles and Objectives 6.Neutralizing competitive advertising and sales promotion. 7.Holding current users by encouraging repeat purchases. 8.Increasing brand usage by loading consumers. 9.Preempting competition by loading consumers. 10.Reinforcing advertising. Objective 6B

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sales Promotion Trade Promotions: Trade Promotions are directed at wholesalers, retailers, and other marketing intermediaries, and represent the first step in any promotional effort. Consumer Promotions: Consumer Promotions encourage consumers to purchase one brand over another, to purchase a particular brand more often, and to purchase in larger quantities through activities such as sampling, couponing, sweepstakes, and contests. Objective 6B

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Public Relations PR is the MarCom tool that is uniquely suited to fostering goodwill between a company and its various publics. It can also increase brand awareness, build favorable attitudes toward a company and its products, and encourage purchase behavior. Objective 6C

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Public Relations Proactive MPR is another MarCom tool in addition to advertising and sales promotion that can give a brand additional exposure, newsworthiness, and credibility. Reactive MPR is undertaken as a result of external pressures and challenges brought by competitive actions, changes in consumer attitudes, changes in government policy, or other external influences. Objective 6C

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sponsorship Marketing Sponsorships range from supporting athletic events to throwing corporate weight behind a worthy cause. Event Marketing Cause Related Marketing Objective 6D

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Sponsorship Marketing Four Factors account for the growth in sponsorships: 1.Enables companies to avoid the clutter inherent in advertising media 2.Helps companies respond to consumers’ changing media habits 3.Helps companies gain the approval of various constituencies 4.Enables marketers to target their communication and promotional efforts to specific regions or groups Objective 6D