Promotional Process. Session 8 4

Transcription

1 Session 8 PROMOTION

2 1. Role of promotion is communication and building awareness. 2. Target audience definition for financially attractive consumers is complicated by heterogeneous needs. 3. Promotional message influenced by involvement and information needs of consumers. 4. Where cost/effective proposition, personal selling is the preferred promotional channel. 5. Social networks and the Internet have caused media channel fragmentation. Session 8 2

3 6. Electronic marketing tends to be less acceptable to financially attractive consumers. 7. Promotional message should communicate delivery of benefit of happiness, love or caring for others. 8. With older consumers the promotion should feature younger individuals. 9. Promotion should avoid communicating a message which evokes negative connotations. 10. Promotional message should be delivered via those channels widely utilised by target audience. Session 8 3

4 Promotional Process Optimising cost/benefits aided by detailed understanding of buyer behaviour. Large firms can afford market research and services of large advertising agencies. Smaller firms do not perceive agency fees are affordable. Not always valid perception because benefits of guidance may be much greater than costs. Session 8 4

5 FIGURE 8:1 THE PROMOTIONAL PLANNING PROCESS Target Target Audience Audience Define Define Promotional Promotional Objective(s) Objective(s) Develop Develop Promotional Promotional Message Message Select Select The Promotional The Promotional Channel(s) Channel(s) Execution Execution Impact Impact Assessment Assessment Parallel Parallel Promotional Promotional Budget Budget Determination Determination CONSUMER SELF IMAGE, ROLE ASSUMPTION & BUYING BEHAVIOUR Session 8 5

6 Planning effectiveness assisted by knowledge of consumer self image and life roles. Target audience is usually group offering largest potential return. Mass marketing targets usually easy to define (e.g housewives with children). Heterogeneous needs of older consumers can complicate target selection. Session 8 6

7 Target definition also complicated as older consumer needs change over time. Also need to recognise own children may become involved in some decisions (e.g. selection of Care Home for parents). Latter instance will require re-direction of promotional campaign. Where seeking to build new demand, target is new customers with aim of educating potential buyers. Session 8 7

8 Communication with existing customers focus is to communicate superiority over competition. Once repeat purchase achieved focus may switch to building strong loyalty. Recognition of task phase and need to change greatly enhances cost/benefit of promotional spending. Session 8 8

9 FIGURE 8:2 PROMOTIONAL TASK PHASES First purchase Promotional Task First-time pre-purchase phase 1 Post purchase phase = Informative task = Persuasive task = Reminder task Time Session 8 9

10 Company Knowledge Benefit Synthesis Message Translation Message Delivery Message Receipt Company Customer Interaction Message Comprehension Competition Respected Sources Impact on Customer Knowledge Attitudes, Beliefs and Values Prior Experience FIGURE 8:3 THE COMMUNICATION PROCESS Session 8 10

11 Supplier benefit claim usually needs to be translated in order for consumer to understand. Impact of message influenced by factors such as prior purchase experience. Also influenced by general cultural attitudes. For example German consumers more receptive to promotions by domestic appliance producers over foreign suppliers. Session 8 11

12 In some cases consumer will depend on respected sources. UK older consumers influenced by consumer magazine Which that tests and evaluates products. Degree of consumer involvement in product will influence promotional message content and process delivery. Involvement varies by product categories. Session 8 12

13 Consumer Information Needs High Low Customer Involvement High Focused Informational Campaign Purchase Closure Campaign High Low Purchase Phase Campaign Demonstrable Superior Benefit Campaign Low FIGURE 8:4a THE CUSTOMER INVOLVEMENT MATRIX Session 8 13

14 Consumer Information Needs High Low Customer Involvement High Low Construction company specialising in home extensions to accommodate 3 generations of a family Insurance broker focusing on the provision of financial and estate planning advice Travel company specialising in upmarket escorted safari holidays Proprietary lawn treatment service High Low FIGURE 8:4b APPLICATION EXAMPLES OF THE INVOLVEMENT MATRIX Session 8 14

15 Promotional Options Personal selling permits two way customer seller interaction. Advertising involves rental of space or airtime to deliver message. Direct marketing where use personalised communication (e.g. mail shot). Public relations providing general information via media. Collateral materials such as overheads, physical facilities, employee appearance. Session 8 15

16 Personal selling is an expensive medium for communication. Restrict to scenarios where each customer buys significant of total supplier output. Personal selling tends to be restricted to B2B markets. Even in high value purchase consumer markets such as financial services, focus is towards replacing sales force with lower cost alternatives. Session 8 16

17 Charles Schwarb U.S. stockbroker developed online trading systems. Complimented with terrestrial offices and downloadable investment software. Contradictory evidence on promotional channel preferences for older consumers. Problem of poor research methodology an insufficient comparison across different age groups. Session 8 17

18 Overall impression suggests older consumers prefer personal contact to acquire adequate information. Also prefer interaction with sales staff of similar age. Extremely important in sectors such as complex financial products. Due to older sales person s broader experience and also more trusted than younger sales staff. Session 8 18

19 Questionable Selling Growing concern over financial services sales people misleading older consumers over most suitable products (= misselling). Persuaded to shift money because sales person can earn larger commission. Example of brokers choice incorporated running training programme for financial advisors in USA. Session 8 19

20 Advise participants to treat consumers like they re blind 12 year olds who make decisions based on fear, anger and greed. Offer free meals at seminars because consumers like freebies. Check what cars driven by consumers to identify richer prospects. Always recommend annuity because generate greatest sales commission. Session 8 20

21 Company insists company emphasises need for integrity by sales people. In reality annuities are complex products not suited to every consumer needs. Correct approach involves: Detailed review of needs and assets Presentation of alternatives Recommendation of what best meets needs, not what maximises sales commission Session 8 21

22 Other Promotional Channels Arrival of television dramatically altered power of advertising. High audiences and effective impact of audio/visual messages. Advent of media fragmentation due to: More channels Satellite/cable television Internet Social networking Watching DVDs at home Session 8 22

23 Space/airtime costs reflect audience size and demand from advertisers. Smaller firms often need smaller geographic footprint so advertising choices restricted to more local media. Local newspapers often have high readership among older consumers. Commercial radio also offers local footprint and tight audience definitions. Session 8 23

24 Telephone as promotional tool became more popular as consumer penetration has risen and telephone costs fall. Uncontrolled tele-sales cold calling has especially alienated older consumer. Added problem of large firms offshoring call centres which older consumers find more difficult to use. Need to recognise number of variables influence face-to-face interaction. Session 8 24

25 No extended wait periods Social benefits of human interaction Consumer Preferences during Product or Service Information Search Re-assurance over skills of provider in face-to-face situation No requirement to learn about new technology Influence of nationality on trust FIGURE 8:5 FACTORS OF INFLUENCE IN INFORMATION SEARCH Session 8 25

26 Public Relations can provide effective low cost way of achieving media coverage. To achieve regular appearance in national media usually requires services of PR Agency. Direct marketing popularity risen due to impact of IT on automated production and automated data base mining for prospects. Some countries Direct Marketing spend now exceeds television advertising spend. Session 8 26

27 Advent of offers new, minimal cost Direct Marketing variable. Problem is spam has damaged medium and many consumers now have anti-spam filters. Opt in is, however, still very effective, especially for communicating special offers. Multi-channel approach can be effective but must offer message consistency. Session 8 27

28 Direct Marketing Guidance Older consumers lower users of mail order products. Older consumers do not like buying at home via door-to-door or party plan sales. Older people perceive greater risk buying via mail order. Direct Marketers must focus on creating trust/integrity image. Session 8 28

29 Budgeting Major firms may use advertising agencies highly sophisticated computer software modelling systems to develop promotional budget. Systems are expensive which restricts usage and appeal to smaller firms. Number of budgeting techniques exist. Most techniques have strengths and weaknesses. Session 8 29

30 Affordability budgeting can work when entrepreneur has successful track record in intuitive decision-making. Utilise prevailing marketing behaviour/trends to assess whether should revise budgets in relation to opportunity. Preferred approach is that of objective task method: Specify promotional aims Develop budget to achieve aims Session 8 30

31 Example of how many sales calls required, average sales person workload used to calculate number of sales people needed. Promotional campaigns can benefit from control systems to determine effectiveness. Tendency even in large firms of marketers adverse to campaign assessment. Nevertheless control systems can greatly assist optimising promotional spending. Session 8 31

32 Self Image Over 70% older U.S. consumers do not like way companies market products to them. Labels such as Greys, Silvers or Golden Age People should be avoided. Follow conventional rules over promotional effectiveness: Avoid negative messages Focus on positive messages Concentrate on reinforcing consumers positive attitudes and beliefs Session 8 32

33 Inform Positive self image Sensitivity Positive association image Positive Mood Enhancing Financially Attractive Consumer Purchase Intent Relevant appealing benefit Convenience Safety and Security Social Interaction Nostalgia Romance GENERIC ISSUES FIGURE 8:6 FACTORS INFLUENCING PROMOTIONAL EFFECTIVENESS Session 8 33

34 Older consumers concerned about ageing and their perceived image among others. Most people over 35 believe they look younger than their biological age. Promotional image should reflect view of 35+ see themselves as looking years younger. Also recognise older consumer adopt more subjective, evaluative, emotional thinking mode. Session 8 34

35 Will encounter behaviour shift as people perceive nearing end of own life. Younger people perceive lifespan means no concern about death. Tend to accept both positive and negative promotional messages. People perceiving limited lifespan remaining react adversely to negative promotions. Session 8 35

36 Younger orientated consumers accept advertisements about funding funeral cost as informative. Older feeling consumers exhibit negative reaction to funeral insurance advertising. With exception of role models (e.g. Jane Fonda, Clint Eastwood) avoid using old people in advertising. Avoid using humans in some cases or feature younger people consistent with older consumers desired self image. Session 8 36

37 Older consumers want to retain self respect and minimise reliance on others. Promotional message must be sensitive to such issues, especially when handling matters such as personal hygiene. Present sensitive issues by demonstrating how product permitting ability to still enjoy life or also being used by much younger people. Session 8 37

38 Use of younger actors may not be relevant when presenting certain types of illness. Example of pain relief for arthritis more effective if shown being used by older person. Where possible adopt general rule of showing older customers gaining happiness and/or achieving warmer closer relationships with others. Session 8 38

39 Show product in context of self image desired by target audience. Example of drink advertisement targeted at older female showing drink in use by attractive woman with partner at social event. Same brand may feature drink being used by male after golf game. Advertiser may face issue of needing to segregate promotions to suit different target audiences. Session 8 39

40 AUDIENCE SEGREGATION BREADTH OF PRODUCT OR SERVICE APPEAL Broad Market Appeal Across Generations Restricted To Financially Attractive Consumers Source: Modified Greco (1989) Separate Separate promotional promotional campaigns campaigns targeted targeted at at financially financially attractive attractive consumers consumers and and younger younger consumers consumers Promotional campaign directed Promotional campaign directed specifically at financially specifically at financially attractive consumers attractive consumers Feasible Single Single promotional promotional campaign campaign directed directed at at all all consumers, consumers, but but execution execution content content biased biased towards towards presenting presenting a a youthful youthful image image for for the the benefit benefit proposition proposition Promotional Promotional campaign campaign directed directed at at financially financially attractive attractive consumers consumers but but featuring featuring characters characters whose whose visual visual image image will will not not alienate alienate other other consumers consumers Impractical FIGURE 8:7 PROMOTIONAL CAMPAIGN OPTIONS Session 8 40

41 Promotion should be supportive of generic concern issues of safety, personal security, not being socially isolated. Exploitation by rekindling nostalgic memories or present product associated with romantic situations. Also recognise declining sight, hearing and/or mental speed may demand attention to execution to ensure effective communication. Session 8 41