Old and New Media: From One-to-Many to Many-to-Many Chapter Twelve © 2012 Pearson Education, Inc. publishing as Prentice-Hall.

12-2 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Chapter Objectives  Understand the communication process and the traditional promotion mix  Understand how marketers communicate using an updated communication model that incorporates buzz marketing activities and new social media  Describe the steps in traditional and multichannel promotional planning

12-3 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Time at Campfire  Should Campfire expand its staff and operations to become the digital AOR for their new client? Option 1: Yes, become the digital AOR and hire new people capable of delivering digital offerings Option 1: Yes, become the digital AOR and hire new people capable of delivering digital offerings Option 2: Partner with a smaller more traditional agency and split the work as necessary to handle the clients needs Option 2: Partner with a smaller more traditional agency and split the work as necessary to handle the clients needs Option 3: Walk away and decline the offer Option 3: Walk away and decline the offer

12-4 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Traditional Communication Model: One-to-Many  Promotion The coordination of marketing communication efforts to influence attitudes or behavior  Marketing communications purposes include the following: Inform Inform Remind Remind Persuade Persuade Build relationships Build relationships

12-5 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Traditional Communication Model: One-to-Many  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 Touchpoints are varied Touchpoints are varied A multichannel promotional strategy is needed A multichannel promotional strategy is needed

12-6 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Traditional Communication Model: One-to-Many  Three models of marketing communication include: One-to-many model One-to-many model  Relies on traditional forms of mass communication One-to-one model One-to-one model  Database marketing, direct marketing, personal selling are key Many-to-many model Many-to-many model  Uses buzz building and social media

12-7 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Communication Model  The communication model explains how organizations create and transmit messages  Elements of the model include: Source: Firm or person sending a message Source: Firm or person sending a message Encoding: Transmitting an idea into a form of communication that conveys meaning Encoding: Transmitting an idea into a form of communication that conveys meaning Message: Communication in physical form that goes from a sender to a receiver Message: Communication in physical form that goes from a sender to a receiver Medium: Communication vehicle through which a message is transmitted Medium: Communication vehicle through which a message is transmitted

12-8 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Communication Model  Elements of the model (cont.): Receiver: Individual or organization that intercepts and interprets the message Receiver: Individual or organization that intercepts and interprets the message Decoding: Process whereby a receiver assigns meaning to a message Decoding: Process whereby a receiver assigns meaning to a message Noise: Anything that interferes with effective communication Noise: Anything that interferes with effective communication Feedback: Receiver’s reactions to the message Feedback: Receiver’s reactions to the message

12-9 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Traditional Promotion Mix  Promotion mix: The major communication elements that the marketer controls Advertising Advertising Sales promotion Sales promotion Public relations Public relations Personal selling Personal selling Direct marketing Direct marketing

12-10 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Mass Communication  Advertising: Nonpersonal communication from an identified sponsor using mass media Provides marketers with total control Provides marketers with total control Rich and dynamic advertising images can help to build or reinforce brand image Rich and dynamic advertising images can help to build or reinforce brand image May provide factual information or offer reminders to consumers May provide factual information or offer reminders to consumers Lacks credibility with cynical consumers Lacks credibility with cynical consumers Extremely expensive Extremely expensive

12-11 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Mass Communication  Sales promotion: Contests, coupons, and other incentives designed to build interest or encourage product purchase during a specified period Provides retailers with incentives to support a brand Provides retailers with incentives to support a brand Builds retailer and consumer excitement Builds retailer and consumer excitement Encourages immediate purchase and trial Encourages immediate purchase and trial Reaches price-sensitive consumers Reaches price-sensitive consumers Does not focus on building brand loyalty Does not focus on building brand loyalty Promotional clutter is hard to break through Promotional clutter is hard to break through

12-12 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Mass Communication  Public relations: Communication activities that create or maintain a positive image of a firm and its products Relatively low cost Relatively low cost Highly credible Highly credible Poor message control; no guarantee that message will even reach the target Poor message control; no guarantee that message will even reach the target Difficult to track the effectiveness of results Difficult to track the effectiveness of results

12-13 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Personal Communication  Personal selling: Direct interaction between a company representative and a customer Flexible; salespeople can modify the message to match customer needs Flexible; salespeople can modify the message to match customer needs Provides immediate feedback Provides immediate feedback High cost per contact High cost per contact Difficult to ensure message consistency between different salespeople Difficult to ensure message consistency between different salespeople Salesperson credibility is linked to firm image Salesperson credibility is linked to firm image

12-14 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Personal Communication  Direct marketing: Efforts to gain a direct response from individual consumers Easily target specific customers with different offers Easily target specific customers with different offers Easily measure results Easily measure results Can provide extensive information and multiple offers with a single appeal Can provide extensive information and multiple offers with a single appeal Facilitates database information collection Facilitates database information collection Consumers dislike some direct marketing Consumers dislike some direct marketing Higher cost per contact than mass appeals Higher cost per contact than mass appeals

12-15 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. The Updated Communication Model: Many-to-Many  Groundswell A social trend in which people use technology to get the things they need from each other, rather than from traditional institutions such as corporations  The many-to-many communication model relies on consumers talking to one another  Buzz marketing is key  Technology magnifies the impact of buzz marketing

12-16 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Ethical Problems in Buzz Marketing  Activities designed to deceive consumers  Buzz marketing targeted a kids or teens  Buzz marketing that damages property  Stealth marketing activities that deliberately deceive or lie on behalf of clients

12-17 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Buzz Marketing  Viral marketing: Marketing activities that aim to increase brand awareness or sales by consumers passing a message along to other consumers Marketing activities that aim to increase brand awareness or sales by consumers passing a message along to other consumers  Brand ambassadors and evangelists: Loyal customers of a brand recruited to communicate and be salespeople with other consumers for a brand they care a great deal about Loyal customers of a brand recruited to communicate and be salespeople with other consumers for a brand they care a great deal about

12-18 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. New Social Media  Social media Internet-based platforms that allow users to create their own content and share it with others who access these sites An important part of the Updated communication model An important part of the Updated communication model Takes many forms Takes many forms

12-19 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. New Social Media  Social networking sites connect people with similar people based on profiles  Opportunities for marketers include: Influencing journalists and opinion leaders Influencing journalists and opinion leaders Creating brand communities Creating brand communities  Key social networking sites Facebook Facebook Twitter Twitter

12-20 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. New Social Media  Virtual worlds Online, highly engaging digital environments where avatars live and interact with other avatars in real time Virtual goods are a booming industry Virtual goods are a booming industry Virtual worlds are also marketplaces Virtual worlds are also marketplaces Marketers use virtual worlds for Marketers use virtual worlds for  Building customer relationships  Improving the brand image

12-21 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. New Social Media  Product review sites Social media sites that enable people to post stories about their experiences with products and services Marketers seek to create a connection between consumers and the brand Marketers seek to create a connection between consumers and the brand Both positive and negative information is available Both positive and negative information is available

12-22 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. New Social Media  Mobile apps and geospatial platforms Digital applications that integrate sophisticated GPS technology to enable users to alert friends of their exact whereabouts via their mobile phones Foursquare is a popular site Foursquare is a popular site Marketers can reach customers on the go to increase sales Marketers can reach customers on the go to increase sales

12-23 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Promotional Planning in a Web 2.0 World  Step 1: Identify target audiences  Step 2: Establish the communication objectives to achieve the following objectives: Create awareness Create awareness Inform the market Inform the market Create desire Create desire Encourage purchase and trial Encourage purchase and trial Build loyalty Build loyalty

12-24 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Promotional Planning in a Web 2.0 World Promotional Planning in a Web 2.0 World  Step 3: Determine and allocate the marketing communication budget Determine the total promotion budget Determine the total promotion budget Use one the following: Use one the following:  Top-down budgeting techniques  Percentage-of-sales  Competitive-parity  Bottom-up budgeting techniques  Objective-task method

12-25 © 2012 Pearson Education, Inc. publishing as Prentice-Hall.  Step 3: Determine and allocate the marketing communication budget Decide on a push or pull strategy Decide on a push or pull strategy  Push strategy  Pull strategy Allocate spending to specific promotion activities Allocate spending to specific promotion activities Promotional Planning in a Web 2.0 World Promotional Planning in a Web 2.0 World

12-26 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Promotional Planning in a Web 2.0 World  Step 4: Design the promotion mix Involves determining the: Involves determining the:  Specific promotional tools to be used  Message to be communicated  Communication channel Message communication goals: Message communication goals:  Attention, interest, desire, and action (AIDA model)

12-27 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Promotional Planning in a Web 2.0 World  Step 5: Evaluate the effectiveness of the communication program Are communication objectives adequately translated into marketing communication that is reaching the right target market? Are communication objectives adequately translated into marketing communication that is reaching the right target market? Some activities (sales promotions) are easier to evaluate than others (public relations) Some activities (sales promotions) are easier to evaluate than others (public relations)

12-28 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Multichannel Promotional Strategies  Multichannel promotional strategies: Combine traditional mass media with online buzz building activities Combine traditional mass media with online buzz building activities Offer important benefits: Offer important benefits:  Boost effectiveness of using either online or offline strategies alone  Strengthen brand awareness

12-29 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Made at Campfire  Mike chose option 3 Why do you think Mike and his partners declined to become the agent of record for the potential client? Why do you think Mike and his partners declined to become the agent of record for the potential client?

12-30 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Keeping It Real: Fast-Forward to Next Class Decision Time at Brownstein Group Brand Communication  Meet Marc Brownstein, President and CEO of Brownstein Group Brand Communication  The agency is an innovator in digital advertising and social media  The decision to be made: How should the agency respond to competitive attacks against a clients new product?

12-31 © 2012 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