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Market Communication

Market Communication. Figure 14.1: The Communications Model. decoding. encoding. Message. Medium. Source. Receiver. Noise. Feedback. Promotion Mix. Advertising Sales Promotions Public Relations Personal Selling. Figure 14.2: Control Continuum. Advertising. Sales Promotion.

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Market Communication

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  1. Market Communication © 2003 Prentice Hall, Inc

  2. Figure 14.1: The Communications Model decoding encoding Message Medium Source Receiver Noise Feedback © 2003 Prentice Hall, Inc

  3. Promotion Mix • Advertising • Sales Promotions • Public Relations • Personal Selling © 2003 Prentice Hall, Inc

  4. Figure 14.2: Control Continuum Advertising Sales Promotion Personal Selling Public Relations Word of Mouth High Low © 2003 Prentice Hall, Inc

  5. Appeals • Personal appeals allow for direct interaction between a company representative and a customer • personal selling • Mass appeals seek to reach many prospective customers at the same time • advertising • sales promotion • public relations © 2003 Prentice Hall, Inc

  6. Advertising • Non-personal communication from an identified sponsor using the mass media • can convey rich and dynamic images • can establish and reinforce brand identity • can communicate factual information • can remind customer to buy © 2003 Prentice Hall, Inc

  7. Sales Promotion • Programs that build interest or encourage purchase of a product through the use of an incentive in a specified time period • coupons • contests • rebates • premiums © 2003 Prentice Hall, Inc

  8. Publicity and Public Relations • Portray an organization and its products positively by influencing the perceptions of various publics • writing press releases • holding special events • conducting and publishing consumer surveys • putting a positive spin on negative news © 2003 Prentice Hall, Inc

  9. Developing the Promotion Plan • Framework for developing, implementing, and controlling the firm’s promotional activities © 2003 Prentice Hall, Inc

  10. Figure 14.3: Stages in Developing the Promotion Mix © 2003 Prentice Hall, Inc

  11. Step 1: Establish Promotion Objectives • Objectives will change depending on where consumers are on the path to loyalty • Some objectives might be • create awareness • inform the market • create desire • encourage trial • build loyalty © 2003 Prentice Hall, Inc

  12. Figure 14.4: Up the Promotional Road © 2003 Prentice Hall, Inc

  13. Step 2: Identify Influence on the Promotion Mix • Mix must be tailored for each situation • Will company use push or pull strategy? • Push means that the company seeks to move its products through the channel by convincing channel members to offer them and entice their customers to select these items • Pull means that the company relies on consumers to learn about and express desire for its products © 2003 Prentice Hall, Inc

  14. Effects of Time and the PLC • Introduction phase: push strategy; mix relies heavily on advertising, sales promotions, and public relations • Growth phase: heavy advertising with emphasis on differentiation • Maturity phase: emphasis on sales promotions to encourage brand switching • Decline phase: dramatic reductions in promotional spending © 2003 Prentice Hall, Inc

  15. Step 3: Determine and Allocate the Total Promotion Budget • Top-down budgeting techniques • percentage-of-sales method • competitive parity • Bottom-up budgeting technique • objective-task method © 2003 Prentice Hall, Inc

  16. Step 4: Allocate Budget to Specific Promotion Mix • Organizational factors • Market potential • Market size © 2003 Prentice Hall, Inc

  17. Step 5: Designing the Promotion Mix • Which elements of promotion will be used? • What message is to be communicated? • Type of appeal? • Structure of appeal? • What communication channels should be employed? • What role will advertising, sales promotion, public relations, and selling play? © 2003 Prentice Hall, Inc

  18. The AIDA Model • Attention • Interest • Desire • Action © 2003 Prentice Hall, Inc

  19. Step 5: Evaluate the Effectiveness of the Promotion Mix • Is the plan working? • Measure response to sales promotions • Measure brand awareness, recall, and image before and after ad campaign • Analyze and compare sales performances by territory and sales force • Clip articles appearing in media © 2003 Prentice Hall, Inc

  20. Interactive Marketing • Attention Economy • The amount of information seems infinite; our ability to get it is limited by the time we can spend looking • Interactive media are in the business of buying and selling people’s attention • Customized marketing communications yield a measurable response in the form of a purchase or request for more information © 2003 Prentice Hall, Inc

  21. De-Mass Marketing • Companies once focused on mass marketing are increasingly segmenting and customizing promotions for small targets © 2003 Prentice Hall, Inc

  22. Levels of Interactive Response • First-order response: product offer directly yields a transaction • Second-order response: product offer results in some form of customer feedback but it isn’t a transaction • request for more information • request NOT to receive more information © 2003 Prentice Hall, Inc

  23. Database Marketing • Critical to interactive marketers as they seek to track responses to messages and develop a dialogue with customers • Allows the organization to learn customer preferences, fine-tune and test offerings, build relationships © 2003 Prentice Hall, Inc

  24. Database Marketing • Is interactive • Builds relationships • Locates new customers • Stimulates cross-selling • Is measurable • Is trackable © 2003 Prentice Hall, Inc

  25. Putting It All Together • Integrated Marketing Communications (IMC) is “a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.” © 2003 Prentice Hall, Inc

  26. Figure 14.5: The Integrated Communications Perspective © 2003 Prentice Hall, Inc

  27. MSN Microsoft practices IMC by coordinating print advertising with other elements of its promotional mix. © 2003 Prentice Hall, Inc

  28. Characteristics of IMC Approach • Focus on customer need for communications • Reliance on customer database to focus messages • Use of consistent messages via diverse communications vehicles • Careful planning of message delivery to generate a steady stream of consistent information • Use of several elements of the promotional mix © 2003 Prentice Hall, Inc

  29. Figure 14.6: Integrated Marketing Model © 2003 Prentice Hall, Inc

  30. The IMC Planning Model • Start with a Customer Database • Develop Promotional Strategies • Implement Specific Promotional Tactics • Evaluate IMC Communications • First-order responses • Second-order responses • Attitudes toward brand and firm © 2003 Prentice Hall, Inc

  31. Barriers to Acceptance of IMC • Requires changes in planning and implementation of promotional strategies • Puts more weight on promotional aspects other than advertising • Requires upper-level management to view other aspects of the marketing mix as part of the communications strategy • Requires company-wide commitment • Traditional ad agencies may not be equipped to handle a true IMC campaign © 2003 Prentice Hall, Inc

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