Market Communication
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Figure 14.1: The
Communications Model
decoding
encoding
Message
Medium
Source
Receiver
Noise
Feedback
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Promotion Mix
•
•
•
•
Advertising
Sales Promotions
Public Relations
Personal Selling
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Figure 14.2: Control Continuum
Advertising
Sales
Promotion
High
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Personal
Selling
Public
Relations
Word of
Mouth
Low
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Appeals
• Personal appeals allow for direct interaction
between a company representative and a
customer
– personal selling
• Mass appeals seek to reach many
prospective customers at the same time
– advertising
– sales promotion
– public relations
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Advertising
• Non-personal communication from an
identified sponsor using the mass media
– can convey rich and dynamic images
– can establish and reinforce brand identity
– can communicate factual information
– can remind customer to buy
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Sales Promotion
• Programs that build interest or encourage
purchase of a product through the use of an
incentive in a specified time period
– coupons
– contests
– rebates
– premiums
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Publicity and Public Relations
• Portray an organization and its products
positively by influencing the perceptions of
various publics
– writing press releases
– holding special events
– conducting and publishing consumer
surveys
– putting a positive spin on negative news
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Developing the Promotion Plan
• Framework for developing, implementing,
and controlling the firm’s promotional
activities
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Figure 14.3: Stages in Developing the
Promotion Mix
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Step 1: Establish Promotion
Objectives
• Objectives will change depending on where
consumers are on the path to loyalty
• Some objectives might be
– create awareness
– inform the market
– create desire
– encourage trial
– build loyalty
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Figure 14.4: Up the
Promotional Road
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Step 2: Identify Influence on the
Promotion Mix
• Mix must be tailored for each situation
– Will company use push or pull strategy?
• Push means that the company seeks to move
its products through the channel by
convincing channel members to offer them
and entice their customers to select these
items
• Pull means that the company relies on
consumers to learn about and express desire
for its products
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Effects of Time and the PLC
• Introduction phase: push strategy; mix relies
heavily on advertising, sales promotions,
and public relations
• Growth phase: heavy advertising with
emphasis on differentiation
• Maturity phase: emphasis on sales
promotions to encourage brand switching
• Decline phase: dramatic reductions in
promotional spending
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Step 3: Determine and Allocate the
Total Promotion Budget
• Top-down budgeting techniques
– percentage-of-sales method
– competitive parity
• Bottom-up budgeting technique
– objective-task method
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Step 4: Allocate Budget to Specific
Promotion Mix
• Organizational factors
• Market potential
• Market size
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Step 5: Designing the Promotion Mix
• Which elements of promotion will be used?
• What message is to be communicated?
– Type of appeal?
– Structure of appeal?
• What communication channels should be
employed?
• What role will advertising, sales promotion,
public relations, and selling play?
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The AIDA Model
•
•
•
•
Attention
Interest
Desire
Action
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Step 5: Evaluate the Effectiveness
of the Promotion Mix
• Is the plan working?
– Measure response to sales promotions
– Measure brand awareness, recall, and
image before and after ad campaign
– Analyze and compare sales performances
by territory and sales force
– Clip articles appearing in media
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Interactive Marketing
• Attention Economy
– The amount of information seems infinite; our
ability to get it is limited by the time we can
spend looking
– Interactive media are in the business of buying
and selling people’s attention
• Customized marketing communications
yield a measurable response in the form of a
purchase or request for more information
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De-Mass Marketing
• Companies once focused on mass marketing
are increasingly segmenting and
customizing promotions for small targets
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Levels of Interactive Response
• First-order response: product offer directly
yields a transaction
• Second-order response: product offer results
in some form of customer feedback but it
isn’t a transaction
– request for more information
– request NOT to receive more information
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Database Marketing
• Critical to interactive marketers as they seek
to track responses to messages and develop
a dialogue with customers
• Allows the organization to learn customer
preferences, fine-tune and test offerings,
build relationships
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Database Marketing
•
•
•
•
•
•
Is interactive
Builds relationships
Locates new customers
Stimulates cross-selling
Is measurable
Is trackable
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Putting It All Together
• Integrated Marketing Communications
(IMC) is “a strategic business process used
to plan, develop, execute, and evaluate
coordinated, measurable, persuasive brand
communication programs over time with
consumers, customers, prospects, and other
targeted, relevant external and internal
audiences.”
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Figure 14.5: The Integrated
Communications Perspective
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MSN
Microsoft practices
IMC by coordinating
print advertising
with other
elements of its
promotional mix.
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Characteristics of IMC Approach
• Focus on customer need for communications
• Reliance on customer database to focus messages
• Use of consistent messages via diverse
communications vehicles
• Careful planning of message delivery to generate a
steady stream of consistent information
• Use of several elements of the promotional mix
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Figure 14.6: Integrated Marketing
Model
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The IMC Planning Model
•
•
•
•
Start with a Customer Database
Develop Promotional Strategies
Implement Specific Promotional Tactics
Evaluate IMC Communications
– First-order responses
– Second-order responses
– Attitudes toward brand and firm
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Barriers to Acceptance of IMC
• Requires changes in planning and implementation
of promotional strategies
• Puts more weight on promotional aspects other
than advertising
• Requires upper-level management to view other
aspects of the marketing mix as part of the
communications strategy
• Requires company-wide commitment
• Traditional ad agencies may not be equipped to
handle a true IMC campaign
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