Module 5: Promotion Strategies (Student)

Module 5 Creating value through marketing  Module 5: Creating value through marketing Topics Promotion Strategies Custom textbook Module 3 Chapter 14  Module 5: Creating value through marketing Coca-Cola “Share a Coke” campaign ...

Module 5 Creating value through marketing  Module 5: Creating value through marketing Topics Promotion Strategies Custom textbook Module 3 Chapter 14  Module 5: Creating value through marketing Coca-Cola “Share a Coke” campaign  Module 5: Creating value through marketing Coca-Cola “Share a Coke” campaign Objectives: Increase customer engagement with young adults Drive more sales Boost social media reach TV commercial: Create virtual bottle at Coca-Cola https://www.youtube.com/watch?v= website e2Rxj2z4HZA Share personalized Coke bottles at Events and promotions in Billboard advertising social media using #ShareaCoke stores  Module 5: Creating value through marketing Learning Objectives 1. Discuss the process and importance of integrated marketing communications in communicating customer value 2. Outline the considerations for developing effective marketing communications 3. Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix Integrated Marketing Communications  Module 5: Creating value through marketing The Marketing Mix Product, price, place, and promotion, must be coordinated for greatest communication impact. Source: textbook P.419 The entire marketing mix  Module 5: Creating value through marketing The Promotion Mix (marketing communications mix) A company’s total promotion mix consists of the specific blend of advertising, sales promotion, public relations, personal selling, and direct- marketing tools that the company uses to communicate customer value and build customer relationships.  Module 5: Creating value through marketing Integrated Marketing Communications (IMC) Integrated Marketing Communications carefully integrate and coordinate the company’s many communication channels to deliver a clear, consistent, and compelling message about the organisation and its products. Source: textbook P.454 Integrated marketing communications  Module 5: Creating value through marketing Why is Integrated Marketing Communications important? IMC calls for recognizing all touch points where the customer may encounter the company, its products, and its brands. Each brand contact will deliver a message, whether good, bad, or indifferent. The company must strive to deliver a clear and consistent message with each contact. Conflicting messages from these different sources can result in confused company images and brand positions.  Module 5: Creating value through marketing Why is Integrated Marketing Communications important? The premium image and the iconic blue color of Tiffany is communicated through its store decorations, advertising, website and even packaging Poll 1 Developing Effective Marketing Communications  Module 5: Creating value through marketing Steps in developing an effective IMC program 3. Design a message 2. Determine the communication - What to say (message 1. Identify the objective content) target audience - Which buyer- - How to say it (message readiness stage is the structure & format) target audience at? 6. Collect feedback 5. Choose the 4. Choose the media - What is the effect on message source - Personal vs. non- target audience? - Use credible personal - What behaviours result sources to promote communication from the message? the product channels  Module 5: Creating value through marketing Determining the Communication Objectives 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 6 buyer-readiness stages, the stages consumers normally pass through on their way to making a purchase. Source: Custom Textbook P. 429 Figure 14.3  Module 5: Creating value through marketing Communication objectives at each of the buyer-readiness stages Awareness: create curiosity and awareness i.e. I know about the product Example: - When Keeta (a new mobile APP for food delivery), it launched a outdoor campaign in MTR to create awareness of the new mobile APP and its promotion offer Key message: free delivery for takeaway orders  Module 5: Creating value through marketing Communication objectives at each of the buyer-readiness stages Knowledge: inform potential buyers of the product’s quality and features i.e. I want to know more about the product Apple spells out the new features of its iPad Pro to increase customers’ knowledge of the new product https://www.youtube.com/watch?v=UjmaxCyJBc4  Module 5: Creating value through marketing Communication objectives at each of the buyer-readiness stages Liking: feeling favourable about the product i.e. I like the product https://www.youtube.com/watch?v=ei1Ozpp-yZE  Module 5: Creating value through marketing Communication objectives at each of the buyer-readiness stages Preference: preferring this product to other brands’ products Comparative advertising builds preference of a particular brand  Module 5: Creating value through marketing Communication objectives at each of the buyer-readiness stages Conviction: believing this product is the best for them Purchase: getting the consumers to take action by offering special promotions, rebates etc.  Module 5: Creating value through marketing Steps in developing an effective IMC program 3. Design a message 2. Determine the communication - What to say (message 1. Identify the objective content) target audience - Which buyer- - How to say it (message readiness stage is the structure & format) target audience at? 6. Collect feedback 5. Choose the 4. Choose the media - What is the effect on message source - Personal vs. non- target audience? - Use credible personal - What behaviours result sources to promote communication from the message? the product channels  Module 5: Creating value through marketing Message Content Rational appeals: relate to the audience’s self-interest; show the desired benefits of the product https://www.youtube.com/watch?v=K2Xlxe WRD4k https://www.youtube.com/watch?v=RJwRThfQNI4  Module 5: Creating value through marketing Message Content Emotional appeals: use negative (e.g. fear, guilt, shame) or positive (e.g. love, pride, joy, humour) emotions to motivate purchase Prudential cancer protection plan: Heineken ad: https://www.youtube.com/watch?v=YRPxqyn https://www.youtube.com/watch?v=HSRieuzms24 0dV4 &t=75s (translation of script in next page)  Module 5: Creating value through marketing Message Content Prudential cancer protection plan: Jeffrey Lai: I take away one HK person’s life in every 20 minutes. If you want to win against me, there are many obstacles. He is the next target. I forget to say.. I am “cancer” Male voice-over: If you want to fight against cancer, you have to get well prepared. The Prudential Cancer Insurance Plan provides you comprehensive coverage all the way from diagnosed of cancer to rehabilitation treatment. Are you ready?  Module 5: Creating value through marketing Message Content Moral appeals: appeal to the audience’s sense of right and wrong; often used to urge support for social causes, e.g. a cleaner environment, helping the disadvantaged https://www.youtube.com/watch?v=S_VNZKbfQ3Q  Module 5: Creating value through marketing Steps in developing an effective IMC program 3. Design a message 2. Determine the communication - What to say (message 1. Identify the objective content) target audience - Which buyer- - How to say it (message readiness stage is the structure & format) target audience at? 6. Collect feedback 5. Choose the 4. Choose the media - What is the effect on message source - Personal vs. non- target audience? - Use credible personal - What behaviours result sources to promote communication from the message? the product channels  Module 5: Creating value through marketing Choose the Media Personal communication Non-personal channels communication channels Word-of-mouth Traditional media Atmospheres Events  Module 5: Creating value through marketing Non-personal communication channels Media that carry messages without personal contact Traditional media: broadcast media e.g. TV, display media e.g. MTR, billboards Atmospheres: designed environments that create or reinforce the buyer’s leanings toward buying a product Advertising agencies are designed in a stylish way to impress clients  Module 5: Creating value through marketing Non-personal communication channels: Atmosphere Chanel Abercrombie & Fitch  Module 5: Creating value through marketing Store Atmosphere B Which store atmosphere conveys prestige? A  Module 5: Creating value through marketing Non-personal communication channels Events: staged occurrences that communicate messages to target audiences Grand openings Press conferences Shows  Module 5: Creating value through marketing Steps in developing an effective IMC program 3. Design a message 2. Determine the communication - What to say (message 1. Identify the objective content) target audience - Which buyer- - How to say it (message readiness stage is the structure & format) target audience at? 6. Collect feedback 5. Choose the 4. Choose the media - What is the effect on message source - Personal vs. non- target audience? - Use credible personal - What behaviours result sources to promote communication from the message? the product channels  Module 5: Creating value through marketing Selecting a Message Source The message’s impact on the target audience is also affected by how the audience views the communicator. Messages delivered by highly credible sources are more persuasive. Sensodyne Toothpaste uses dentists to endorse its products to increase the credibility of its products https://www.youtube.com/watch?v=mR-LVOuTr9s  Module 5: Creating value through marketing Selecting a Message Source Nike discontinued using Marketers often hire celebrity endorsers to Tiger Woods after his deliver their message. But companies must scandalous marriage failure be careful when selecting celebrities to represent their brands e.g. Mirror (the boy band) is endorsing a lot of brands e.g. CSL, Samsung Galaxy  Module 5: Creating value through marketing Steps in developing an effective IMC program 3. Design a message 2. Determine the communication - What to say (message 1. Identify the objective content) target audience - Which buyer- - How to say it (message readiness stage is the structure & format) target audience at? 6. Collect feedback 5. Choose the 4. Choose the media - What is the effect on message source - Personal vs. non- target audience? - Use credible personal - What behaviours result sources to promote communication from the message? the product channels  Module 5: Creating value through marketing Collecting Feedback After sending the message, the communicator must research its effect on the target audience Market research is used to find out:  Did the ad achieve the original objective?  If and what the target audience remember about the ad?  How they feel about the ad?  Their past and present attitudes toward the product and company  After seeing the ad, how many people bought the product/talked to others about it – response can be seen immediately with ”likes”, “share”, “comments”  Module 5: Creating value through marketing Collecting Feedback Feedback on marketing communications may suggest changes in the promotion program or in the product offer itself Consumers strongly associate this with moisturizing function https://www.youtube.com/watch?v=K2XlxeWRD4k Setting the Total Promotion Budget and Mix  Module 5: Creating value through marketing Budgeting How does the company decide on the total promotion budget and its allocation among the major promotional tools to create the promotion mix? There are four common methods to set the total budget for advertising: Affordable Percentage of sales Competitive parity Objective and task  Module 5: Creating value through marketing Affordable Method  Setting the promotion budget at the level managers think the company can afford. Total revenue – operating Allocate a portion of the expenses – capital outlay remaining funds to advertising  Often used by small businesses because they think that the company cannot spend more on advertising than it has. Cons Completely ignores the effects of promotion on sales Can result in overspending/under-spending on advertising  Module 5: Creating value through marketing Percentage-of-sales method  Setting the promotion budget at a certain percentage of current or forecasted sales Pros Cons  Simple to use  Assumes that sales is the cause of  Helps management think about promotion rather than the result the relationship between  Based on availability of funds rather than promotion spending, selling on opportunities  may prevent the price, and profit per unit increased spending needed to turn around falling sales  Does not provide any basis for choosing a specific percentage  Module 5: Creating value through marketing Competitive-parity method  Setting the promotion budget to match competitors’ outlays  Companies may monitor competitors’ advertising or get industry promotion spending estimates from publications or trade associations, then set their budgets based on the industry average Cons  Competitors may not have a better idea of what the company should be spending on promotion than the company itself  Companies differ greatly, and each has its own special promotion needs  Module 5: Creating value through marketing Objective-and-task method  Sets promotion budget based on what the company wants to accomplish with promotion  This budgeting method entails:  Defining specific promotion objectives  Determining the tasks needed to achieve these objectives  Estimating the costs of performing these tasks  The sum of these costs is the proposed promotion budget Cons  The most difficult method to use  hard to figure out which specific tasks will achieve stated objectives  Module 5: Creating value through marketing Promotion Mix Strategies Source: Textbook P. 470 Figure 14.6  Module 5: Creating value through marketing Promotion Mix Strategies Push strategy “Pushing” the product through marketing channels to final consumers Producer promotes the product to channel members to induce them to carry the product and to promote it to consumers E.g. Personal selling, trade promotions  Module 5: Creating value through marketing Promotion Mix Strategies Pull strategy Producer directs the marketing activities towards final consumers to induce them to demand the product from channel members E.g. advertising, consumer promotions  Module 5: Creating value through marketing To sum up