Transcript Formulating Strategic Marketing Programs

Formulating Strategic Marketing
Programs
Marketing Communications
Management
Integrated Marketing
Communications (IMC)

Effective marketing requires an integrated
communications plan--relying not just on
one form of communication, but bringing
together a number of different modes in a
consistent and complementary way.
Communication Vehicles

Contrast communication options along two
dimensions:
– Broadcast vs. interactive (1-way message vs. 2way message)
– Mass vs. addressable/customized
Characteristics of
Communication Options
Addressable/
customized
Mass
Salesperson
Super Bowl
Ad
Broadcast
1-way message
2-way with
Time lag
2-way
instantaneous
Position of Major
Communication Vehicles
Salesperson
Addressable/
Customized
Direct
Media
Radio
Newspapers
Magazines
Mass
Web
Telemarketing
E-mail
Direct Mail
Catalogs
Infomercials
Television
1-way
2-way
Characteristics of Leading Media
Advertising

Television
– 70% expenditures for national coverage.
– Average 30 second prime time ad costs about
$185,000.
– In a typical hour of prime time programming,
more than 15 ads will be featured.
– Cable stations enable more customization.
– Summarize cost with CPM (cost per thousand)
$185,000
x 1000 = $18.50 CPM
10,000,000
Television, continued

Limitations
– Ads are viewed as intrusive--zapping
– Clutter
– Sensory adaptation
Leading Media...

Newspapers
– 90% of expenditures for local coverage
– Most consumers view newspaper ads as
informational.
– Limitations:
» Relatively weak production quality
» Limited life
Leading Media

Radio
– Largely local medium
– Audiences are well-segmented--able to deliver
message to well-defined audience
– Relatively low cost
– Limitations
» Clutter, easy to tune out
Leading Media...

Magazines
– Growing numbers of special interest magazines,
enabling increased customization
– Deliver strong visual message to well-defined
target audience
– Longest life of any medium and benefit from
pass-along readership
Characteristics of Direct
Marketing Communications

Infomercials
– High-quality, detailed marketing messages
– Deliver to well-defined audiences
Direct Marketing...

Catalogs
– High-quality
– Highly customizable due to database
management
Direct Marketing...

Direct Mail
– Letter, sales brochure
– Includes directions for ordering or requesting
information
– Highly customizable
– Limitations
» “junk mail”
Direct Marketing...

E-mail
– Offers more opportunity for customization
– Quicker exchange of information
Direct Marketing

Telemarketing
– Less cost than in-person selling
» $5 per call vs. $250 per call
– Immediate 2-way nature--caller can customize
the message in accord with the message
receiver’s initial response
– Limitations:
» “junk calls”
Characteristics of the Web
Opportunity to exchange customized
messages and responses instantaneously
 “Hyper impulsivity”
 Great potential for bringing the marketing
system all together

Role of Promotions in Integrated
Marketing Communications

Promotions are a specific inducement to
generate purchase behavior.

Consumer promotions

Trade promotions
Consumer Promotions
Free samples
 Price-oriented programs

Cents-off coupons
Mail-in refunds
Rebates
Premiums
 Tie-ins
 Continuity programs
 Contest/sweepstakes

Price pacs
Bonus pacs
Trade Promotions
Slotting allowances
 Co-op advertising
 Floor planning
 Temporary price cuts
 Volume discounts
 Contests

Rounding out IMC:

Event Marketing Sponsorships

Publicity and Public Relations
Formulating the IMC Program

6 M’s Model for Communication Planning
1. Market
2. Mission
3. Message
4. Media
5. Money
6. Measurement
1. Market
Analyze the consumer situation in terms of
stages in the purchase and consumption
process
 Response hierarchy models

– Cognitive stages
– Affective stages
– Behavioral stages
Hierarchy Model: AIDA
Stages
AIDA Model
Cognitive
Attention
Affective
Interest
Desire
Behavioral
Action
Hierarchy-of-Effects Model
Stages
Hierarchy-ofEffects Model
Cognitive
Awareness
Knowledge
Affective
Liking
Preference
Conviction
Behavioral
Purchase
Innovation-Adoption Model
Stages
Cognitive
Affective
Behavioral
Innovation-Adoption
Model
Awareness
Interest
Evaluation
Trial
Adoption
Communication Model
Stages
Communication
Model
Cognitive
Exposure
Reception
Cognitive Response
Affective
Attitude
Intention
Behavioral
Behavior
Customer Response Index

The combination of effects in the customer
response hierarchy.

Tool for adjusting communications or other
marketing tactics.
Customer Response Index
CRI=% aware x % that comprehend x % that are interested
= .63 x .54 x .77
= .26 or 26%
Comprehend
(54%)
Aware
(63%)
Interested
(77%)
Intentions
(68%)
No intentions
(32%)
Not interested (23%)
Don’t comprehend (46%)
Unaware (37%)
Action
(90%)
No Action
(10%)
2. Mission

Communication objectives, related to
customer response
Build Awareness
Message Reinforcement
Stimulate Action
3. Message

Decisions related to message content,
structure, format, and source
–
–
–
–
What kind of an appeal?
One-sided or two-sided message?
Peripherals
Spokesperson
4. Media
Decisions related to media communication
channel
 Decisions related to media exposure

– Target market reach
– Frequency
– Advertising effectiveness
» GRPs
» CPMs
Media Exposure (continued)

Decisions related to message reinforcement
– Pulsing
– Heavy-up message frequency

Decisions related to use of consumer
promotions
5. Money

The optimal marketing communications
budget is typically a function of:
– The size and heterogeneity of the target
audience
– Nature of the message
– Receptivity of the audience
– Amount of clutter
Money (continued)

Some firms use:
– % of expected or previous year’s sales
– Competitively based benchmark

Spending levels vary greatly across
industries and even across firms within the
same category
6. Measurement

Plan a mechanism for evaluating the effects
of communications efforts.

Critical input to future spending levels,
allocation of the budget across media, and
specific communication messages.