Marketing - Chapter 12 Flashcards

Promotion Mix Tools

The promotion mix, also known as the marketing communications mix, comprises the specific blend of promotion tools used by a company to:

• Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.
• Sales Promotion: Short-term incentives to encourage purchase or sales of a product or service.
• Personal Selling: Personal customer interactions by the firm's sales force for the purpose of making sales and building customer relationships.
• Public Relations (PR): 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 and Digital Marketing: Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

The total promotion mix is used to engage customers, persuasively communicate customer value, and build customer relationships.

Changing Communications Landscape and Integrated Marketing Communications

The marketing communications landscape is changing due to:

• Changing Consumers: Consumers are better informed and more communications empowered.
• Changing Marketing Strategies: Marketers are shifting away from mass marketing and developing more focused marketing programs.
• Advancements in Digital Technology: Creating new ways to communicate with customers.

New Marketing Communications Model:

• Marketers reach smaller consumer segments in interactive and engaging ways.
• Utilizes a mix of traditional mass media and a wide array of online, mobile, and social media.
• Content marketing managers create, inspire, and share brand messages and conversations.

Integrated Marketing Communications (IMC):

• Integrates and coordinates the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands.
• A carefully blended mix of promotion tools including advertising, sales promotion, personal selling, public relations, and direct and digital marketing.

Nature of the Promotion Tools

• Advertising:
  • Reaches masses of buyers at a low cost per exposure.
  • Builds a long-term image for a product.
  • Can trigger quick sales.
  • Has a public nature and is viewed as legitimate.
  • Very expressive.
  • Impersonal and lacks the direct persuasiveness of salespeople.
• Personal Selling:
  • Personal interaction between two or more people.
  • Allows all kinds of customer relationships to spring up.
  • Buyer feels a greater need to listen and respond.
  • Most expensive promotion tool.
• Sales Promotion:
  • Wide assortment of tools with unique qualities.
  • Attracts attention and offers incentives to purchase.
  • Used to dramatize product offers and boost sales.
  • Invites and rewards quick response but has short-lived effects.
• Public Relations:
  • Very believable to readers.
  • Can dramatize a company or product.
  • Reaches many prospects.
  • Effective and economical when well thought out.
• Direct and Digital Marketing:
  • More targeted and interactive.
  • Immediate and personalized.

Push vs. Pull Promotion Strategy

• Push Strategy: The company "pushes" the product to resellers, which in turn "push" it to consumers through personal selling and trade promotion.
• Pull Strategy: The company promotes directly to final consumers, creating a demand vacuum that "pulls" the product through the channel using advertising, sales promotion, and online/social media.
• Most companies use some combination of push and pull strategies.

Major Decisions in Developing an Advertising Program

The advertising program involves several key decisions:

• Objectives Setting:
  • Communication Objectives: Informative advertising, persuasive advertising, reminder advertising.
  • Sales Objectives.
• Budget Decisions:
  • Affordable Method: Setting the budget at the level management thinks the company can afford.
  • Percentage-of-Sales Method: Setting the budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.
  • Competitive-Parity Method: Setting the budget to match competitors’ outlays.
  • Objective-and-Task Method: Defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.
• Message Decisions:
  • Message Strategy: The general message that will be communicated to consumers.
  • Message Execution: How the message is executed (e.g., slice of life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, and testimonial evidence or endorsement).
• Media Decisions:
  • Impact and Engagement.
  • Major Media Types: Television, digital/mobile/social media, newspapers, direct mail, magazines, radio, outdoor.
  • Specific Media Vehicles.
  • Media Timing.
• Advertising Evaluation:
  • Communication Impact.
  • Sales and Profit Impact.
  • Return on Advertising.

Possible Advertising Objectives

• Informative Advertising:
  • Communicating customer value.
  • Building a brand and company image.
  • Telling the market about a new product.
  • Explaining how a product works.
  • Describing available services and support.
  • Informing the market of a price change.
  • Correcting false impressions.
• Persuasive Advertising:
  • Building brand preference.
  • Encouraging switching to a brand.
  • Changing customer perceptions of product value.
  • Persuading customers to purchase now.
  • Creating customer engagement.
  • Building brand community.
• Reminder Advertising:
  • Maintaining customer relationships.
  • Reminding consumers that the product may be needed in the near future.
  • Suggesting new uses for a product.
  • Reminding consumers where to buy the product.
  • Keeping the brand in a customer’s mind during off-seasons.

Advertising Strategy

• Accomplishes the company’s advertising objectives.
• Major elements:
  • Creating advertising messages and brand content.
  • Selecting advertising media.

Creating the Advertising Message and Brand Content

• Breaking through the clutter.
• Merging advertising and entertainment (advertainment, brand entertainment).
• Message and content strategy (general message that will be communicated).
• Message execution (slice of life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, and testimonial evidence or endorsement).
• Consumer-generated content (incorporate the voice of the customer into brand messages and generate greater customer engagement).

Selecting Advertising Media

• Advertising media: Vehicles through which advertising messages are delivered to their intended audiences.
• Steps in advertising media selection:
  • Determining reach, frequency, impact, and engagement.
  • Choosing among major media types.
  • Selecting specific media vehicles.
  • Choosing media timing.

Profiles of Major Media Types

Evaluating Advertising Effectiveness and Return on Advertising Investment

• Return on Advertising Investment: Net return on advertising investment divided by the costs of the advertising investment. \text{Return on advertising investment} = \frac{\text{Net return on advertising investment}}{\text{Costs of the advertising investment}}
• Advertisers should regularly evaluate communication effects, sales, and profit effects.

Organizing for Advertising

• Small firms may use their sales department staff.
• Large companies may have their own advertising departments.
• Advertising agency: Assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.

International Advertising Decisions

• Degree of adaptation.
• Standardization benefits:
  • Lower advertising costs.
  • Greater global advertising coordination.
  • More consistent worldwide image.
• Standardization drawbacks:
  • Ignores the fact that country markets differ in their cultures, demographics, and economic conditions.

Problems Faced by Global Advertisers

• Countries differ in media costs and availability, and advertising practices.
• Diversity between countries requires advertisers to adapt their campaigns to meet local cultures and customs, media characteristics, and regulations.

Public Relations

• Promotes products, people, ideas, organizations, and nations.
• Builds good relations with consumers, investors, the media, and communities.
• Rebuilds interest in commodities for trade associations.

Functions of Public Relations (PR) Departments

• Press relations or press agency (creating and placing newsworthy information in the news media).
• Product publicity (publicizing specific products).
• Public affairs (building and maintaining national or local community relationships).
• Lobbying (building and maintaining relationships with legislators and government officials).
• Investor relations (maintaining relationships with shareholders and others in the financial community).
• Development (working with donors or members of nonprofit organizations to gain financial or volunteer support).

Role and Impact of PR

• Strong impact on public awareness at a lower cost than advertising.
• Power to engage consumers and make them part of the brand’s story.
• Limited and scattered use.
• Powerful brand-building tool.

Major Public Relations Tools

• News (about company and its products or people).
• Special events (conferences, speeches, etc.).
• Written materials (annual reports, brochures, etc.).
• Audiovisual materials (online videos, etc.).
• Corporate identity materials (logos, signs, forms, etc.).
• Public service activities (goodwill by contributing money and time).