MKTG Management Chapter 17 (FINAL) – Flashcards

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Answer: Technology and other factors have profoundly changed the way consumers process communications, and even whether they choose to process them at all. The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders (DVRs) have eroded the effectiveness of the mass media. In 1960, a company could reach 80 percent of U.S. women with one 30-second commercial aired simultaneously on three TV networks: ABC, CBS, and NBC. Today, the same ad would have to run on 100 channels or more to achieve this marketing feat. Consumers not only have more choices of media, they can also decide whether and how they want to receive commercial content.

Answer: The marketing communications mix consists of eight major modes of communication:

1. Advertising — Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor via print, broadcast, network, electronic, and display media.
2. Sales promotion — A variety of short-term incentives to encourage trial or purchase of a product or service including consumer promotions, trade promotions, and business and sales force promotions.
3. Events and experiences — Company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers, including sports, arts, entertainment, and cause events as well as less formal activities.
4. Public relations and publicity — A variety of programs directed internally to employees of the company or externally to consumers, other firms, the government, and media to promote or protect a company’s image or its individual product communications.
5. Direct marketing — Use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects.
6. Interactive marketing — Online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services.
7. Word-of-mouth marketing — People-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or services.
8. Personal selling — Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.

Answer:

The macromodel of the communications process has nine key factors in effective communication. Two represent the major parties — sender and receiver. Two represent the major tools — message and media. Four represent major communication functions — encoding, decoding, response, and feedback. The last element in the system is noise, random and competing messages that may interfere with the intended communication. Senders must know what audiences they want to reach and what responses they want to get. They must encode their messages so the target audience can decode them. They must transmit the message through media that reach the target audience and develop feedback channels to monitor the responses. The more the sender’s field of experience overlaps that of the receiver, the more effective the message is likely to be.

Answer: The macromodel of the communications process comprises of nine key factors in effective communication. Two represent the major parties – sender (Gravity) and receiver (audience). Two represent the major tools – message (content of the ad) and media (print, TV, radio, etc). Four represent the major communications functions – encoding (creation and transmission of the ad by Gravity), decoding (the reception and comprehension of the ad by the audience), response (either ignoring the message or buying Gravity shirts), and feedback (customers providing information about the ad to measure its effectiveness). The last element is noise, random and competing messages that may interfere with the intended communication. Examples of noise in this case could be misunderstood messages from the ad, similar ads from competitors, etc.

Answer: All the four classic response hierarchy models assume that the buyer passes through cognitive (learn), affective (feel), and behavioral stages (do), in that order. Since buying a car, used or new, represents a significant investment for the buyer, it can be said that the buyer has involvement in the purchase decision and perceives high differentiation with the product category. Hence a “learn-feel-do” sequence is considered appropriate for the used-car showroom account.

Similarly, a buyer intending to purchase home appliances, such as a dishwasher or a refrigerator, has high involvement in the purchase decision, even though he perceives little differentiation within the product category. Hence, a “do-feel-learn” approach may be appropriate when planning communications for the home appliances account.

Finally, a buyer has low involvement in purchasing soap that has very little differentiation within its category. For the soap company account, Alan should consider a “learn-do-feel” sequence for planning communications.

Answer: Student answers may vary.
Since customers are comfortable with their present electronic razors, Derek’s communications strategy should aim to build preference for Glazers. Customers have already developed a liking for Glazers. So, Derek should focus on comparing the quality of Glazers with that of competing brands. This can be done by illustrating the improved features of Glazers that provide clean and hassle-free use. Derek could do well to compare the Glazers with other brands in terms of value, utility, and performance factors as well.

Answer: Student answers may vary.
Derek’s task, once the intent to make a purchase has been fostered in the consumers, is to lead the them to the actual buying action. This can be achieved by offering the razors at a low introductory purchase to encourage initial use among customers, offering a discount on the price, or holding a promotional event where they can actually try out the product first-hand.

Answer: Micromodels of marketing communications concentrate on consumers’ specific responses to communications. All the response hierarchy models assume the buyer passes through cognitive, affective, and behavioral stages, in that order. This “learn-feel-do” sequence is appropriate when the audience has high involvement with a product category perceived to have high differentiation, such as an automobile or house. An alternative sequence, “do-feel-learn,” is relevant when the audience has high involvement but perceives little or no differentiation within the product category, such as an airline ticket or personal computer. A third sequence, “learn-do-feel,” is relevant when the audience has low involvement and perceives little differentiation, such as with salt or batteries. By choosing the right sequence, the marketer can do a better job of planning communications.

Answer: To increase the odds for a successful marketing communications campaign, marketers must attempt to increase the likelihood that each step occurs. For example, the ideal ad campaign would ensure that:
1. The right consumer is exposed to the right message at the right place and at the right time.
2. The ad causes the consumer to pay attention but does not distract from the intended message.
3. The ad properly reflects the consumer’s level of understanding of and behaviors with the product and the brand.
4. The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity.
5. The ad motivates consumers to consider purchase of the brand.
6. The ad creates strong brand associations with all these stored communications effects so they can have an impact when consumers are considering making a purchase.

Answer: 1. Identify target audience
2. Determine objectives
3. Design communications
4. Select channels
5. Establish budget
6. Decide on media mix
7. Measure results
8. Manage integrated marketing communications

Answer: The objective for Nissin’s marketing communications objective should be to build brand awareness, i.e. fostering the consumer’s ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall—consumers asked to think of a brand of frozen entrées are more likely to recognize Stouffer’s distinctive orange packages than to recall the brand. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

Answer: Brand awareness refers to fostering the consumer’s ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve than recall. Brand recall is important outside the store; brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

Answer: Communicators use negative appeals such as fear, guilt, and shame to get people to do things (brush their teeth, have an annual health checkup) or stop doing things (smoking, abusing alcohol, overeating). Fear appeals work best when they are not too strong, when source credibility is high, and when the communication promises, in a believable and efficient way, to relieve the fear it arouses. Messages are most persuasive when moderately discrepant with audience beliefs. Stating only what the audience already believes at best just reinforces beliefs, and if the messages are too discrepant, audiences will counterargue and disbelieve them.

Communicators also use positive emotional appeals such as humor, love, pride, and joy. Motivational or “borrowed interest” devices—such as the presence of cute babies, frisky puppies, popular music, or provocative sex appeals—are often employed to attract attention and raise involvement with an ad. These techniques are thought necessary in the tough new media environment characterized by low-involvement consumer processing and competing ad and programming clutter. Attention-getting tactics are often too effective. They may also detract from comprehension, wear out their welcome fast, and overshadow the product.

Answer: Student answers may vary.
Negative appeals such as fear, guilt, and shame are used by communicators to get people to do things (brush their teeth) or stop doing things (smoking). The cooking oil ad can use fear appeals to get consumers to start using its product. This can be achieved by depicting health risks associated with using cooking oils other than Savola, such as hypertension, heart attacks, etc. Guilt appeal can be used to depict a family grieving the death of someone who did not use Savola. Shame appeal could illustrate the case of a parent who cannot play catch with his kids because his fitness is compromised by not using Savola.

However, the ad agency should take care to ensure that the negative appeals do not come across as too strong to the audiences, the credibility of the source in the ads is high, and the ad promises to relieve fears of health risks in a believable and efficient way. The ad is most persuasive when moderately discrepant with audience beliefs. If the ad merely says that using unhealthy oil leads to health risks, it only serves to reinforce the belief, and if the message exaggerates the health risks of not using Savola, audiences will only counterargue and disbelieve the ad.

Answer: Celebrities are likely to be effective when they are credible or personify a key product attribute. Tiger Woods’ personal problems have resulted in the erosion of his credibility as a product’s spokesperson. The three most important sources of a spokesperson’s credibility are expertise, trustworthiness, and likability. Following revelations about his personal life and his past indiscretions, his trustworthiness (how objective and honest the source is perceived to be) was negatively affected and also his likability (the source’s attractiveness). The most highly credible source would score high on all three dimensions—expertise, trustworthiness, and likability. Scoring high on only one or two dimensions would still negatively affect his credibility. Also, the principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience. The converse also holds true, i.e. a product’s positive brand image is likely to be hit by virtue of being associated with a communicator with a negative image.

Answer: Personal influence carries especially great weight (1) when products are expensive, risky, or purchased infrequently, and (2) when products suggest something about the user’s status or taste. On that count, life insurance, real estate, health services, automobiles, luxury items, consultation services, etc. can be expected to be significantly influenced by word-of-mouth and endorsements by credible sources.

Answer: Using the objective-and-task method, Derek can arrive at the marketing communications budget by following these steps:
1. The company estimates 50 million potential users and sets a target of attracting 8 percent of the market—that is, 4 million users.
2. The percentage of the market that should be reached by advertising is determined. Derek hopes to reach 80 percent (40 million prospects) with his advertising message.
3. The percentage of aware prospects that should be persuaded to try the brand is then calculated. Derek would be pleased if 25 percent of aware prospects (10 million) tried Glazers. He estimates that 40 percent of all triers, or 4 million people, will become loyal users. This is the market goal.
4. Next, the number of advertising impressions per 1 percent trial rate is estimated. Derek estimates that 40 advertising impressions (exposures) for every 1 percent of the population will bring about a 25 percent trial rate.
5. The number of gross rating points that would have to be purchased is now calculated. A gross rating point is one exposure to 1 percent of the target population. Because Derek wants to achieve 40 exposures to 80 percent of the population, he will want to buy 3,200 gross rating points.
6. Finally, the necessary advertising budget on the basis of the average cost of buying a gross rating point is estimated. To expose 1 percent of the target population to one impression costs an average of $4,500. Therefore, 3,200 gross rating points will cost $14,400,000 (= $4,500 × 3,200) in the introductory year.

Answer: Companies use sales promotion tools—coupons, contests, premiums, and the like—to draw a stronger and quicker buyer response, including short-run effects such as highlighting product offers and boosting sagging sales. Sales promotion tools offer three distinctive benefits:
1. Ability to be attention-getting—They draw attention and may lead the consumer to the product.
2. Incentive—They incorporate some concession, inducement, or contribution that gives value to the consumer.
3. Invitation—They include a distinct invitation to engage in the transaction now.

Answer: Although marketers rely more on sales calls in business markets, advertising still plays a significant role:
1. Advertising can provide an introduction to the company and its products.
2. If the product has new features, advertising can explain them.
3. Reminder advertising is more economical than sales calls.
4. Advertisements offering brochures and carrying the company’s phone number or Web address are an effective way to generate leads for sales representatives.
4. Sales representatives can use copies of the company’s ads to legitimize their company and products.
5. Advertising can remind customers how to use the product and reassure them about their purchase.

Answer: Communication tools vary in cost-effectiveness at different stages of buyer readiness. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.

Answer: In the introduction stage of the product life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness, followed by personal selling to gain distribution coverage and sales promotion and direct marketing to induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Advertising, events and experiences, and personal selling all become more important in the maturity stage. In the decline stage, sales promotion continues strong, other communication tools are reduced, and salespeople give the product only minimal attention.

Answer: Mobile phones have relatively short life cycles. In the introduction stage of the phones’ life cycle, advertising, events and experiences, and publicity have the highest cost-effectiveness. In-store personal selling helps improve distribution coverage, while sales promotions such as discounted accessories, freebies etc., help induce trial. In the growth stage, demand has its own momentum through word of mouth and interactive marketing. Web sites are effective tools during the growth stage. As the phones reach the maturity stage, advertising, promotional events and experiences, and personal selling again become more important. As the phones enter the decline stage of their life cycle, sales promotion takes over as the most important tool in the marketing communications mix, even as other communication tools are reduced, and salespeople give the phones only minimal attention.

Answer: Senior managers want to know the outcomes and revenues resulting from their communications investments. Too often, however, their communications directors supply only inputs and expenses: press clipping counts, numbers of ads placed, media costs. In fairness, communications directors try to translate inputs into intermediate outputs such as reach and frequency (the percentage of target market exposed to a communication and the number of exposures), recall and recognition scores, persuasion changes, and cost-per-thousand calculations. Ultimately, behavior-change measures capture the real payoff.

After implementing the communications plan, the communications director must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and what are their previous and current attitudes toward the product and the company. The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it.

Answer: Many companies still rely on only one or two communication tools. This practice persists in spite of the fragmenting of mass markets into a multitude of minimarkets, each requiring its own approach; the proliferation of new types of media; and the growing sophistication of consumers. The wide range of communication tools, messages, and audiences makes it imperative that companies move toward integrated marketing communications. Companies must adopt a “360-degree view” of consumers to fully understand all the different ways that communications can affect consumer behavior in their daily lives.

The American Marketing Association defines integrated marketing communications (IMC) as “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” This planning process evaluates the strategic roles of a variety of communications disciplines—for example, general advertising, direct response, sales promotion, and public relations—and skillfully combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of messages.

Answer: Media coordination can occur across and within media types, but marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact.

Promotions can be more effective when combined with advertising, for example. The awareness and attitudes created by advertising campaigns can increase the success of more direct sales pitches. Advertising can convey the positioning of a brand and benefit from online display advertising or search engine marketing that offers a stronger call to action.

Many companies are coordinating their online and offline communications activities. Web addresses in ads (especially print ads) and on packages allow people to more fully explore a company’s products, find store locations, and get more product or service information. Even if consumers don’t order online, marketers can use Web sites in ways that drive them into stores to buy.