Communicating Customer Value: Communicating Customer Value: Advertising and Public Relations Chapter 12

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Define the five promotion mix tools for communicating customer value. 2. Discuss the changing communications landscape and the need for integrated marketing communications. 3. Describe and discuss the major decisions involved in developing an advertising program. 4. Explain how companies use public relations to communicate with their publics. Rest Stop: Previewing the Concepts

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Unilever Integrates Digital & Traditional Media First Stop Background  About Unilever: World’s # 2 advertiser spends $5.3 billion on global advertising and promotion. Less is being spent on traditional media; more is being invested in online and digital.  Recognition: Unilever was named digital marketer of the year by Advertising Age. However, Unilever does not run digital campaigns in isolation of other media; rather, digital is integrated with traditional media. Implementation  How They Do It: Innovative websites, viral videos, and “webisodes” represent key digital content. Real, funny TV ads pull viewers to websites to build consumer involvement with brand. Public relations gets clips aired on talk shows.  Results: The key benefit of all integrated efforts is termed “superdistribution”, which means digital clips are picked up and shown by other media for free. “Evolution” created $200 million in free media coverage.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Promotion Mix Specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. Also referred to as “marketing communications mix”.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Figure 12.1: Integrated Marketing Communications

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Integrated Marketing Communications  Several factors are changing the face of marketing communications: –Consumers. –Marketing strategies. –Communication technology.  These factors have shifted the marketing communications model so that firms are doing less broadcasting and more narrowcasting.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Integrated Marketing Communications (IMC) Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling message about the organization and its products. Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling message about the organization and its products.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Integrated Marketing Communications  A strong need for integrated marketing communications exists. –Conflicting messages from different sources can create confusion or blur brand perceptions.  Marketers must understand each promotion tool when shaping the marketing communications mix. –Each brand contact delivers a message.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action Burger King’s integrated, multipronged Whopper Freakout campaign employed a carefully coordinated mix of TV, radio, rich media banner ads, and a Freakout web site. Successful? You bet! Sales grew by 29%!Freakout web site

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Shaping the Overall Promotion Mix  Nature of advertising: –Can reach masses of geographically dispersed buyers at a low cost per exposure. –Can repeat a message many times. –Consumers view advertised products as more legitimate. –Is impersonal, one-way communication. –Can be very costly for some media types.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Shaping the Overall Promotion Mix  Nature of personal selling: –Involves personal interaction between two or more people. –Most effective tool at building preferences, convictions, and actions. –Allows relationship building and two-way communication. –Requires long-term commitment to sales force. –Most expensive promotion tool.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action With personal selling, customers feel a greater need to listen and respond. Two-way communication is a key strength of selling compared to other forms of marketing communications.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Nature of sales promotion: –Includes a wide assortment of tools. –Attracts consumer attention. –Can be used to dramatize product offers. –Offers strong incentives to buy. –Invites and rewards quick consumer response. –Effects are short-lived. Shaping the Overall Promotion Mix

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Nature of 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. Shaping the Overall Promotion Mix

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Nature of direct marketing: –Many forms of direct marketing exist. –Direct marketing forms share four primary characteristics: Less public. Immediate. Customized. Interactive. –Well suited to highly targeted marketing. Shaping the Overall Promotion Mix

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Figure 12.2: Push vs. Pull Promotion Strategy

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Advertising  Advertising has been used for centuries.  U.S. advertisers spend more than $290 billion each year; worldwide spending exceeds $604 billion.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Advertising  Advertising is used by: –Business firms. –Not-for-profit organizations. –Professionals. –Social agencies. –Government.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Figure 12.3: Major Advertising Decisions

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Advertising objective: –A specific communication task to be accomplished with a specific target audience during a specific period of time.  Overall advertising goal is to help build customer relationships by communicating customer value.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Advertising objectives can be classified by purpose: –Informative advertising. –Persuasive advertising. –Comparative advertising (a special type of persuasive advertising). –Reminder advertising.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Fuel For Thought What is the objective of this ad for De Beers diamonds?

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Setting the advertising budget: –Affordable method. –Percentage-of-sales method. –Competitive-parity method. –Objective-and-task method. $

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action Audi gained a competitive advantage by spending heavily on advertising and promotion at a time when rivals were retrenching.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Developing advertising strategy: –Creating advertising messages. Message strategy and message execution must break through the clutter. Advertising is being merged with entertainment. Major Advertising Decisions

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall “Madison & Vine” A term that has come to represent the merging of advertising entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages. Visit the Adverblog’s archive on Advertainment for current examples. Advertainment

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action Ad agency JWT attempted to promote its “Madison & Vine” philosophy to potential business partners with this ad.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Planning the message strategy: –Identify customer benefits that can be used as advertising appeals. –Develop compelling creative concept— the “big idea”. –Choose an ad advertising appeal that is: Meaningful. Believable. Distinctive.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Technical expertise  Scientific evidence  Testimonial evidence or endorsement  Slice of Life  Lifestyle  Fantasy  Mood or image  Musical  Personality symbol Message Execution Styles:

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Message execution process: –Choose the execution style. –Choose a tone. Use memorable, attention-getting words. –Choose format elements: Illustration. Headline. Copy.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Fuel For Thought What is the message execution style? What is the tone of the ad? Are the words used attention-getting and memorable? How does the illustration work with the rest of the ad?

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Consumer-generated messages: –Tapping consumers for message ideas or actual ads can involve: Searching existing Web video sites. Holding contests or inviting consumers to submit ad message ideas and videos. –Benefits of consumer-generated messages: Collects new ideas and fresh brand perspectives at relatively little expense. Boosts consumer involvement and gets consumers talking and thinking about the brand.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action The Doritos “Crash the Super Bowl” ads are among the top- rated ads on USA Today’s Super Bowl Ad Meter. Visit the “Crash” web site to learn how you can submit your ad and to view the ads created by the most recent winners.“Crash”

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Developing advertising strategy: –Selecting advertising media. Set reach, frequency, and impact goals. Choose among major media types. Select specific media vehicles. Decide on media timing. Major Advertising Decisions

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Deciding on reach, frequency, impact: –Reach: Percentage of people exposed to ad campaign in a given time period. –Frequency: Number of times a person is exposed to advertisement. –Media Impact: The qualitative value of a message exposure through a given medium.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Each media type has specific advantages and disadvantages.  Choosing among media types requires consideration of the: –Medium’s impact –Message effectiveness –Cost  The media mix should be regularly reexamined.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Advertising Decisions  Media vehicles: –Specific media within each general media type, such as Newsweek.  Factors to consider when choosing vehicles: –Cost. –Audience quality. –Audience engagement. –Editorial quality.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Marketers must also decide on media timing, or 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. Major Advertising Decisions

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action Many products, services, and retailers advertise more heavily before special holidays, new seasons, or even particular times of the year, such as “Back to School”.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Return on advertising investment: –The net return on advertising investment divided by the costs of the advertising investment.  Evaluating advertising involves: –Measuring the communication effects of an ad or campaign. –Measuring the sales and profit effects of the ad campaign. Evaluating Advertising and Return on Advertising Investment

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action The 2010 Super Bowl drew the single largest TV audience ever in the US (105 million), with ad prices ranging from $ 2.8 to $3 million for a 30 second spot. Was it worth it?? Learn how Nielsen measures ROI for Super Bowl ads.ROI for Super Bowl ads

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  Organization of ad function: –Small companies—one person in firm. –Large companies—ad department that may also work with an ad agency. –Advertising agencies employ specialists who perform ad tasks better then the company’s own staff can. Bring outside viewpoints to problem-solving. Wide range of experience. Other Advertising Considerations

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall  International advertising issues: –To what degree should global advertising be adapted to various countries? Greater need for standardization of global brand advertising strategies. Specific advertising programs must usually be adapted to local cultures and other factors. Other Advertising Considerations

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall 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. 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.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Public Relations  Public relations departments perform the following functions: –Press relations or press agency. –Product publicity. –Public affairs. –Lobbying. –Investor relations. –Development.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Public Relations Role and Impact  Public relations: –May strongly impact public awareness at a lower cost than advertising. –Can yield spectacular results. –Is beginning to play an increasingly important brand-building role. Advertising and PR can work together in unintended ways. Watch this clip to see more! Click on filmstrip icon at left to play video

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Marketing in Action Starting with preview events like the one shown above, Nintendo’s award-winning PR campaign for its new Wii game produced nonstep stock- outs for more than two years.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Major Public Relations Tools  Corporate identity materials  Public service activities  Buzz marketing & social networking  Company Web site  News  Speeches  Special events  Written materials  Audiovisual materials

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall Define the five promotion mix tools for communicating customer value. 2. Discuss the changing communications landscape and the need for integrated marketing communications. 3. Describe and discuss the major decisions involved in developing an advertising program. 4. Explain how companies use public relations to communicate with their publics. Rest Stop: Reviewing the Concepts

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Pearson Education, Inc. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall