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Chapter 12

Comm131 - Chapter 12 Notes.docx

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Department
Commerce
Course
COMM 131
Professor
Jacob Brower
Semester
Winter

Description
Marketing Chapter 12: Advertising and Public Relations March 5, 2013 The Promotion Mix - Promotion Mix/Marketing Communications Mix: Specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships Advertising: Any paid for of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor (mass media – television, radio, internet) Sales Promotion: Short-term incentives to encourage the purchase or sale of a product or service (discounts, rebates, coupons, contests, displays) Personal Selling: Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships (sales presentations, trade shows, incentive programs) Public Relations (PR): Building good relations with the company’s various publics by obtaining favourable publicity, building a good corporate image, and handling or heading off unfavorable rumors, stories, and events (press releases, sponsorships, special events) Direct Marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships (catalogues, websites, direct mail, mobile marketing) Integrated Marketing Communications - Mass Marketing: Selling highly standardized products to masses of consumers New Marketing Communications Landscape - Factors changing today’s marketing communications:  Consumers - Better informed and more communications empowered - Use the internet to research on their own - Easily connect with other consumers to exchange brand-related information and to create their own marketing messages  Marketing Strategies - Shifting away from mass marketing - Developing focused marketing programs to build customer relationships - Improvements in technology speed the movement to segmented marketing - Amass detailed customer information, keep track of customers needs, tailor offerings to narrowly defined groups  Communications Technology - Changes the way companies and customers communicate - On-demand television, satellite radio, downloading music, wireless networks, smartphones, social networking - Give companies exciting new media to interact with consumers - Give consumers more control over the nature and timing of messages Shifting Marketing Communications Model - Companies are doing less broadcasting and more narrowcasting - Mass media costs are rising, audiences are shrinking, ad clutter is increase, viewers are gaining control of message exposure through technology - Companies are able to reach smaller groups of consumers in more interactive ways - New model will consist of a shifting mix of traditional mass media and new, more personalized media - Challenge is to bridge the “media divide” that separates traditional creative media approaches to new interactive and digital ones Need for Integrated Marketing Communications - In the consumer’s mind, messages from different media and promotional approaches all become part of a single message about the company - Conflicting messages can confuse company images, brand positions, and customer relationships - Integrated Marketing Communications (IMC): Carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products - IMC recognizes all touch points where the public may encounter the brand - IMC ties together all of the company’s messages and images Shaping the Promotion Mix Nature of Promotion Tools - Each promotion tool has unique characteristics and costs  Advertising - Reach masses of geographically dispersed buyers at low cost - Enables seller to repeat a message many times - Large-scale advertising says something positive about the seller’s size, popularity, and success - Consumers view advertised products are more legitimate - Expressive – allows company to dramatize its products through artful use of visuals, print, sound, and colour - Impersonal, cannot be as directly persuasive as salespeople - One-way communication  Personal Selling - Most effective tool for building up buyers’ preferences, convictions, and actions - Most common promotional tool for B2B marketers - Involves long-term personal interaction between decision makers from customer organization and sales representatives from the vendor - Focuses on developing customer relationships - Buyer feels a greater need to listen and respond  Sales Promotion - Coupons, rebates, contests, discounts, sales offers, etc. - Designed to attract consumer attention, offer strong incentives to purchase, dramatize product offers, encourage trial, boost sagging sales - Invite and reward quick response - Effects are often short-lived and not as effective as advertising or personal selling in building brand preference or customer relationships  Public Relations - Very believable; seem more real - Reach prospects who avoid advertisements and sales people - The message gets to the buyer as “news” rather than sales-directed communication  Direct Marketing 1. Less Public: The message is normally directed to an individual 2. Immediate: Messages can be prepared quickly 3. Customized: Messages are tailored to appeal to specific customers 4. Interactive: Allows for dialogue between marketers and consumer Promotional Mix Strategies - Push Strategy: a promotion strategy that calls for using the sales force and trade promotion to push the product through channels; the producer promotes the product to channel members who promote it to final consumers (B2B markets use push more) - Pull Strategy: a promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product, creating a demand vacuum that “pulls” the product through the channel (B2C markets use pull more) Advertising Setting Advertising Objectives - Advertising Objective: a specific communication task to be accomplished with a specific target audience during a specific period of time - Classified by primary purpose – to inform, persuade, or remind  Informative Advertising - Use when introducing a new product or brand - Objective is to build demand by communicating the product’s benefits - Educational purpose (ie. iPhone)  Persuasive Advertising - Important as competition increases - Objective is to build selective demand (persuade consumers that your product has more benefits than competitors)  Comparative Advertising - Company compares its brand with one or more other brands - ie. Mac vs. PC commercial - Often indirect – suggests a comparison to another brand without naming it  Reminder Advertising - Important for mature products - Helps maintain customer relationships and keep customers thinking about the product Setting Advertising Budget - Advertising Budget: the dollars and other resources allocated to a product or company advertising program 1. Affordable Method - Setting advertising budget at the level management thinks the company can afford - Small businesses - Ignores effects of advertising on sales - Places promotion last among spending priorities 2. Percentage-of-Sales Method - Setting promotion budget at a certain percentage of current or forecasted sales, or as a percentage of the unit sales price - Simple to use and helps management think about the relationships between promotion spending, selling price, and profit per unit - Wrongly views sales as a cause of promotion rather than result - Based on availability of funds rather than opportunities 3. Competitive-Parity Method - Setting promotion budget to match competitors’ outlays - Monitor competitors advertising - Competitor’s budgets represent the collective wisdom of the industry - Spending what competitors spend helps prevent promotion wars 4. Objective and Task Method - Company sets advertising budget based on what it wants to accomplish - Developing the advertising budget by: 1. Defining specific promotion objectives 2. Determining the tasks needed to achieve these objectives 3. Estimating the costs of performing these tasks - Sum of these costs is the advertising budget - Forces management to spell out relationship between dollars spent and promotion resu
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