Transcript Market-Based Management

Market-Based
Management, 4th
edition
Marketing Communications
and Customer Response
Chapter Ten
Marketing Communications
and Customer Response
Chapter Ten
– Marketing Communications
• Awareness
• Frequency
• Effectiveness
– Communications Strategies
– Measuring Marketing Communications Effects
10-2
Marketing Communications
• What is the role of Marketing
Communications?
1. To Build Awareness
2. To Maintain Awareness
3. To Stimulate Action
• What is the Objective of Marketing
Communications?
– Communicate effectively to target customers
10-3
Advertising Awareness and
Message Frequency
10-4
Advertising Effectiveness and
Customer Response
10-5
Causes of Poor Customer
Response
• Low Levels of Ad Exposure
– Poor media selection and/or limited media exposure
• Low Levels of Ad Awareness
– Insufficient ad frequency and/or ineffective ad content
• Low Levels of Ad Content Comprehension
– Insufficient ad frequency and or ineffective ad content
• Low Intensions to Take Desired Actions
– Insufficient ad frequency and/or weak value proposition
• Low Levels of Desired Action
– Insufficient ad frequency and/or action not clearly specified
10-6
Building Customer Awareness
and Comprehension
• Media Selection and
Customer Awareness
– Target Market Reach
• Message Frequency
and Customer
Awareness
– Concentrated vs.
Distributed
– Gross Rating Points
• Ad Copy and
Customer Response
10-7
Message Reinforcement
Pulsing Vs. Heavy-Up
10-8
Push vs. Pull Communications
Strategies
10-9
Advertising Elasticity
• Advertising Elasticity
% Change in Sales
% Change in Ad Expense
• Estimating Advertising Elasticity
.4 Advertising Elasticity Means?
• Promotional Price Elasticity
-1.5 (Normal Elasticity) vs. -6.0 (Price Promotion)
10-10
Advertising Carryover Effects
10-11
Direct Marketing Promotions
10-12
Takeaways/Review
• Role and Objectives of Marketing
Communications
• Advertising Awareness, Frequency, and
Response
• Building Awareness
• Reasons for Poor Awareness
• Message Reinforcement
• Push vs. Pull Strategies
• Advertising Elasticity
• Carryover Effects
• Direct Marketing Promotions
10-13
Marketing Performance
Tools
Estimating Ad Effectiveness and Customer Response
Take Action
90%
16.0%
Intend to Act
68%
Comprehend
77%
Awareness
54%
Exposure
No Action
10%
1.8%
No Intension
32%
8.4%
Not Comprehend
23%
7.8%
63%
No Awarness
46%
29.0%
No Exposure
37%
37.0%
100%
10-14
Marketing Performance
Tools
Estimating Advertising Elasticity
Sales Revenue
Perform ance
Advertising Expense
Perform ance
Adertising
Elasiticy
Before Advertising
$200,000
Before Advertising
$10,000
After Advertising
$220,000
After Advertising
$15,000
% Change in Sales
10.0%
% Change in Advertising
50.0%
0.20
10-15
Marketing Performance
Tools
Estimating Advertising Carry-Over Sales Effect
Advertising Period
0
1
2
Advertising Expense
$10,000
$15,000
$10,000
$195,000
$200,000
$205,000
With Ad Spending Increase
$220,000
$210,000
Incremental Sales
$20,000
$5,000
Sales Performance
Without Ad Spending Increase
Estimated Carryover Effect
0.25
Total Incremental Sales
$26,667
Carryover Sales (after period 1)
$6,667
10-16