Transcript Promotion and the Internet (cont`d)

Presentation prepared by Robin Roberts, Griffith University and
Mike Spark, Swinburne University
Technology
Copyright Johnof
Wiley
& Sons 2007
Chapter 14
Integrated marketing
communications
Copyright John Wiley & Sons 2007
Chapter Objectives
1. Discuss the nature of integrated marketing
communications
2. Understand the role of promotion in the
marketing mix
3. Describe the process of communication
4. Explain the objectives of promotion
5. Understand the major elements of the
promotion mix
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Chapter Objectives (cont’d)
6. Describe the factors that affect the choice
of promotion mix elements
7. Examine how the Internet affects the
promotion mix
8. Understand the criticisms and defences of
promotion
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What are integrated marketing
communications?
Coordination of promotional efforts for maximum
informational and persuasive impact.
_________________________
• Major Goal of IMC — is to send a consistent
message to customers
• Reasons for acceptance
– Targeted promotional tools (e.g. direct mail)
– Broadly diversified suppliers of advertising
– Increased focus on evaluations and ROI from
upper management
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The role of promotion
Promotion — Communication to build and
maintain relationships by informing
and persuading one or more audiences
To stimulate demand by:
• Building and enhancing customer relationships
• Focusing customers on information about
company activities and products
• Promoting programs that build goodwill (cause
related marketing)
• Sponsoring special events that generate
promotion of an organisation and its brands
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Promoting an Australian Idol
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Critical thinking exercise
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Information flows
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The communication process
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Promotion and the
communication process
Key elements of the communication process:
Communication
– A sharing of meaning; the transmission of
information
Source
– A person, group, or organisation with a
meaning it tries to share with an audience
Receiver
– An individual, group or organisation that
decodes a coded message
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Promotion and the
communication process (cont’d)
Coding process (encoding)
– The converting of meaning into a
series of signs or symbols
Medium of transmission
– The means of carrying the coded
message from the source to the
receiver
Decoding process
– The conversion of signs or symbols
into concepts and ideas
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Promotion and the
communication process (cont’d)
Noise
– Anything which reduces a
communication’s clarity and accuracy
Feedback
– The receiver’s response to a message
Channel Capacity
– The limit on the volume of information a
communication channel can handle
effectively
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Objectives of promotion
• Promotional objectives vary considerably
from one organisation to another and within
organisations over time.
• For the purpose of analysis we can focus on
eight promotional objectives — these eight
are not exhaustive and one or more of these
underlie many promotional programs
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Objectives of promotion (cont’d)
Create awareness
– Crucial to initiating the product adoption
– Assists to recoup R&D costs
– Refreshes interest
Stimulate demand
– Primary demand
– Pioneer promotion
– Selective demand
Encourage product trial
– Fosters consumer evaluation of a
product
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Creating awareness - Carlton Draught’s
‘Big Ad’
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Objectives of promotion (cont’d)
Identify prospects
– Customer-response — generate sales leads
Retain loyal customers
– Rewards from frequent-user programs
Facilitate reseller support
– Increased sales for resellers
Combat competitive promotional efforts
– Efforts to counter competitors promotions
Reduce sales fluctuations
– Attempts to raise sales in off-peak periods
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Retaining loyal customers:
Virgin Blue’s Velocity Program
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Darren Wright, National Marketing Manager — Virgin Blue
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What is the Queensland Cancer Fund’s
likely promotional objective?
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The promotion mix
•
A combination of promotional methods
used to promote a specific product
•
The four possible elements of a
promotion mix are:
1. Advertising
2. Personal Selling
3. Public Relations
4. Sales Promotion
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What promotion methods do you use?
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Neil Paterson, Director of Sales and Marketing — Sofitel Gold Coast
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What promotion methods do you use?
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Bruce White, Director of Marketing — Story Bridge Adventure Climb
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What promotion methods do you use?
Dial-Up
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Darren Wright, National Marketing Manager — Virgin Blue
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The promotion mix (cont’d)
• Advertising — A paid non-personal
communication about an organisation and
its products transmitted to a target audience
through mass media.
• Benefits
– Extremely cost efficient in reaching a
large audience
– Repeatable several times in several
media markets
– Adds value and enhances a firm’s image
• Limitations
– Hard to measure effectiveness
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The promotion mix (cont’d)
• Personal Selling — A paid personal
communication that seeks to inform
customers and persuade them to purchase
products in an exchange situation.
• Benefits
– More specific form of advertising
– Greater impact on consumers
– Provides immediate feedback
• Limitations
– Expensive form of advertising
– Labour intensive and time consuming
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The promotion mix (cont’d)
•
Public Relations — A broad set of
communication efforts used to create and
maintain favourable relationships between
the organisation and its stakeholders.
•
Benefits
– Key resource tool if planned,
implemented and used to support other
elements of the promotional mix
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The promotion mix (cont’d)
•
Sales Promotion — An activity or material
that acts as a direct inducement, offering
added value or incentive for the product,
to resellers, salespeople or consumers.
•
Not to be confused with the larger area of
promotion
Bigger spend on sales promotion than
advertising with this trend increasing over
time
Often used on an irregular basis, many
offers are seasonal
•
•
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Selecting promotion mix elements
•
An effective promotion mix requires the
right combination of components
•
•
Consideration of factors and conditions
Word-of-mouth (WOM) communication
has a strong impact on consumers’
buying proclivities
– Viral advertising
– More effective in some product
markets (e.g. medical and legal)
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Selecting promotion mix elements
(cont’d)
•
Promotion resources, objectives and policies
– A limited promotional budget affects the
number and types of promotion mix
components affordable to a firm
– Promotional objectives and policies
influence the types of promotion selected
•
Characteristics of the Target Market
– Size, geography and demographics help
dictate the choice of elements
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What promotion methods do you use?
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Jason Haynes, Director of Marketing — Quiksilver Australasia
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Selecting promotion mix elements
(cont’d)
•
Characteristics of the product
– B2B promotion mixes focus on
Personal Selling
– B2C promotion utilises Advertising and
Sales Promotion
• The costs and availability of promotional
methods
– National promotions require large
expenditures
– The medium used has to reach the target
market!
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What promotion methods do you use for a
B2B manufacturing product?
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Simon Bottomley, General Manager — HaveStock Manufacturing
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Push and pull channel policies
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Push and pull channel policies (cont’d)
•
Push Policy
– Promoting a product only to the next
institution down the marketing channel.
• Pull Policy
– Promoting a product directly to
consumers to create and develop
stronger consumer demand that pulls
products through the marketing
channel.
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Promotion and the Internet
• The Internet is an interactive medium used
to inform, entertain and persuade.
• Benefits
– Used on its own or in conjunction with other
promotional methods
– Online activity imply interest and dialogue can be
initiated
• Limitations
– Lack of control and increased access can create
segmentation and response problems
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Promotion and the Internet (cont’d)
• Advertising and Publicity
– The most visible elements of the
promotional mix on the web.
– Cross website advertisements via:
• Banners
• Use of keywords
• Buttons
• Pop-ups and Pop-unders
• Sponsorship (advertorials)
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Promotion and the Internet (cont’d)
• Personal selling and sales promotion
– Internet is a key facilitator
– Electronic devices (PDA’s, email,
notebooks) can achieve effective and
efficient communications
– Value adding and buying incentives are
assisting to drive online sales further
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Promotion and the Internet:
The Google advertising model
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Richard Kimber, Managing Director
Google Australia and South East Asia
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Criticisms and defenses of promotion
•
•
•
•
•
Is promotion deceptive?
Does promotion increase prices?
Does promotion create needs?
Does promotion encourage materialism?
Does promotion help customers without
costing too much?
• Should potentially harmful products be
promoted?
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Critical thinking exercise
You are a consultant and have been employed
to advise on a new business. The business
caters for children's themed birthday parties
(e.g. fairy princess and pirate parties)
Questions for discussion
1. Who would be the target market?
2. What competitors should they be concerned
about?
3. Location of the business, what actions would
you recommend to the owners?
4. What types of promotion should they use?
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Which element(s) of the promotion mix
could be effectively used for the
Go for 2 and 5 campaign?
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