Chapter 12 Objectives 1 5 Promotion mix tools for communicating customer value 2 Need for IMC 3 Decisions involved in developing an advertising program 4 How do companies use PR The promotion mix Objective 1 Advertising any paid form of non personal presentation and promotion of ideas goods or services by an identified sponsor Sales promotion short term incentives to encourage the purchase or sale of a product or service Personal selling personal presentation by the firm s sales force for the purpose of making sales and building customer relationships Public relations building good relations with the company s various publics by obtaining favorable publicity building up a good corporate image and handling or heading off unfavorable rumors stories and events Direct marketing direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships Market communications the process of creating delivering assessing impact of the marketing message Informs consumers Reminds them of prior knowledge experience Persuades them to choose Builds and reinforces the relationship Ways consumers get information Communication method varies with the range of audience o One to many outward one way delivery o One to one personalized either via database profile or personal o Many to many crowd sources social media leveraged word of selling mouth type persuasion Integrated marketing communications IMC is a process to plan develop execute and evaluate the coordinated measurable persuasive brand communication programs over time to a targeted audience where each contact delivers a consistent positive message Objective 2 Focus is on customer engagement IMC is customer centric Looks at all contacts with customer CRM and formulates a consistent coherent message to elicit audience response o It is designed to impact customer behavior Utilizes and integrates product positioning packaging logo pricing corporate image plus multiple media events traditional and non0traditional communications Mixed communications from a company result in blurred brand perceptions by customers which is why there is a need for IMC Traditional promo mix See pro con on page 420 Advertising any paid form of non personal presentation and promotion of ideas goods or services by an identified sponsor o Pro reaches a large audience at a low cost per exposure o Con impersonal and lacks direct persuasiveness Sales promotion short term incentives to encourage the purchase or sale of a product or service o Pro attract consumer attention offers strong incentives can be used to dramatize product offers and boost sagging sales o Con short lived not as effective as personal selling or advertising Direct marketing direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships o Pro less public immediate and customized interactive Publicity building good relations with the company s various publics by obtaining favorable publicity building up a good corporate image and handling or heading off unfavorable rumors stories and events o Pro believable reaches people who avoid ads and salespeople o Con can dramatize a product marketers underuse it or use it as an afterthought Personal selling personal presentation by the firm s sales force for the purpose of making sales and building customer relationships o Pro most effective at certain stages of the buying process particularly in building up buyers preferences convictions and actions buyer feels a greater need to listen allows company to reach all types of consumer o Con long term commitment very expensive These have mass appeal Today s promo mix Traditional promo mix plus Product placement Guerilla event marketing Buzz Word of mouth WOM viral social media Advergaming Print ads in odd places Experiential Consumer generated marketing CGM Considerations to the promotional plan Target market Product lifecycle stage The product The buying stage The channel strategy o Push vs pull Push marketing sales force and trade promotion are used to push the product through the channels The producer promoted the product to channel members who in turn promote it to final customers Pull marketing the company spends a lot of money on consumer advertising and promotion to induce final consumers to buy the product creating a demand vacuum that pulls the product through the channel Advertising Objective 3 Developing the advertising program o Setting advertising objectives such as Informative advertising used heavily in new product categories Persuasive advertising brand features compared more important when competition increases Primary category demand vs secondary brand demand building Here s why we re better Reminder advertising reinforcement of brand awareness important for mature products o Setting advertising budget Affordable method setting the budget at a level management thinks the company can afford Percentage of sales method setting the budget at a certain percentage of current or forecasted sales Competitive parity method budget matches competitor s outlays Objective and task method developing the budget by defining specific objectives determining the tasks that must be performed to reach those objectives and estimating the costs of performing those tasks o Developing the advertising strategy Creating the message Breaking through the clutter Merging advertising and entertainment Message strategy Message execution o Slice of life showing typical people using the product in everyday life o Lifestyle shows how a product fits into a o Fantasy creates a fantasy around the product or particular lifestyle its use o Mood or image builds a mood or image around a product such as love beauty or intrigue o Musical shows people or cartoon characters singing about the product o Personality symbol creating a character that represents the product o Technical expertise shows the company s expertise in making the product o Scientific evidence presents survey or scientific information that the brand is linked to o Testimonial evidence or endorsement showing a highly believable or likeable source endorsing the product Consumer generated messages CGM when companies ask users to create their own ad Selecting advertising media Determining reach frequency and impact Choosing among major media types Selecting specific media vehicles Deciding on media timing o Evaluating advertising