Consumer Behavior and Promotion Strategy

Chapter 17
Consumer Behavior and

Promotion Strategy
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Types of Promotion
• Promotion defined
• Advertising
– Any paid, nonpersonal presentation of
information about a product, brand, company, or
store
– Usually has an identified sponsor
– Has been characterized as image management
– May be conveyed via a variety of media
17-2
Types of Promotion cont.
• Sales promotion
– Direct inducements to the consumer to make a
purchase
– Difficult to define sales promotions due to many
types
• Personal selling
– Direct interactions between a potential buyer
and a salesperson
17-3
– What makes it a powerful promotion method?
– Certain consumer products are traditionally
promoted through personal selling
– For other businesses, a form of personal selling
by telephone, called telemarketing, has become
popular
• Publicity
– Any unpaid form of communication about the
marketer’s company, products, or brands
17-4
– Can either be positive or negative
– Can sometimes be more effective than
advertising because consumers may not screen
out the messages so readily
• The promotion mix
– Ideally, marketing managers should develop a
coherent overall promotion strategy that
integrates the four types of promotions into an
effective promotion mix
17-5
– A controversy continues in marketing about the
relative importance of advertising vs. sales
promotions
– The promotion mix of the future is likely to be
more eclectic with many more options
17-6
A Communication Perspective
• The cognitive processing model of decision
making is relevant to an understanding of
the effects of promotions on consumers
• The communication process
– Key factors
• Source
• Encode
• Transmit
• Receiver
• Decode
• Action
17-7
A Communication Perspective cont.
17-8
– Two stages of the communication are
particularly important to the success of
promotion strategies
• Encoding
• Decoding
• Goals of promotion communications
– Effects can be ordered in hierarchical sequence
of events or actions that are necessary before
consumers can or will purchase a brand
17-9
– Effects can be treated as a sequence of goals
or objectives for promotion communications
– Stimulate category need
• Need to create beliefs about the positive
consequences of buying and using the product
category or form
• Typically use advertising to stimulate category need
17-10
– Brand awareness
• A general communication goal for all promotion
strategies
• Level of brand awareness necessary for purchase
varies depending on how and where consumers
make their purchase decisions
• Ask consumers to state the brand names they can
remember or recognize as familiar
• A company’s brand awareness strategy depends on
how well known the brand is
17-11
– Brand attitude
• Create a brand attitude
• Maintain existing favorable brand attitudes
• Increase the existing brand attitude
• Cannot analyze consumers’ brand attitudes in an
absolute or very general sense without specifying the
situational context
17-12
– Brand purchase intention
• Most promotion strategies are intended by marketers
to increase the probability that consumers will buy
the brand
• To develop effective promotion strategies directed at
brand purchase intention, marketers must know
when BI are formed by most of the target customers
17-13
• More typically, formation of a brand BI is delayed
until well after exposure to advertising, when the
consumer is in a purchase context
• Personal selling and sales promotion are usually
designed to influence purchase intentions at the time
of exposure to the promotion information
– Facilitate other behaviors
• Some promotion strategies are designed to facilitate
behaviors other than purchase
17-14
The Promotion Environment
• Includes all stimuli associated with the
physical and social environment in which
consumers experience promotion strategies
• Two environmental factors can influence
advertising and sales promotion strategies
17-15
The Promotion Environment cont.
– Promotion clutter
• The growing number of competitive strategies in the
environment
• Possible that clutter created by multiple ads during
commercial breaks and between TV programs will
reduce the communication effectiveness of each ad
• Also affects other types of promotion strategies,
especially sales promotions
17-16
The Promotion Environment cont.
– Level of competition
• A key aspect of the promotion environment
• Comparative advertising, featuring direct
comparisons with competitive brands, has become
more common’
• Promotion often becomes the key element in the
marketers’ competitive arsenal in fiercely competitive
environments
17-17
Promotion Affect and Cognition
• Interpretation of promotion communications
and integration processes are extremely
important
• Consumers’ comprehension processes vary
in depth and elaboration, depending on their
levels of knowledge and involvement
17-18
Promotion Affect and Cognition cont.
• Attitude toward the ad
– The affective evaluations of the ad itself can
influence the attitudes toward the advertised
product or brand
– Ads that consumers like seem to create more
positive brand attitudes and purchase intentions
than ads they don’t like
17-19
• The persuasion process
– Refers to changes in beliefs, attitudes, and
behavioral intentions caused by a promotion
communication
– The Elaboration Likelihood Model (ELM)
• Identifies two cognitive processes by which
promotion and communication can persuade
consumers
17-20
– The central route to persuasion is more likely when
consumers’ involvement is higher
– The peripheral route to persuasion is more likely when
involvement is lower
• Also distinguishes between two types of information
in the promotion communication
– Central route to persuasion
– Peripheral route to persuasion
17-21
Promotion Behavior
• Information contact
– Consumers must come into contact with
promotion information for it to be successful
– Information contact with promotions may be
intentional, but probably is most often incidental
– Placing information in consumers’ environments
may be easy when target consumers can be
identified accurately
17-22
Promotion Behavior cont.
– Cold calls vs. referrals and leads
– Use of telemarketing
– Consumers must also attend to the promotion
messages
• Word-of-mouth communication
– Helps to spread awareness beyond those
consumers who come into direct contact with
the promotion
17-23
Managing Promotion Strategies
• Analyze consumer-product relationships
– Requires identifying the appropriate target
markets for the product
– May require considerable marketing research to
learn about the consumer-product relationship
– The FCB grid
17-24
Managing Promotion Strategies cont.
17-25
– Based on consumers’ involvement and their
salient knowledge, meanings, and beliefs about
the product
– Think products
– Feel products
– The appropriate promotion strategy depends on
the product’s position in the grid
17-26
• Determine promotion objectives and budget
– Promotion strategies may be designed to meet
one or more of the following objectives
• To influence behaviors
• To inform
• To transform affective responses
• To remind
17-27
– Before designing a promotion strategy,
marketers should determine their specific
promotion objectives and the budget available
to support them
– Some promotions have multiple objectives
– Some promotions are designed to first influence
consumers’ cognitions in anticipation of a later
influence on their overt behaviors
17-28
• Design and implement a promotion strategy
17-29
– Must be sensitive to the consumer-product
relationships represented in different market
segments
– Various consumer segments to be considered
– Appropriate promotions depend on the type of
relationship consumers have with the product or
brand, especially their intrinsic self-relevance
17-30
– Promotion methods vary in their effectiveness
for achieving certain objectives
– Promotion objectives will change over a
product’s life cycle as changes occur in
consumers’ relationships with the product and
the competitive environment
17-31
– Developing advertising strategy
• Specify advertising strategy in terms of the type of
relationship the consumer will have with the product
or brand
• MECCAS model can help marketers understand the
key aspects of ad strategy and make better strategic
decisions
17-32
17-33
• MECCAS defines four elements of advertising
strategy
– Driving force
– Leverage point
– Consumer benefits
– Message elements
• The executional framework
• Consumer-product relationship
• The driving force
• Leverage point
17-34
• An advertising strategy should specify how a brand
will be connected to the important ends the
consumer wants
• Developing personal selling strategies
– ISTEA model
17-35
17-36
• Model suggests salespeople’s influences depend on
their skills at performing five basic activities
– Developing useful impressions of the customer
– Formulating selling strategies based on these impressions
– Transmitting appropriate messages
– Evaluating customer reactions to the messages
– Making appropriate adjustments in presentation should the
initial approach fail
• ISTEA model is consistent with the communication
approach to consumer promotions
• Model emphasizes analysis of the customer as the
starting point
17-37
• Evaluate effects of the promotion strategy
– Involves comparing its results with the
objectives
– Determining promotion effects can be difficult
– Promotion objectives stated in behavior terms
can be hard to evaluate
17-38
– In some cases, evaluation of promotion effects
can be relatively straight-forward
– Measuring advertising effects
• Three broad criteria have been used as indicators
– Sales
– Recall
– Persuasion
17-39
Summary
• Discussed how knowledge about
consumers’ affect and cognitions,
behaviors, and environments can be used
by marketers in developing more effective
promotion strategies
• Described four types of promotions
• Detailed how the basic communication
model can be used
17-40
Summary cont.
• Discussed important aspects of the
promotion environment, affective and
cognitive responses to promotions, and
promotion-related behaviors
• Examined a managerial model for designing
and executing promotion strategies
17-41
Summary cont.
• Described the various goals and objectives
marketers may have for promotion
strategies
• Looked at two special models for
developing advertising strategies and
personal selling strategies
• Discussed how to evaluate the
effectiveness of promotion strategies
17-42

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Chapter 17

Consumer Behavior and

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