Chapter 13 – Advertising and Public Relations Promotion mix/marketing communication mix- blend of promotion tools used to engage consumers, persuasively communicate customer value, and build customer relationships. Promotion tools are: 1) Advertising – paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor 2) Public relations – building good relationships with various publics by obtaining favorable publicity, building up good company image and managing unexpected occurrences, both positive and negative 3) Personal selling - personal customer interactions by a firm Salesforce for the purpose of making sales and building customer relationships 4) Sales promotion- short term incentives to encourage the purchase or sale of a product or service 5) Direct and digital marketing - engaging directly with carefully targeted individual consumers and customer communities to obtain an immediate response and build lasting customer relationships. Integrated Mktg Communications – -earlier, mass marketing worked perfectly – selling highly standardized products to masses of customers. -Communication is changing: consumers see “Single” messages from companies, communication technology is richer, faster, marketing strategies must be integrated For maximum effectiveness, all promotional components must work together to reinforce the marketing offer. Ensure brand contact coveys a clear message. 1) The new mktg communications model -consumers are changing – better-informed and more communications empowered. use internet and other tech to find info on their own, they can speak to other consumers directly too -market strategies are changing – moving away from mass marketing due to fragmentation of markets. Emphasis on focused marketing programs designed to build closer relationships with customers in more narrowly defined micro markets -digital technology is changing – resulting in changes of how consumers and companies communicate with each other. Predicted that mass media will become obsolete. -brand content management – creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels. 2) The need for INTEGRATED Marketing communications (IMC) -shift toward a richer mix of media and communication approaches -messages from different sources and promotional approaches become a part of a single message about the company -conflicting messafes from different sources can result in confused company images, brand positions and customer relationships -companies separate their communications tools, but customers don’t -IMC: carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent and compelling message about the org and its products -calls for recognizing all touch points where customer may encounter company and its brands -each contact should deliver a consistent and positive message Advertising Pros: 1) Reaches masses of geographically dispersed buyers at low cost per exposure 2) Repeats message many times 3) Creates consumer trust (view of advertised products as more legitimate) 4) Tv ad’s reach can be extended through online and social media 5) Says something about seller’s size, popularity, and success Cons 1) Impersonal and lacks direct persuasiveness 2) One-way communication with an audience 3) Costs are high for some media types 4) Difficult to receive good feedback Public Relations Pros: 1) Legitimizes creditability, very believable 2) Reaches people who resist advertising 3) Dramatizes a company or product 4) Saves money when used proactively Cons: 1) Tends to be used as an afterthought Personal selling Pros 1) Communicates personally, most effective 2) Two-way communication - each person can observe each other’s needs and characteristics 3) Builds preferences, convictions, and actions 4) Allows relationship building Cons 1) Requires long-term commitment to sales force 2) Most expensive promotion tool Sales promotion – but it NOW! Pros 1) Includes a wide assortment of tools like coupons, contests 2) Attracts consumer attention 3) Offers strong incentives to purchase 4) Dramatizes product offers 5) Invites and rewards quick consumer response Cons 1) Effects are short-lived 2) Not as effective as advt or personal selling in building long-run brand preference and customer relationships Direct & Digital Marketing Pros 1) Communicates more directly with targeted customers 2) Immediate and personalized – tailored to appeal to specific consumer groups 3) Creates interactivity 4) Builds one-to-one relationships Cons 1) Often perceived as junk-mail/spam Push Promotion 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, which in turn promote it to final consumers -trade promotion and personal selling, primary tools Producer -> Marketing activities like personal selling, trade promotions, etc -> Retailers and wholesalers -> Marketing strategies like personal selling, advertising, sales promotion, etc. -> Consumers Pull Promotion strategy A promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that “pulls” the product through the channel. -primary tools: advertising, consumer promotion, and direct & digital marketing Producer -> Marketing activities like consumer advertising, sales promotion, etc. -> Consumer Consumer -> Demand -> Retailers and Wholesalers -> Demand -> Producers Advertising Decisions Advertising objective: specific communication task to be accomplished with a specific target audience during a specific period of time. Classified by role- to persuade, inform, or remind. Also, comparative advertising (ad wars) Budgeting methods: 1) Affordable method – how much can I spend -setting the promotion budget at the level mgmt. thinks the company can afford -Total Rev-Op Expenses-Capital Outlays -> some leftover portion goes to advt -ignores the effects of promotions on sales, de-prioritizes promotion 2) Percentage of sales - Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of unit sales price - may not be a good idea, as you will spend less if sales decline, when you may need it most - wrongly views sales as cause of promotion rather than the result 3) Competitive-parity method – company matches competitors’ spending, maybe based on market share 4) Objective-and-task method – developing the promotion budget by 1) defining specific objectives 2) determining the tasks that must be performed to achieve these objectives 3) estimating the costs of performing these tasks. The sum of these costs is the budget. -forces mgmt. to spell out its assumptions about the relationship between dollars spent and promotion results -most difficult – hard to figure out which tasks will achieve stated objectives Developing Advertising strategy: 1) Creating advt. messages – advt only successful if it gains attention, engages consumers and communicates well -must break through the clutter – content must be better planned, more imaginative, more entertaining, and more emotionally engaging -Merging of ads and entertainment: Two forms: 1) branded entertainment – brand integrations. Making brand an inseparable part of some other form of entertainment (eg- Modern Family iPad episode) 2) Madison & Vine (Advertainment) – merging ads with entertainment (Eg- Superbowl) – make ads so entertaining or useful that people want to watch them. 2) Message strategy -the general message that will be communicated to consumers -identify benefits to be used as appeals (highly valued, unique benefit) -develop a compelling creative concept (The Big Idea) that will be distinctive and memorable -choose an advt appeal that is meaningful, believable, and distinctive -message execution styles (approach, style, tone, words, format): 1. Slice of life – typical people using the product in a normal setting 2. Lifestyle – shows how prod fits in a certain lifestyle 3. Fantasy – creates fantasy about the product or its use 4. Mood or image – builds a mood or image around the prod or service like love, beauty, intrigue, or serenity 5. Musical – people or cartoon characters singing about the product 6. Personality symbol – creates a character that represents the products 7. Technical expertise – shows company’s expertise in making the product 8. Scientific evidence – presents survey or scientific evidence that the brand is better or better liked than one or more brands 9. Testimonial evidence or endorsement – a highly believable or likeable source endorsing the product. 3) Consumer generated content – many companies are tapping consumers for marketing content, message ideas, or even actual ads. Eg- hashtag campaigns, Crash the Super Bowl, etc. 4) Selecting advt. media a) Set reach, frequency, and impact goals -Reach: percentage of people exposed to an ad campaign in a given time period -Frequency: no. of times a person is exposed to an ad -Media impact: qualitative value of a message exposure through a given medium -choose media that will engage consumers rather than simply reach them -consumer expressions (engagement through likes, comments, etc.) over consumer impression (how many people see, hear or read an ad) b) choose among major media types – marketers want to assemble a full mix of paid, owned, earned, and shared media c) select specific media vehicles -each media type includes specific vehicles (eg: Maclean’s as a specific magazine) -consider cost, audience quality/engagement, and editorial quality while selecting vehicle -balance costs against effectiveness for particular media d) decide on media timing - media timing schedules- follow seasonal pattern, oppose seasonal pattern, same coverage all year -choose pattern of the ads: 1. Continuity – scheduling ads evenly within a given period 2. Pulsing – scheduling ads unevenly over a given time period (advertise heavily for a short period to build awareness that carries over to the next advt period. -while pulsing may achieve same impact at lower cost, it may sacrifice depth 5) Evaluating advt effectiveness and RoI 1) Evaluating advt involves measuring -communication effects of an ad or campaign – whether the ads and media are communicating the ad message well -sales and profit effects of the ad campaign 2) Return on Advt Investment -the net return on advt investment divided by the costs of the advt investment 6) Decide whether take advt efforts on your own or hire an advertising agency -advt agency- a mktg services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs -small companies – advt is done by someone in the sales dept -large companies – have advt departments. However, most large companies use outside advt agencies as they offer several advantages Public Relations Functions
