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Integrated Marketing Communications

Integrated Marketing Communications

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INTEGRATED MARKETING COMMUNICATIONS BY PROF. SHIVAKUMAR. R.

SHARMA MMS – III SEMESTER

PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH MUMBAI UNIVERSITY

COURSE CONTENTS Communications Process – Communication models for urban and rural communication, Integrated Marketing Communications. 2. Advertising – Organizational structure of advertising agency and its function. Evaluating of agency functioning. 3. Advertising objectives with specific reference to DAGMAR , Brand objectives, Consumer attitude and market structure. 4. Brand position and brand image strategy development. 5. Persuasion and attitudinal change through appropriate copy development. 6. Creative decisions.
1.

Copy decision – Creation and production of the Copy. 8. Advertising budget, Media planning and media research. 9. Advertising research 10.Public relations & Publicity campaigns. 11.Event management. 12.Role of advertising manager in firms, advertising briefs, Agency coordination activities, managing advertising campaigns.
7.

REFERENCE TEXT Advertising and Promotion: An Integrated Marketing Communications Perspective – George Belch, Michael Belch San Diego University. 2. Advertising Management – Rajeev Batra, John G Myers, David A Acker. 3. Logo – Naomi Klien. 4. Brand Reporter Fortnightly. 5. Other Guy Blinked – Jesse Kornbluth. 6. Belch Advertising & Promotions ( TMH ). 7. J V Vilanilam & A K Verghese: Advertising Basics ( Sage )
1.

Integrated Marketing Communication
Marketing Communication Its importance and relevance in today’s world Aims and objectives •To provide a historical perspective of marketing communication •To introduce the study of marketing communications and the reason for its growing importance •To consider the impact of the overlap of the tools of marketing communications •To explain the communication process The changing nature and role of Marketing Communication •Unprecedented changes in the marketing environment •Dramatic increase in competition, locally as well as globally •Mergers and acquisitions to confront the future needs of the organisation are common place •At the same time, companies are divesting themselves of non-essential business to concentrate on their core business •The nature of the retail environment continues to change •Proliferation of brand choices •Consumer confused at the array of choices •Rapid pace of technological changes •Multiplicity of media channels available for communication

•Yet, within this array of confusion, marketing

communications increasingly represents the single most important opportunity for companies to convince potential consumers of the superiority of their products and services What is Communication?
•It

is concerned with sending and receiving information, knowledge, ideas, facts, figures, goals, emotions and values •It is an constant activity •It is universal and essential feature of human expression and organisation. •It scope is as broad as society itself, for every social act involves communication •It is central element of the way in which people relate to and co-operate with each other •Communication is the act of sending information from the mind of one person to the mind of the other person •Sender – Message – Receiver •Sounds simple but is quite complex A brief historical perspective •At a very basic level, communications are the most important element of social interchange between individuals •As time passed, with the development of rudimentary printing processes, it became possible to reach a wider audience •With that, the era of mass communications had begun •In the earliest form, these communications took the form of the printed word and with the advent of the newspaper, this style continued.

Different Communication Equations •One individual to another individual •One individual to many individuals •One organisation to one individual •One organisation to many individuals •One organisation to another organisation •One organisation to many organisations Types of Communication •Internal •External –Oral communication –Written communication –Audio-visual communication –Passive communication The Communication Process
•Understanding

the basic process of communications fundamental to the development of an appreciation of how marketing communications might function •Important to know how people extract information from the environment they live in •How they interpret this information to assist them in their daily lives •90% of the stimuli that individuals perceive comes as a result of sight and the balance 10% from hearing The Theory of the Communication Process

What is Marketing Communication?
•The process by which a marketer develops and presents

stimuli to a defined target audience with the purpose of eliciting a desired set of responses
•It is a systematic relationship between a business and its

market in which the marketer assembles a wide variety of ideas, designs, messages, media, shapes and forms and colours, both to communicate ideas to, and to stimulate a particular perception of products and services by, individual people who have been aggregated into a target market
•The result of this process of assembling is referred to by

marketers as the communication mix
•To assemble this mix, the marketer uses a number of

marketing communication tools – personal selling, advertising, sales promotion, public relations, direct marketing etc.
•Direct Tools
–Advertising –Personal Selling –Direct Marketing –Promotions –Exhibitions –Direct Mail

•Indirect Tools
–Public

Relations

–Sponsorships –Corporate Identity –Packaging –Brand Identity –Word of Mouth

The growth of marketing communication •The growth of manufacturing and services •Improvements in transportation •The proliferation of brands •The increasing separation of the manufacturer from the consumer •The relative decline in personal selling The growth of marketing communication •The changing face of distribution •The growth in technology •The increased use and sophistication of market research •Increasing improvements in living standards •Use of credit facilities The growth of marketing communication •The wider reach of the media •Growing understanding of the use of marketing communications •Access to specialist companies in the field of marketing communications •The expanded marketing communications mix Marketing Communication Models •Three key stages in the consumer’s response –Knowledge (Cognitive) –Feelings (Affective)

–Action

(Conative) •Each of these stages are inter-related and also reversible Marketing Communication Models •AIDA (Strong, 1925) •DAGMAR (Colley,1961) •HEIRARICHY OF EFECTS (Lavidge and Steiner,1961) •ADOPTION (Rogers,1962) •PROCESSING (McGuire, 1969) –Depicting the stages through which the consumer passes en route to purchase The Integration of Marketing Communication
•Old

marketing communication strategies have lost their value as competitive weapons •Today’s marketing environment can be best described as an age of “hyper-competition” •Successful marketing today require total consumer orientation •Consumers are today seeking more than a single element in any transaction •They buy into the array of relevant experiences which surround the brand
•Integrated

Marketing Communication –‘A concept of marketing communications planning that recognises the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines them to provide clarity, consistency, and maximum communications impact

through the seamless integration of discrete messages’ – American Association of Advertising Agencies Factors impacting IMC •The growth of narrow casting •The growth of global marketing •Non-verbal communications- importance of visual communication •Growing consumerism – recognition of their rights The driving forces behind the growth of IMC •Clients seeking value for money •Increasing client sophistication •Disillusionment with advertising •Disillusionment with agencies •Power shift towards retailers •Environmental factors Forget the 4 Ps…think 4 Cs •Forget product…Study consumer wants and needs •Forget price…Understand the consumer’s cost to satisfy that want or need •Forget place…Think of the consumer’s convenience to buy •Forget promotions…the word is communications Marketing Communication Wheel. Budgeting The process •Factors influencing the budget •Determining the budget appropriation

•Allocating the budget •Characteristics of a good Budget

The budget process •Preparation •Presentation •Execution •Control •Monitoring Factors influencing the budget •PLC •Competition •Product category •Usage pattern (Seasonal v/s All year round) •Consumer pull v/s Dealer Push Determining the budget appropriation – the methods •Percentage of sales (A/S Ratio) •Percentage of product gross margin •Market share •Competitive expenditure •Need based •Affordability •Arbitrary •Media inflation Allocating the budget •Time (monthly) •Media •Promotional Activity

•Segment •Geographical •Product Category •Brand

Budget allocation •Brand objectives •Past performance of the brand •Review of past mix •Category trends •Contingency Characteristics of a good budget •Dedicated •Based on realistic estimation •Contingency •Sustainable •Flexible Advertising “Advertising creates a sympathy between the maker and the user that becomes, in time, the most valuable asset any manufacturer can acquire.” J. Walter Thompson
•One of the many communication tools •Plays the lead role in many categories •The most visible and vocal form of brand communication •Expensive •Wide reach

The Structure and disciplines in an advertising agency

•Account •Creative •Media •Account

servicing

planning •Research •Administration •Accounts •Print Production •Film Production
•The

functions of advertising •To inform •To persuade •To sell
•To inform
–Seeks

to provide specific pieces of information •Details about performance •New uses •New features •Operating or usage convenience •Availability

•To persuade
–Change

consumer’s point of view or perception •Attitudes •Habits •Beliefs
•To sell

–Promoting

the sale of the product through advertising of a promotional nature •Accelerate purchase •Prepone a purchase •Incentivise a purchase Advertising Process is all about What to say, How to say and How to reach the message to your target prospect. Advantages •Helps create a image which will serve to differentiate the brand in the market place •Assist in the creation and maintaining brand equity •Can create a unique personality for the brand •Reduces overall selling costs Limitations •Is not a universal panacea or a magic wand •Expensive •Essentially represents a one-way medium…lacks interactivity The Advertising Process The development of advertising is a sequential process which must reflect the marketing strategy

Understanding how advertising works •AIDA (Strong, 1925) •DAGMAR (Colley,1961) •HEIRARICHY OF EFECTS (Lavidge and Steiner,1961) •ADOPTION (Rogers,1962)

•PROCESSING (McGuire, 1969)
–Depicting

the stages through which the consumer passes en route to purchase Consumers’ interaction with advertising The Scale of Advertising Effect •The ultimate goal of any advertising is to affect the consumer’s thinking or behaviour. •In the Scale of Ad Effect, we have a tool which helps determine what that effect should be. •There are 5 possible effects from direct call for action, to the indirect reinforcements of attitudes
•Direct Action

– Prompting immediate consumer action like Coupons filled, telephone calls, orders placed, reps invited…purchase made •Seek Information – Disseminating information…purchase is imminent •Relate to own needs and wants – Get into the considered set…purchase will be made when the opportunity arises
•Bring

to Top of Mind – Remind for repurchase… purchase will be made when the opportunity arises •Modify Attitudes – Correct, modify or re-evaluate,reasons inhibiting purchase…will encourage re-trial •Reinforce Attitudes – Reassure correctness of purchase… encourages repeat purchase Determination of Advertising Strategy

The Butterfield Diamond framework for strategic analysis* Definition of the brand’s business problem Interrogation of all aspects of the brand’s marketing mix Analysis of the brand’s total marketing situation Analysis of the consumer’s relationship with the brand Derivation of a realistic defined role for advertising The advertising objectives & strategy The Campaign Planning Cycle J Walter Thomson The Campaign Planning Cycle •The planning cycle is a series of 5 questions •These questions lead us through the entire planning and creative process •It constitutes a unique way of thinking about advertising, as it takes us through a process of learning, building, evaluating and modifying hypothesis •The planning cycle is not a short term, one campaign system. It is a system dedicated to brand building. Starts where we end…a cycle Q 1 - Where are we? •It requires you to collect facts; about the market, the competition, the consumer and your brand.

•These

may be culled from available statistics, from syndicated studies, government sources, your media or research departments or supplied by the clients themselves •Get as much information as possible to obtain the correct analysis, a must to begin well Where are we? •Social and Economic Factors •The Market –The Products in the market –Consumers in the market •Competitive position •Company policy Q 2 - Why are we there? •An analysis based on the study of all the information collected in the earlier stage •What trends in the competitive marketing, brand or advertising activity have led to the current situation •Must be able to draw conclusions as to why the current position exists, in the market and in the consumer’s mind Why are we there? •Past brand and competitive advertising analysis •The consumer; attitudes and perceptions •Factors affecting the brand sales Q 3 - Where could we be? •These are objectives and goals that is set for the brand •They must be designed to be achievable •Marketing Objectives in terms of brand share and brand volume •Advertising goals being the changes, new directions or restatements of what we need to do at the different stages

of the consumer buying system that is new, different or simply the same •What can we do to modify or restate the brand’s position Where could we be? •Brand Objectives –Product Change –Market Share Projection –User Change –Usage Change •Brand Positioning •Brand Strategy Q 4 - How do we get there? •The answer must encompass all activities, not only creative and media recommendations, but total communications; PR, DM, Display, Research, Timing and Budgets How do we get there? •The summary of the creative brief •Creative Proposals •Media Proposals •Research Proposals •Any other specific proposals Q 5 – Are we getting there? •Monitoring progress –Tracking studies –Research –Sales, Brand Share performance –Annually or Bi-annually Positioning

•The

position of a brand or product is the perception it brings about in the mind of the target consumer •This perception reflects the essence of the brand in terms of its functional and non-functional benefits in the judgment of the consumer •It is relative to the perception held by that consumer, of competing brands, choices, categories, all of which, can be represented as points or positions in this perceptual space and together, make a product class Positioning •The four basic components of positioning concepts •Product class or the structure of the market in which our brand will compete •Consumer segmentation •Consumer perception of our brand in relation to competitors, leading to perceptual mapping •The benefits offered by a brand. These benefits may also be expressed as attributes Setting Advertising Objectives •First part of the campaign development process •Evolved out of the total marketing strategy •It could be either short term or long term •Should be realistic, achievable and measurable •Must take into account what advertising can and cannot do •Must lay decision criteria to evaluate campaigns Setting Advertising Objectives •The Definition •A specific communication task aimed at a defined target audience and accomplished in a given time •A clearly stated measurable end result of an advertising message, messages, campaign or programme

•The

objective is always measure in terms of change in awareness, preference, attitude, belief, conviction or behaviour Setting Advertising Objectives •The advertising objectives could be to: •Inform and build awareness •Create brand knowledge •Reinforce positive attitudes about the brand •Precipitate buying action •Build an image Setting Advertising Objectives •Increase sales •It is important to note that increasing sales cannot be the sole objective of advertising •Advertising must be viewed as one of the many factors influencing sales, the other elements of the marketing mix like pricing, distribution, packaging, timing of launch, environmental factors etc. Setting Advertising Objectives •Short term Objectives •Build awareness •Promote new uses for a product •Extend the selling season •Motivate Dealers •Stimulate primary demand for a product type •Establish credentials •Establish image Setting Advertising Objectives •Long term Objectives

•Change habits •Change attitude and beliefs •Build a favourable image •Educate the consumer •Correct a well entrenched perception

Setting Advertising Objectives •An example: •To create an awareness of Brand X among 70 % of our target market (primarily women in the top 50 markets,in the age group 18-45, with one or more children, and having a monthly household income of Rs. 25000 and above) by the end of year 1, the introductory year of the national campaign •To have 70% aided recall in our target group of our brand’s message/image as projected by the creative •To have 60% of our target group report a preference for Brand X over other competing brands Setting Advertising Objectives •Effect of advertising on consumer response •Product - Filter cigarette •Brand – A •Three Advert Campaign Various models for defining advertising goals DAGMAR Defining Advertising Goals for Measured Advertising Results DAGMAR

•Proposed by Russell H.Colley •Denotes advertising goals as a specific communication

task and achievement level to be accomplished with a specific audience in a specific period of time •Advertising has been assigned various communication and sales objectives DAGMAR •The four stages of commercial communication suggested by Colley: •Awareness – The prospect must be made aware of the product •Comprehension – The prospect must comprehend what the product is and what it will do for him •Conviction – The prospect must arrive at a mental disposition or conviction to buy the product •Action – Finally, the prospect must take action DAGMAR •The 6 M approach •Merchandise – is the product to be advertised. The ad campaign includes the positive attribute of their merchandise and/or negative aspects of the competitor’s merchandise •Market – includes both the present as well as potential customers of the product advertised. Different ad campaigns are designed for different segments of the market DAGMAR •Motives – are utilised for advertising purposes and are also changed depending on the consumer behaviour. And,

the approaches to deal with the consumers in the right way are evaluated for effective advertising results •Messages – Alternative messages are developed to appeal to consumers and the best message is utilised for the advertising communication process DAGMAR •Media – A thorough knowledge about the different media, their cost, benefits and disadvantages is gathered keeping in mind the product type •Measurement – are framed to provide real guidelines for comparison of results with advertising efforts Factors that affect setting of Advertising Objectives •Factors that affect the setting of the advertising objectives are: •Marketing Objective •Marketing Strategy •PLC •Competition •Financial Resources Developing the Advertising Plan Developing the Advertising Plan •Integral part of the marketing plan •Cannot and does not exist in isolation of other marketing communications mix •Needs total integration •Competitive factors will influence the effectiveness of the advert campaign Developing the Advertising Plan

•Review of the background situation •Competitive analysis •Overview of the brand •Analysis of the consumer
–Who is he? –How does he buy? –What are his motivations?

Developing the Advertising Plan •Statement of the marketing goals •Summary of advertising recommendations •Summary of creative recommendations •Budget determination •Summary of evaluation procedures The Buying System The Buying System •Understanding how people buy •Six stages of thought and action that consumers go through when making a purchase decision •The objective is to move the consumer swiftly through the process towards either purchase or re-purchase •Ensures total communication plan for the brand

The Buying System

•The Six Stages
•Trigger •Consider •Search •Choose

•Buy •Experience

The Buying System •Trigger – First there is a something that triggers off the need… What has been the trigger for the purchase? •Routine – The need to replenish supplies like washing powder, toothpaste, soap etc •Impulse – A purely spontaneous purchase like ice-creams, chocolates or candy •Solution – A need to solve an existing problem like a new washing machine or disinfectant or medicines •Lifestyle – An indulgence purchase for pleasure, like holidays or a new suit or Hi-Fi •Some categories are a blend or reasons, for e.g. Cars can be bought for both solution and lifestyle reasons. The Buying System •Consider –Next, the consumer begins to think about what he wants from the purchase –There are 4 needs a purchase can satisfy: •Self maintenance – Shampoo, Razor or Foodstuff •Self Expression – For Personal Image - Clothes, Cars, Cigarettes •Self Reward or gift – For Personal Satisfaction like chocolates,jewelry or books •Self Improvement – Computers, Books, Banking The Buying System •Search

Next, the consumer begins to collect and evaluate information –There are 4 sources which range from active to passive •Direct Experience •Word of Mouth •Editorial •Publicity or Advertising

The Buying System •Choose –The consumer now begins to compare and form preferences for the available brands –There are 2 factors which will influence choice •Functional Values: Will one purchase perform better than another? Is it better value? Is it going to last longer? •Non-functional Values: Which brand is more appealing? A more attractive personality? A better reputation? A perceived popularity? Reflects the image of the user?

The Buying System •Buy –Now, that the consumer has made up his mind to make a final purchase… –There are six factors that could make or break the selection of our brand •Distribution – Availability •Display – On the shelf, In-store •Promotion – Ideally Brand related •Trial – Can the consumer try it at the POS? •Salesman •After-Sales – Warranties, Guarantees, AMC etc

The Buying System •Experience –Now, the consumer is using the brand, only one factor has any effect: Did the product perform as promised? Development of advertising
•Most

advertising agencies use a precise format for the purpose of briefing creative work •Aim is to provide the creative departments with the appropriate guidance to the development of creative material in a succinct and easily comprehensible form •The creative brief is the basis of all advertising development and should encompass, in summary form, all major findings of research and other inputs upon which the advertising will be eventually based The Creative Brief – Point 1 •What is the opportunity and/or problem which the advertising must address? •A brief summary of why we are advertising at all •The current consumer perceptions that advert is suppose to enhance or correct •The consumer’s point of view The Creative Brief – Point 2 •What do we want the people to do as a result of the advertisement? •Direct Action, Seek Information, recognise brand’s relevance, bring it top of mind, change attitudes or retain •The Scale of the Ad Effect

The Creative Brief – Point 3 •Who are we talking to? •The Creative Target group and not the Marketing Target Group •Not just Demographics, but Psychographics as well •Accurate profile The Target Group
•The

most effective advertising knows who it is talking to •The Marketing Target Group •The Advertising Target Group •The Creative Target Group –The job is to derive a specific and clear advertising target group from within the marketing target group, then translate this into meaningful creative terms that will allow us to get into the target’s mind The Marketing Target Group •Very broad definition •Encompasses all potential users – latent as well as potent •Casting the net very wide
•E.g. Anti-dandruff shampoo targeting people with

dandruff as well as people who want to prevent dandruff The Advertising Target Group •Narrow casting – Current Users, Occasional Users, Lapsed Users, Users of another category, brand etc. •Precise for maximum effect – what stage of the buying system are we trying to impact

•E.g. A cooking

oil can broadly target all who cook but can narrow it down to women who cook regularly and use a specific oil, quantity or a brand The Creative Target Group •Tightly focused – Defined in terms of lifestyle, mindset, motivation, personality, opinions, passions etc. •‘Igniting or Lighting the Creative fire’ •E.g. A health drink targeting Mothers aged between 25-40 with small children who are concerned about the proper all round development of their children as opposed to Mothers aged between 25-40 with small children The Creative Brief – Point 4 •What is the Key Response we want from our Advertising? •One single thing that we want the consumer to notice or believe as a result of our advertising that will best distinguish our brand from competition •Consumer language – How will the consumer express it? •Its not what you put in…it is what the consumer takes out…the stimulus response theory •The GIGO effect The Stimulus & The Response The Stimulus & The Response •The most effective advertising is not about sending messages •The Stimulus-Response Theory •E.g. The Comedian The Stimulus & The Response

•Identify the desired response…the key response…bear the

following in mind: •Consumer is not a moron •Be Single minded •Consumer language and not manufacture language The Creative Brief – Point 5 •What information attributes might help produce this response? •Functional or physical attribute •Psychological emotional user need which the brand fulfills •Avoid a laundry list
•Functional Discriminators
–What

unique, practical characteristic makes your product different from others? –It should be a formula or technical enhancement. It could be faster, or lighter or tougher or bigger.

•Functional Discriminators
•It

has to be a practical difference. If it has no demonstrable advantage, then it will not discriminate in the consumer’s mind •It must not be too easily duplicated otherwise it will soon be equalled or superceded •If the product has nothing physically unique, then say so. It highlights the importance of the Non-functional discriminators
•Non-functional

Discriminators

•Unique

characteristics which serve no practical purpose the brand possesses that differentiate it from other products •It could be reputation or rarity •It could be more beautiful or more contemporary or more colourful or more fragrant •Generally, it will be what, purchase or ownership of this brand will say about the consumer that others would not. It could be a display of their good judgment, their status or their intelligence
•Non-functional Discriminators
•Discriminators

fabricated by the advertising are fragile unless based on a product characteristic •If there is no alternative to the fabrication of brand discriminators, major emphasis will be placed upon the brand personality The Creative Brief – Point 6 •What aspect of the brand personality should the advertising express? •Capture the essence of the brand in one single sentence •Unique blend of its characteristics that the advertising help to highlight •Not a cluster of traits •Luna, Spark, CDM, Amul
•Describe the brand in human terms •Unique personality can be the key differentiator •Makes the brand more appealing •Cannot be replicated •Does not mean a description of the target group

•Brands,

like people, have a blend of functional and emotional appeals which can be described in human terms •And while the individual appeal may not be unique, your particular blend of appeals can be •In a highly competitive market, where no single appeal can discriminate, the way be blend our brand’s personality becomes critical •Lists of human traits like; intelligent, lively, gregarious only represent the ingredients. •A personality has to be humanized, e.g.the brand is your favourite uncle, not very exciting but completely trustworthy •Ensure that the brand personality is supportable by the brand. At the risk of stating the obvious, a luxury soap could not have the personality of Rambo How to describe a Brand Personality •Vivid and human like •Distinctive •Relate to TG – identification or aspiration Brand Personalities •Mrs. Corn Flakes – A woman who dedicates her life selflessly to the well-being of her family. But retains her sense of proportion. Your Mother •Ms.Lux – A woman who is extremely aware that her very glamorous life means she is continually under close public scrutiny. A star Brand Personalities •The Salem Couple – Young, modern, optimistic, innocents who love the life they live. Today’s beautiful people

•Mr.

Listerine – A totally gregarious fellow with an extremely wide circle of friends who leads full life. A real popular guy •Mr. Colgate – A Teacher •Mr. Mentadent – A scientist
•The

Creative Brief – Point 7 •Are there any media or production constraints? •Medium •Size •Colour •Length The Creative Brief – Point 8 •Any additional information that could be useful •Promotional Plans •Public Relation exercise •Legal Restrictions •Company Sensitiveness •Ethics Recap •What is the opportunity and/or problem which the advertising must address? •What do we want the people to do as a result of the advertisement? •Who are we talking to? •What is the Key Response we want from our Advertising? Recap •What information attributes might help produce this response?

•What aspect of the brand personality should the

advertising express? •Are there any media or production constraints? •Any additional information that could be useful Creative Strategies and Tactics The determination of the creative platform
•Achieving distinctiveness is a paramount consideration

and the driving force behind the creative process •Bland advertising fails to attract the attention of the consumer •It passes like a ship in a dark night
•Key factors which make people notice advertising are:
–When –When –When

the product itself is inherently different the advertisement is sufficiently unusual the advertisement has some particular personal relevance
•The

‘Hard-Sell’ approach –Is an approach in which the advertiser uses specific facets of the product or service, to convince the target audience that it is the best available –More of a rational approach •The ‘Soft-Sell’ approach –By contrast, it uses a somewhat more subtle approach to the differentiation of its products –More of an emotional approach The Idea •The most effective advertisement has a recognisable idea

•Both for creators as well as evaluators •Vivid Demonstration – What the brand does •Vivid Metaphors – What the brand stand for

The Idea •An idea is a new combination of old elements •Kaleidoscope – always a new pattern •An idea rests upon the ability to see relationships •A new relationship •Random Juxtaposition/Syncopate The Idea •Characterised by – •Surprise •Sympathy •Shivers •Simplicity •Synergy The Idea •Distinctive •Memorable •Durable The Advertising Appeals
•‘Few

purchases of any kind are made for entirely rational reasons. Even a purely functional product such as a laundry detergent may offer what is now being called an emotional benefit – say the satisfaction of seeing one’s children in bright clean clothes. In some product categories, the rational

element is small. These may include soft drinks, beer, certain personal care products, lifestyle products’ – (Ogilvy & Raphaelson, 1982)
•The advertising appeal refers to the basis or approach

used in the advertising to attract the interest and attention of consumers and influence their feelings towards the product
•Feature appeal •Competitive advantage appeal •Price or value appeals •Quality appeals •News appeals •Popularity appeals •Appeals to ego or self-esteem

Styles of advertising – creative execution style •Product as hero •Product demonstration •Problem-solution •Slice of life •Testimonial •Spokesperson presenter •Endorsements •Opportunistic or topical advertising •People like me •Mini-drama •Continuing character •Pastiche or borrowed interest •Spectacular, musical, stage show •Non-verbal

•Infomercial •Teaser advertising •Animation •Fantasy •Fear/Intrigue/Shock advertising •Humour •Surrogate

Media & Media planning
•The

underlying media scene has become dramatically more complicated, with changes in both the number and scope of the available media outlets •The task of the media planner and, with it, the responsibilities of ‘getting it right’ have become more involved •The improvements in technology have provided access to an ever increasing volume of data. The tasks of media analysis have become more sophisticated •The media role has become, in many instances, a discipline separated from other aspects of advertising planning, not divorced but has an separate identity •The need for media planners to adopt an innovative approach to break through noise level and clutter is becomingly increasingly important •The requirement of the media function to be accountable is greater than at any other time The role of media planning •Identifying the appropriate target audience •Determining the media objectives •Specifying the media categories and vehicles

•Determining the optimum time to advertise •Negotiating for and buying media •Evaluating the performance of the media plan

Media and their characteristics
•Media must be considered against three separate

dimensions: –Does it enable the communication of the advertising message? –Does it provide cost-effective coverage of the target audience? –Is it the appropriate environment in which to place the message? A comparison of media A comparison of media A comparison of media A comparison of media A comparison of media A comparison of media A comparison of media Importance of media plan •The development of the appropriate media plan commences with a statement of media objectives •Media objectives are the translation of marketing and advertising objectives and strategies into goals that can be achieved by media •Media strategy (plan) is the translation of these objectives into general guidelines that will control the planner and the use of media

The guidelines… •What target audience should be reached by the media? •What is the message that the advert wishes to convey? •To what geographic markets should the message be directed? •How far into the target audience can the advert reach given the budgetary constraints? •With what frequency should the message reach the target audience during the campaign period? •At what times should the message reach the target audience? •What type of medium provides the best match between the intended market and the actual audience? Factors for consideration •The intrusive nature of the message •The competitive environment •The nature of the message •Message length •Number of exposures •Status of the brand •Seasonality factors •Purchasing patterns Scheduling options •Burst or flighting •Continuous or drip •Pulsing Advertising Research

Think of an advertisement not as what you out into it, but as what the consumer takes out of it Rosser Reeves Factors to be addressed •Whether or not to test •What and When to test •What criteria or test to use Should you test? •New Product Entry - Y •Cut throat competition - N •New Concept - Y •Relaunch - Y •Creative Work - N •Extension of existing advert – N Testing implies cost and time When and What should you test? •Testing can be done at –Beginning of the creative process (Pretest) •Ideation (Advert Platform) •Alternate Strategies –End of the creative process (layout) (Pretest) •Quicker •Less Expensive •Storyboard/Layouts/Animatics/Photomatics/Cinematics End of the production stage ( finished commercial or advert) (Pretest) •Expensive •Alternative executions –After the advert has been released (Posttest)

•Five

most widely used criteria –Advert Recognition (Low involvement categories) –Awareness/Recall (Low involvement categories) –Comprehension –Likeable –Persuasion (High involvement categories) –Behavior Unlikely one single criteria will exist for advert effectiveness;multiple criteria are usually required
•Recognition

( Attention getting capability) –Refers to whether a respondent can recognize an advert as one has seen before –Necessary condition for Advert Effectiveness –Low recognition > Low Involvement > Low Trial •Mail Survey •Edit exposure (TV/radio programs)
•Recall

Refers to a proportion of the sample audience being able to recall the advert •Unaided •Aided •Proven –Day after recall (DAR) - George Gallop •Mainly used for television adverts •Can be used for Press/Radio Adverts –Real Time recall Inappropriate for emotional adverts

•Comprehension

/ Persuasion/Likeable –Refers to ability of the advert to bring about about an attitudinal or behavioral change in the target audience Diagnostic Exploration: –Comprehension of message/Slogan –Communication of secondary copy ideas –Evaluation of Demonstrations/Spokesperson/Message –Perception of brand uniqueness/differentiation –Irritating/Confusing Elements –Viewer Involvement

•Comprehension/Persuasion/Likeable •Forced

Exposure Test –Clutter test –Multiple Exposure Test (Growth Factor) –Portfolio Tests
•Consumer

Jury •Rating Scales •Character Empathy •Purchase Behavior/Brand Preference loyalty –Refers to actual brand choice in an in-store, real world setting Coupon-Stimulated Purchasing –Test group exposed to commercial/ Control Group –Though exposure is artificial, buying is realistic

Coupon Use or Inquiries: Split-Run Tests (Magazine) –Mostly used for Industrial Products

Measured by inquiries generated via coupons –Two advert versions checked –Adverts coded

BUY Test - Intention to buy scores

Diagnostic Tests •Qualitative Research –Focus Group –Audience Impressions of the advert –Adjective Checklists –Advert Testing Emotional Response •Words (Verbal Scales) •Pictures (Non-verbal Scales) Diagnostic Tests •Physiological Measures –Eye Movement Check –Pupillometrics (Eye Dilation) –Facial Expression Observation –CONPAD (Conjugately Programmed Analysis of Advertising) •Operation of a device that controls the audio and video intensity of signals •Measures interest levels Diagnostic Tests •Physiological Measures –On-line Monitoring of Response •Operation of device indicating Interest/Irritation (Program Analyser) –Brain Waves •Brain wave activity measured through EEG ( Electroencephalograph)

•Left

Brain V/s Right Brain Tracking Studies •Purpose to evaluate and reassess the advert campaign and understand why it is working or not working •Measures tracked –Awareness –Awareness of elements of the advert –Brand awareness –Brand attributes –Credibility –Brand Image –Occasion/Frequency of use –Brand Loyalty –Brand Satisfaction •Diary Method Principles of testing •A good testing system should –provide measurements which are relevant to the objectives of the advertising –requires agreement about how the results will be used in advance of each test –provides multiple measures, single measures are inadequate to assess the performance of the advert –be based on Human Response Model - Reception of a stimulus, comprehension of the stimulus and response to the stimulus Principles of testing •A good testing system should –allow for considerations of whether the advert stimulus should be exposed more than once

–recognize

the consistency in the extent of finishing of the

advert –provide controls to eliminate bias –consider the difference between forced and natural exposure –consider reactivity in test environment –demonstrate reliability and validity Principles of testing •A good testing system should –consider the competitive Context –relevant to the target prospect –robust recruitment system in selection of respondents Testing Options •The advert used –Mock-up –Finished Advert •Frequency of exposure –Single exposure test –Multiple exposure test •Method of exposure –Isolated –In a clutter –In a program or a magazine Testing Options •Where the exposure occurs –In a shopping center facility –At home on TV –At home through mail –At a centralized location –At a theatre

•How

respondents are obtained –Pre-recruited forced exposure –Not pre-recruited, natural exposure Testing Options •Geographic Scope –One city –Several cities –Nationwide •Alternative Measures of persuasion –Pre/Post measures of attitude or behavior shifts –Multiple measures - Recall/Involvement/Buying intention –Single Measure - Brand preference –Test Market sales measures •Bases of comparison and evaluation –Comparing test results to norms –Using a control group Media Research •DAR •Structured Questionnaire (NRS) •Audit (ABC) •Diary Method (Radio Listenership) •T V Meters (TRP) •Telecheck (Viewership) Sales Promotion The growing role of sales promotion •Today, significantly large percentage of marketing expenditure is driven towards sales promotion •Very relevant at times of economic recession •Pressure on personal disposable income tends to make consumers more price and value sensitive

•Used

to create an on-shelf differentiation for the brand in a highly competitive market place •Increased pressure from the retailers to step up promotional support to increase profitability •Quick-fix sales increase •Pressure on margins…pressure from management to deliver volumes •Increasing cost of other forms of marketing communications tools What is sales promotion? •It is to offer the consumer some sort of incentive to accelerate the desired action •It is often short term, with a specific time period •Often used tactically, seldom strategically Benefits of sales promotion •Enable the manufacturers to regulate demand-supply variations •Helps even out peaks and troughs of consumer demand •Helps smaller brands to compete with large brands with big advertising budget •Increase in retailer involvement •Increase stocking •Liquidate stocks •Encourage trials in new categories or for newer lesser known brands Limitations of sales promotion •Sales oriented but not conducive to brand building

•Loyalty

lasts till the offer lasts •Increasing use of sales promotion may diminish the strength of the brand franchise…may be perceived to be a discounted brand •As a rule, promotions can never improve the brand image or help the stability of the brand franchise •Conditions consumers to becomes price-sensitive or bargain-seeker The determination of objectives…some guidelines •Sales promotion objectives must be defined clearly and succinctly •Must be capable of measurement •Quantify the impact on volume and contribution •Must be achievable •Must be realistically budgeted Sales promotion objectives •Consumer objectives •Generate enquiries •Build and refine data base •Initiate trial and sampling •Product re-purchase post trial •Build loyalty •Increasing rate/frequency of purchase •Prepone purchases…stock up •Upgrade to larger pack sizes •Trade objectives •Traffic building •Inventory building •Stock reduction or liquidating •Offsetting impact of competitive activity

•Promotional support to the trade •Increase dealer involvement

Sales promotion techniques •Immediate price-offs •Deferred price-offs (Redemption coupons) •Cross-couponing •Bonus or multi-packs (extra gm/ml or but three for the price of two) •Free gifts –On-pack free gift (stuck to the product) –In-pack free gift (inside the pack) –With-pack free gift (independent of the pack) –The pack itself •Proof of purchase for gift item •Self liquidating offers •Contests and competition •In-store/In-house sampling Evaluating sales promotion activities •Factors to be borne in mind –Does the promotional concept fit well with the brand, its desired imagery and its target audience? –Is the recommended solution the most likely to achieve the desired objective? –Is the promotion easy to understand and credible to the audience?
•Factors to be borne in mind

Is it easy to participate in, or does it create a series of unnecessary obstacles for the potential consumer to overcome? –Is the promotion likely to satisfy the needs of consumers? Ideally, promotional offers should not over claim, since this

is likely to result in post-purchase dissonance. Rather, they should get more than they expected –Is the promotion dependent on a particular fad or fashion (such as a tie-in with a specific event) or does it provide a concept which can be repeated over time? Research & Sales promotion •Market research can provide an important contribution to the understanding of sales promotion in two broad areas: –Testing –Monitoring
•Research

can contribute to the development or more efficient and effective sales promotion –Desk research –Pre-testing (Simulation techniques) –Qualitative research (Simulation techniques) –Quantitative research –Monitoring research The legal framework •Any price offer should be clear and not contain hidden extra charges •The promoter should avoid implying that the price is less than it really is, where there is some form of restriction on the nature of the offer, for e.g. the money off next purchase. Both parts of the offer should be made clearly and distinctly in the same typeface and size •Where some form of comparison of value or worth is made, this must be justified in a way that consumers can understand

•Should conform to MRTP regulation •Should conform to Standard Weights and Measures Act •Must conform to Prizes and Lotteries act •Should not encourage gambling

Direct Marketing Factors contributing to the growth of direct marketing •Acceleration in the pace of life, leading to change in lifestyle •Desire for greater convenience •Desire for personalised service •Greater need for customisation, especially in the growing service sector •Emergence of micro segments •Increasing mass media costs •Fragmented audiences •Improvements in information technology, helps in identifying customers, keeping track and servicing them What is Direct marketing?
•Quite simply, it is the attempt made by the manufacturer

or marketer to establish direct contact with his potential customer, with the intention of either eliciting information or soliciting a sale. •This process is a continuous and ongoing process. More importantly… •‘Direct Marketing: –Allows you to isolate someone as an individual –Allows you to build a continuing relationship with them –Allows you the ability to test and measure responses

»

Drayton Bird

•The

key differentiator between direct marketing and other attempts to contact the consumer directly is the emphasis that direct marketing places on building a relationship with the consumer •Merely establishing a contact could be done by introducing response devices in conventional brand advertising •Should not be confused with Direct Selling or Personal Selling •It is not about sending an one-off mail The essentials… •Identify your consumer •Understand your customer, know him well •Keep in touch regularly…have a continuous dialogue •Build a relationship •Make him feel that he is the center of your world •Treat him like a friend and not a buyer •Be sensitive to his needs and requirement •Keep him satisfied by fulfilling promises made by you The advantages of direct marketing… •Helps in targeting your customers precisely •Encourages high degree of interactivity •Creation and maintenance of relationship between the manufacturer/marketer and the prospect, overtime nets better yield •Works better in motivating action •Relatively easy to measure •Results can be predicted based on past exercise •Comparatively low investment •Controlled growth

•Conducive to testing

Identify your customer •Important here to classify the word customer from a long term perspective than from a short term single sale •Gathering key contact information at the end of a visit or sale – visiting card, visitors book, guarantee/warranty cards, feed back forms, etc. or… •While expressing an interest; response coupon in the advert filled, telephone call made, email received, snail mail received, call solicited etc. Identify your customer •Getting information from an outside source •Ready lists are available in the environment…a good revenue generating activity •However these lists have to be checked and verified on the following before employing them Identify your customer •Source of list •Restrictions on use •When collected •Frequency of use •Size •Profiling information •Extent of profiling •Cost Establishing the contact •You can establish contact with your prospect by any of the following media –Email –Telephone call

–Mail –SMS –Personal

contact Establishing the contact – The essentials •Make the contact appealing •The contact should be should be made to feel special about the contact •It should be personalised •Addressed rightly •Value his time •Be Courteous •Motivate a response •If need be incentivise, it works most of the time •Seed required profiling data Understand your customer, know him well •Profiling the database –An important part of gaining an understanding of the customer database –Different ways to profile – demographics, psychographics, location, ownership of durables etc. Understand your customer, know him well •This is an important information to enable the identification of potential customers with particular needs •Detailed analysis will enable far more precise targeting of potential customers with a high propensity to respond to a particular type of product, service or offer Understand your customer, know him well •Customer profiling focuses your sales message onto specific segments with reduced media costs and increased consumer response

•If you have an accurate picture of your present customer,

you are more likely to be able to look for and find more of the same Build a relationship •Relationship means: •Creating a bond •Nurturing this bond •Making this bond unbreakable •Fostering a feeling of togetherness •Loyalty that is made for life How is it relevant in the business context? •Today,increasingly business seem to be transacted on an emotional plane •All factors being equal,people would like to do business with people with whom they have a chemistry……they like •80% of the business tends to come from a small base of 20% The Conveyor Belt Analogy •Every business can be visualised as an infinitely long conveyor belt •Most marketers concentrate on getting prospects to step up onto that belt to begin a customer relationship… •But a lot of customers fall off the belt at some point •Here is where the biggest opportunities and the biggest profits are waiting The Challenge •Very few organisations pay attention to their customer turn-over or “churn rate”,the rate at which customers let their account slip into inactivity •Getting customers on the belt

•Keeping them on the belt and if they fall… •Getting them back on the belt

Economics of customer retention •In an increasingly competitive and sluggish market environment, sellers will find the economics of customer retention very compelling and attractive •The moment customer loyalty increases, a beneficial flywheel effect kicks in - repeat sales and referrals increase Economics of customer retention •Company becomes less vulnerable to competition entering the customer’s life •Customers become less price sensitive •A study revealed that a decrease in customer defection rate by 5% can boost profits by as high as 25-50% •Less energy to be expended to get back lapsed users Requisites of a successful relationship programme •Know him well •Understand your customer •Keep in touch regularly •Make him feel that he is the center of your world •Treat him like a friend and not a buyer •Be sensitive to his needs and requirement Requisites of a successful relationship programme •Make him participative,involve him in your business •Conduct regular checks on the status of your relationship with your customer •The Relationship Barometer The Relationship Barometer •It is a measurement of the intensity,extent of your relationship with your customers,through research •Set pre-determined parameters for the check

•Set bench-marks for these parameters •Track the scores on these over time •Redefine the parameters if required •The limitations of direct marketing •Increase yield

Role of Direct Marketing Agencies •Database Generation •Database Management •Response Handling •Creating Direct Response Communication •Mail Handling/Sorting/Dispatch •Contest Management •Measuring Relationship Through Research-The Relationship Barometer •Telemarketing •Fulfillment Public Relations •Public relations is the dimension of communications which is specifically concerned with establishing and enhancing goodwill between an organisation and the various publics with which it seeks to communicate •Although sometimes used independently, more often PR is integrated with other aspects of the promotional mix, for example, advertising, sales promotion or personal selling
•The Institute of Public Relations (IPR) defines public

relations as: –The deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation and its publics

•The Public Relations Society of America adopts a

broader-based definition and more, importantly, identifies a series of specific functions relating to public relations; –Anticipating, analysing and interpreting public opinion, attitudes and issues which might impact, for good or ill, on the operations and plans of the organisation
•Counselling

management at all levels with regard to policy decisions, courses of action and communication •Researching, conducting and evaluating, on a continuing basis, programmes of action and communication to achieve informed public understanding necessary for the success of the organisation’s aims •Planning and implementing the organisation’s efforts to influence or change public policy •Managing the resources needed to perform the functions of public relations Distinction between Publicity and Public Relations •In simple terms, publicity may be any form of information from an outside source used by the news media •It is largely uncontrollable, since the source of the news item will have little control of how and when the story will be used and, most importantly, on how it will be interpreted Distinction between Publicity and Public Relations •Although much of public relations is concerned with the gaining of publicity, not all publicity is derived from public relations •The responsibility of public relations is to create and influence publicity in such a way as to have a positive impact on the company for which the activity is undertaken

Comparison between PR and Advertising •The primary goal of advertising is to inform and persuade consumers in relation to a specific product offering, whereas the goal of PR is to establish goodwill, and to develop favourable attitudes and an understanding of the organisation and its products and services •A major distinction between advertising and PR is the credibility of the alternative routes to message delivery. PR messages are included in media vehicles as news stories and are, as a result , more credible than advertising Comparison between PR and Advertising •Advertising is inherently based upon the self-interest of the organisation placing it and paying for the exposure – hence is subjected to a greater degree of scrutiny and is often discounted by the reader or viewer •On the other hand, since PR messages appear as editorial content, they are seen to be independent of the company that originated them – viewed less cynically and more likely to be accepted Comparison between PR and Advertising •In many respect, the story carries an apparent endorsement, of the media vehicle which carries it, hence viewed with greater credibility •The credibility of the medium or the vehicle enhances the credibility of the PR message •Public Relation exercise is much cheaper than advertising Comparison between PR and Advertising •PR can address issues outside conventional marketing, issues that would be rendered ineffective in an advertising environment – company values, philosophy etc.

•PR

can be very cost-effective reaching some specific audiences – Small retail outlets can often gain coverage in local newspapers for a new opening or some other activity which is likely to arouse public interest Comparison between PR and Advertising •PR can be used to publicise, enhance a company’s name, image, reputation better than corporate advertising – Institution of Awards, Public Service activity like blood donation camps etc •Public relations often involves the creation of special events, either to provide a vehicle for direct communication to others or through media coverage The disadvantages •Unlike advertising, where the nature and content of the message is entirely within the control of the initiating company, a PR message is uncontrollable •Must have the buy-in from the media organisation so that the message appears Functions of Public Relations •Opinion forming •Counselling senior management •Liaison with public officials •Communicating policies •Community relations •In-house activities – Internal PR • Business relations - Financial Institutions/Tax Authorities •Media relations •Event management – Samsung Super Singer •Business Sponsorship – Brand Equity Quiz The ‘Publics’ Of PR

•Employees and potential employees •Shareholders and investors •Suppliers and vendors to the company •The Trade – Distribution channels •Buyers and consumers •The local community •The national community •Opinion formers/leaders •The Media – local/national/international

The tools •Press release •Exclusive story •Interviews •Press conference •By-lined article •Speeches •Special events •Advertorials •Infomercials Event Management & Sponsorship •Initially a part of the PR armoury, have spun off to be independent function •Event Management is the creation, implementation and administration of short-term activities designed to promote product/service/organisation •Hospitality events, exhibitions, conferences etc. •Sponsorship is a more embracing activity •It is the association with some third party activity, designed to achieve a series of separate but mutually agreed objectives

•Definition
–An

investment in cash or in kind, in an activity, in return for access to the exploitable commercial potential associated with that activity (Meenaghan, 1991)
–Sponsorship

is a business relationship between the provider of funds, resources or services and an individual, event or organisation which offers in return some rights and associations that may be used for commercial advantage (Sleight, 1989)
•‘Advertising

works in a direct way; creating its own values and context for the product, and stimulating the desired consumer response from the way they perceive the brand
•Events/Sponsorship,

by contrast works in a more indirect way. It borrows the values of the sponsored event or programme, making them part of the brand in the mind of the viewer’
•‘The creativity in advertising comes in defining the nature

of the brand, while creativity in sponsorship comes in determining the nature of the fit between the required brand personality and the donated associations’ (Byles and Walford, 1991)
•Events/Sponsorship can be used for:
–Name and brand awareness –Image reinforcement –Media exposure –Hospitality –Sales Promotion – Contests,

Sampling etc.

–Staff Motivation –Community relations

•Key factors to be considered:
–Is

there a fit between the activity and the brand or corporate positioning? –Is the sponsorship sufficiently distinctive? –Are there other sponsors associated with the event? –Does the activity have an existing identity, or does one need to be created? –Can the sponsorship be ambushed?
•Key factors to be considered:
–Who

are the audience for the vent – both live and in terms of the expected media coverage? –What exploitation opportunities exist? –Is there synergy with the current advertising or other marketing communications activity?

INTEGRATED STRATEGY

MARKETING

COMMUNICATION

promotion- introduction It is not enough to have good products sold at attractive prices. To generate sales and profits, the benefits of products have to be communicated to customers. Promotion is, therefore, about communicating with customers. companies

A business' total marketing communications programme is called the promotional mix and consists of a blend of: • Advertising • Direct marketing • Personal selling • Sales promotion • Public relations tools Promotion has several possible objectives and many pieces of marketing promotion aim to achieve several of the following objectives at the same time: Inform Management may need to make their audience aware that their product exists, and to explain exactly what it does. This is a particularly important objective for new products Persuade An important stage in creating favourable attitudes towards the business and its brands. Through persuasive promotion, management will seek to persuade customers and the trade that their brand has benefits that are superior to competitors

Image creation Sometimes, promoting a brand image is the only way to create differentiation in the mind of the consumer (e.g. lager advertising) Reassurance Much promotion (particularly advertising) is about reassuring customers that they have made the right choice and encouraging them to stay loyal to a brand. There are a large and growing number of promotional methods that businesses can use. The main instruments - advertising, direct response mailing, sales promotion, public relations and direct selling, are often mixed together as part of the promotional mix. Each has different strengths. What is important is that the promotional mix is carefully planned and the results monitored to ensure that the total promotional cost is controlled. promotion introduction promotional mix to the

It is not enough for a business to have good products sold at attractive prices. To generate sales and profits, the benefits of products have to be communicated to customers. In marketing, this is commonly known as "promotion".

Promotion is all about communicating with customers.

companies

A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. In this revision note, we describe the four key elements of the promotional mix in more detail. It is helpful to define the four main elements of the promotional mix before considering their strengths and limitations. (1) Advertising Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across) (2) Personal Selling Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale".

(3) Sales Promotion Providing incentives to customers or to the distribution channel to stimulate demand for a product. (4) Publicity The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise known as "public relations" or PR. Advantages and Disadvantages of Each Element of the Promotional Mix Mix Element Advantages Disadvantages

Advertising Good for building Impersonal awareness cannot answer all a customer's Effective at questions reaching a wide audience Not good at getting Repetition of main customers to brand and product make a final positioning helps purchasing build customer decision trust Personal Selling Highly interactive Costly lots of employing a sales

communication force has many between the buyer hidden costs in and seller addition to wages Excellent for Not suitable if communicating there are complex / detailed thousands of product important buyers information and features Relationships can be built up important if closing the sale make take a long time Sales Can stimulate If used over the Promotion quick increases in long-term, sales by targeting customers may promotional get used to the incentives on effect particular Too much products promotion may Good short term damage the brand tactical tool image

Public Relations

Often seen as Risk of losing more "credible" - control - cannot since the message always control seems to be what other coming from a people write or third party (e.g. say about your magazine, product newspaper) Cheap way of reaching many customers - if the publicity is achieved through the right media

promotion- the promotional mix Promotional mix It is helpful to define the five main elements of the promotional mix before considering their strengths and limitations. Advertising Advertising is any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform.

The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across) Direct marketing Direct marketing creates a direct relationship between the customer and the business on an individual basis. Personal Selling Personal selling refers to oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". Sales Promotion Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. Public Relations Public relations is the communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly

Factors that determine the type of promotional tools used Each of the above components of the promotional mix has strengths and weaknesses. There are several factors that should be taken into account in deciding which, and how much of each tool to use in a promotional marketing campaign: (1) Resource availability and the cost of each promotional tool Advertising (particularly on television and in the national newspapers can be very expensive). The overall resource budget for the promotional campaign will often determine which tools the business can afford to use. (2) Market size and concentration If a market size is small and the number of potential buyers is small, then personal selling may be the most cost-effective promotional tool. A good example of this would be businesses selling software systems designed for supermarket retailers. On the other hand, where markets are geographically disperse or, where there are substantial numbers of potential customers, advertising is usually the most effective.

(3) Customer information needs Some potential customers need to be provided with detailed, complex information to help them evaluate a purchase (e.g. buyers of equipment for nuclear power stations, or health service managers investing in the latest medical technology). In this situation, personal selling is almost always required - often using selling teams rather than just one individual. By contrast, few consumers need much information about products such as baked beans or bread. Promotional tools such as brand advertising and sales promotion are much more effective in this case. promotion - advertising: introduction The Institute of Practitioners in Advertising (IPA), the body which represents advertising agencies, defines advertising as: "The means of providing the most persuasive possible selling message to the right prospects at the lowest possible cost". Kotler and Armstrong provide an alternative definition: "Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as

newspapers, magazines, television or radio by an identified sponsor". There are five main stages in a well-managed advertising campaign: Stage 1: Set Advertising Objectives An advertising objective is a specific communication task to be achieved with a specific target audience during a specified period of time. Advertising objectives fall into three main categories: (a) To inform - e.g. tell customers about a new product (b) To persuade - e.g. encourage customers to switch to a different brand (c) To remind - e.g. remind buyers where to find a product Stage 2: Set the Advertising Budget Marketers should remember that the role of advertising is to create demand for a product. The amount spent on advertising should be relevant to the potential sales impact of the campaign. This, in turn will reflect the characteristics of the product being advertised. For example, new products tend to need a larger advertising budget to help build awareness and to encourage consumers to trial the product. A

product that is highly differentiated may also need more advertising to help set it apart from the competition - emphasising the points of difference. Setting the advertising budget is not easy - how can a business predict the right amount to spend. Which parts of the advertising campaign will work best and which will have relatively little effect? Often businesses use "rules-ofthumb" (e.g. advertising/sales ratio) as a guide to set the budget. Stage 3: Messages Determine the key Advertising

Spending a lot on advertising does not guarantee success (witness the infamous John Cleese campaign for Sainsbury). Research suggests that the clarity of the advertising message is often more important than the amount spent. The advertising message must be carefully targeted to impact the target customer audience. A successful advertising message should have the following characteristics: (a) Meaningful - customers should find the message relevant (b) Distinctive attention capture the customer's

(c) Believable - a difficult task, since research suggests most consumers doubt the truth of advertising in general Stage 4: Decide which Advertising Media to Use There are a variety of advertising media from which to chose. A campaign may use one or more of the media alternatives. The key factors in choosing the right media include: (a) Reach - what proportion of the target customers will be exposed to the advertising? (b) Frequency - how many times will the target customer be exposed to the advertising message? (c) Media Impact - where, if the target customer sees the message - will it have most impact? For example does an advert promoting holidays for elderly people have more impact on Television (if so, when and which channels) or in a national newspaper or perhaps a magazine focused on this segment of the population? Another key decision in relation to advertising media relates to the timing of the campaign. Some products are particularly suited to seasonal campaigns on television (e.g. Christmas hampers) whereas for other products, a regular advertising campaign throughout the year in media such as newspapers and specialist

magazines (e.g. cottage holidays in the Lake District) is more appropriate. Stage 5: Evaluate the results of the Advertising Campaign The evaluation of an advertising campaign should focus on two key areas: (1) The Communication Effects - is the intended message being communicated effectively and to the intended audience? (2) The Sales Effects - has the campaign generated the intended sales growth. This second area is much more difficult to measure. advertising- why and what? Why and what should a business advertise? Before undertaking an advertising campaign, marketers should be able to answer two key questions: (1) Why are we advertising? (2) What are we advertising? On the face of it these seem like two fairly obvious questions. But they are significant. Advertising can be a very expensive promotional tool. It is widely believed that much advertising

spend is wasted. So careful consideration about “Why” and “What” can pay dividends. Why advertise? The following may be good reasons why a business is advertising: • To create awareness, customer interest or desire • To boost sales (moving the demand curve to the right) • To build brand loyalty (or to maintain it at the existing level) • To launch a new product • To change customer attitudes – perhaps trying to move a product more “upmarket” or to dispel some widely held perceptions about the product • To support the activities of the distribution channel (e.g. supporting a “pull” strategy) • To build the company or brand image • To reminds and reassure customers • To offset competitor advertising – businesses may defend market share by responding to competitors’ campaigns with their own advertising

• To boost public standing: companies can boost their public standing with advertisements that link them with generally approved campaigns such as care for the environment • To support the sales force – advertising can make the job of the sales force easier and more effective by attracting leads from potential customers and perhaps motivate them by boosting the profile of the business Take a look through any magazine and select a sample of adverts. Which of the above reasons do you think are behind the adverts you choose? Don’t forget that some adverts aim to achieve multiple objectives. What to advertise? Factors that help answer the “what are we advertising”? focus on what the advertising message should be. In general, there are really only two kinds of effective advertising message: Firstly, does the business/product Unique Selling Proposition (“USP”) have a

A unique selling proposition is a customer benefit that no other product can claim In reality these are rare, although that does not stop marketers from claiming them for their products.

Secondly, does the thing that is advertised “add value” and if so, how?

being

For example, advertising for washing powders will focus on the “added value” created by whitening agents or the fact that a particular formulation will last longer than the competition (take a look at the Fairy web site to see if you can spot the other “added value” features claimed for its products) Whatever is advertised, it is important that the message is: • Seen • Read • Believed • Remembered • Action upon by target customers advertising budget Introduction A famous comment usually attributed to Lord Leverhulme goes: “I know that half of my advertising budget is wasted, but I’m not sure which half” It is notoriously difficult to measure the effect of advertising on a business’ sales. Advertising setting the advertising

is just one of the variables that might affect sales in a particular period. These include: • Consumer and business confidence • Levels of disposable income • Availability of product (e.g. does the retailer actually have stock to sell?) • Availability of competing products • The weather (often blamed by retailers for poor sales!) How can a business know whether a specific advertising campaign was effective? As a percentage of sales, advertising expenditure varies enormously from business to business, from market to market. For example, the leading pharmaceutical companies spend around 20% of sales on advertising, whilst business such as Ford and Toyota spend less than 1%. An average for fast-moving consumer goods markets (“FMCG”) is around 8-10% of sales. In practice, the following approaches are used for setting the advertising budget: Approaches to setting the advertising budget Method (1) Fixed percentage of sales In markets with a stable, predictable sales pattern, some companies set their advertising spend consistently at a fixed percentage of

sales. This policy has the advantage of avoiding an “advertising war” which could be bad news for profits. However, there are some disadvantages with this approach. This approach assumes that sales are directly related to advertising. Clearly this will not entirely be the case, since other elements of the promotional mix will also affect sales. If the rule is applied when sales are declining, the result will be a reduction in advertising just when greater sales promotion is required! Method (2) Same level as competitors This approach has widespread use when products are well-established with predictable sales patterns. It is based on the assumption that there is an “industry average” spend that works well for all major players in a market. A major problem with this approach (in addition to the disadvantages set out for the example above) is that it encourages businesses to ignore the effectiveness of their advertising spend – it makes them “lazy”. It could also prevent a business with competitive advantages from increasing market share by spending more than average. Method (3) Task

The task approach involves setting marketing objectives based on the “tasks” that the advertising has to complete. These tasks could be financial in nature (e.g. achieve a certain increase in sales, profits) or related to the marketing activity that is generated by the campaigns. For example: • Numbers of enquiries received quoting the source code on the advertisement • Increase in customer recognition / awareness of the product or brand (which can be measured) • Number of viewers, listeners or readers reached by the campaign Method (4) Residual The residual approach, which is perhaps the worst of all, is to base the advertising budget on what the business can afford – after all other expenditure. There is no attempt to associate marketing objectives with levels of advertising. In a good year large amounts of money could be wasted; in a bad year, the low advertising budget could guarantee a further low year for sales. advertising- media Advertising media There is a huge variety of media available through which a business can conduct an

advertising campaign. What are the main types of media and what considerations should a business make in choosing between them? The starting point in the selection of appropriate advertising media is a “media analysis”. This can be defined as: "An investigation into the relative effectiveness and the relative costs of using the various advertising media in an advertising campaign" Before committing an advertising budget it is necessary to carry out marketing research on: - Potential customers - Their habits reading habits, television-watching

- How many times the advertisers wish the potential customers to see an advertisement - How great a percentage of the market they wish to reach, etc. These elements all need to be considered and balanced to plan a campaign that will effectively reach its target audience at a reasonable cost. A useful distinction can be made between “published media” and “visual/aural media”. Published media include:

• National daily newspapers • Sunday newspapers • Local and regional newspapers • Consumer magazines • Specialist magazines • Trade and professional press • Internet Visual and aural media include: • Television • • • • • Direct mailing (terrestrial and digital) Radio Cinema Billboards Transport

advertising - effectiveness? Judging the effectiveness of advertising How can the effectiveness of an advert be judged? The answer depends on what objectives or tasks were set for the advert. The table below sets out some possible objectives/tasks and how the effectiveness of the advert might be measured: Advertising objective Stimulate How success can be measured an - Number of enquiries from

advert increase in sales - Number of enquiries converted into sales - Test customer awareness Remind customers both before and after the of the existence of a advertising campaign product - Number of enquiries - Test customer awareness Inform customers - Number of requests for further information -Sales -Test customer awareness Build a brand image of brand recognition and perceived values Build customer - Levels of repeat purchase loyalty and Levels of customer relationship retention - Measure demographic profile of purchases Change customer - Measure type of goods attitudes ordered by new purchasers - Compare with previous data promotion - direct marketing Introduction Direct marketing is concerned with establishing an individual relationship between the business

offering a product or service and the final customer. Direct marketing has been defined by the Institute of Direct Marketing as: The planned recording, analysis and tracking of customer behaviour to develop a relational marketing strategies The process of direct marketing covers a wide range of promotional activities you may be familiar with. These include: • Direct-response adverts on television and radio • Mail order catalogues • E-commerce (you bought this marketing companion following tutor2u’s direct marketing campaign!) • Magazine inserts • Direct mail (sometimes also referred to as “junk mail”) • Telemarketing Direct mail Of the above direct marketing techniques, the one in most widespread use is direct mail. Direct mail is widely thought of as the most effective medium to achieve a customer sales response.

Why? • The advertiser can target a promotional message down to an individual level, and where possible personalise the message. There are a large number of mailing databases available that allow businesses to send direct mailing to potential customers based on household income, interests, occupation and other variables • Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a small, representative sample) before committing to the more significant cost of a larger campaign • Direct mailing campaigns are less visible to competitors – it is therefore possible to be more creative, for longer However, direct mail has several weaknesses: • A piece of direct mail is less “interactive” than a television or radio advert, although creative packaging can still stimulate customer response • Lead times to produce campaigns can be quite long direct mailing

• There is increasing customer concern with “junk mail” – the receipt of unsolicited mail which often suggests that the right to individual privacy has been breached.

The Direct marketing database Direct mailing is based on the “mailing list” – a critical part in the direct marketing process. The mailing list is a database which collects together details of past, current and potential customers. A properly managed mailing database enables a business to: • Focus on the best prospective customers • Cross-sell related products • Launch new products to existing customers How is the mailing database compiled? The starting point is the existing information the business keeps on its customers. All forms of communication between a customer and the business need to be recorded so that a detailed, up-to-date profile can be maintained. It is also possible to “buy” mailing lists from elsewhere. There are numerous mailing list owners and brokers who sell lists of names. The Internet, directories, associations and other sources are good sources. promotion - personal selling Introduction Personal selling can be defined as follows:

Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale" Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to support a push strategy (encouraging intermediaries to buy the product) or a pull strategy (where the role of the sales force may be limited to supporting retailers and providing after-sales service). What are the main roles of the sales force? Kotler describes six main activities of a sales force: (1) Prospecting - trying to find new customers (2) Communicating - with existing and potential customers about the product range (3) Selling - contact with the customer, answering questions and trying to close the sale (4) Servicing - providing support and service to the customer in the period up to delivery and also post-sale

(5) Information gathering obtaining information about the market to feedback into the marketing planning process (6) Allocating - in times of product shortage, the sales force may have the power to decide how available stocks are allocated What are the advantages of using personal selling as a means of promotion? • Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of personal attention • The sales message can be customised to meet the needs of the customer • The two-way nature of the sales process allows the sales team to respond directly and promptly to customer questions and concerns • Personal selling is a good way of getting across large amounts of technical or other complex product information • The face-to-face sales meeting gives the sales force chance to demonstrate the product • Frequent meetings between sales force and customer provide an opportunity to build good long-term relationships

Given that there are many advantages to personal selling, why do more businesses not maintain a direct sales force? Main disadvantages of using personal selling The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive. In addition to the basic pay package, a business needs to provide incentives to achieve sales (typically this is based on commission and/or bonus arrangements) and the equipment to make sales calls (car, travel and subsistence costs, mobile phone etc). In addition, a sales person can only call on one customer at a time. This is not a cost-effective way of reaching a large audience. promotion- push and pull strategies "Push or Pull"? Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull". Push A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product.

The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. Pull A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme – the Fimbles. Aimed at two to fouryear-olds, 130 episodes of Fimbles have been made and are featured everyday on digital children's channel CBeebies and BBC2. As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, FisherPrice will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland. In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of £90m from its children's brands and properties last year. The demand created from broadcasting of the Fimbles and a major advertising campaign is likely to “pull” demand from children and encourage retailers to stock Fimbles toys in the stores for Christmas 2002. promotion - public relations Introduction

The Institute of Public Relations defines public relations as follows: “The planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation and its publics” What is meant by the term “publics” in the above definition? A business may have many “publics” with which it needs to maintain good relations and build goodwill. For example, consider the relevant “publics” for a publicly-quoted business engaged in medical research: • Employees • Shareholders • Trade unions • Members of the “general public” • Customers (past and present) • Pressure groups • The medical profession • Charities funding medical research • Professional research bodies and policyforming organisations • The media • Government and politicians The role of public relations is to: • Identify the relevant publics • Influence the opinions of those publics by:

o Reinforcing favourable opinions o Transforming perhaps neutral opinions into positive ones o Changing or neutralising hostile opinions Public relations techniques There are many techniques available to influence public opinion, some of which are more appropriate in certain circumstances than others: Consumer communication Customer Trade Promotional Consumer Competitions Product Celebrity Web sites press press and launch releases releases videos exhibitions prizes events endorsements

Business communication Corporate identity Company and product Direct Web Trade exhibitions Internal / employee communication design videos mailings site

In-house Intranet Notice Employee Email

newsletters

and

magazines boards conferences

External corporate communication Company literature (brochures, videos etc.) Community involvement programmes Trade, local, national and international media relations Financial communication Financial media relations Annual report and accounts Meetings with stock market analysts, fund managers etc Shareholder meetings (including the annual general meeting Given the wide range of techniques used in public relations, how is it possible to measure the effectiveness of public relations? It is actually quite difficult to measure whether the key messages have been communicated to the target public. In any event, this could be quite costly since it would involve a large amount of regular research. Instead, the main measures of effectiveness concentrate on the process of public relations, and include:

• Monitoring the amount of media coverage obtained (press cuttings agencies play a role in keeping businesses informed of this) • Measuring conferences attendance at meetings,

• Measuring the number of enquiries or orders received in response to specific public relations efforts. promotion - sales promotion Introduction A good definition of sales promotion would be as follows: “An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on other methods”. More than any other element of the promotional mix, sales promotion is about “action”. It is about stimulating customers to buy a product. It is not designed to be informative – a role which advertising is much better suited to.

Sales promotion is commonly referred to as “Below the Line” promotion. Sales promotion can be directed at: • The ultimate consumer (a “pull strategy” encouraging purchase) • The distribution channel (a “push strategy” encouraging the channels to stock the product). This is usually known as “selling into the trade” Methods of sales promotion There are many consumer sales promotional techniques available, summarised in the table below: Price promotions Price promotions are also commonly known as” price discounting” These offer either (1) a discount to the normal selling price of a product, or (2) more of the product at the normal price. Increased sales gained from price promotions are at the expense of a loss in profit – so these promotions must be used with care. A producer must also guard against the possible negative effect of discounting on a brand’s reputation

Coupons Coupons are another, very versatile, way of offering a discount. Consider the following examples of the use of coupons: - On a pack to encourage repeat purchase - In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer - A cut-out coupon as part of an advert - On the back of till receipts The key objective with a coupon promotion is to maximise the redemption rate – this is the proportion of customers actually using the coupon. One problem with coupons is that they may simply encourage customers to buy what they would have bought anyway. Another problem occurs when retailers do not hold sufficient stocks of the promoted product – causing customer disappointment. Use of coupon promotions is, therefore, often best for new products or perhaps to encourage sales of existing products that are slowing down. Gift with purchase The “gift with purchase” is a very common promotional technique. It is also known as a

“premium promotion” in that the customer gets something in addition to the main purchase. This type of promotion is widely used for: - Subscription-based products (e.g. magazines) - Consumer luxuries (e.g. perfumes) Competitions and prizes Another popular promotion tool with many variants. Most competition and prize promotions are subject to legal restrictions. Money refunds Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer. These schemes are often viewed with some suspicion by customers – particularly if the method of obtaining a refund looks unusual or onerous. Frequent user / loyalty incentives Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this are the many frequent flyer or user schemes used by airlines, train companies, car hire companies etc. Point-of-sale displays Research into customer buying behaviour in retail stores suggests that a significant

proportion of purchases results from promotions that customers see in the store. Attractive, informative and well-positioned point-of-sale displays are, therefore, very important part of the sales promotional activity in retail outlets. promotion - sponsorship Introduction An increasingly common form of promotional activity is sponsorship. What is sponsorship? Sponsorship can be defined as follows: Supporting an event, activity or organisation by providing money or other resources that is of value to the sponsored event. This is usually in return for advertising space at the event or as part of the publicity for the event. There are many kinds of sponsorship: • Television and radio programme sponsorship (e.g. Cadbury’s sponsor broadcasts of Coronation Street). The increasing fragmentation of television in the UK through new digital channels is providing many more opportunities for sponsorship of this kind • Sports sponsorship: major sporting events have the advantage of being attended and (more importantly) watched by large numbers of

people. They also attract significant media coverage. • Arts sponsorship; arts events or organisations are not as well attended as sports events but are often regarded as more “worthy” and more in keeping with the image of certain businesses and brands. • Educational sponsorship; this can take several forms from the sponsoring of individual students at college through to the provision of books and computers nationwide using the redemption of product or store-related vouchers (e.g. Tesco’s Computers for Schools) What is involved in developing a sponsorship promotion? Smith suggests a six-stage process to decide what and how to sponsor: (1) Analyse the current situation: look at which other businesses are sponsoring in the target area. Are competitors already doing this and is it providing them with an advantage? (2) Define the sponsorship objectives: e.g. raise awareness of the brand; build an image; promote a new product (3) Agree the strategy: how does the sponsorship fit in with any other promotional activity?

(4) Develop the tactics: agree the details of what to sponsor, price, timing etc (5) Define the target audience (6) Consider what resources are needed to make the sponsorship a success.

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