Chapter 2 The Role of IMC PDF

Chapter 2 The Role of IMC in the Marketing Process Source: Citizen Watch Company of Ame...

Chapter 2 The Role of IMC in the Marketing Process Source: Citizen Watch Company of America, Inc ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Learning Objectives 1. Describe the role of advertising and promotion in an organization’s integrated marketing program. 2. Define target marketing. 3. Discuss the role of market segmentation in an IMC program. 4. Describe positioning and repositioning strategies. 5. Identify the marketing-mix decisions that influence advertising and promotional strategy. ©McGraw-Hill Education.  Marketing and Promotions Process Model Jump to Appendix 1 long image description ©McGraw-Hill Education.  Marketing Strategy and Analysis Strategic marketing plan: – Guides allocation of organization’s resources – Guides specific marketing programs and policies – Evolves from an organization’s overall corporate strategy – Allows for an understanding of market opportunities, competition, and market segments Market segments: distinct consumer groups within a market who have common needs ©McGraw-Hill Education.  Opportunity Analysis Market opportunities: Areas where: – There are favorable demand trends – Customers’ needs and opportunities are not being satisfied – Firm can compete effectively Steps to identify market opportunities – Examine the marketplace – Observe demand trends and competition in various market segments ©McGraw-Hill Education.  Competitive Analysis Analyzing the competition in the marketplace and searching for a competitive advantage – Competitive advantage: Attributes that give a firm an edge over competitors Better quality products Superior customer service Low production costs and lower prices Dominating channels of distribution Advertising (Samsung vs Apple) ©McGraw-Hill Education.  Competition ©McGraw-Hill Education.  Target Market Selection Done after evaluating market opportunities and doing a competitive analysis Has direct implications on a firm’s advertising and promotional efforts Which Segment/S to Target? ©McGraw-Hill Education.  The Target Marketing Process Identifying Determining Positioning Selecting a markets with market through target unfulfilled segmentation marketing market needs strategies ©McGraw-Hill Education.  Identifying Markets Marketer identifies the specific needs of groups of people (or segments) Selects one or more of these segments as a target Isolates consumers with similar lifestyles, needs, and the like Increased marketer’s knowledge of consumers’ specific requirements ©McGraw-Hill Education.  Market Segmentation  Dividing a market into distinct groups with common needs, who respond similarly to a marketing situation  Customer characteristics segmentation criteria  Geographic: Dividing the market on the basis of region, city size, metropolitan area, and/or density  Demographic: Dividing the market on the basis of age, sex, family size, marital status, etc.  Socioeconomic: Dividing the market on the basis of income, education, or occupation  Psychographic: Dividing the market on the basis of personality, lifecycles, and/or lifestyles ©McGraw-Hill Education.  Buying Situations  Markets can also be divided by customer buying situations  Buying situations segmentation criteria  Outlet type  Benefits sought  Usage  Awareness and intentions  Behavior ©McGraw-Hill Education.  Basis for Market Segmentation  Behavioristic segmentation  Dividing consumers into groups according to their usage, loyalties, or buying responses to a product  80-20 rule: 20 percent of buyers account for 80 percent of sales volume  Benefit segmentation  Grouping of consumers on the basis of attributes sought in a product ©McGraw-Hill Education.  Selecting Target Market  Determine how many segments to enter  Utilizing market coverage alternatives  Determine which segments offer the most potential  Selecting the most attractive segment ©McGraw-Hill Education.  Market Coverage Alternatives Undifferentiated marketing Ignoring segment differences and offering just one product or service to the entire market Differentiated marketing Involves marketing in a number of segments, developing separate marketing strategies for each Concentrated marketing Selecting a segment and attempting to capture a large share of this market ©McGraw-Hill Education.  Selecting the Most Attractive Segment  Sales potential of segment  Opportunities for growth  Competition analysis  Ability to compete  Ability to market to this group ©McGraw-Hill Education.  Market Positioning Positioning: Fitting a product or service to one or more segments of the broad market to make it unique within the marketplace Approaches – Focusing on the consumer—Linking the product with the benefits the consumer will derive (BMW) – Focusing on competition—Positions the product by comparing the benefit it offers versus the competition ©McGraw-Hill Education.  Positioning Strategies (1 of 2)  Positioning by product attributes and benefits  Sets the brand apart from competitors on the basis of specific characteristics or benefits offered  Salient attributes: Important to consumers and are the basis for making a purchase decision  Positioning by price/quality Price is used as a characteristic of the brand. If a product is positioned as high quality, price may be a secondary consideration. Another option is to focus on product quality or value offered at a competitive price. ©McGraw-Hill Education. © NetPhotos/Alamy  Positioning Strategies (2 of 2)  Positioning by use or application  Used to enter a market on the basis of a particular use or application  Positioning by product class  Positioning by product user  Positioning by competitor  Positioning by cultural symbols  Makes the brand easily identifiable and differentiated from others ©McGraw-Hill Education. Source: California Avocado Commission  Positioning Strategies (2 of 2) Use/Application - This strategy associates the brand with a specific use. This approach can be an effective way to expand usage of a product. Product Class - This strategy positions the product against a product in another category, rather than against a competitor. For example, positioning frozen orange juice against fresh oranges (Blue Bus). Product User - This strategy associates a brand with a type of person or group that uses a product or service. Competitor - This strategy positions a company or brand against a competitor. Often another form of positioning is used to differentiate the brand. Cultural Symbols - This strategy uses a cultural symbol to differentiate a product from competitors (e.g. Keebler elves, the Jolly Green Giant, Tony the Tiger). ©McGraw-Hill Education.  Repositioning Altering a product’s or brand’s position due to: – Declining or stagnant sales – Anticipated opportunities in other market positions Difficult to accomplish because of entrenched perceptions and attitudes toward the product or brand ©McGraw-Hill Education.  Product Decisions  Product symbolism: Refers to:  What a product or brand means to consumers  What consumers experience in purchasing and using a product (GUCCI, Prada)  Branding  Building and maintaining a favorable identity of the company and its products  Packaging  Provides functional benefits such as economy, protection, and storage ©McGraw-Hill Education.  Branding  Builds and maintains brand awareness and interest  Develops and enhances attitudes toward the company or product  Builds relationships between the consumer and the brand  Brand identity  Combination of name, logo, symbols, design, packaging, image, and associations held by consumers  Brand equity  Intangible asset of added value ©McGraw-Hill Education.  Packaging  Traditionally, the package provided functional benefits: economy, protection, and storage  Role and function have changed due to:  Self-service emphases of many stores  More buying decisions at point of purchase  First impressions matter  Often first exposure to product ©McGraw-Hill Education. © Keith Jackson/Alamy  Price Decisions  Price variable—Refers to what the consumer has to give in exchange for a purchase  Factors that determine price  Costs  Demand factors  Competition  Perceived value  Product quality  Advertising ©McGraw-Hill Education.  Marketing Channels Interdependent organizations involved in making a product or service available for use Direct channels: Directly deal with customers – Driven by direct-response ads, telemarketing, the Internet – Used when selling expensive and complex products Indirect channels: Network of wholesalers and/or retailers ©McGraw-Hill Education.  Promotional Push Strategies Programs designed to persuade the trade to stock, merchandise and promote a manufacturer’s products Goal – Push the product through the channels of distribution by selling and promoting it Trade advertising: Used to motivate wholesalers and retailers to purchase products for resale ©McGraw-Hill Education.  Promotional Pull Strategies Spending money on advertising and sales promotion efforts directed toward the ultimate consumer Goals – Create demand among consumers – Encourage consumers to request the product from the retailer ©McGraw-Hill Education.