Promotional Strategy Exam 1

Marketing exchange 

Involves two or more parties with  something of value to one another, desire and ability to give up something to the other party, and a way to communicate with each other.

Integrated Marketing Plan – goal and advantages 

• Detailed situation analysis. (detailed assessment of the current marketing conditions facing the company, its product lines, and its individual brands.) 

• Specific marketing objectives with time frame and mechanism for measuring performance.

• Selection of target market(s) and plans for each element of the marketing mix.

• Program for implementing the marketing strategy.

• Process for monitoring and evaluating performance and providing feedback.

Review of the Marketing Plan

• Examining overall marketing plan and objectives.

• Identifying the role of advertising and promotion.

• Performing competitive analysis.

• Assessing environmental influences

Mass media

Includes the diverse arrays of media that reach a large audience via mass communication; Non-personal component of advertising; large group of individuals susceptible to transmitting messages; no opportunity for immediate feedback.

Micromarketing

An approach to advertising that tends to target a specific group of people in a niche market; a strategy that focuses on precision, personalization, and localization to engage with specific customer segments or even individual customers; requires a deep understanding of customer data.

Brand identity

Who a company is and how they are seen by others. Focuses on what a customer thinks when they see the company logo; what feelings do people associate the company with. Focuses on relationship era and sustainability.

Relationship Era

Recognizes the need for companies to connect with consumers based on trust, transparency, and authenticity.

Sustainability

Development that meets the needs of the current generation without compromising the ability of future generations to meet their needs.

Brand equity

Intangible added value. Perceived added value from the perspective of the consumer - maybe it’s immaculate customer service, quick checkout process, informed salespeople, etc.

Primary Demand

Stimulates demand for the entire product class or general product category. (Examples:  milk, orange juice, pork, beef, etc).

Selective Demand

Stimulating demand for a specific company’s product.

Intrinsic Touchpoint

Occurs during the buying process or while using the product. Not intentionally created by the company, but are discussed with sales associates or customer service representatives. (Examples: Website design, product packaging, etc).

Unexpected Touchpoint

Unexpected references or information that can’t be directly controlled by the brand. (Examples: Word of mouth, viral marketing, etc).

Customer Initiated Touchpoint

When customer make contact with the brand themselves

IMC planning model – analysis of communication process

Coordinates the various promotional elements and other marketing activities that communicate with the firm's customers. Recognize the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines the disciplines to provide clarity, consistency, and maximum communications impact. It ensures that all marketing and promotional activities project a consistent, unified image.

Situation Analysis 

• What’s going on right now, what the marketing conditions are.

• Detailed assessment of the current marketing conditions facing the company, its product lines, and its individual brands.

• Provides information needed to guide a business in the right direction. Methodical look at the internal and external factors influencing a business at any given moment.

Competitive Advantage

Attributes that give a firm an edge over competitors. Those attributes are better quality products, superior customer service, low production costs and lower prices, dominating channels of distribution, and advertising.

Target Marketing

Selected after opportunity and competitive analysis. These are groups of people classified by demographics, geographics, and psychographics to embody the ideal consumer base of a particular brand. These brands can select one or multiple target markets, and these groups directly impact promotional tactics.

Market Segmentation

Dividing a market into distinct groups with common needs, who respond similarly to a marketing situation. Bases for segmentation include geographic, demographic, and psychographic.

Geographic Segmentation

Dividing market on basis of region, city size, metropolitan area, and/or density.

Demographic Segmentation

Dividing market on the basis of age, sex, family size, marital status, etc.

Psychographic Segmentation

Dividing market on basis of personality, lifecycles, and/or lifestyles.

Positioning

The art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from the competition. Basically the position of the product, service or even store is the image that comes to mind and the attributes consumers perceive as related to it.

Examples of Positioning

• A handbag maker may position itself as a luxury status symbol.

• A TV maker may position its TV as the most innovative and cutting-edge.

• A fast-food restaurant chain may position itself as the provider of cheap meals.

Repositioning

When a product or brand, that is usually declining or stagnant in sales, changes the positioning of the product or brand. Basically the brand or product redoing their positioning.

Promotional Push Strategy 

Programs designed to persuade resellers to stock, merchandise, and promote a manufacturer's product. Trade advertising  Used to motivate wholesalers and retailers to purchase products for resale.

Promotional Pull Strategy 

Spending money on advertising and sales promotion efforts directed toward the ultimate consumer. Goals  Create demand among consumers & Encourage consumers to request products from retailers.

Basic functions of managers in advertising and marketing

Responsible for administration and execution, coordination with departments, and coordination with outside agencies and services.

Basic functions of staff in advertising and marketing

There are many different staff positions in advertising and marketing. In marketing, there is sales, product management, and marketing services. In sales, these positions work more directly with the consumers where they directly market their products or services. In product management, these positions align consumer’s wants and needs to the product or service they are selling. In marketing services, there is the advertising department and marketing research. The advertising department consists of sales promotions, packaging design, sponsorship, and things along those lines. Marketing research positions’ goals are to better understand the company’s target market.

Centralized Brand Managers

Systems have marketing activities divided along functional lines.

Advantages of Centralized Brand Management

• Facilitated communications

• Fewer personnel required

• Continuity in staff

• More involvement from top management

Disadvantages of Centralized Brand Management

• Less involvement and understanding of overall goals

• Longer response time

• Not able to handle multiple product lines

Decentralized Brand Managers

Systems are used by firms with multiple divisions and many different products.

Advantages of Decentralized Brand Management

• Concentrated managerial attention

• Rapid response to problems and opportunities

• Increased flexibility

Disadvantages of Decentralized Brand Management 

• Ineffective decision making

• Internal conflicts

• Misallocation of funds

• Lack of authority

• Internal, not external focus

Commission Rates Negotiated System

When the client pays a specific commission to an agency for media placement. It varies from 8%-10% depending on how much the client is spending on media (it typically goes down as clients spend more on media).

Types of agencies

• Direct Marketing Agencies

• Sales Promotion Agencies

• Public Relations Firms

• Digital Agencies

Direct Marketing Agencies 

Provides a variety of marketing services designed to directly reach consumers.

Direct Marketing Agency Services

Database analytics & management, direct mail, research, media services, creative & production capabilities.

Sales Promotion Agencies

Develop and manage sales promotion programs.

Sales Promotion Agency Services

Promotional planning, creative research, tie in coordination, fulfillment, premium design and manufacturing, catalog production, contest/sweepstakes management.

Public Relations Firms 

Develops and implements programs to manage organization’s publicity, image, & affairs with consumers and public.

Public Relations Firm Services

Planning the PR strategy & program, generating publicity, lobbying & public affairs efforts, community activities & events, news releases & other communications, research, special events, managing crises.

Digital Agency Services

Website design & development, apps, search engine optimization, banner ads, video, mobile marketing, social media campaigns.

Obstacles in implementing IMC

• Lack of broad perspectives, knowledge, and from marketers and managers.

• Internal turf wars & agency egos.

• Fear of budget reductions.

• Some agencies add to resources, while others seek specialization.

Stages in the Basic Model of Consumer Decision Making

• Problem recognition

• Information search

• Alternative evaluation

• Purchase decision

• Post-purchase evaluation

Relevant Internal Psychological Processes (in the Basic Model of Consumer Decision Making)

• Motivation

• Perception

• Attitude formation

• Integration

• Learning

Problem Recognition

• Consumers perceive a need and get motivated to solve the problem.

• Caused by the difference between consumer’s ideal and actual state.

• Sources of problem recognition include out of stock, dissatisfaction, new needs/wants, related products/purchases.

Information Search Types

Internal and external

Internal search 

Retrieving information from past experiences and information from product alternatives.

External search

Seeking information from external sources.

Alternative Evaluation

• Comparing brands and their effectiveness in solving the problem, price, etc.

• Functional consequences refer to the tangible outcomes of product usage while psychosocial consequences are abstract and subjective.

Purchase Intention 

Predisposition to buy a certain brand by matching purchase motives with attributes of brands considered.

Brand Loyalty

Preference for a particular brand that results in repeated purchases.

Post Purchase Evaluation

Satisfaction occurs when expectations are met, and dissatisfaction occurs when they aren’t.

Cognitive dissonance 

Psychological tension experienced after a difficult purchase choice.

Motivation

Factors that compel a consumer to take action.

Perception

Receiving, selecting, organizing, and interpreting information to create meaningful pictures of the world.

Attitude formation

Attitudes represent positive and negative feelings and behavior tendencies.

Salient beliefs 

Beliefs concerning certain attributes.

Consumer Behavior

Processes and activities people engage in with relation to products and services to satisfy their needs and desires. It helps us understand the reasons underlying consumer purchases.

Hierarchy of Needs

Lower-level physiological needs must be met before higher-order needs become meaningful.

Novelty Seeking Behavior

Consumers want to try new things. (Example: Trying a new energy drink purely because it’s new or you just want to see what it tastes like).

Evoked Set

Subset of all brands of which consumers are aware. The set from which consumer decisions are made. The size of the evoked set depends on the importance of the purchase & time and energy spent comparing alternatives.

Classical reinforcement

• Learning is an associative process with the existing relationship between a stimulus and a response; contiguity and repetition are necessary. A conditioned stimulus elicits a conditioned response (Ex. Mariah Carey perfume ad associating with the looks/ sweetness of lollipops).

• Marketers strive to associate their products and services with positive perceptions, images, and emotion.

Continued reinforcement

Learning occurs rapidly and every response is rewarded. Behavior is likely to cease when reinforcement stops.

Reference groups

A group whose presumed perspectives/values are utilized by an individual for judgment, opinions or action. The three main types are associative, aspirational, and dissociative.

Associative Group

A type of reference group of people who we view as equals.

Aspirational Group 

A type of reference group that we might like to belong to.

Dissociative Group 

A type of group that we wish to not belong to.

Parts of the Communication Process

• Source

• Message

• Channel

• Encoding

• Receiver

• Decoding

• Noise

• Response

• Feedback

Source

A person/org. that has info to share with another person/group

Message 

Contains info/meaning source wishes to communicate.

Channel

Personal (direct marketing/communication) vs non personal (mass marketing).

Encoding 

Matching abstract (ideas, thoughts, info.) to symbols that are easy to understand.

Receiver 

The recipient of the sender's shared thoughts/info.

Decoding 

The sender’s message → thought.

Noise 

Unplanned disruption of communication process.

Response

The receiver’s reactions after seeing, hearing, or reading the message.

Feedback 

The receiver’s response that was communicated back to the sender. Personal selling provides most immediate feedback

Buzz Marketing

Word of mouth marketing as it pertains to a company, its products and/or services, and brands. It is often encouraged by marketers using tactics like  providing products to influential people, handing out samples, and encouraging people to recommend brands/products to others.

Word of Mouth (WOM)

Informal communication among consumers about products or services. A type of marketing that generates this discussion is called “buzz marketing.” It is a type of personal channel, or direct communication, between two or more persons. This has high credibility with consumers because it often comes from someone they know and or trust.

Cognitive response stage 

What the receiver knows or perceives about the product or brand. First stage of traditional hierarchy models, like AIDA. Impacted by counterarguments and support arguments.

Affective response stage 

Receivers feelings or affect level for brand. Indicate interest in a brand. Second stage of traditional hierarchy models.

Behavioral response stage 

The consumer's action toward the brand. Last stage in the traditional hierarchy model.

The “standard learning model”

This is similar to the traditional hierarchy models and is represented by the same sequence. This process is more common with “high involvement” shopping when a consumer has many options and needs to differentiate between brands. These steps can also be referred to as learn, feel, and do.

Passive shopping mode

A passive shopper receives information about a product only from unsolicited sources, such as social media, tv ads, magazines, websites, WOM, or referrals from other customers. Not spending a lot of time on looking at displays, ads, etc.

Elaboration Likelihood Model (ELM)

The ways that consumers process and respond to persuasive messages. Attitude formation or change process depends on the amount and nature of elaboration of relevant info that occurs in response to persuasive messages. It will be more effective for high involvement consumers.

Central route to persuasion

The ability and motivation to process messages is high, the receiver paying close attention to the message.

Peripheral route to persuasion 

The ability and motivation to process message flow, receiver focusing more on peripheral cues than message content.

Source factors

In general, the closer the relationship to the consumer, the more credible the source such as WOM. Also social media influencing product demos is credible to consumers. The credibility of the ad depends on the target market, because certain celebrities only appeal to certain groups of consumers.

Why present strong points first in marketing?

You may only have a small window of attention before the customer is not interested. Passive shopping is increasing, and attention spans are decreasing. Strong points give the consumer a reason to choose the product over the competition, and to give them a want if they don't already have one.

Clutter

All the nonprogram material that appears in the broadcast environment. It is a major concern among TV providers. It is difficult to attract and hold viewers’ attention and to communicate effectively and increases in nonprogram time and trend toward shorter commercials.

Benchmarking

Determining the target markets present position regarding the various response stages requires benchmark measures.

DAGMAR

Stands for Defining Advertising Goals for Measured Advertising Results. The major thesis is that communications effects are the logical basis for advertising goals and objectives against which success or failure should be measured. An advertising goal involves a communications task.

What are the characteristics of objectives?

• Concrete and measurable tasks. Start and stop time.

• Well-defined target audience.

• Benchmark and degree of change sought.

• Benchmark measures

• Specified time period in which goals must be accomplished.

Sales-Oriented Objectives

Aim to increase sales of product or service. This is why we spend on advertising. They require economic justification and are required to produce quantifiable results.

The Carryover Effect

Monies spent on advertising do not have an immediate impact on sales.

Concave downward model measuring advertising

As the amount of advertising increases, its incremental value decreases. It’s an S-shaped response curve.

Competitive Parity Method

Budget amounts established by matching competition’s percentage-of-sales expenditures. It reduces marketing warfare.