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Promotional Mix

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The combination of one or more of the communication tools used to inform, persuade, or remind prospective buyers consists of public relations, advertising, sales promotion, and personal selling

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Integrated Marketing Communications

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The concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences

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Communication

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process of conveying a message to others

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6 elements of communication

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a source a message a channel of communication a receiver and the process of encoding and decoding

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source

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company or person who has information to convey

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message

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information sent by a source such as a description of product

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Channel of communication

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how the message is conveyed such as a salesperson, advertising media, or public relations tool

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receivers

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consumers who read, hear or see the message

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encoding

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process of having the sender transform an idea into a set of symbols

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decoding

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reverse of encoding process of having the receiver take a set of symbols, the message, and transform the symbols not an idea preformed by receivers according to their attitudes, values, and beliefs

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field of experience

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necessary for communication to be effective a similar understanding and knowledge by sender and receiver that apply to the message

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Feedback Loop

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consists of a response and feedback

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response

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impact the message had on the receivers knowledge, attitudes, or behaviors

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feedback

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the senders interpretation of the response and indicates whether the message was decoded and understood as intended

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Pretesting

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ensures messages are decoded properly

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Noise

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extraneous factors that can work against effective communication by distorting a message or the feedback received can be through a mistake like a printing error, bad use of words or pictures that fail to communicate or a salespersons message misunderstood by buyers due to accent, use of slang, or communication style

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Promotional Alternatives/Elements, 5 basic IMC tools

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advertising personal selling public relations sales promotion direct marketing

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Mass selling

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used with groups of prospective buyers advertising, sales promotion, public relations

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customized interactions

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personal selling is example of

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Advertising

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any PAID form of NON PERSONAL communication about an organization, service, or idea of an identified sponsor -or public service announcement is an exception to paid part- space or time is donated -involves MASS MEDIA, does not have immediate feedback loops -Market research important before ad is released

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Advantages to Advertising

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Attention Getting Can reach large number of people Can communicate a specific product benefits to prospective buyers By paying a company can control WHAT it wants to say and to WHOM it is sent Can also decide WHEN it is sent or HOW OFTEN Non personal advantages too- same message with trust it is decoded the same

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Disadvantages of Advertising

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Costs to produce and place message higher Lack of direct feedback makes it difficult to know how well the message is received

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Personal Selling

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two way flow of communication between a buyer and seller, often in a face-to-face encounter designed to influence a person's or group's purchase decision **Customized

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Advantages to Personal Selling

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Can control to WHOM the presentation is made Reduces the amount of wasted coverage (communication with consumers who are not the target audience) Seller can see or hear the reactions of the potential buyer Can get feedback to modify message Can give complex information

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Disadvantage of Personal Selling

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Flexibility can be one Changing of messages so that no consistent communication is given to all customers High cost cost per contact high *generally most expense

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Public Relations

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A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, stockholders, suppliers, employees, and others about a company and its products/services special events, lobbying efforts, press conferences, social media

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Publicity

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A non personal, indirectly paid presentation of an organization, product, or service can take form of news story, editorial, or product announcement. Company DOES NOT pay for space in mass medium but attempts to get the medium to run a favorable story of company *MASS

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Advantage to Publicity

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Credibility Often most credible source in consumers mind

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Disadvantage to Publicity

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Lack of user control over it No guarantee that story will be written, will be positive, or target audience will receive the message Rise of social media blogs companies now post responses Difficulty to get media cooperation

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Sales Promotion

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short term inducement of value offered to arouse interest in buying a product or service Used in conjunction with advertising and personal selling offered to intermediaries and ultimate consumers ex coupons, rebates, samples, contest *Mass

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Advantages of Sales Promotion

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Short term nature stimulates sales for the duration Increase store traffic from consumers who are not store loyal Flexible

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Disadvantage of Sales Promotion

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Gains are temporary, sales drop when deal ends Advertising support is needed to gain long term customer Loose effectiveness if conducted continuously Customers delay purchase until coupon or question value May be regulated by federal government Abused, duplicated, or promotional wars

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Direct Marketing

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Promotional alternatives that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to retail outlet face-to-face selling, direct mail, catalogs, direct response advertising, online marketing -Interactive communication *Customized

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Advantage of Direct Marketing

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Messages can be developed quickly and adapted quickly develop relationships one of the fastest growing forms

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Disadvantages of Direct Marketing

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need a comprehensive and up-to-date database of information about the target market developing and attaining such data base can be expensive and time consumer concerns of privacy decline in response rates among consumers

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developing and selecting the promotional mix

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look at: target audience product life cycle characteristics of product decision stage of buyer channel of distribution and coordinate a consistent promotional effort

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Target Audience

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Promotional programs are directed toward ultimate consumer, intermediary, or both -Direct toward consumers- use mass media (# of potential buyers is large) -Personal Selling used at place of purchase, usually at retail store -Direct marketing used to encourage first time buyers or repeat customers -Advertising to business buyers is used in trade publications -Personal selling- used for business buyers (more technical questions or specialized needs) -intermediaries focus of promotional efforts

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Product Life Cycle

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-introduction stage: Providing info in an effort to increase awareness. All promotional mix elements used. Sales promotions: free samples, salesforce calling on intermediaries, advertising, publicity in magazines to inform -Growth stage: Persuade the consumers to buy product. Advertising to communicate brand differences, Personal selling to solidify channel of distribution. Personal selling to intermediaries to persuade -Maturity: Maintaining existing buyers. Advertising to remind buyers of product existence. Sales promotion in for of discounts, coupons, events to maintain loyal buyers. Limited personal selling, direct mail reminders to remind Decline; Phase out of product. Little money spent in promotional mix to phase out

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Channel Strategies

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push, pull, or both in its channel of distribution

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Push Strategy

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Directing the promotional mix to channel members to gain their cooperation in ordering and stocking a product Personal selling and sales promotions play large role Salespeople call on wholesalers to encourage orders and provide sales assistance sales promotions offered to stimulate demand **By pushing product through channel goal is to get channel members to push to their customers Example Ford Motor Company provides support and incentive for dealers. Reward when meeting and exceeding sale goals

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Pull Strategy

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-Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product -used when manufactures face resistance from channel members who do not want to order a new product or increase inventory -seeing demand retailers order the product from wholesalers so item is pulled through intermediaries Example Pharmaceutical companies use of direct to consumer prescription drug advertising

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Developing an IMC Program

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Promotional decision process is dividend into developing, executing, and assessing the promotional program

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developing the program aka planning

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1)identify the target audience- group of prospective buyers that promotional program is directed toward 2) specify objectives 3) Set budget 4) select right promotional tools 5) design the promotion 6) schedule promotion

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hierarchy of effects

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the sequence of stages a prospective buyer goes through: awareness, interest,t evaluation, trial, adoption

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awareness

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consumers ability to recognize and remember the product or brand name

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interest

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an increase in the consumers desire to learn about some of the features of the product or brand

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Evaluation

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consumers appraisal of the product or brand on important attributes

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trial

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consumers actual first purchase and use of the product or brand

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Adoption

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through a favorable experience on the first trial, the consumers repeated purchase and use of product or brand

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specifying promotional objectives

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hierarchy of effects an objective can focus on a single stage objectives have 3 qualities: 1) be designed for well defined target audience 2) be measurable 3) cover a specified time period

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Setting the Promotional budget

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decision on how much to spend difficult because there is no precise way to measure the exact results of spending promotion dollars.

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methods for setting budget

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percentage of sales competitive parity all you can afford objective and task

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percentage of sales

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amount of money spent on promotion is a percentage of past anticipated sales.

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Competitive Parity

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matches competitors absolute level of spending or the proportion per point of market share

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all you can afford

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allows money to be spent on promotion only after all other budget items such as manufacturing cost are covered

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objective and task

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best approach to budgeting company 1) determines the promotion objectives, 2) outlines the tasks to accomplish those objectives, 3) determines the promotion cost of performing those tasks only method to take into consideration what the company wants to accomplish and requires that the objectives be specified

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selecting right promotional tools

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once budget is set can choose the combination of IMC tools to use. many combinations can lead to achieve same objective important to be analytical and to have experience example the Olympics

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designing the promotion

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advertising-consists of advertising copy and the artwork that the intended audience is designed to see or hear personal selling- depend on characteristics and skills of sales person sales promotion- specific details of inducements such as coupons, samples public relations- readily seen in tangible elements like news releases direct marketing- depend on written, verbal, or electronic forms of delivery promotion- play a primary role in deterring the message that is communicated to audience This design activity requires most creativity Design alternatives

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Scheduling a Promotion

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Important to determine the most effective timing of the use promotion schedule describes the order in which each promotional tool is introduced and the frequency of its use during the campaign EX Disney promotion of Oz

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Executing and Assessing

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pretesting each design before to allow for changes and modifications is important posttest are also important to evaluate impact and to see if objectives have been met must create and maintain a test-result data base, new printing technologies carry out promotion program can be expense and time consuming "organization with sales less than 10 mill, can implement IMC in one year, 200-500 mill need 3 years" firms with market orientation are more likely to implement IMC and more successful/effective IMC programs have support from top management create a process that facilitates their design and use to evaluate current position use IMC audit

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direct marketing growth

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exceeds total economic growth ability to customize communication efforts and create one to one interactions is favorable

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value of direct marketing

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don't have to go to store, can shop 24 hours a day, buying direct saves time, can save money, avoid sales people customer service-toll free numbers

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direct orders

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response the result of direct marketing offered that contain all the information necessary for a potential buyer to make a decision to purchase and complete the transaction ex price line

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lead generation

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response the result of a direct marketing offer designed to generate interest in a product or a service and a request for additional information ex four seasons hotel

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traffic generation

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response the outcome of a direct marketing offer designed to motivate people to visit a business ex home depot

chapter 14 integrated marketing communications – Flashcards

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