Session 5_Hard_Promotion

• The slides cover VO Management I - Marketing (MA), Week 5 on the topic of Promotion / Marketing Communication, presented by Univ.-Prof. Dr. Christoph Fuchs, Chair of Marketing.

Course Framework

• The marketing process includes marketing research, consumer behavior, segmentation, targeting, positioning, and creates a marketing plan involving product, price, promotion and place.

Key Objectives (Communication)

• The main goal of marketing communication is to inform, persuade, and remind customers about a product, both directly and indirectly.
• It's important to be systematic and ask yourself:
  • What is your objective?
  • Who are you trying to reach?
  • Where is the best place to reach your target?
  • How is the best way to reach your target?

Types of Product Promotion

Advertising

• Advertising is defined as any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor, and includes traditional avenues such as TV and print ads

Personal Selling

• Personal selling constitutes a two-way flow of communication between buyer and seller, designed to influence the purchase intentions, typically face-to-face
• Personal selling is generally:
  • More customized
  • It is more effective for sharing complex information
  • More expensive in terms of the cost to reach one person
  • Allows for more consistent delivery of communication

Public Relations

• Public relations involves a nonpersonal, indirectly paid presentation of an organization, good, or service, news articles, editorials, product launch announcements etc where the company does not pay for the space in the mass medium.

Sales Promotion

• Sales promotion constitutes a short-term inducement of value offered to both consumers and sales channel to arouse interest in buying a good or service; examples include coupons and rebates.
• Sales promotions stimulate behavior but provide information about price.
• Examples of monetary incentives include:
  • Price cut on the shelf
  • Coupons
  • Cash refunds
  • Extra volume
  • Savings cards
• Examples of ways to offer a chance to win a prize include:
  • Contests
  • Sweepstakes and lotteries
• Examples of product promotions include:
  • Sampling
  • Free in mail
  • Premiums
  • Self-liquidators
  • Savings cards

Objectives, Advantages, and Disadvantages of Consumer Promotions

• Promotion objectives can include generate trial, induce repeat purchase, and basket-filling.
• Some (dis)advantages include direct consumer benefit, ease of obtaining benefit, impact on brand image and brand loyalty, manufacturer's workload and problems, impact on consumer's price perception, ease of targeting, ease of budget planning, database support, immediate increase in sales, impact on store image and store loyalty, and retailer's workload
• Some are short term positive effect, and others long term negative effect depending on promotion itself.

Integrated Marketing Communications

• Common examples includes:
  • Coca-Cola for advertising
  • Tupperware, Ikea for direct marketing
  • Google, Facebook for interactive/internet marketing
  • Lidl Happy Meal for sales promotion
  • Red Bull, Apple events for publicity/public relations
  • BMW , GE for personal selling

Developing Effective Communication

• Decide communication content based on:
  • STP strategy
  • Market research
  • Unique Selling Proposition
• Decide how to say it includes
  • Credible sources (experts, users of producers, etc.)
  • Creativity / Humor

Steps in Developing Effective Communication

• Steps include:
  • Identify the target audience
  • Determine the communication objectives
  • Design the message
  • Choose the media
  • Select the message source

communication objectives

• Objectives depend on Product Life Cycle
  • includes Category need for introduction stage,. Brand attitude in growth phase, retention and customer satisfaction in maturity and new target groups in decline phase.
• Before creating a message, it's important to identify objective

DAGMAR Model

• DAGMAR Model stands for "Defining Advertising Goals For Measured Advertising Results".
• Measurable communication objectives include category need, brand awareness, brand knowledge, brand attitude, brand purchase intention, purchase facilitation, purchase, satisfaction, and brand loyalty.

Category Need

• Category need means the basic condition fulfilled by a brand must fit within the needs and wants of the category
• Ads need to communicate why consumers need something

Brand Awareness

• Brand awareness; Recognition (2) and Recall (1)
  • Brand awareness – two definitions:
  • If people think of a soft drink, they may spontaneously think of Coca-Cola, which constitutes unaided brand awareness
  • Recognizing a brand by its package, color, and logo constitutes aided brand awareness

Brand Knowledge

• Brand Knowledge mean target consumers are aware of the most essential brand characteristics, features and benefits
• Consumers know the strengths of the brands when compared to competitors, and know why they should buy brand X instead of brand Y or Z.
• Objective for brand knowledge is to provide over 400 logical reasons

Brand Attitude

• Brand attitude means that if consumers are equally aware of a number of brands in a certain product category, they will base their brand choice on an evaluation of the different brands
• It is the perceived value of a brand to a consumer
• Some brands rely on celebrity endoresments

Brand Purchase Intention

• It is a mediating step between attitude and purchase, especially for high involvement products
• An example of it is step rugs

Purchase Facilitation

• Purchase facilitation means assuring buyers that there are no barriers hindering the purchase

Purchase

• It should be the main objective in marketing and promotions
• Limited edition is an appeal example of scarcity

Satisfaction

• When a consumer buys a product or service he or she has certain expectations.
• When the product or service lives up to the required and desired benefits or surpasses expectations, the consumer will be satisfied and thus inclined to choose the same brand whenever he or she buys the product again.
• It is often not what is advertised, which is why promotions need to be honest

Brand Loyalty

• Brand loyalty is defined as the mental commitment or relation between a consumer and a brand.
• Repeat purchase is not the same as brand loyalty, with the latter being result of habit or routine buying rather than a brand preference.
• This is instead of evaluating alternatives and choosing a new brand for every new purchase, in low-involvement, fast-moving packaged goods consumers tend to buy the same brands again without having a commitment to the brand.

Focus on relevant objectives!

• Avoid thinking about competition too much
• Do not use market share as an objective
• Focus on effective communication objectives such as
  • Communication: Brand awareness, brand attitude, brand purchase
  • Action objectives
  • Product trial, store visit, website visit,.

Communication Objectives

• Factors to consider:
  • time horizon (planning period)
  • target (who to reach)
  • communication task (message)
  • effect wanted (desired change)
• Communications must consistent with marketing analysis/positioning

Benefits of having clear objectives

• helps determine your communication strategy based media type and content of communication
• It helps illustrate what type of ads you can create to:
  • Make people aware your product exists
  • Rationally convince people of benefits
  • Emotionally convince people of benefits
  • Medium for clothing, medical equipment, and/or perfume
• A clear objective helps you evaluate your strategy

Media strategy selection

• Media types include
  • Broadcast (TV, radio)
  • Print (newspapers, magazines, direct mail)
  • Internet (search engines, content sites, social media platforms)
  • Transit (bus, billboards, rolling billboards)
  • Mobile devices (apps, ads).
  • Other alternatives: Personal selling, guerilla marketing, PR, trade shows and more.
• Criteria can includes:
  • Target segment and the brand image.
  • Cost
• Vehicle selection means efficiency of alternative vehicles in reaching the target and cost per thousand.

Types of Media

• Consist of;

  • Paid media such as traditional advertising (TV, radio, print, outdoor), sponsorship, Display/Banner Ads, Search Ads, (Google Advertising), Social Network Ads; and E-Mail Advertising

  • Owned media such as Brochures ; Company Press Release ; Retail-In-Store Displays, Company Website, Company Blog and company accounts on social networks (Twitter, etc.).

  • Earned Media such as Mentions in traditional media outlets / digital media outlets, Ratings and Reviews, Online Reviews, Word Of Mouth, Posts in online communities; .

Types of Media -- Overview

• Owned media is about channeling a brand that the brand controls; use web site, mobile site, blog, or Twitter account.

  • To build relationships with customers or earn media
  • the benefits are: Control; Cost efficiency; Longevity; Versatility ;Niche audiences
  • The challenges are: No guarantees; Company communication not trusted; Takes time to scale

• Paid media is when Brand pays to leverage a channel; includes sponsorships, display ads or paid searches

  • it has Shift from foundation to a catalyst that feeds owned; it includes cost/scale/control
  • the challenges: Clutter, Poor credibility

• Earned media is when you turn customers into WOM ;Includes . WOM; Buzz; "Viral"

  • key to sales and most credible - but hard to measure
  • the benefits: the message is transparent and lasts even if ad is paid or gone
  • the challenges: no control - could be negative, also requires scale

Wrap Up

• Effective promotion strategy requires insight into customer's buying process
• Important to know where the loss out happens in process
• The goal; Guide customer through buying process & Match promotion tool to task in buying process
• Remember the Different buying process for different industries and customer segments
  • Examples high vs. low involvement goods, experience goods, new vs. established products, also considers the type of goods, and product complexity.