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Importance of RelationshipMarketing and IMC

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Companies need to integrate their marketing communications activities with all their other functions To receive consistent messages about the company in the marketplace

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Integrated marketing communications

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Building and reinforcing relationships by developing and coordinating a strategic communications program

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Direct Marketing

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Companies build their own database of customers and communicate with them directly through ads and catalogs

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Key Characteristics of Direct Marketing

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-Interactive -Interaction can take place at any location -Possibility of the ongoing mutually beneficial relationships -Use of one or more advertising media

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Database marketing

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: Tracking and analyzing the purchasing patterns of specific customers in a computer database and targeting advertising to their needs

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Key Characteristics of Direct Marketing 2

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-Addressability Database marketing: Tracking and analyzing the purchasing patterns of specific customers in a computer database and targeting advertising to their needs -Inform, create awareness, and spur immediate purchase behavior -Distinguished from mass advertising in measurability, accountability, efficiency, and return on investment

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Impact of Databases on Direct Marketing

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Compile and analyze important customer information Use of databases

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Customer lifetime value

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Total sales or profit value of a customer to a marketer over the course of that customer's lifetime

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Loyalty (continuity) programs

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Reward customers with discounts and free products in return for frequent and continuous patronage

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Importance of Direct Marketing to IMC

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Best way to develop a good database -Allows marketers to build relationships by learning about customers -Helps choose the prospects they can serve most effectively and profitably Helps companies send discrete messages to individual customers and prospects Offers: -Accountability by providing a tangible response -Convenience to time-sensitive consumers -Precision and flexibility to cost-sensitive marketers Has favorable economics More private

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Drawbacks to Direct Marketing

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Bad reputation of being sales oriented Do not get the affiliation offered by some media Clutter Privacy concerns

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Direct-response advertising:

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Asks the reader, listener, or viewer to provide feedback straight to the sender Direct mail Catalog sales Direct-response print advertising Direct-response broadcast advertising Direct-response digital interactive media

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Personal Selling

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Interpersonal communication process by which a seller ascertains and satisfies the needs of a buyer Types: Selling to other businesses Selling to retailers Selling to consumers -Retail store -Direct selling situation

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Pros of personal sellling

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Personal and persuasive Facilitates instant feedback Flexibility to adjust the presentation Flexibility in time Helps in distribution of new products Good for high-priced items

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COns of personal selling

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Labor-intensive Time-consuming Poor reputation/perception Requires sales executives with the right personality attributes

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Functions of salespeople

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Information gathering Information providing Order fulfillment Relationship building

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Trade Shows

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Exhibitions where manufacturers, dealers, and buyers of get together for product demonstrations and discussions Construction of trade-show booths and exhibits has become a major factor in sales promotion plans

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Considerations while Establishing an Exhibit Booth Program

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1. Planning: Budget, Brand image, size location. 2. Budgeting:Trade shows are expensive, and costs have increased substantially in the last decade 3. Promotion: Sending out personal invitations, Direct mail, ads in trade, etc. 4. People -staff: articulate, people-orientated, enthusiastic, knowledgeable. 5. Productivity: Contact information of the prospect should be collected and organized into a lead list

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Product Packaging

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Encompasses the physical appearance of the container Includes the design, color, shape, labeling, and materials used Ways in which it serves marketers Protection Preservation Information Promotion

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Product Packaging (2)

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Functions: Creates relationship with customers Influences in-store shopping decisions Sets the product apart from competitors Informs customers of features and benefits Design factors : Stand-out appeal How it communicates verbally and nonverbally Image and prestige desired

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Product Packaging (3)

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Environmental issues: Consumers expect green packaging Recyclable tin-coated steel and aluminum packages have gained popularity Government impact: Food and Drug Administration (FDA) Nutrition Labeling and Education Act

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Reasons to change a package

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Product alteration or improvement Substitution in packaging materials Competitive pressure Environmental concerns Changes in legislation Need to increase brand recognition

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Sales Promotion

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Direct inducement offering extra incentives all along the marketing route --To accelerate the movement of the product from the producer to the customer

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Positive Effects of Sales Promotion on Brand Volume

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Adds value to brand Maximizes sales Helps build short-term market volume Accelerates sales by motivating customers to try a new product or brand

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Negative Effects of Sales Promotion on Brand Value

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Excessive sales promotion at the expense of advertising can reduce profitability Emphasis on brand image and quality makes customers become deal-prone Overemphasis on price destroys brand equity High cost Excessive efforts can lead to a price war

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Push strategies

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Help get products into the dealer pipeline and accelerate sales by offering inducements to dealers, retailers, and salespeople

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Trade promotions:

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Aimed at wholesalers and retailers to induce product purchase, display, and consumer sales promotion

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Trade advertising

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Stimulates intermediaries to buy goods for resale to customers or for use in their businesses

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Pull strategies

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Activities aimed at inducing trial purchase and repurchase by consumers

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Consumer sales promotions

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Aimed at consumers to stimulate product interest, trial, or repurchase

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Giving Brands a Push withTrade Promotions: Slotting allowances:

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Fees paid by manufacturers to retailers for obtaining shelf or floor space for a new product

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Display allowances:

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Fees paid to retailers to make room for and set up manufacturers' displays

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Trade deals:

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: Short-term dealer discounts on the cost of a product or other dollar inducements

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Forward buying

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Stocking up on a product when it is discounted and buying smaller amounts when it is at list price

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Diverting:

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Purchasing large quantities of an item at a regional promotional discount and shipping portions to areas of the country where the discount is not offered

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Buyback allowance:

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Manufacturer's offer to pay for an old product to take it off the shelf to make room for the new product

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Advertising allowances

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Percentage of gross purchases or a flat fee paid to the retailer for advertising the manufacturer's product

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Cooperative (co-op) advertising

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Sharing of advertising costs by the manufacturer and the distributor or retailer

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Push money (PM):

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Monetary inducements for salespeople to push the sale of particular products Known as spiff

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company conventions:

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Held by companies with their employees, sales representatives, and/or customers

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Dealer meetings

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Held by companies with their authorized brokers, distributors, and/or retailers

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Using Consumer Promotions to Pull Brands Through

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Point-of-purchase (P.O.P) materials, coupons, premiums, sampling, Gift cards, Refunds rebates, combination offers, contest, games

Chapter 15: IMC, direct selling, personal selling, packaging, sales promotion – Flashcards

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