MARKETING THEORY AND PRACTISE (MKF1120)

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1 MARKETING THEORY AND PRACTISE (MKF1120) CONTENTS: Week 1: Introduction to Marketing and Value Week 2: Key Marketing Terms and Concepts....4 Week 3: The Marketing Environment Week 4: Buyer Behaviour Week 5: What is Marketing Research? Week 6: Segmenting, Targeting and Positioning Week 7: Product Week 8: Price Week 9: Distribution Week 10: IMC (Promotion) Week 11: Current Issues in Marketing Practise Week 12: Strategy and Planning

2 WEEK TEN Integrated Marketing Communication (Promotion) Communication and IMC The Communication Process: Sender: person or an actor who wants to communicate something Receiver: someone who the sender wants to communicate to Channel: Sender encodes their message in a channel, receiver receives this message and decodes it Tricky part is encoding and decoding o What you do or say may not be decoded by the receiver as in intended o E.x. LOL. It may mean laugh out loud or it may mean lots of love o How is our receiver going to be decoding our message? Stuff in the middle complicates this process Getting an ad across: are there other ads creating distractions, is audience paying attention Feedback: receiver isn t passive, they can act in feedback activities (written feedback, do they like your Facebook page, do they buy the product, do they come back to your restaurant Environmental factors: will affect which channel you use, effects how senders and receivers encode and receive messages (e.x. different cultural backgrounds Message Source: power, liking, creditability Emphasis on link between companies and consumers Intermediaries: can be involved in communication: supermarket advertising Feedback groups Publics (word of mouth): consumers may be talking to their friends or families and talking about your brand (challenging because company may be in charge of marketing, but they aren t in charge of this) 2

3 Communication Purposes TO INFORM o Telling the market about a new product o Suggesting new uses for a product o Informing the market of a price change o Explaining how the product works o Describing available services o Correcting false impressions o Reducing buyers fears o Building a company image o E.x. Ikea TO PERSUADE o Building brand preference o Encouraging switching to your brand o Changing buyer perceptions of product attributes o Persuading buyers to purchase now o Persuading buyers to receive a sales call TO REMIND o Remind buyers that the product may be needed in the future o Reminding buyers where to buy the product o Keeping the product in the buyers minds during off seasons o Maintaining top-of-mind product awareness Buyer Readiness State and Communications Objectives Awareness à o Being aware that a product or service is available Knowledge à o What are some of the facts or features I know about this particular product Liking à o Emotional components Preference à o Evaluate it with competitors Conviction à o I really intend to purchase this product Purchase o Leads to the final purchase Push VS. Pull Messages PUSH 3

4 o Manufacturer is targeting the intermediary and pushing the product or service through that channel, then the intermediary pushes that onto the consumers PULL o Manufacturer targeting end consumer who then drives the demand and pulls the product through the channel IMC Tools Tools used to communicate messages o Any marketing communication campaign will employ a combination of following tools depending on their objectives and target audience ADVERTISING o Any paid form of non-personal communication by an identified sponsor o Have to make media and vehicle choices Broadcast Print Outdoor Interactive PUBLIC RELATIONS AND PUBLICITY o Public relations Building good relations with the company s various publics by obtaining favourable publicity, building up a good corporate image and handling or heading off unfavourable rumours (includes press releases, product publicity, corporate communications, lobbying and counselling o Publicity Activates to promote a company or its products by planting news about it in media not paid for by the sponsor DIRECT RESPONSE o Direct response marketing involves techniques that use mass and targeted media to create a direct response from customers TECHNIQUE MEDIA Direct selling Direct mail and catalogues Telemarketing and SMS Direct response advertising and interactive TV Electronic interactive marketing Interpersonal Mail Telephone Radio, TV and press Internet and 4

5 SALES PROMOTION o Direct inducement that offers extra value or incentive to the sales force, distributors or ultimate consumer, with the primary objective of creating an immediate sale o Main tools: Samples (in store, through mail, magazines) Price-offs (short term) Refunds/rebates (on proof of purchase) Premiums (Free gifts e.g. glass with purchase of whiskey) Contests/sweepstakes/games (delayed entry VS. immediate gratification) Bonus packs (20% extra free.) POP (instore displays) PERSONAL SELLING o Oral presentation in a conversation with one or more prospective purchasers for the purpose of marketing sales o The role of personal selling varies by types of business and industry, the nature of product or service, and the business strategy, e.g. retail selling vs. selling consulting services o The salesperson is often seen as the company in the eyes of the consumers and prospects o The process of personal selling may involve: Generating leads Qualifying leads Making sales calls Negotiating and closing the sale Following up to build and maintain the customer relationship SPONSORSHIPS o Sponsorships enhance a company, product or brand s visibility by associating it with something the market segment views as positive Events and sponsorships are good relationship building activities that can emotionally bind customers to a company or brand o Includes: People with cultural, sporting or educational importance Cultural and sporting events (Olympics) Charities and causes CHANGING FACE OF MARKETING COMMUNICATIONS o Social media marketing o Viral communication o Ambient advertising o Permission marketing 5

6 o Product placement Designing and IMC Mix Key theme is the need for companies to integrate their communications, promotional material must be consistent with the product, or distribution the promotional media (or tools) themselves must be integrated it is what customers will see Tools Used to Communicate Messages Any marketing communications campaign will employ a combination of the following tools depending on their objectives and the target audience o Advertising o Public relations / publicity o Direct marketing o Sales promotion o Personal selling o Sponsorship o Social media and other Points of differentiation for IMC tools: o Costs: can differ based on reach, medium and intermediaries used (e.g. advertising agencies o Reach: some tools achieve higher exposure o Impact: people pay more attention to virals, permission marketing, PR/publicity, personal selling o Measuring effectiveness: one-way communication more difficult than two ways TOOL STRENGTHS WEAKNESSES Advertising Sales Promotion Direct Response PR / Publicity Personal selling Sponsorship Low cost per person exposed to advertisement Encourages trial Can be customised Message is often perceived as more credible Interactive, can close the sale Cost effective Easy to ignore Effect may only be short term Can be perceived as junk mail Often uncontrolled, can be negative Expensive, may be out of control of organisation Uncontrolled peripheral message 6