Marketing Notes

Chapter 13: Promotion – Introduction to Integrated Marketing Communications

Tag Team and GEICO: An Example of Effective Promotion

  • GEICO's success story involves a shift from targeting low-risk groups to broader markets, necessitating aggressive advertising.
  • The talking lizard (Gecko) campaign significantly increased awareness and attracted new customers.
  • GEICO's substantial advertising spending (over 10billion10 billion in the 2010s) and memorable ads like the "Scoop, There It Is" campaign demonstrate its commitment to promotion.
  • The "Scoop, There It Is" ad won awards but GEICO focuses more on awareness and interest objectives rather than just awards.
  • GEICO partnered with Mikey Likes It creamery to create "Scoop, There It Is" ice cream, generating publicity and supporting a Black entrepreneur's positive story.
  • GEICO employs organic and paid search strategies to appear prominently in online search results.
  • They invest significantly (over 4040 per click) in sponsored links to capture customers actively searching for auto insurance.
  • GEICO balances online promotion with personal interaction through local offices and call centers with trained, licensed insurance agents.
  • They maintain customer relationships through regular email updates and a highly-rated customer service team.
  • GEICO's mobile app offers roadside assistance and a virtual assistant named "Kate", enhancing customer experience.
  • During the pandemic, GEICO offered 15% credits, saving customers 2.5billion2.5 billion, building loyalty.
  • GEICO's website serves as owned media for policy management, information, and links to social media.
  • Social media presence on platforms like Facebook, Instagram, TikTok, YouTube, and Twitter fosters engagement with current and potential customers.
  • GEICO integrates advertising, personal selling, and online media to acquire and retain customers, contributing to a significant market share increase.
  • GEICO's success has inspired competitors like Progressive and Allstate to create similar advertising campaigns.

Learning Objectives

  • Identify the advantages and disadvantages of various promotion methods.
  • Understand the concept of integrated marketing communications.
  • Recognize the importance of promotion objectives.
  • Understand the traditional communication process.
  • Understand the customer-initiated interactive communication process.
  • Know how promotion plans are blended for channel support and customer pull.
  • Understand how promotion blends vary over the adoption curve and product life cycle.
  • Determine how much to spend on promotion efforts.

Promotion Communicates to Target Markets

  • Promotion: Communicating information between seller and buyer to influence attitudes and behavior.
  • Promotion involves informing customers about product availability, place, and price.
  • Promotion must be tailored to specific target markets, aligned with other marketing mix variables, and reinforce differentiation and positioning strategies.
  • Marketing managers can select from methods like personal selling, mass selling, sales promotion, and publicity.
  • These methods are typically used in combination due to different strengths and limitations.
  • Specialists manage different types of promotion, emphasizing the need for teamwork and integrated marketing communications.
  • Understanding communication processes, both broadcast and interactive, helps in developing the best promotion blend.

Several Promotion Methods Are Available

  • Personal selling: Direct communication between sellers and potential customers; allows for immediate feedback and tailored messaging, but can be expensive.
  • Mass selling: Communicating with large numbers of potential customers simultaneously; less flexible than personal selling but more cost-effective for large, dispersed markets.
  • Advertising: Paid, non-personal presentation of ideas, goods, or services by an identified sponsor, using traditional and new media.
  • Sales promotion: Activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase, targeting consumers, intermediaries, or employees; typically produces immediate results.
  • Publicity: Unpaid form of non-personal presentation of ideas, goods, or services, utilizing various media, including websites, social media, and press coverage.
  • Firms generally spend more on personal selling and sales promotion than on advertising.

Someone Must Plan, Integrate, and Manage the Promotion Blend

  • Each promotion method requires specialized expertise, leading to the involvement of various specialists.
  • Sales managers manage personal selling and distribution channels.
  • Advertising managers manage mass-selling efforts and work with advertising agencies.
  • Sales promotion managers manage sales promotion efforts, often using both internal and external specialists.
  • Public relations managers handle communication with non-customers, including the press, labor groups, and stockholders.
  • Social media managers manage a company's social media presence and website.
  • Marketing managers are responsible for determining the optimal promotion blend, coordinating efforts across departments and personalities.
  • Integrated marketing communications involves intentional coordination of communications to convey a consistent and complete message.
  • Achieving consistency requires a clear understanding of the overall marketing strategy and how each promotion method contributes to specific objectives.

Which Methods to Use Depends on Promotion Objectives

  • The primary objective is to encourage customers to choose a specific product.
  • Priorities depend on the market situation and target market, considering the customer's buying path.
  • Specific objectives should state whom to inform, persuade, or remind, and why.
  • Three basic promotion objectives: informing, persuading, and reminding target customers.
  • Informing objectives educate customers about a product's features and benefits.
  • Persuading objectives develop favorable attitudes towards a product, demonstrating its superiority over competitors.
  • Reminding objectives reinforce positive attitudes and prevent customers from switching to competitors.
  • The customer purchasing process can be visualized as a funnel: (1) awareness, (2) interest, (3) evaluation, (4) trial, (5) decision, (6) confirmation, and (7) increasing commitment.
  • The number of customers decreases at each stage of the funnel, but customer equity grows.
  • Promotion objectives align with the funnel stages: informing for awareness and interest, persuading for evaluation and trial, and reminding for decision, confirmation, and increasing commitment.
  • AIDA Model: AIDA (Attention, Interest, Desire, Action) is an action-oriented model that aligns with the purchase funnel and basic promotion objectives.

What’s Next? Once upon a time…

  • Growing evidence supports the effectiveness of storytelling in connecting with customers and aiding persuasion.
  • Stories transport listeners, making them more receptive to new ideas.
  • Popular ads often follow a classic story pattern: exposition, rising action, climax, falling action, and dénouement.
  • Stories can solve problems, as demonstrated by B2B firms' use of case studies.
  • They can convey purpose, as seen in Lifebuoy soap's