Marketing - Lesson 11

MANAGING INTEGRATED MARKETING COMMUNICATIONS

MARKETING COMMUNICATION MIX CONSISTS OF

·         ADVERTISING

·         SALES PROMOTION

·         PUBLIC RELATIONS AND PUBLICITY

·         PERSONAL SELLING

·         DIRECT MARKETING

·         MERCHANDISING

·         EVENT SPONSORSHIP

·         PRODUCT DESIGN

·         ONLINE ADVERTISING

·         WORD OF MOUTH RECOMMENDATION

There are eight steps in developing effective communications

·         Identify the target audience

·         Determine the communication objectives

·         Design the message

·         Select the communication channels

·         Establish the total communications budget

·         Decide on the communications mix

·         Measure the communication’s results

·         Manage the integrated marketing communications process

Four common methods to decide the promotion budget:

Affordable Method

Many companies set the promotion budget at what they think the company can afford .This method completely ignore the role of promotion on sales volume. It leads to an uncertain annual budget, which makes long range planning difficult.

Percentage of sales method:

Here the promotion expenditure is specified as a percentage of sales or of the sales price. The advantages are:

·         Makes sure that the expenditure is closely related to the movement of corporate sales over the business cycle.

·         Encourages managers to think of the relationship among promotion cost, selling price and profit per unit

·         Encourages stability as the competing firms almost spend the same percentage of their sales on promotion

Competitive parity method:

Some companies set their promotion budgets to achieve a parity of share of voice with the competitors. The arguments for the method are

·         It prevents promotional wars

·         The competitor’s budget represents the collective wisdom of the industry

Objective and task method:

Promotion budget is done by defining specific objectives, determining the task that must be performed to achieve these objectives and estimating the costs of performing these tasks. The major steps involved in doing the same are:

•        Establish the market share goal

•        Determine the percentage of the market that should be reached by advertising

•        Determine the percentage of aware prospects that should be persuaded to try the brand

•        Determine the advertising impressions per 1 percent trial rate

•        Determine the number of gross rating points that would have to be purchased

•        Determine the necessary advertising budget on the basis of the average cost of buying a gross rating point

Advertising

The qualities noted are:

•        Public presentation: offers a kind of legitimacy to the product and suggests a standardized offering. Since the same message goes to all the buyers, we know what motivated purchase

•        Pervasiveness: one can repeat message. Compare the messages of various competitors. Also large scale advertising says something positive about the firm’s size, power and success.

•        Amplified expressiveness: opportunity for dramatizing the company and its products

•        Impersonality: audience not obligated to pay attention or respond to advertising

•        It allows the company to build a long term image

Sales promotion:

The distinctive benefits are:

•        Communication: they gain attention and usually provide information that may lead to the consumer to the product

•        Incentive: incorporates some concession. Inducement or contribution that gives value to the consumer

•        Invitation: they include a distinct invitation to engage the transaction now

Public relations and publicity:

The three distinctive qualities are:

•        High credibility

•        Ability to catch the buyers off the guard

•        Dramatization

Personal Selling:

Most effective tool at the later stages of the buying process, particularly in building up buyer preferences, conviction, and action. Three distinctive qualities are:

•        Personal confrontation: immediate interactive relationship between two parties and ability to observe the other’s reaction at close hand.

•        Cultivation: permits all kind of relationship to build up, ranging from a matter of fact selling relationship to a deep personal friendship.

•        Response: makes the buyer feel under some obligation for having to listened to the sales talk

Direct marketing:

It is:

•        Non public

•        Customized

•        Up to date

•        Interactive

Factors in setting the marketing communication mix:

Type of product market:

•        Consumer marketers spend on sales promotion, advertising, personal selling and public relations in the order.

•        The Business markets spend on personal sales, sales promotion, advertising, and public relations in that order.

•        Personal selling is used more with complex, risky and heavy goods and in markets with fewer and larger sellers.

Role of advertising in business markets:

•        Awareness building

•        Comprehension building – embodies new features, some explaining can be effectively performed by advertising

•        Efficient reminding – if prospects know about the product but are not ready to buy it then it is better to use reminder advertising as it is more economical than calls.

•        Lead generation: brochures are effective ways to generation of leads for sales representatives.

•        Legitimization: can use tear sheets of the company and products

•        Reassurance: can remind the customers how to use the product and reassure them about their purchase.

Push vs. Pull strategy:

The promotional mix is heavily influenced by whether the company chooses to a push or a pull strategy. A push strategy involves the manufacturing using sales force and trade promotions to induce the intermediary to carry, promote and sell the product to end users. It is generally important when the product is in low brand loyalty in a category, brand choice is made at the store, or the product is an impulse item.

A pull strategy involves the manufacturing using advertising and consumer promotion to induce the consumers to ask intermediaries to order it. This is especially appropriate for high brand loyalty products and the categories with high involvement.

Buyer Readiness stage:

•        Advertising and publicity play the most important roles in the awareness building stage

•        Customer comprehension is affected by the advertising and personal selling.

•        Customer conviction is mostly influenced by personal selling

•        Closing the sale is influenced by the mostly by personal selling and sales promotion

•        Reordering also affected by mostly by personal selling and sales promotion and somewhat by reminder advertising

Product Life cycle:

•        Introduction stage: advertising and publicity have the highest cost effectiveness, followed by personal selling to gain distribution coverage and sales promotion

•        In growth stage all the tools can be toned down because demand has own momentum through word of mouth.

•        In the maturity stage sales promotion, advertising, and personal selling all grow more important in that order

•        In the decline stage sales promotion continues strong advertising and publicity are reduced and sales people give product only minimal attention.

Advertising- any paid form of none personal presentation and promotion of ideas, goods or services by an identified sponsor. In developing a marketing programme

•        Identify the target market and buyer motives.

•        Make five major decisions- 5 M’s

·         Mission – advertising objectives

·         Money – amount to be spent

·         Message

·         Media

·         Measurement – evaluation of results

The ideal ad campaign would ensure that:

·         The right consumer is exposed to the right message at the right place and at the right time.

·         The ad causes the consumer to pay attention to the ad but does not distract from the intended message.

·         The ad properly reflects the consumer’s level of understanding               about the product and the brand.

·         The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity.

·         The ad motivates consumers to consider purchase of the brand.

·         The ad creates strong brand associations with all of these stored communication effects so that they can have an impact when consumers are considering making a purchase.

RECOGNISING GOOD ADVERTISING

1. STRATEGIC FIT WITH POSITIONING

2.  DISTINCTIVE / EXCLUSIVE

3.  COMPETITIVE

4.  NON-GENERIC

5.  PROVOCATIVE

6.  CONTENT MORE IMPORTANT THAN STYLE

7.  BOING FACTOR

8.  BELIEVABLE LOGIC

9.  VISUAL / VERBAL COHERENCE

10. CONSUMER EMPATHY

MEDIA BRIEF

•            TARGET AUDIENCE

•            ADVERTISING

•            REACH V/S FREQUENCY

•            MEDIA HABITS OF TARGET AUDIENCE

•            TIMING OF CAMPAIGN

•            REGIONAL WEIGHTS

•            SHARE OF VOICE DESIRED IN EACH MARKET

•            CREATIVE REQUIREMENTS - MINIMUM SIZE OR LENGTH OF TIME

Marketing Factors Important to Determining Frequency

•          Brand history

•          Brand share

•          Brand loyalty

•          Purchase cycles

•          Usage cycle

•          Competitive share of voice

•          Target group

Creative Factors in Determining Frequency

•          Message complexity

•          Message uniqueness

•          New vs. continuing campaigns

•          Image versus product sell

•          Message variation

•          Wear out

•          Advertising units

Media Factors Important to Determining Frequency

•          Clutter

•          Editorial environment

•          Attentiveness

•          Scheduling

•          Number of media used

•          Repeat Exposures

Evaluating Advertising Effectiveness

Communication Effect Research called copy testing can be done before an ad is put into media or after. 3 major methods of adverting pretesting:-

·         Direct Rating Method: consumers to rate alternate ads

·         Portfolio tests: test consumers recall level by exposing to plethora of ads

·         Laboratory tests: uses equipment to measure physiological reactions

These tests measure attention getting power but reveal nothing about impact on beliefs and attitudes.

Sales Effect research: this is harder to measure than above. A company’s share of advertising expenditures produces a share of voice that produces a share of minds and hearts and ultimately a share of market. Researchers try to measure the sales impact through analyzing

·         Historical Approach

·         Experimental design

Sales Promotion

It consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Advertising offers a reason to buy and sales promotion offers an incentive to buy.

Factors contributing to the rapid growth of sales promotion, particularly in consumer markets

·         Internal factors:

o   Acceptance by top management

o   Product managers more qualified to use it

o   Greater pressure to increase sales

·         External Factors:

o   Increase in number of brands

o   Use by competitors

o   Similar brands

o   Price oriented consumers

o   More deals from manufacturers

o   Decline in advertising efficiency due to rising costs

o   Media clutter

o   Legal restraints

MAJOR DECISIONS IN SALES PROMOTION

·         Establishing Objectives: The specific objectives for sales promotion vary with the target market.

·         Selecting Consumer Promotion Tools: The promotion planner should take into account the type of market, sales promotion objectives, competitive conditions, and each tools’ (e.g. samples, coupons etc.) cost effectiveness.

·         Selecting Trade Promotion Tools:

o   To persuade the retailer or wholesaler to carry the brand

o   To persuade the retailer or wholesaler to carry more units than the normal amount

o   To induce retailers to promote the brand by featuring , display, and price reductions

o   To stimulate retailers and their sales clerks to push the product

·         Sales Force Promotion Tools

·         BUSINESS PROMOTION - TRADE SHOWS, FAIRS, CONVENTIONS, SPECIALITY ADVERTISING

PUBLIC RELATIONS

PR involves a variety of programs designed to promote or protect a company’s image or its individual products. PR Dept generally performs the following functions:

o   Press Relations

o   Product Publicity

o   Corporate Communication

o   Lobbying

o   Counselling

Sales Management:

Six different positions sales representatives cover (McMurry):

o   Deliverer – delivery of products

o   Order taker – inside order taker (behind the counter) outside order taker (calling on customers for orders)

o   Missionary – build goodwill and educate the user

o   Technician – high level of technical knowledge

o   Demand creator – creative methods of selling products / services

o   Solution vendor – solving customers’ problems

Sales Force Objectives and Strategy

Specific tasks to be performed:

o   Prospecting: searching for prospects or leads

o   Targeting: decide how to allocate their time among prospects and customers

o   Communicating: information about company’s products and services

o   Selling: approaching, presenting, answering objections and closing sales

o   Servicing: providing different services – consultation, technical assistance, arranging finance, expediting deliveries

o   Information gathering: market research and intelligent work

o   Allocating: deciding which customer will get scarce products during shortages