Transcript Marketing communications

Prof. Dr. Beril Akıncı VURAL
Integrateg Marketing Communication
Value-added is an accounting process which involves
horizontal analysis of the industry a firm is in, along
with a vertical study of the overall distribution
chains to see where value can be improved and
competitive advantage gained by strategic
repositioning or sales reconfiguration.
Another important technique which overlaps
with public relations is market segmentation.
Market segmentation is ‘the process of
identifying groups of customers with highly
similar buying needs and motives within the
relevant market’.
Segments are formed by identifying response
differences between segments.
They can be clearly described and reached,
and are worthwhile,
They are stable over time, so marketing
programmes can fix costs to be acceptable.
An integrated marketing communication (IMC) mix model
Communication theory is grounded in models of
perception.
Thus, another tool that is increasingly popular is the
use of perceptual mapping, where consumer
perceptions of product attributes can be analysed
psychologically.
COMPETITIVE ADVANTAGE
Perhaps the most popular competitive advantage
theory of the past 15 years has been Porter’s (1985)
five competitive forces in determining industry
profitability.
Perceptual mapping is a technique
which identifies gaps in the market to
see if there is scope for a new product ,or
to plan branding or competing products
in terms of particular characteristics
such as price and quality.
Market intelligence
The importance of theoretical models such as
Porter’s lies in its focus on the competitor
stakeholder group and the subgroups within it, such
as rivalry between existing competitors, the threat of
entry from new niche competitors, and the financial
muscle of buyers and suppliers.
The dynamic nature of competition and thus short
and longer-term relationship building is central to
both marketing and public relations involvement.
The focus on data collection tends to be organized
around customer databases, which provide insight
into customers’ behaviour and motivation in many
markets, but particularly retail markets with data
collated from loyalty card schemes in the grocery
sector.
One supermarket chain uses the Target Group
Index, a research service which matches customer
databases to three years of customers’ buying
behaviour.
Target Group Index
CUSTOMER RELATIONS
Porter’s model suggests that there are three
fundamental ways in which firms achieve
sustainable competitive advantage through
customer relations.
These
are
cost
leadership
strategy,
differentiation strategy and focus strategy.
Other areas of promotional overlap with public
relations are in the sales and marketing of fastmoving consumer goods, and business-to-business
markets.
Consumer markets are characterized by heavy
advertising and promotion programmes targeted at
key segments so as to build brands and speed up the
process of innovation and new product
development.
Impact of Business on its
Environment (Peach, 1987)
Philanthropy
 ‘Corporations perform charitable actions’.
 Different from CSR
 Not necessarily linked to the expectations of
society.
 19th century phenomena
 Corporate philanthropy as a short-term one-way
relationship
Organisational Responsibilities
 Organisational
-
responsibilities to
stakeholders
Identify your stakeholders.
What are your responsibilities
towards them?
Develop strategies to manage
these relationships.
Brings the organisation closer to
its stakeholders
Improves understanding.
Organisational Responsibilities
 Organisational
responsibilities to society
- Four kinds of social
responsibility
Corporate social responsibility in action:
corporate community involvement and causerelated marketing
Corporate community involvement (CCI) is one of the faces
of corporate social responsibility in practice.
Such involvement is down to basic self-interest, to enable the
company to have an easy life.
‘A corporation can gain competitive advantage
by having the goodwill of local communities’.
Only through deepened relationships with and
between employees, customers, suppliers,
investors and the community will companies
anticipate, innovate and adapt fast enough,
while maintaining public confidence.
‘There is still no measure of the relationship
between ethics and financial performance.
No one can quantify the impact of social and ethical
performance on shareholder value, but damage to
reputation can wipe out millions of that value.’
‘Companies that set profits as their No. 1 goal are
actually less profitable in the long run than peoplecentred companies.’
Definitions of CCI
A definition of CCI would be a good place to start.
‘Providing money or people, or advice, something
that may be only indirectly measurable.’
‘Planned investment in the society in which you
operate’
The distinguishing feature of the corporate
philanthropy model of CCI is that the company does
not expect anything in return for its contribution.
While companies are not the state and should not
provide services and facilities which should be
provided by welfare agencies, they are still part of
the society in which they operate and need to
consider their corporate behaviour as part of the role
they play in society.
CCI activities
Seven kinds of activity which can be used in CCI:
 The open house: a tour of the facilities of the
organisation, enabling large numbers to come onto
the premises.
 Special events: ground breaking for a new building,
the completion of one, special seminars linked to the
company’s products, such as a safe driving school run
by a motor manufacturer
 Extended internal publication circulation: with the addition of
some specific news, the internal publication can be circulated
throughout the community to enable a wider knowledge of the
company’s activities.
 Volunteer activities: encouraging and enabling employees to
perform voluntary service for local organisations, including
secondment.
 Local advertising: controlling and focusing the message for local
media.
 Contribution of funds: sponsoring or donating money
to local organisations, whether in cash or kind.
 News services: tailoring information to the needs of
local media.
In 1993, more than 90 per cent of large companies in
the US had a community involvement programme,
more than two thirds allowed time off during work for
volunteering and 63 per cent had a community
involvement fund.’
In the UK, in 1995 a survey found that only a third of
large companies had a volunteer programme and only
44 per cent of those allowed time off for volunteer
activities.
Cause-related marketing
CRM is ‘a commercial activity by which
businesses and charities or causes form a
partnership with each other to market an
image, product or service, for mutual benefit’.
CRM as a commercial activity moves on from
sponsorship, which might include the
donation of a one-off amount to a charity, or
the provision of equipment to a special needs
school, for instance, into a clear statement of
a need to fit into the commercial objectives of
an organisation.
Cause-related Marketing (CRM)
 Charitable causes
 CRM is ‘a commercial activity by which a company
with a product or service to market, builds a
relationship with a “cause” or a number of “causes”
for mutual benefit’
 CRM programme in conjunction with local
schools, ‘Tesco Computers for Schools’
Cause-related Marketing (CRM)
 ‘When price and quality are
equal, consumers will
discriminate in favour of the
company that espouses a
good cause.
 Generates direct,
measurable benefits for the
company.
 Those needing help receive
it.
 The public feels good about
supporting the cause.
 The organisation gains
reputation and sales
 Consumers are less cynical
about CRM.
 CRM has long-term
strategic benefits.
 Being socially responsible
creates good ‘word of
mouth’
Why CRM is also gaining importance
 74 per cent of consumers think that it is acceptable
for companies to involve a charity or good cause in
their marketing
 86 per cent of consumers agree that when price and
quality are equal, they are more likely to buy a
product associated with a ‘cause’
 61 per cent agreed that they would change retail
outlet for the same reason
 86 per cent of consumers agree that they have a
more positive image of a company if they see it is
doing something to make the world a better place
 67 per cent of consumers feel that CRM should be a
standard part of a company’s business practice.
 70 per cent of marketing directors and chief
executives believe that CRM will increase in
importance, 75 per cent felt that CRM could enhance
corporate or brand reputation and 42 per cent said it
was important to achieving overall company
objectives
Beril Akıncı VURAL
Public relations in the field of consumer relations is often
regarded as marketing communications.
Marketing is the identification of the needs of consumers,
and how to satisfy those needs profitably.
Organisations who class consumers as one of their main
publics or stakeholder groups are likely to be relating to them
as buyers of their products.
Seven forms of assistance to the marketing function which PR
can perform:
1 Publicising news and events related to the launching of
new or improved products or services.
2 Promoting established products or services, to the
extent that they are newsworthy.
3 Creating a favourable image of ‘the company behind
the product’.
4 Arranging for public appearances of marketing
spokespersons.
5 Probing public opinion in market areas.
6 Focusing news media attention on sales
conferences and other marketing events.
7 Assisting in programmes concerning
consumerism.
Marketing communications
Marketing communications encompasses any form of communication
that contributes to the conversion of a non-customer to a customer,
and subsequently to the retention of such customer.
Customers base decisions on the benefits they perceive from the
product.
Packaging and presentation will affect this perception.
Size, weight, colour and smell all appeal, often on an unconscious
level.
The size of the market is the first consideration when
deciding which tactics to use when communicating
with various publics.
A group of people who are involved in any decision are
often called the buying decision unit, or BDU.
If only ten BDUs are to be approached, personal
contact would be the most appropriate medium.
six main zones of influence within families when
making decisions about buying various products:
 man’s influence
 woman’s influence
 children’s influence
 man and woman
 man and children
 woman and children.
The kind of message is the next consideration.
A simple message could be conveyed by a poster, but a complex
or technical one would need to be presented in the specialist
press.
In selecting media, cost must be considered in two ways.
First, the actual price of using the medium selected and whether
this fits the budget available.
Second, a cost per contact should be evaluated to see if the
medium delivers cost-effectiveness.