Transcript Chapter 12 - Personal homepages

Chapter Twelve
Communicating Customer Value:
Advertising, Sales Promotion, and
Public Relations
Roadmap: Previewing the Concepts
1. Discuss the process and advantages of
integrated marketing communications.
2. Define the five promotion tools and discuss
the factors that must be considered in
shaping the overall promotion mix.
3. Describe and discuss the major decisions
involved in developing an advertising
program.
4. Explain how sales promotion campaigns are
developed and implemented.
5. Explain how companies use public relations
to communicate with their publics.
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Case Study
CP + B: An Unusual Success Story
The Agency
The Tactics
 Has recently won both
multiple creative awards
and several major
advertising accounts.
 Located in South Beach,
FL, far removed from
mainstay agencies on
Madison Avenue in NY.
 Agency philosophy:
“Anything and everything
is an ad.”
 Heavy focus on guerilla
tactics, unconventional
uses of media, and holistic
marketing strategies while
TV is used only sparingly.
 Street level research helps
develop creative appeals.
 Tries to start a consumer
movement behind the
brand, and campaigns go
well beyond advertising.
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The Marketing Communications
(Promotion) Mix
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Advertising
Sales Promotion
Public Relations
Personal Selling
Direct Marketing
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New Communications Realities
 Mass markets have fragmented, leading
to a shift away from mass marketing.
 Improvements in information
technology are speeding movement
toward segmented marketing.
 These factors have shifted the
marketing communications model.
– Less broadcasting
– More narrow casting
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Integrated Marketing
Communications
 Using IMC, the company carefully
integrates and coordinates its many
communication channels to deliver a
clear, consistent, and compelling
message about the organization and its
brands.
– Several factors influence the choice of
promotional tools.
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Advertising
 Can reach masses of geographically
dispersed buyers.
 Can repeat a message many times.
 Is impersonal, one-way communication.
 Can be very costly for some media
types.
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Personal Selling
 Involves personal interaction between
two or more people.
 Most effective tool at building
preferences, convictions and actions.
 Allows relationship building.
 Most expensive promotion tool;
requires long-term commitment.
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Sales Promotion
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Wide assortment of tools.
Attracts consumer attention.
Offers strong incentives to buy.
Invites and rewards quick consumer
response.
 Effects are short-lived.
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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.
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Direct Marketing
 Many forms that share four primary
characteristics:
– Nonpublic
– Immediate
– Customized
– Interactive
 Well suited to highly targeted
marketing.
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Promotion Mix Strategies
 Push Strategy
– Producer directs its marketing activities
toward channel members to induce them
to carry the product and promote it to the
final consumers.
 Pull Strategy
– Producer directs its marketing activities
toward final consumers to induce them to
buy the product.
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Advertising
 Advertising has been used for centuries.
 U.S. advertisers spend more than $264 billion
each year; worldwide spending approaches
$550 billion.
 Advertising is used by:
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Business firms
Nonprofit organizations
Professionals
Social agencies
Government
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Major Advertising Decisions
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Setting advertising objectives
Setting the advertising budget
Developing advertising strategy
Evaluating advertising campaigns
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Setting Advertising Objectives
 Advertising Objective:
– specific communication task to be
accomplished with a specific target
audience during a specific period of time.
 Classified by Purpose:
– Inform
– Persuade
– Compare
– Remind
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Setting the Advertising Budget
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Affordable method
Percentage-of-sales method
Competitive-parity method
Objective-and-task method
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Developing Advertising Strategy
 Consists of two major elements:
– Creating advertising messages
• Message strategy and message execution must
break through the clutter.
– Selecting advertising media
• Set reach, frequency, and impact goals.
• Choose among major media types.
• Select specific media vehicles.
• Decide on media timing.
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The Message Strategy
 Identify customer benefits
 Develop compelling creative concept—
the “Big Idea”
 Advertising appeals should be:
meaningful, believable, and distinctive
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Message Execution
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Slice of Life
Lifestyle
Fantasy
Mood or Image
Musical
Personality
Symbol
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 Technical
Expertise
 Scientific
Evidence
 Testimonial or
Endorsement
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Message Execution
 Choose a tone
 Use memorable, attention-getting
words
 Choose correct format elements
– Illustration
– Headline
– Copy
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Setting Media Objectives
 Reach
– Percentage of people exposed to ad.
 Frequency
– Number of times a person is exposed to
advertisement.
 Media Impact
– The qualitative value of a message
exposure through a given medium.
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Choosing Media Type
 Factors to consider when selecting
media type:
– Medium’s impact
– Message effectiveness
– Cost
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Choosing Media Vehicles
 Media vehicles:
– Specific media within each general media
type
 Factors to consider:
– Cost
– Audience quality
– Audience attention
– Editorial quality
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Deciding on Media Timing
 Must decide 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
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Evaluating Advertising
 Measure the communication effects of
an ad—“Copy Testing”
 Measure the sales effects of an ad
– Is the ad increasing sales?
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Other Advertising
Considerations
 Organization of Ad Function
– Small companies
– Large companies
– Advertising agency
 International Advertising Issues
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Sales Promotion
 Sales promotion consists of short-term
incentives to encourage the purchase
or sales of a product or service.
 The idea behind sales promotion is to
generate immediate sales.
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Rapid Growth of Sales
Promotion
 Sales promotion can take the form of
consumer, business, trade, or sales force
promotions.
 Rapid growth in the industry has been
achieved because:
– Product managers are facing more pressure to
increase their current sales
– Companies face more competition
– Advertising efficiency has declined
– Consumers have become more deal oriented
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Consumer Promotion
 Objectives:
– Increase short-term sales
– Help build long-term market share
 Many tools exist which can help to
achieve these objectives.
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Consumer Sales Promotion
Tools
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Samples
Coupons
Cash refunds
Price packs
Premiums
Advertising
Specialties
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 Patronage rewards
 Point-of-purchase
displays
 Demonstrations
 Contests
 Sweepstakes
 Games
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Trade Promotion
 Objectives:
– Persuade resellers to carry a brand.
– Give a brand shelf space.
– Promote brand in advertising.
– Push brand to customers.
 Tools:
– Discounts, allowances, free goods, push
money, specialty advertising items.
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Business Promotion
 Objectives:
– Generate business leads.
– Stimulate purchases.
– Reward customers.
– Motivate salespeople.
 Tools:
– Conventions, trade shows, sales contests,
and many of the same tools used for
consumer or trade promotions.
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Developing the Sales
Promotion Program
 Decide on the size of the incentive
 Set conditions for participation
 Decide how to promote and distribute
the promotion program
 Decide the length of the program
 Evaluate the program
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Public Relations
 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.
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Public Relations Functions
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Press relations or press agency
Product publicity
Public affairs
Lobbying
Investor relations
Development
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Public Relations Role & Impact
 May strongly impact public awareness
at a lower cost than advertising.
 Results can be spectacular.
 Beginning to play an increasingly
important brand-building role.
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Public Relations Tools
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News
Speeches
Special events
Buzz marketing
Mobile marketing
Written materials
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 Audiovisual
materials
 Corporate identity
materials
 Public service
activities
 Company Web
site
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Rest Stop: Reviewing the Concepts
1. Discuss the process and advantages of
integrated marketing communications.
2. Define the five promotion tools and discuss
the factors that must be considered in
shaping the overall promotion mix.
3. Describe and discuss the major decisions
involved in developing an advertising
program.
4. Explain how sales promotion campaigns are
developed and implemented.
5. Explain how companies use public relations
to communicate with their publics.
Copyright 2007, Prentice Hall, Inc.
12-38