Chapter 12

Instructor Shan A. Garib, Fall 2012 1

Promotion: communication by marketers that informs, persuades, and reminds potential buyers of a product for the purpose of influencing their opinion or getting a response Promotional Strategy is a plan for the optimal use of the elements of promotion: advertising, direct response, public relations, personal selling, event marketing (sales promotion), alternative marketing communication approaches (on-line marketing) 2

 ◦ ◦ ◦ The tools of the promotion mix can be used to: Inform prospective buyers about product benefits Persuade prospective buyers to try product Remind buyers of benefits they enjoyed by using the product

Outbound marketing: widely broadcasting messages using ads, direct mail, e-mail marketing, telemarketing, personal selling

Promotional Strategy is a plan for the optimal use of the elements of promotion: advertising, direct marketing, public relations, personal selling, sales promotion, on-line marketing -main goal to convince target customers that the products offered provide a competitive advantage over the competition -unique features that make make buyer think product is superior eg. high QLTY 5

  Advertising Any paid form of non-personal, one-way communication about an organization, product or service paid for by marketer eg. TV commercial ◦ ◦ ◦ Paid: must cost money Non-personal: mass media without feedback Identified sponsor: can tell who ad is for

  ◦ ◦ ◦ ◦ Advantages: Attention-getting, large number of people Communicates specific product benefits Control what is said Decide who sees message ◦ ◦ ◦  Example: use a channel that fits your target market Same message to all receivers Disadvantages Cost per contact low but overall cost high Lack of direct feedback – difficult to know if message received

   PR: evaluates public attitudes, identifies areas within the organization the public may be interested in and excecutes a programme of action to earn public understanding and acceptance Wants to influence the feelings, opinions or beliefs held by customers, suppliers and employees Events sponsorship, image management and publicity are all aspects of public relations

Generates Publicity  Nonpaid presentation in news or informational medium Advantages  Adds credibility Disadvantages  Uncertain timing  No guarantee  Little control

◦ Short-term offer to make people want to buy a product ◦ Example: Coupon, rebate, samples

  ◦ ◦ ◦ Advantages ◦ ◦ Stimulates sales Increase participation of non-loyal customers Disadvantages Benefits are temporary Advertising support necessary for new customers Continuous sales promotions do not work – customer gets in habit of waiting for sales

 Conversation between a buyer to a seller, often face-to-face, to influence a buyer’s decision -paid selling -maximize revenue and profits -business to business, business to consumer build LTR ie. relationship selling eg.University recruiters Retail salespeople Army recruiters

 Advantages   Control to whom presentation is made Seller can see and hear buyer’s reaction ▪ If not positive, message can be adjusted  Other channels allow for some control, but there will be wasted coverage  Disadvantages   Different sales people change the message High cost – most expensive

  Direct communication with carefully selected customers Advantages  Customized to meet specific needs    Messages adapted to facilitate one-on-one relationships Results can be measured and altered Internet easy way to directly communicate  Disadvantages  Requires accurate, up-to-date information on target market  Maintain customer information is expensive

 In the past, advertising, personal selling, sales promotion, public relations and direct marketing have been done separately  Now, it is important to make sure they all work together and maximize promotional budget and customer impact

 ◦ Communication Exchange and share meanings to others through common set of symbols ◦ Divided into two categories: 1. Interpersonal Communication – direct, face to face -can see reaction and respond immediately eg. salesman 2. Mass Communication – communicating a concept or message to large audience eg. TV or Magazine -marketer does not know consumer -can’t respond to reactions

 ◦ ◦ ◦ ◦ Communication requires six elements: A source  company or person with information to convey A message  information sent by a source to receiver A channel of communication   Way to convey message A receiver Consumers who read, hear, or see the message sent

 Encoding: the process of having the sender transform an abstract idea into a set of symbols  Decoding: the process of having the receiver take a set of symbols and transform them into an abstract idea

    Source: BMW Encoded Message: the advertisement Channel: magazine Decoded message: Any weather, any corner, any pace, any passion

   Source might not correctly change the message into symbols An encoded message might be sent through the wrong channel and not reach receiver The receiver may not properly transform symbols into idea  Effective communication is difficult!

 For the message to be communicated effectively, the sender and receiver should have a mutually shared field of experience  Field of experience: similar understanding and knowledge

 ◦ Response: Impact the message had on receiver’s knowledge  ◦ ◦ Feedback: The sender’s interpretation of the response Proves whether the message was decoded and understood as intended ◦ Feedback in this class is used to make sure we all understand each other and that the class is going well

 Outside factors that can work against effective communication by distorting a message or feedback  ◦ ◦ ◦ Example: A printing mistake Words or pictures that don’t communicate clearly Salesperson’s accent, use of terms or slang isn’t understood

Promotion seeks to modify behaviour and thoughts -also tries to reinforce existing behaviour -performs three tasks: 1) inform 2) persuade 3) remind

Promotion seeks to modify behaviour and thoughts 1) inform – convert an exisiting need into a want or to stimulate interest in a new product -usally during early stages of life cycle -complex technical products use promotion even after purchase -higher risk purchase

Promotion seeks to modify behaviour and thoughts 2) Persudae – designed to stimulate a purchase or actions -usally during growth stage of life cycle -consumers have general awareness of product category and how it fulfills need -emphasizes competitive advantage -appeal to emotional need -sometimes in mature stage it is used to elicit brand switching

Promotion seeks to modify behaviour and thoughts 3) Reminding – designed to keep product in public’s mind -usally during maturity stage of life cycle -consumers already know product is good

Promotion al goal to have someone buy product Classic model for achieving these goals is the AIDA concept sequence -consumers respond to marketing messages in a cognative, affective, and conative

 The following are the four steps in the purchase decision process:     Attention: gain attn of target market Interest: create interest in the product eg arrange demos of iPad Desire: create brand preference by highlighting unique features that full-fill needs Action: continue to advertise to effectively communicate features and benefits

 ◦ A Changing Consumer Time spent with the media ◦  Most time on the internet, TV second  18-24 spend most time on net Use of Technology  Affordable leads to ease of use, portable communications Social Media: form of on-line media allows create network of friends to exchange msgs, pics, vids, self-expression

 ◦ ◦ A Changing Consumer An evolving Media   Offline media now creating websites, APP, TWITTER eg mags, TV shows, news (RT) A Changing Advertiser Spending on on-line ads is second to TV

 ◦ ◦ ◦ ◦ ◦ Five areas that work together to form the industry: The media Agencies Research companies Associations Regulatory bodies

 ◦ Five areas that work together to form the industry: The media  TV, Internet, Mags, paper, radio, out-of-home, mobile Out-of-Home Advertising: “Outdoor” reaches consumers outside the home, in transit, in business locations eg billboards, posters, electronic signs Mobile Marketing: using mobile devices to communicate with consumers eg txt msgs

 New Media Terms: ◦ Paid media: media time purchased eg TV commercials ◦ Owned media: TV channels that a company controls eg website CBC used to communicate ◦ Earned Media: free publicity through unpaid media mentions and word-of-mouth

 ◦ ◦ ◦ Five areas that work together to form the industry: Marketing Communication Agencies  Provide marketers with expertise on how best to communicate messages Research Companies  Need metrics on readership numbers, consumer trends  Eg Nielson Associations   Provide research data, and host informative events and educational workshops for the industry eg. Marketing week hosted by the CDN marketing association, and Marketing magazine event focussed on media innovation

 ◦ Five areas that work together to form the industry: Regulations   Limitations and restrictions placed on marketers Four main groups: Advertising Standards Canada (ASC) • • • Self-regulatory, non-government Sets and regulates advertising, advises Uses consumer complaint process to review ads

 Five areas that work together to form the industry: • The Canadian Radio-Television and Telecommunications Commission (CRTC) Regulates the broadcast and television industry including licencing of stations The Canadian Marketing Association ◦ Uses a code of ethics and standards of practice to guide the marketing industry on telemarketing, email marketing, cell marketing, contests, fundraising

Inbound marketing: consumers find products through online techniques eg search engine optimization, pay-per-click ads, and social media -it is the result of paid, unearned and owned media -smaller businesses use more

Integrated Marketing Communications (IMC): designing a marketing programme that coordinates all promotional activities -each element has a distinct role in overall campaign eg use TV ads, mag ads, personal selling, events, on-line, mailing

 Advertising – see previous slides for definition Eg. ◦ ◦ TV Internet  Display ads: use of online ads with graphics places on website they can be static or dynamic  Display ads are also called banner ads in form of boxes, leaderboards – stretch across top of webpage, skyscrapers – tall, slim vertical on side of page advergamming – banner ads embedded within online games they appear like posters or billboards in the game Display ads can also take over home pages this is called home page take overs

 Advertising – see previous slides for definition Eg. ◦ ◦ TV Internet ◦ ◦ ◦ ◦  On-line Video advertising – use of video ads on the internet eg. a pre-roll TV tape that run before watching a TV show, movie, news clip  Pay-per-click ads (PPC) - mini text ads that are served during keyword searches  Search engine gets paid when the ad is clicked Newspapers Mags Radio Outdoor/Transit

 PR – see previous slides for definition Eg.      Press releases – an announcement sent out to media Press Conferences – when media are invited to informal meeting with company Special Events – sponsorships Company Reports – formal company info published to spread positive msgs Social Media – SM release: use of on-line media to communicate with consumers

Sales Promotion – see previous slides for definition   User Generated Content (UGC) – content created by participants ie. Contest Interaction by txting Augmented Reality (AR) – real world images interact with computer generated information to provide additional info to views eg QR codes to access online content

Direct Response – see previous slides for definition   Lead generation – request for additional info by consumer Traffic generation – visit to a website, or location  Event Marketing and Sponsorship Event Marketing - Creation or involvement of a brand in an experience or occasion that heightens it’s awareness, creates positive association and generates desired responses

   Event Marketing and Sponsorship  Sponsorship – a company paying a fee to be included in an event eg marathon Personal Selling -see previous slides for definition Alternative Marketing Communication Approaches Word-of-mouth Product placement Branded entertainment – when company pays to have whole episode focussed on its business eg The Apprentice

Unique On-Line Tools  Search Engine Marketing (SEM) – includes search engine optimization (SEO) and pay per-click ads Search engine optimization (SEO): looks at web design, codes, written content, links and updates to ensure that websites are highly rated Microsites: short term promos Corporate Websites: access to info about company

Unique On-Line Tools Social Network Marketing: use of on-line communities to interact with consumers by sharing ideas, events and offers.

Affiliate Marketing: promotion of business through online affiliates who get commissions for business generated

  Designing Marketing and Comm programmes Push Strategy: focus communication efforts on the distribution channel eg retailers, distributors, wholesalers Pull Strategy: focus efforts on end user eg consumer to build awareness, trial and demand The Customer Advocacy Funnel

The Customer Advocacy Funnel: encompasses the latest in marketing approaches where, over time, the positive connections that customers make with brands encourage them to become brand advocates Steps: Awareness – using web Interest – use experts to demo Engagement – social media added to mix to generate additional interest

The Customer Advocacy Funnel Steps: Trial – contest, samples, free downloads and trials Purchase – display ads can prompt purchases Retargeted ads – display ads redelivered to computer’s IP address after a consumer clicked on an ad Loyalty – through CRM programmes that reward continued purchases Advocacy – on-going comm through email, blogs, social networks used to provide consumers with info that can be passed on

Steps in the Marketing Communications Process 1.

Specify Integrated Marketing Communication (IMC) objectives – formalizes purpose of the promotional programme eg build brand awareness, creating customer engagement, increase brand loyalty 2.

ID the target audience – ID demo, geo, psyco, behavioural data Consumer Touch Points – points of interaction that can be used to connect with customers including personal time at home, shopping time, workplace, travel time or face-to-face

Steps in the Marketing Communications Process 3. Set the promotional Budget – allocated initial amount and then change 4. Design the Promotional Programme – key component is messaging - needs to be visible and resonate with audience Promotional Mix - promotional tools used to comm with the target market using both on line and offline modes

Inform Persuade Remind Min Spending 54

Steps in the Marketing Communications Process 5. Schedule and Run the IMC elements – make sure individual aspects work together 6. Evaluate the Programme and Recommend Changes – Four Levels 1. Messaging is evaluated before programme is developed 2. once programme live need research to measure awareness and elements like “likeability, messaging comprehension, attitude changes towards the brands”

Steps in the Marketing Communications Process 6. Evaluate the Programme and Recommend Changes – Four Levels 3. Once programme over each element evaluated against expectations 4. Once programme over promotional programme will be measured against objectives