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Western University
Management and Organizational Studies
Management and Organizational Studies 3322F/G
Tara Lee

Direct Marketing, Internet & Online Marketing Communications Additional Reading #3 Celebrity Endorser: Source credibility and source attractiveness Celebrities bring their meanings in to the ad and transfer them to the product they are endorsing Stage 1 (Culture) – Role  Celebrity Stage 2 (Endorsement) – Celebrity  Product Stage 3 (Consumption) – Product  Consumer Implications to marketers: Decide on the image or symbolic meanings important to the target audience for the particular product Decide which celebrity best represents the meaning Design the ad that captures the meaning in the product and moves it to the consumer Direct Marketing Amarketing system for developing products, sending messages directly to customers (B2C and B2B), and accepting orders through a variety of media and then distributing the purchase directly to customers Mass marketing is being combined with micromarketing techniques Importance of Direct Response Communications Direct mail alone accounts for 9.4% of net advertising revenues Direct mail is the fourth most utilized advertising medium after television, the Internet and newspapers Communications are much more personalized Ability to nurture relationships at a personal level Database Management It’s the list that makes or breaks the campaign Quality information is the backbone of a direct response strategy Agood system collects and maintains relevant customer information (Data Warehouse) Data Warehouse Customer names and addresses E-mail addresses and the cookies History of customer interactions (e.g., inquiries, complaints, returns) Results of any customer surveys Preferences and profiles supplied by the customer Marketing promotions and response history for marketing campaigns Database Management: Internal Sources Collecting Data List information Purchasing behaviour Acquisition of external information Demographics Psychographics Accessing Data Instant, accessible storage system Data mining Allows profiling Prediction of future sales Database Management: External Sources Lists can be purchased from a list broker and through a merge/purge process integrated into the database Three types of lists available Response Lists: Alist of direct mail buyers who have previously made purchased based on direct response offers (e.g. Charity donor list) Circulation Lists: e.g. The Chatelaine list Compiled Lists: Adirect mail list prepared from government, census, telephone, warranty or other publication info (e.g. Fraser’s Canadian Trade Index, the Canadian Medical Association) Direct ResponseAdvertising Direct mail: Accounts for 13% of net advertising revenues The third most utilized advertising medium after television and newspapers Direct response print Direct Response Television (DRTV) Telemarketing Catalogues Direct Mail Strategies Consumer Receptiveness Advantages and Disadvantages of Direct Mail Advantages Audience Selectivity – Targets can be precisely identified and reached based on demographic, psychographic, and geographic characteristics. It is possible to secure external lists that closely match internal lists Creative Flexibility – Unlike other media, the message can be copy oriented, visually oriented, or a combination of both. Because a mailing includes several components, there is ample time to expand on the benefits of the product Exclusivity – Mail does not compete with other media or other ads upon receipt. In contrast, magazines and newspapers include clusters of ads and create a cluttered environment to advertise in Measurability – Direct mail response is measured by the sales it generates. Asale can be directly linked to the mail offer (for example, receipt of a phone call or order form in the mail). The success of a campaign is determined in a relatively short period Disadvantages Image – Direct mail is not a prestigious medium. Often perceived as junk mail, it can be easily discarded by the recipient Cost per Exposure – When all costs are included (for example, printing, securing list, mail delivery, and fulfillment), total cost can be higher than an ad placed in another print medium, although selective targeting reduces waste circulation Lack of Editorial Support – As a standalone medium, compared to newspapers or magazines, it can’t rely on editorial content to get people to read the message Direct Response Television (DRTV) DRTV is growing in popularity among traditional television advertisers Three types include Infomercials (30 or 60 min): Characters and script 30- and 60- second direct response commercials Direct home shopping: The Shopping Channel Direct Response Print Media Print is a good alternative when targeting an audience based on geographic and psychographic characteristics Two options include Ads in newspapers and magazines Inserts Telemarketing Roles of Telemarketing To be effective, the telemarketing call must be carefully planned and the representative must be thoroughly trained Telemarketing is effective for Fundraising Sales support Personal selling Fulfillment – Accepting orders, maintaining customer records, invoicing and payment processing Customer service Analysis of Telemarketing Advantages Cost offers considerable savings Response rates are 100 times higher than direct mail Disadvantages Negative image Calls unwelcome and intrusive Least-liked sales technique Catalogues Catalogue marketing involves the merchandising of products through catalogue sales Leaders such as Sears and Canadian Tire see the value of integrated marketing communications Catalogue Facts and Trends Catalogues offer convenience, a top priority among busy shoppers Consumers are into “multi-channel” shopping Companies are producing their own magazines to stay in touch with customers (CRM) Online and Interactive Communications Online Realities Online communications offer a high degree of personalization Generation Y is turning away from traditional media Spectrum of digital communications is exploding, particularly with youth and 18 to 34 year olds Online and Interactive Marketing Communications Contributing factors to online advertising growth Automatically gears ads to personal viewer’s tastes Immediate feedback regarding how effectively their message reached the target Delivers accountability The expansion of broadband capabilities and the growing penetration of smartphones and tablets provide new opportunities Traditional Media versus Online Media The Internet will become the medium of choice for companies wanting to reach large numbers of people in a cost- efficient manner Targeting Online Demographic targeting Geographic targeting Behavioral targeting is a means of delivering online ads based on a consumer’s previous surfing patterns The primary benefit of online communications Cookie is an electronic identification tag sent from a web server to a user’s browser to track the user’s browsing patterns Reach becomes less important Facilitates mass customization The development, manufacture, and marketing of unique products to unique customers Example of mass customization Dell operates one of the highest-value commercial websites in the world Online and Interactive Communications Planning Interactive Communications – The placement of an advertising message on a website, usually in the form of a banner, pop-up ad, rich media ad, sponsorship at a website, or an ad delivered by email Also via cell phones, PDAs, MP3s, and video games Online and Interactive Communication Objectives Creating awareness Branding and image branding Offering incentives Generating leads Providing customer service Conducting transactions Creating Awareness Portal –Awebsite that serves as a gateway to a variety of services of searching, news, directories, email, online shopping, and links to other sites Examples include: Yahoo!, Google, and MSN Branding and Image Branding Must present an integrated message between traditional and non-traditional forms of media Website must project proper image Appearance Style Tone Offering Incentives The Internet is the most popular means of delivering information about sales promotion offers Good medium for implementing sales promotions Price discounts are common Online coupon offers are available Contests and sweepstakes popular Encourages purchase and/or loyalty Database information Offering Incentives The Internet is the most popular means of delivering information about sales promotion offers Good medium for implementing sales promotions Price discounts are common Online coupon offers are available Contests and sweepstakes popular Encourages purchase and/or loyalty Database information Tim Hortons – Roll Up The Rim Shoppers Drug Mart – Trying to create customer loyalty with Optimum card, coupons Generating Leads Consumers are willing to disclose information for contests Consumers and businesses will provide vital information when searching for information online It’s the start of CRM! Providing Customer Service Efficient and cost-effective way of providing service Speed of service is a primary benefit Carefully index FAQs and key word searches Pay attention to all aspects of CRM Response times become critical Conducting Transactions 13.2 million Canadians bought something online in 2010 Online sales reached $15.3 billion in Canada in 2010 (total annual spending has doubled since 2005) Businesses need to combine traditional methods of conducting business with e-marketing and e-business methods Basic Terminology for Online and Interactive Communication Ad Impressions (Ad Views) – The number of times a banner is downloaded; the standard way of determining exposure for an ad on the web Ad Clicks (Clickthroughs) – The number of times users click on an ad banner Ad Click Rate (Clickthrough Rate as %) – The ratio of ad clicks to ad impressions Visitor (Unique Visitor) – Any individual who accesses a website within a specific time period Visit (session or browsing period) – Asequence of page requests made by one user at one website Stickiness – The notion that the website has a compelling reason for users to stay for a longer visit or to return frequently ASite’s Activity The number of unique visitors The time they spend visiting How often they return to the site 8 million page views, 100000 visitors, 800000 visits last month The average visitors return the site 8 times each month and view 10 pages on each visit (sticky website!) Online and Interactive Communications Strategies Search advertising Banner advertising Rich media Sponsorships Email advertising Webcasting Company website SearchAdvertising SearchAdvertising (pay-per-click advertising) – The advertiser’s listing is placed within or alongside search results in exchange for paying a fee each time someone clicks on the listing BannerAdvertising Banner –An ad that stretches across a webpage; the user can click on the ad for more information Can be static or animated Standard sizes established by the InteractiveAdvertising Bureau (IAB) based on Internet Measurement Units (IMU) Universal Ad Package Sizes for InternetAdvertising Rich Media Rich Media – Online communications that include animation, sound, video, and ineractivity Rich media (inside-the-banner) options: Expandable banner Video strip shows Push down banner Rich media (outside-the-banner) options: Floating ad Window ad Wallpaper ad VideoAdvertising VideoAdvertising – Offer the opportunity to connect with consumers on an emotional level Streaming - Continuous delivery of small packets of compressed data interpreted by a software player and displayed as full-motion video Pre-roll ads Mid-roll ads Post-roll ads Sponsorships Sponsorship – Acommitment to advertise on a third-party website for an extended period or to sponsor a webpage Attracted on the basis of web content Advertiser does not have to drive viewer to website, viewers come to them Trust in the sites resulting in a more positive perception fo the sponsor Example – Online sponsorship  Kraft EmailAdvertising Nearly 96% of Canadian Internet users access email (Statistics Canada) Inexpensive: Costs $5-$7 per thousand sends versus $500-$700 per thousand for direct mail High response rates More acceptable to Internet users versus direct mail Allows for greater frequency of distribution Potential for incredible level of customization Email produces good return on investment Average return of $40.56 for every dollar spent Permission-based email – Sent to recipients who agree to receive information in that form versus receiving spam Sponsored email – Permission-based email that includes a short message from a sponsor along with a link to the sponsor’s website Opt-in list –Alist of people who have agreed to receive message via email Viral Marketing – Asituation where the receiver of an online message is encouraged to pass it on to friends In the United States 89% of adult Internet users share content with others via email Must be compelling to work; shocking or risky information works best Company Websites Traditional media communications and online communications encourage users to visit a company or brand website Build brand awareness and preference with engagement Common source of information among business decision makers Webcasting (Webisodes) The production of an extended commercial that includes entertainment value Advantages and Disadvantages of Online Marketing Communications Advantages Targeting Capability –Advertiser reaches individuals based on browsing behaviour and preferences Broad and Flexible Reach – The online audience is growing rapidly; since ads can be bought by the impression, you can buy as much or as little of the audience as you desire Timing – Messages can be delivered 24 hours a day, 7 days a week Interactivity – Messages encourage consumers to interact with brands while online (performing a task, playing a game, and so on) Tracking and Measurement – Detailed information on who saw an ad, in what context, and how many times, is available immediately Transaction –Assuming e-business capability at a website, an online purchase can occur Disadvantages Low Click Rates – Average click rates of only 1% are common, which significantly reduces the number of visitors to a website (the intended action) Advertising Overload – Too much advertising clutter on a webpage reduces the potential impact of any ad appearing on the page Consumer Frustration – The barrage of unexpected banner ads and unsolicited emails frustrates, even harasses, consumers; advertisers must deal with their wrath Too Measurable –Amarketer can be overburdened with the amount of data available from an online advertising campaign Mobile Media Location-based targeting An effort to integrate consumers’location information into a marketing communications strategy Text messaging Refers to the transmission of text-only messages Canadians send 186 million text messages a day Video messaging The transfer of video messages and other content (via cell phones and other personal electronic devices) Mobile applications All smartphone suppliers offer applications that encourage in-application advertising (Apple’s system is called iAd) Quick Response (QR) code Atwo-dimensional barcode that can be scanned and read by smartphones; allows for sharing of text and data Video game advertising (advergaming) The integration of brands into video games More effective than product placement Social Media Networks Benefits Word-of-mouth –Astudy shows 46% of social media users have recommended or talked about a product or brand on Facebook Not just for younger consumers Consumer engagement with a brand The opportunity to learn about customer preferences Brand democratization – Consumers are now in charge of brand marketing Consumer-generated content – Online content, often brand oriented that is created by consumers for consumers Crowdsourcing – Using “collective intelligence” of the public Although the potential benefits of using social media as a communication tool, the social media is not yet that popular with marketing executives. Why? ROI vs. COI Public Relations Current Trends Public Relations Hyper-competition Advancing electronic technology Heavy news coverage of “bad” companies These trends and others are driving marketers to look for alternative ways to build brands Public Relations Public Relations – Aform of communication designed to gain public understanding and acceptance Uses publicity which does not necessarily involve payment to have it communicated in the media There are costs of creation and distribution from the company if it is proactive Offers legitimacy when appearing in the news Used to build rapport with various “publics” Internal Publics Employees Distributors Suppliers Shareholders Customers External Publics Media Governments Public Relations Prospective shareholders Financial Organizations The Role of Public Relations Generally falls into 6 key categories: Corporate communications Reputation management Publicity generation Product placement, branded content, and product seeding Community relations and public affairs Fundraising Company’s Reputation Reputation rating from the Fortune Survey – Media exposure had a strong negative relation with reputation. Why? Corporate Communications CorporateAdvertising – Designed to convey a favourable image of a company among its various publics How they solve customer problems Promoting goodwill Demonstrating social responsibility Public Relations AdvocacyAdvertising – Paid for by a sponsor that promote a particular view on a recognized, controversial issue Objective is to Influence public opinion Encourage others to support the cause Take action to correct the problem Community Relations and PublicAffairs Social responsibility is important Perceived as good corporate citizens and contributors to local communities Indirect and long term effect on sales Public has to “like you before they will buy you” Product Publicity Publicity – News about an organization, product, service, or person that appears in the media Deemed to be “newsworthy” New product launch is good timing Given advertising clutter, it is no longer undervalued Product Placement, Branded Content, and Product Seeding Product Placement – The visible placement of brand name products in television shows, movies, radio, video games, and other programming More credibility over advertising, better chance of being noticed and remembered Public Relations Virtual product placement can occur via editing Branded Content (Product Integration) – Integrating the name of the brand right into the storyline of a show, movie, or video Product Seeding – Giving a product free to a group of trendsetters who promote the product to others by word-of- mouth Low cost and it works for narrow targets The Origins of Product Placement People usually point to the use of Reese’s Pieces in E.T. as the inaugural event in product placement Product placement agreements apparent in the 1930s, however Product Placement Objectives “Placement” helps ensure that products are portrayed in a favourable light Develop brand recognition Cost effective when compared with the normal costs of buying commercial time or obtaining celebrity endorsements Reach desirable target markets Synergistic with other promotion (IMC) When is Product Placement Likely to be Effective? Seems naturalistic Congruency between brand and plot of show Prominent placements elicit higher recall Brand placement recognition levels for audio-visual prominent placements exceed visual-only prominent placements Public Relations Explicit mention of product in audio script (without a visual depiction) leads to higher recall than a subtle visual placement (without audio reinforcement) Effectiveness Order: 1. Audio & Visual 2. Audio 3. Visual It’s not just movies and TV  Books, computer games… Maple Leaf Foods Listeria Outbreak Maple Leaf Food Michael McCain “Going through the crisis there are two advisers I’ve paid no attention to. The first are the lawyers, and the second are the accountants. It’s not about money or legal liability, this is about our being accountable for providing consumers with safe food.” BPOil Spill BP “will honor all legitimate claims for business interruption.” Areporter asked what an illegitimate claim would look like. “I could give you lots of examples. This is America – come on. We’re going to have lots of illegitimate claims. We all know that.” Reputation Management Public relations plays a vital role when a company finds itself in a crisis situation Being prepared is essential Senior executives must be ready to act instantly and demonstrate control of the situation All messages must be credible and factual Use appropriate messaging Public Relations Fundraising PR key is not-for-profit Help educate the public about how funds are used Message predisposes people to give Strategies include Direct mail Telemarketing Print advertising Websites Public Relations Objectives Objectives can be Creating awareness Shaping attitudes Altering behaviour Primary goal is to get media exposure in a positive way Gross impressions – The number of times an item was potentially seen Equivalent advertising value Engaging customers Public Relations Strategy Public Relations Company cannot control the media or dictate the manner in which the message is communicated Challenges: Getting past the media gatekeepers Ensuring accuracy Strategic role should be examined based on how best to Reach opinion leaders Maximize the news value Time events to reinforce other marketing communications strategies Reach designated targets Borrowed-interest strategy –Aplan to promote a marketing activity that is related to a product Public Relations Execution Press Release – Adocument prepared by an organization containing public relations information that is sent to the media for publication or broadcast Press Conference – Ameeting called by an organization to present information to representatives of the media Media Kit – Apackage of relevant information associated with a product or organization that is distributed at a press conference Website Awebsite communicates information about a company or brand, so it can be a very useful PR tool Impressions are formed when visiting a website so it must: Download quickly and navigate easily Provide entertainment Be updated quickly Public Relations Newsletter Adocument sent to a predetermined audience that contains news about an organization Distributed by internal or external mail or email Sent to employees or members Relies on accurate database Can be a special interest newsletter Booklet or Brochure Amulti-page document distributed to consumers and other interested stakeholders (usually related to product or service) Annual Report Adocument published annually by an organization primarily to provide current and prospective investors and stakeholders with financial data and a description of its operations Special interest report can also occur Social Media Online tools that people use to share content, profiles, opinions, insights, experiences, perspectives, and media itself, thus facilitating conversations and interaction online between groups of people Blogs Afrequent, chronological publication of personal thoughts Corporate blog are effective tools to fight negative public blogs Consumer-generated content has credibility Timeline and Budget Timeline is essential so that all activities are carefully coordinated with other marketing communications activities Public relations programs cost less than advertising programs but they still have to be accounted for Public Relations Measurement and Evaluation Three levels for measuring public relations effectiveness: Outputs – Measure the transmission Outgrowths – Measure message reception by the target audience Outcomes – Measure attitude and behavioral change Public R
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