Communicating Customer Value: Integrated Marketing Communications Strategy

Transcription

1 Communicating Customer Value: Integrated Marketing Communications Strategy Chapter 14 Learning Goals 1. Know the tools of the marketing communications mix. 2. Understand the process and advantages of integrated marketing communications. 3. Learn the steps in developing effective marketing communications. 4. Understand methods for setting promotional budgets and the factors that affect the design of the promotion mix. 1 1

2 Terms to know Marketing Communications Mix (or promotion mix) Integrated Marketing Communications (IMC) Elements in the communication process Steps in developing effective communication (there are six) Buyer readiness stages AIDA, message content, message structure, message format Personal and non-personal communication channels Setting the total promotion budget Promotion tools (advertising, personal selling, sales promotion, public relations and direct marketing) Promotion mix strategies (push and pull) Socially Responsible Communications 2 The Marketing Communications Mix Modern marketing calls for more than just developing a good product. Companies must also communicate with current and prospective customers, and what they communicate should not be left to chance. All of their communications efforts must be blended into a consistent and coordinated communications program. Marketing Communications Mix (also known as promotion mix) The specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives. Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service. Public relations: Building good relations with the company s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Personal selling: Personal presentation by the firm s sales force for the purpose of making sales and building customer relationships. Direct Marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships the use of telephone, mail, fax, , the Internet, and other tools to communicate directly with specific consumers. 3 Goal 1: Know the tools of the marketing communications mix 2

3 Integrated Marketing Communications The Marketing Communications Environment is Changing: Mass markets have fragmented, causing marketers to shift away from mass marketing to target marketing Improvements in information technology are facilitating segmentation Media fragmentation has occurred with companies doing less broadcasting and more narrowcasting 4 Goal 1: Know the tools of the marketing communications mix Integrated Marketing Communications The Need for Integrated Marketing Communications Conflicting messages from different sources or promotional approaches can confuse company or brand images The problem is particularly prevalent when functional specialists handle individual forms of marketing communications independently The Internet must be integrated into the broader IMC mix Best bet is to wed traditional branding efforts with the interactivity and service capabilities of online communications In the past, no one person or department was responsible for thinking through the communication roles of the various promotion tools and coordinating the promotion mix. Today, more companies are adopting the concept of integrated marketing communications (IMC). Integrated Marketing Communications The concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products. 5 Goal 1: Know the tools of the marketing communications mix 3

4 A view of the Communication Process Communications efforts should be viewed from the perspective of managing customer relationships over time. The communication process begins with an audit of all potential contacts a customer might have with the brand. Effective communication requires knowledge of how communication works. Communication involves the nine elements in the communication process. 6 Goal 2: Understand the process and advantages of IMC Elements in the Communication Process Sender: the party sending the message to another party. Encoding: the process of putting thought into symbolic form i.e. advertising agency assembles words and illustrations into an advertisement that will convey the intended message. Message: the set of symbols that the sender transmits. Media: the communication channels through which the message moves from sender to receiver, i.e. magazines. Decoding: the process by which the receiver assigns meaning to the symbols encoded by the sender, i.e. a consumer reads the ad and interprets the words and illustrations it contains. Receiver: the party receiving the message sent by another party. Response: the reactions of the receiver after being exposed to the message, i.e. more aware of the product, actually buys the product, or does nothing. Feedback: the part of the receiver s response communicated back to the sender, i.e. through research if they remember the ad, consumers write or call the company to praise or criticize the ad. Noise: the unplanned static or distortion during the communications process which results in the receiver s getting a different message than the one the sender sent. 7 Goal 2: Understand the process and advantages of IMC 4

5 Developing Effective Communication We now discuss the steps in developing an effective integrated communications and promotion program. The marketing communicator must do the following: Step 1: Identifying the Target Audience Affects decisions related to what will be said, how it will be said, when it will be said, and where it will be said, as well as who will say it Step 2: Determining Communication Objectives The marketing communicator must decide what response is sought. In many cases, the final response is purchase. But purchase is the result of a long process of consumer decision making. The marketing communicator needs to know where the target audience now stands and to what stage it needs to be moved. The target audience may be in any of six buyer-readiness stages. Six buyer readiness stages: Buyer-readiness stages are the stages consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase. 8 Goal 3: Learn the steps in developing effective marketing communications Buyer-Readiness Stages Awareness & Knowledge: the communicator must first build awareness and knowledge. Liking, preference & cognition: assuming target consumers know about the product, how do they feel about it? Once potential buyers knew about the product, marketers will want to move them through successively stronger stages of feelings toward the product. These stages include liking (feeling favorable about the product), preference (preferring the product over other similar brands), and conviction (believing that the product is the best for them). Purchase: finally, some members of the target market might be convinced about the product, but not quite get around to making the purchase. The communicator must lead these consumers to take the final step. Actions might include offering special promotional prices, rebates or premiums. 9 Goal 3: Learn the steps in developing effective marketing communications 5

6 Developing Effective Communication Step 3: Designing a Message The communicator turns now to developing an effective message. Ideally the message should follow the AIDA framework. AIDA framework guides message design: get Attention, hold Interest, arouse Desire, and obtain Action. In putting the message together, the marketing communicator must decide what to say (message content) and how to say it (message structure and format). Message Content: Key decisions are required with respect to three message content issues: Rational appeals relate to the audience s self-interest. They show that the product will produce the desired benefits. Emotional appeals attempt to stir up either negative (fear, guilt, and shame) or positive emotions (love, pride, joy, and humor) that can motivate purchase. Moral appeals are directed to the audience s sense of what is right and proper. They are often used to urge people to support social causes such as a cleaner environment, equal rights for women, and aid to the disadvantaged. Message Structure: the communicator must also decide how to handle three message structure issues: The first is whether to draw a conclusion or leave it to the audience. The second issue is whether to present the strongest arguments first or last. The third issue is whether to present a one-sided argument (mentioning only the product s strengths) or a two-sided argument (touting the product s strengths while also admitting its shortcomings). Message Format: The communicator has to decide on the design, layout, copy, color, shape, movement, words, sounds, voice. If on tv, in addition to the above, body language has to be planned. 10 Goal 3: Learn the steps in developing effective marketing communications Developing Effective Communication Step 4: Choosing Media: The communicator must then select channels of communication. There are two broad types: Personal communication channels: channels through which two or more people communicate directly with each other, including face to face, person to audience or through the mail Includes face-to-face, phone, mail, and Internet chat communications Word-of-mouth (personal communication about a product between target buyers and neighbors, friends, family members, and associates) influence is often critical. Buzz marketing cultivates opinion leaders and gets them to spread information about a product or service to others in their communities. Non-personal communication channels media (print, broadcast, display and online media) that carry messages without personal contact or feedback, including media, atmosphere, and events. 11 Goal 3: Learn the steps in developing effective marketing communications 6

7 Developing Effective Communication Step 5: Selecting the Message Source The message s impact on the target audience is also affected by how the audience views the communicator: Highly credible sources are more persuasive A poor spokesperson can tarnish a brand Step 6: Collecting Feedback After sending the message, the communicator must research its effect on the target audience. Recognition, recall, and behavioral measures are assessed May suggest changes in product/promotion 12 Goal 3: Learn the steps in developing effective marketing communications Setting the Total Promotion Budget & Mix Setting the Total Promotional Budget: how much to spend on promotion? There are four methods: Affordability Method Budget is set at a level that a company can afford Percentage-of-Sales Method Past or forecasted sales may be used Competitive-Parity Method Budget matches competitors outlays Objective-and-Task Method Specific objectives are defined Tasks required to achieve objectives are determined Costs of performing tasks are estimated, then summed to create the promotional budget 13 7

8 Setting the Total Promotion Budget & Mix Setting the Overall Promotion Mix: how does the company determine what mix of promotion tools it will use? Determined by the nature of each promotion tool and the selected promotion mix strategy. Each promotion tool has unique characteristics and costs. Marketers must understand these characteristics in selecting their mix of tools. 14 Setting the Promotional Promotion Tools Advertising Personal Selling Sales Promotion Public Relations Direct Marketing Reaches large, geographically dispersed audiences, often with high frequency Low cost per exposure, though overall costs are high Consumers perceive advertised goods as more legitimate Dramatizes company/brand Builds brand image; may stimulate short-term sales Impersonal; one-way communication 15 8

9 Setting the Promotional Promotion Tools Advertising Personal Selling Sales Promotion Public Relations Direct Marketing Most effective tool for building buyers preferences, convictions, and actions Personal interaction allows for feedback and adjustments Relationship oriented Buyers are more attentive Sales force represents a longterm commitment Most expensive of the promotional tools as it requires a sales force with a longer-term commitment that does advertising which can be turned on and off at will. 16 Setting the Promotional Promotion Tools Advertising Personal Selling Sales Promotion Public Relations Direct Marketing Makes use of a variety of formats: premiums, coupons, contests, etc. Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales Stimulates quick response Short lived Not effective at building longterm brand preferences 17 9

10 Setting the Promotional Promotion Tools Advertising Personal Selling Sales Promotion Public Relations Direct Marketing Highly credible Many forms: news stories, news features, events and sponsorships, etc. Reaches many prospects missed via other forms of promotion Dramatizes company or benefits Often the most underused element in the promotional mix 18 Setting the Promotional Promotion Tools Advertising Personal Selling Sales Promotion Public Relations Direct Marketing Many forms: Telephone marketing, direct mail, online marketing, etc. Four distinctive characteristics: Nonpublic Immediate Customized Interactive Well-suited to highly targeted marketing efforts 19 10

11 Setting the Promotional Promotion Mix Strategies Push strategy: A promotion strategy that calls for using the sales force (through personal selling efforts) and trade promotions to push the product through the distribution channels to the final consumer. Pull strategy: A promotion strategy that calls for spending a lot on advertising and consumer promotion to build up consumer demand. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. 20 Setting the Promotional Integrating the Promotion Mix: Here is a checklist for integrating the firm s marketing communications: Analyze trends (internal and external) that can affect the company s ability to do business. Audit the pockets of communications spending throughout the organization. Identify all points of contact for the company and its brands. Team up in communications planning Create compatible themes, tones, and quality across all communications media. Create performance measures that are shared by all communications elements. Appoint a director responsible for the company s persuasive communications efforts

12 Socially Responsible Communications In shaping its promotion mix, a company must be aware of the large body of legal and ethical issues surrounding marketing communications. Advertising and Sales Promotion Avoid false and deceptive advertising. No bait-and-switch advertising that attracts buyers under false pretenses. Trade promotions can not favor certain customers over others. Use advertising to promote socially responsible programs and actions. Personal Selling Salespeople must follow the rules of fair competition (no lies, no misleading) Three-day cooling-off rule protects ultimate consumers from high pressure tactics Under this rule, customers who agree in their own homes to buy something costing more than $25 have 72 hours in which to cancel a contract or return merchandise and get their money back, no questions asked. Business-to-business selling Bribery, industrial espionage, and making false and disparaging statements about a competitor are forbidden REVIEW QUESTION: List and define the elements of the Marketing Communications Mix