Transcript Principles of Marketing

Principles of
Marketing
“ Integrated Marketing
Communications Strategy”
• We have so far studied product, price,
placement, now we are going to concentrate on
the last of the marketing mix tools,
PROMOTION.
• Once a company has developed a good
product, priced it attractively and has made it
available to the customers, the final step is to
COMMUNICATE with current and prospective
customers, henceforth what is communicated
should not be left to chance.
• All the communication efforts should be
blended into a consistent and coordinated
communication program, which is why studying
an integrated marketing communication strategy
is important.
The Marketing Communications Mix:
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The marketing mix consists of product, price, promotion.
The Marketing Communication Mix / promotional mix
consists of:
Advertising – paid form non-personal presentation or
promotion. ( TVC, print, Internet)
Sales promotion – short term incentives to encourage sale
of product. (POP, premiums, discounts)
Public Relation – Building good relations with the various
publics of the company. (press releases, special events)
Personal Selling – Personal presentation by the firm's
sales force. (Sales Presentations, trade shows)
Direct Marketing – Direct connections with carefully
targeted customers based on immediate response.
(catalogs, the Internet)
Integrated Marketing Communication
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Mass markets have fragmented and marketers are
shifting away from mass marketing, they are
developing focused programs designed to make
closer relationships with consumers.
IT is speeding up he move towards segmented
markets
Market fragmentation has resulted in media
fragmentation
Broadcasting has changed to narrow casting
Customers don't distinguish between message
sources the marketers do , in the consumer’s mind
messages form a different media and promotional
approaches all mean a single message, henceforth
conflicting messages from different sources can result
in confused company and brand images.
IMC involves Identifying the target audience, Shaping
a well coordinated marketing program to obtain
desired audience response
Communication Process
Sender
Encoding
Decoding
Receiver
Message
Media
Noise
Feedback
Response
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The two major parties of
communication are the
sender and receiver
The two tools are the
message and the media
The major communication
functions are encoding,
decoding, response and
feedback
Noise is the unwanted static
in the system.
Developing Effective Communications
1. Identify the Target Audience, this will pinpoint as to what will be said, how it will
be said, when it will be said, where it will be said and to whom.
2. Determine the Communications Objectives – This is done to decide what
response must be sought. Buyer Readiness Stages are Awareness, Knowledge,
Liking, Preference, Conviction, Purchase.
3. Designing a Message – Create Attention, Hold Interest , arouse Desire and
Obtain Action ( AIDA model)
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Message Content – Rational, emotional or moral
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Message structure
a) Whether to draw a conclusion or leave it to the audience.
b) Whether to present the strongest argument first or last.
c) Whether to present a one sided argument ( the good side) or two sided
argument ( the good and bad sides of a product)
4. Message format : how the message will be displayed in print, on TV , on the
radio
5. Choosing Media – personal ( where two or more people communicate directly,
word of mouth) or non-personal ( where media that carry messages without
personal contact or feedback, including media , atmospheres, events)
6. Select the Message Source. (celebrities)
7. Collecting Feedback
Setting the Total Promotion Budget
1. Affordable Method: When the budget is set at the level the company thinks
it can afford. One starts with total revenues, deducts operating expenses
and capital costs and then devote some portion of the remaining funds to
advertising.. This method ignores the effect of promotion on sales
2. Percentage of sales method: Setting the promotion budget at a certain
percentage of current or forecasted sales or as a percentage of the unit
sales. This approach views sales as the cause of promotion rather than
the result, henceforth this method is base don availability of resources
rather than on opportunities.
3. Competitive Parity Method: Setting the promotion budget to match
competitor outlays, this is though to be a workable , viable philosophy as
the competitors budget shows the collective wisdom of the industry and
secondly budgeting as much as one’s competitor prevents price wars. But
unfortunately neither is valid.
4. Objective and Task Method: This is the most logical budgeting method
whereby the company sets it budget based on what it wants to accomplish
with promotion; start off with defining specific objectives, determine tasks
needed to achieve with those objectives, estimate costs of performing
these tasks.. The advantage of this method is that it forces management to
spell out its assumptions about the relationship b/w dollars and promotion
Setting the Overall Communication Mix
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Advertising: reaches masses that are
geographically dispersed at a low cost per
exposure and it enables seller to repeat his
message many times. , large sale
advertising says something about the
sellers size, popularity and success, it is a
very expressive tool and helps to build up
a long term image for a product and also
helps to trigger sales. Since its so nonpersonal, it proves to be non-persuasive in
nature and it can prove to be costly ( TV
commercials)
Setting the Overall Communication Mix
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Personal Selling: It is an effective tool
when it comes to building buyer
preferences, convictions, and actions. It
helps to create a deeper interaction
between buyer and seller. The seller is
more receptive here.
Sales Promotion: These attract consumer
attention and offer strong incentives to
purchase, they invite and reward quick
response where as advertising says ‘buy
are product’ sales promotion says ‘buy it
now’
Setting the Overall Communication Mix
 Public Relations: This tool helps to
reach people who otherwise avoid
sales people and advertisements.,
the message gets to buyer as news
rather than as a sales directed
promotion.
 Direct Marketing: This tool is
nonpublic, immediate, customized,
and interactive. It is most useful when
one-to-one relationships want to be
developed.
Promotion Mix Strategies
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Push Strategy : A promotion Strategy that calls for
using the sales force and trade promotion to push
the product through the channels. The producer
promotes the product to wholesalers, the
wholesalers promote to retailers, and the retailers
promote to consumers.
Pull Strategy: A promotion strategy that calls for
spending a lot on adverting and consumer
promotion to build up consumer demand. If the
strategy is successful consumers will ask their
retailers for the product, the retailer will ask the
wholesalers and the wholesalers will ask the
producers.
Integrating the promotion Mix
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Analyze trends, internal and external that can effect the
company’s ability to do business.
Audit the pocket of communications spending through
out the organization.
Identify all contact points for the company and its
brands
Team up in communications planning
Create compatible themes, tones and quality across all
communications media
Create performance measures that are shared by all
communications elements
Appoint a director responsible for the company's
persuasive communications efforts