Transcript Communicating Customer Value

CHAPTER 12
Communicating
Customer Value:
Advertising, Sales
Promotion, and Public
Relations
Roadmap: Previewing the Concepts
 Discuss the process and advantages of
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integrated marketing communications.
Define the five promotion tools and discuss the
factors that must be considered in shaping the
overall promotion mix.
Describe and discuss the major decisions
involved in developing an advertising program.
Explain how sales promotion campaigns are
developed and implemented.
Explain how companies use public relations to
communicate with their publics.
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CP + B – An Unusual Success Story
The Agency
 Has recently won both
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
multiple creative awards
and several major
advertising accounts.
Located in South Beach,
FL, far removed from
mainstay agencies on
Madison Avenue in NYC.
Agency philosophy:
“Anything and everything
is an ad.”
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The Tactics
 Heavy focus on guerilla
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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
Sales
Promotion
Public
Relations
Advertising
Direct
Marketing
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Personal
Selling
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Changing Communications
Landscape
 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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Figure 12-1
Integrated Marketing Communications
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Integrated Marketing Communications
 Begins by recognizing
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
all contact points where
the customer may
encounter the company
or its brand.
Seeks to deliver a clear
and positive message
via each contact.
Ties together messages
and images in
consistent fashion.
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 Target audience(s)


must be identified.
Creates an integrated
communication
program which focuses
on encouraging
behavioral responses.
Helps the firm to
manage customer
relationships over time.
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Advertising
 Can reach masses of
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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
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interaction between
two or more people.
Allows relationship
building.
Most effective way
for preferences,
convictions, and actions to be influenced.
Most expensive promotion tool; requires
long-term commitment.
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Sales Promotion
 Wide assortment of
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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
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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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Direct mail is one form of
direct marketing.
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Figure 12-2
Push Vs. Pull Promotion Strategy
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Figure 12-3
Major Decisions in Advertising
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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
– Remind
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Marketing in Action
Fulfilling Objectives
Outdoor advertising (billboard, transit, etc.) is
often used for reminder purposes. Print ads can
fulfill this objective as well.
Which of the ads above is/are attempting to remind
consumers, versus inform or persuade?
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Setting the Advertising Budget
 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 & 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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Video Snippet
Angela Talley of DDB
Worldwide explains how
advertising people learn
to think like consumers
when developing the
message strategy.
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Message Execution
 Slice of Life
 Lifestyle
 Fantasy
 Mood or Image
 Musical
 Personality
 Technical
Expertise
 Scientific
Evidence
 Testimonial or
Endorsement
Symbol
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Marketing in Action
Celebrity Endorsements
www.whymilk.com
Celebrity endorsements have been at the heart of
the “ Got Milk?” milk mustache campaign for years.
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Marketing in Action
Humorous Advertising Appeals
Humorous advertising tones are being used in the
marketing of many products, including dictionaries.
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Message Execution
 Choose a tone.
 Use memorable,

attention-getting
words.
Choose correct format
elements.
– Illustration
– Headline
– Copy
www.absolutad.com/
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Absolut print ads attract
attention through choice of
illustration and headline.
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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 & Vehicles
 Media Type:
– consider the medium’s impact, message
effectiveness, and cost.
 Media Vehicles:
– Specific media within
each general media type
 Factors to Consider:
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–
–
–
Cost
Audience quality
Audience attention
Editorial quality
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Marketing in Action
Alternative Media
Can you
think of
any other
examples?
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Let’s Talk!
The Summit Combo unit offers the
convenience of a refrigerator, freezer,
and microwave combined into a
single, compact, energy-efficient unit.
The product is targeted towards
people in college residence halls,
assisted-living facilities, government
offices, and business offices.
What media categories and vehicles
would you use to reach these
targets? Can you think of some
alternative media that might be useful
as well?
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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
 Advertising accountability is becoming

increasingly important to firms.
Evaluating advertising effectiveness
involves:
– Measuring the communication effects of an ad—
“Copy Testing”
 Is the proper message being communicated?
– Measuring the sales and profit 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
– Standardization vs.
adaptation.
– Costs and media
availability vary by
An example of
country.
standardized advertising
– Advertising practices
are regulated differently in each country.
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Sales Promotion
Sales promotion consists of shortterm incentives to encourage the
purchase of sales of a product or
service.
The idea behind sales promotion is to
generate immediate sales.
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Marketing in Action
Pull-Oriented Sales Promotions
Pull-oriented sales
promotions are those that
target the ultimate
consumer and encourage
consumers to prefer a
particular brand to
competitive offerings.
Contests and coupons are
two examples of pulloriented sales promotions.
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Rapid Growth of Sales Promotion
 Sales promotion can take the form of
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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
 Objectives for Consumer
Sales Promotions:
– Increase short-term sales.
– Help build long-term
customer relationships.
 Many tools exist that can
help in accomplishing
these objectives.
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Consumer Sales Promotion Tools
 Coupons: provide a
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
discount off the
purchase price of the
product when
redeemed.
Cash Refunds: offer
a refund of part of the
purchase price after the
item has been bought.
Price Packs: offer
savings off the regular
price of the product;
marked on the package.
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 Samples: offer a trial

amount of the product.
Premiums: goods
offered for free or at a
low price as an
incentive to buy.
 Advertising
Specialties: useful
items imprinted with
the name or logo of the
advertiser which are
given as gifts to
consumers.
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Consumer Sales Promotion Tools
 Patronage Rewards:  Contests: entries are
cash or other awards
offered for regular use
of a brand.
 POP Displays:
include signs and
displays that exist at
the point-of-sale.
 Demonstrations:
food or product in-store
sampling.
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judged by a panel who
selects the winner.
 Sweepstakes: names
are submitted for a
random drawing.
 Games: game pieces
are given for each
purchase. Some win
instantly; others must
fit a game pattern.
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Let’s Talk!
Point-of-purchase
displays can draw
attention to the
brand and stimulate
impulse buys.
Why do you think
many retailers resist
using POP displays?
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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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Marketing in Action
Trade Shows
The International Consumer Electronics trade show
attracts over 20,000 exhibitors and over 130,000 visitors.
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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.
 Public Relations Functions:
– Includes press relations or press agency,
product publicity, public affairs, lobbying,
investor relations and development.
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Public Relations Tools
 News
 Audiovisual
materials
 Speeches
 Corporate
 Special events
identity
materials
 Buzz marketing

Public
service
 Mobile marketing
activities
 Written materials
 Company Web
site
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Marketing in Action
Public Relations
Scholastic sponsored low-cost sleepovers, games,
and costume contests which effectively promoted
the release of the sixth Harry Potter book.
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Rest Area: Reviewing the Concepts
 Define the three steps of target marketing:
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market segmentation, market targeting, and
market positioning.
List and discuss the major bases for
segmenting consumer and business markets.
Explain how companies identify attractive
market segments and choose a target
marketing strategy.
Discuss how companies position their products
for maximum competitive advantage in the
marketplace.
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