Transcript Marketing343 - University of Alaska system

Marketing Channel Management
Price
Product
Target
&
Position
Place
Promo
Distribution
Channels
Media
Channels
SMC
IMC
thru
Supply Chain Management
thru
Integrated Marketing
Communication
The Changing Worlds of
Distribution & Promotion
Channel Integration
Supply Chain Mgt-
Shared
Info replaces inventory
Integrated Marketing
Communication
Developing Creative &
Media Strategy
The “New” Media &
Advertising-Promotional
techniques…
Changing World of Distribution
Old World
Marketer’s distribution
decisions not extend
much beyond level of
intensity(Convenience, Selective
or Exclusive)
Levels of
distribution
intensity
Mfgr. Channel Strategy
Exclusive Distribution
When mfgr. restricts
distribution to single/ select
few retailer(s)
Specialty Products
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Expensive
Infrequently purchased
Sought after by consumers
Require considerable aftersale servicing
Levels of
distribution
intensity
Mfgr. Channel Strategy
Selective Distribution
Product available in
multiple retail outlets
Shopping goods
Buy less frequently
 High-Mod. price
 Comparison shop
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i.e Clothing, appliances
Levels of
distribution
intensity
Mfgr. Channel Strategy
Intensive Distribution
Convenience products
- sold thru virtually every available
retail outlet in a particular market
Buy frequently, immediately
 Low priced
 Mass advertising
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 i.e Candy, soda, newspapers- anything in a
convenience store
Changing World of Distribution
Old World
Independent Middlemen
New World
Supply Chain Team
Separate functions
handled by separate
businesses
Integrate all members
of SC thru shared
info- system
Focus only on your
link in the chain
Coordinate supplyproductiontransportation &
Distribution
Changing World of Promotion
Old World
New World
Mass Media &
Mass Middlemen
Integrated Marketing
Communication
Communication
Separate
functions
Dominated
Advertising
handled byby“experts”
in
& Ad Agencies
separate
departments
Integrate all channels of
promotional mix under
one strategic umbrella
Focus on
Focus
on mass
massmedia
media
Mass media advertising
serves supportive role in
overall Marketing
Communications effort
SCM & IMC
Getting
the Right
Things
to the Right Places
at the Right Times
w/ Minimum cost &
Maximum levels of
Customer service
 Getting
the Right
Messages
 to the Right people
 at the Right Times
 w/ Minimum waste
& Maximum effect
Product & Message
Distribution Commonalities
To get Product out:

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Effective Communication w/
distributors
Effective Distribution Channel
strategy & mgt.
To get the Message out:
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Effective Communication w/
consumers
Effective Media Channel strategy
& mgt.
Advertising
Webvertising
Direct
Marketing
In
Sync
Public
Relations
Events &
Sponsorships
Packaging
Sales
Promotion
Personal
Selling
Manufacturers
Transporters
In
Sync
Distributors
Shippers
Warehouses
Suppliers
Retailers
Supply
chain
team
Logistics information system
Free & Immediate movement of Information
up & down supply chain
Sourcing & procurement
Production scheduling
Order processing
Inventory control
Warehouse & materials handling
Transportation
Information Distortions and
the “Bullwhip Effect
Sales rate volatility
Production rate volatility
The “Bullwhip Effect”
1200
Customer
Demand
900
600
300
0
4
8
12
16
20
24
Mo.
1200
Retailer Orders
To Distributor
900
600
300
4
8
12 chain
16
20
24
Mo.
Inventory is insurance0 against
supply
uncertainties
1200
Distributor
Orders
To Manufacturer
900
600
300
0
4
8
12
16
20
24
Mo.
Supply chain management substitutes
information for inventory
Standard Deviation, 10-yr Moving Average
20%
Production Growth Volatility
18%
16%
14%
12%
10%
Sales Growth Volatility
8%
6%
'68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04
Logistics Costs Continue to Fall
Costs as a percent of GDP
16
14
Total Logistics Costs
12
10
8
Transportation Costs
6
4
Inventory Carrying Costs
2
'81
'83
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
Wireless/Mobile IMS
Key Point: Distribution
functions can be
improved w/ INFOintegration (“compunication”,
Scanning & RFID technologies)
 Receiving
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Product storage/
“putaways”
Order Fulfillment/ “Picks”
Inventory
Shipping
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Increased productivity
Increased accuracy
Increased space
efficiencies –
Better customer
service=satisfaction–
order processing time
& effort;
Better (fresher)
product shipped; Less
damage
Integrated Marketing
Communications
Wherein a
Company
Integrates &
Coordinates all
its
Communications
Co-ordinate, Synthesize, Orchestrate all
Marketing Communications…
Mass
Media
campaign strategy
Creative
Concept
PR
Cust.
Service
Execution of single strategy
& concept across all
communication channels
In-store
New
Media
Broader Perspective of
Promotion
Conceptualize
IMC in terms of
“All
Contacts”
between
customer &
brand
Integrated Marketing
Communication
More
Continuous
Maximum
Impact!
More
Consistent
More Impact
IMC helps Cut Thru Message Clutter
IMC
Strategy
More Continuity & Impact
Integrate Comm. Across Time & Channels
High
Personal selling
Importance
Sales promotion
Advertising
Low
Pre-purchase
Purchase
Post-purchase
Stage of consumer’s purchase decision
“IMC
Simple in
Concept
Need only
1. Have something
interesting &
compelling to say
2. Have an effective
means of reaching
logical prospects
Developing IMC Campaigns
Need only
1. Have something
interesting &
compelling to say
2. Have an effective
means of reaching
logical prospects
(Media Strategy)
Creative Strategy
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Campaign
Concept- “the
big idea”
Message
Executionstyle & format
Can’t be pulled out of a hat …
…nor from of a book
The Creative Work-plan
The Situation
The Target
The Product
The Message
Developing the Communication
Campaign Concept
Suits--
“Its not creative
unless it sells”
Director of Marketing
Brand Manager
Ad Agency AE
Creative Director
Copy Chief
Copywriter
Art Director
Poets–
Artistic; value
entertainment &
originality
Artist
The Situation
 Key
fact- major problem /
opportunity to emerge from
sit. analysis
 Marketing
Goals- sales,
votes, memberships…
 Advertising
Goalscommunication based
The Target

Prospect Definitionall relevant descriptors

Key Dimensionsmost relevant
descriptors
The Product
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Benefits & Attributesreal, imagined, inuse,result-use, social,
psycho…
Competition— what/how
are they selling
Position- in consumer’s
evoked set

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-
The Message

Concept- “The Big Idea”
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Promise / USP — what
“really” offering

Support- words, facts,
reasons, images backingup promise

Slogo- visual/verbal ID
We’re ready to go when you are…
That’s why
We’re #1 in
the #2
Business
Johnny-on the Spot
Having developed WHAT your going to
say– next decide HOW to say it
User-Testimonial
Scientific/Technical
Expert
Animated-Personality
Unique Character, Image,
Persona—that
represents
Celebrity Endorsement
the Brand—
(Leo Burnett School:
Slice of Life
 Tony the Tiger
 The Keebler Elf
FORMATS
Fantasy
 Jolly Green Giant
 Charlie the Tuna
 Morris the CatDemonstration
Music Video
Creative Brief
Del Monte
• The Objective – Increase
awareness of the smaller-size
cans with pull-top lid.
• Target Audience – senior
citizens, especially those that
live alone and suffer from
arthritis.
• Message Theme – The new
cans not only contain a smaller
portion but are easier to open.
• Support – 30 cent introductory
coupon to encourage usage.
• Constraints – copyright logo,
toll free number, website
address, legal requirements of a
The message theme of
this milk advertisement
was that milk will provide
calcium. The calcium will
provide the customer
with benefit of strong
bones.
Humor
Humor
Evaluating Campaign
Two Measures
of Success
Demonstrates
process
of Communication
Testing
Communication Effects
Sales Effects
What makes message
Effective
Tell A Story
The Ultimate Evaluative Criteria:
You Know you have
succeeded when:
 You
get people to buy
things they don’t need…
 With money they don’t
have…
 To impress people they
don’t like!
Developing Marketing
Communication Campaigns

Creative strategy
– Campaign Concept
& Execution

Media Channel
strategy
– Media Planning
Basic Media Decisions
1. Deciding
on
Message Weight:
Reach, Frequency,
Continuity & Budget
& Message WeightGRP’s & CPM
2. Choosing Media
Channels &
Vehicles
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
What % of
market –
target sees
-reads,
hearsMessage
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
How often
target
audience
exposed
to
message
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
When are
the best
times to
reach the
target
audience?
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
-Spend
1.What can afford
2.% of sales
3.What need to
spend to achieve
certain level R&F
4.What
competitors
spending
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
(Message Weight)
Gross Rating
Points=
Reach x
Frequency
Media-Plan Metrics
Reach
Frequency
Continuity
Cost
GRP
CPM
Cost- Per Thousand
Cost * (x1000)
(Audience size)
Statistic allows
comparison of
cost efficiency of
different media
vehicles
Basic Media Decisions
1. Deciding
on Message
Weight: Reach, Frequency,
Continuity & Budget &
Message Weight- GRP’s &
CPM
2. Choosing Media Channels
& Vehicles
Established Channels & Methods
There’s an old adage …
“Half of my $ spent on
advertising is wastedThe only question is
what half?”

w/ U.S. advertisers spending $200+
billion each year & Worldwide
spending exceeding $400+
billion…that’s a lot a $$$$$
And it could be getting
a whole lot worse…
The “old & established” methods
of promotion ain’t what they
used to be….
“Mass reach” is
giving way to a
world of niches…
• Everybody has multi comm devices
& consume what they want - when
they want - where they want
Agents of Change are Everywhere:
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DVRs , PDA’s & Smart- phones
Wireless hot spots
“Branded entertainment”
Word-of-mouth, viral marketing
Podcasts, online video
Pervasive usage of GPS
assisted content delivery
Rapid deployment of
addressable advertising
technology
The media universe has
shattered
mfgrs. are losing their
simple connection to
the consumer...
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In 1995 it took 3 TV
commercials to reach 80% of
18- to 49-year-old women.
Today- takes > 10 times #
Ads to reach the same group.
Even if could reach w/ 1 ad….
…effectiveness is
questionable
Given increased consumer
resistance to and
skepticism of advertising
AdsAdult
no evening
longerTVsecure
customer
attention
viewers able
to name, without
prompting, a brand or product advertised in show just
seen
Source: Newspaper Association of America, Cabletelevision Advertising Bureau, and Nielsen Media Research
don’t TRUST!
believe that
Beware of 76%
eroding
companies tell the truth
in advertisements
--Yankelovich, 2005
Consumer trust in advertising has
plunged 41% over the past three years
Only 10% of consumers say they
“trust” ads today
20th Cent. Media Business
Model on Its Last Legs!
“Emerging digital technologies are
wresting power from the hands
of the content provider and
placing it with the consumer,
forever changing the traditional
paid-media advertising model”
_____________
“Madison Ave. melds pitches and content,”
Advertising Age ; Chicago; Oct 7, 2002; Hank Kim
The DVR: consumers control
programming, content & time
• From 2000 –
to date—
The % of
HH’s w/
DVR’s
gone from
0% to 40%
(projected -2008)
Marketing Professionals Vary in Awareness
The Rush to Second Life
23%
39%
49%
“SAW IT
COMING”
50%
54%
58%
65%
75%
77%
80%
86%
The Rise of YouTube
61%
Popularization of “Mash-ups”
51%
50%
Newspapers Moving to Tabloid Format
52% Issue-Specific Print Audience Measures 48%
53%
77%
47%
TV Commercial Rating System
46%
Growth of Free Daily Newspapers
42%
Restructuring of Traditional Media
Explosion of Consumer Content
35%
Emergence of Podcasting
25%
Social Media in Communication Plans
Mass Adoption of Text Messaging
TV Programs on the Internet
Media Investment Survey 2007
23%
20%
14%
“TOOK ME
BY
SURPRISE”
New Communication technology
has & continues to alter
Consumer preferences &
patterns of media consumption
And as a consequence- has & will
continue to
render long established business
methods & models obsolete!
Mass Media Out - Mass Channel In
It's the Mass Channel…Not the
Mass Media that is attracting bulk of
marketing dollars
 10
biggest Mega-Retailers: account for
~ 80% of mfgrs biz vs. ~ 30% decade ago
 ~ 60% of mfgrs' marketing $$ go to
retailers compared with 36% two
decades ago
PUSH STRATEGY
Manufacturer
promotes to
wholesaler
Wholesaler
promotes to
retailer
Retailer
promotes to
consumer
Consumer
buys from
retailer
Orders to manufacturer
PULL STRATEGY
Manufacturer
promotes to
consumer
Consumer
demands
product
from retailer
Retailer
demands
product
from wholesaler
Orders to manufacturer
Wholesaler
demands
product from
manufacturer
Thus Increased importance of Packaging
 Protection
Containment, storage,
recycling

Information
Ingredients, UPC,
Instructions,

Promotion
Readily noticed &
recognized (Brand ID)
Facilitate, use &
convenience
Changing World of Marketing Communication
Old World
New World
“Talking At” Consumers
Two-way
Two-wayDialogue
DialogueWith
W/
Consumers
Consumers
Focus on Winning New
Customers
Focus
Focus on
- Building
Building Long
Long
Term
Term Relationships
RelationshipsWith
W/
Consumers
Consumers
Marketers Relied
Primarily on Advertising
and Promotions
Marketers Use &
Coordinate Many
Different Forms of
Communication
Mass Marketing
One-to-Many
Many-to-Many
Social Network Marketing
Your network of
friends/associates
One-to-One
W3 Marketing
Their network of
friends/associates
IMC- Integrating the Buzz w/ other Marketing Comm. Vehicles
The New (and not so new) WOM
Marketing Techniques
• Buzz Marketing
• Brand Blogging
• CGM- Consumer Generated Media
• Product Placement
• Viral Marketing
• Stealth Marketing
• Guerilla Marketing
• Conversation Marketing
• Grassroots Marketing
• Evangelist Marketing
• Referral Marketing
• Influencer Marketing
• 2Step Flow Marketing
• Many-to Many
Viral Marketing
Creating
entertaining / infotaining messages
designed to be
passed along …
Example:
Go Elf Yourself- Stats
Radian6
http://www.tremor.com/
•250,000+ teen Connectors
screened & opted in
http://www.bzzagent.com/
80,000 members
Cost: 1,000 agents -12
weeks ~$100K
BUZZ
Marketing:
Using high
Profile
entertainment
or news to get
people talking
about your
product
Halo : WOM Campaign
Buzz Generator= On-line- Community
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interactive-immersive mystery story that
allowed advance play of Halo2
600,000 full-time players
2.3 million participants
1million+ blog posts
Media coverage w/ CNN, USA Today,
NYT, etc.
= $125 million opening day salesbiggest opening day revenue in
entertainment history

Halo3=$170M vs. &151M
Spiderman
Evangelist
Marketing
Cultivating advocates
volunteers who will
take a leadership role
in actively spreading
the good word about
your product/service
Video - ClipList

V-8 Communication Test
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Top Ten Super Bowl Ads 2009 –
Best SB ad all time- Herding cats
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