Kotler 2020, Chapter 13 Marketing Communications PDF

CHAPTER 13 – Marketing communications Mini contents. Company case - Volvo Cars: marketing communications as competitive edge, before, during and after a crisis The communication process Integrated marketing communications The marketing communications mix Advertising Think about - Repetition:...

CHAPTER 13 – Marketing communications Mini contents. Company case - Volvo Cars: marketing communications as competitive edge, before, during and after a crisis The communication process Integrated marketing communications The marketing communications mix Advertising Think about - Repetition: once at the heart of advertising Think about - Balancing standardization and local adaptation in marketing communications Public relations. Personal selling ◦ Sales promotion ◦ Direct and digital marketing ◦ Real Marketing - Converse: letting customers co-author the Steps in developing effective marketing communication brand story Setting the total marketing communications budget and mix Choosing communications channels and media Marketing communications mix strategies Challenges in the contemporary marketing communications Company case-Volvo Trucks: integrated marketing landscape communications of epic proportions Chapter preview In this chapter, we'll examine the last of the four marketing mix tools - marketing communications, or promotion. Companies must do more than just create customer value. They must also clearly and persuasively communicate that value. Marketing communications include a mix of several tools that ideally, under the concept of integrated marketing communications, are carefully coordinated to engage customers and build a clear, consistent, and compelling message about an organization and its products. We`ll begin by introducing the various marketing communications mix tools Next, we discuss the steps in developing marketing communications and the marketing communications budgeting process. Finally, we'll examine the rapidly changing communications environment, characteristics of the contemporary marketing communications landscape such as polarization, and the need for integrated marketing communications. Learning objectives After reading this chapter, you should be able to: 1. Define the elements in the marketing communications mix. 3. Outline the communications process and the steps in developing effective marketing communications. 4. Describe integrated marketing communications and evaluate to what extent a specific organization has an integrated marketing communication. 5. Explain the methods for setting the marketing communications budget and factors that affect the design of the marketing communications mix. 6. Explain how the availability and costs of different media types might influence marketing communication decisions. 7. Evaluate whether a specific organization has effective marketing communications, 8. Describe and discuss challenges in the contemporary marketing communications landscape. The communication process Because customers differ, communications programmes need to be developed for specific segments, niches and even individuals. Companies must ask not only, How can we reach our customers?' but also, 'How can we find ways to let our customers reach us?' In contem- porary markets, many companies attempt to build customer relationships and commu- nication is essential in such attempts. Thus, the communications process should start with an audit of all the potential touch points that target customers may have with the company and its brands. When the customer wants to contact the company for one reason or another, the company should ideally be there, available with thought-through commu- nication strategies. Too often, marketing communications focus on immediate awareness, image or preference goals in the target market. But this approach to communication is often too short-sighted. One example is chat conversations, which are too often run on a pure cost-per-conversation basis, rather than taking the customer relationship perspec- tive, which would mean a chat session is also an opportunity to listen to, get feedback from and developing relationships with customers. And even in pure transaction-oriented businesses such as low cost travel providers competing on price comparison web sites, poor experiences from e.g. chat conversations are soon mirrored in consumers' ratings of the company's service. To communicate effectively, marketers need to understand how communication works Communication involves the nine elements shown in Figure 13.1. Two of these elements are the major parties in a communication - the sender and the receiver. Another two are the major communication tools- the message and the media. Four more are major communication functions - encoding, decoding, response and feedback. The last element is noise in the system. Definitions of these elements follow and are applied to a McDonald's Tm lovin' it television commercial for fast food: Sender: the party sending the message to another party - here, McDonald's. Encoding: the process of putting thought into symbolic form- McDonald's advertising agency assembles words, sounds and illustrations into an advertisement that will convey the intended message. Message: the set of symbols that the sender transmits - the actual McDonald's advert. Media: the communication channels through which the message moves from sender to receiver -in this case, television and the specific television programmes that McDonald's selects. Decoding: the process by which the receiver assigns meaning to the symbols encoded by the sender- a consumer watches the McDonald's advert and interprets the words and images it contains. Receiver: the party receiving the message sent by another party - the customer who watches the McDonald's advert.  Response: the reactions of the receiver after being exposed to the message -any of hundreds of possible responses, such as the consumer likes McDonald's better, is more likely to eat at McDonald's next time, hums the Tm lovin' it jingle, or does nothing. Feedback: the part of the receiver's response communicated back to the sender-McDon- ald's research shows that consumers are struck by and remember the advert, or they write or call McDonald's praising or criticizing the advert or products. Noise: the unplanned static or distortion during the communication process, which results in the receiver getting a different message from the one sent by the sender – the consumer is distracted while watching the commercial or misses its key points. For a message to be effective, the sender's encoding process must tie in with the receiver's decoding process. The best messages consist of words and other symbols that are familiar to the receiver. The more the sender's field of experience overlaps with that of the receiver, the more effective the message is likely to be. This model points out several key factors in good communication. Senders need to know what audiences they wish to reach and what responses they want. They must be good at encoding messages that take into account how the target audience decodes them. They must send messages through media that reach target audiences, and they must develop feedback channels so that they can assess the audience's response to the message. Integrated marketing communications In the consumer's mind, messages from different media and promotional approaches all become part of a single message about the company. Conflicting messages from these different sources can result in confused company images, brand positions and customer relationships. The emergence of grass- roots- driven information and user- generated content is likely to result in increased problems with conflicting messages for many companies. Marketing communications gO beyond the specific communication tools. The product's design, its price, the shape and colour of its package, and the stores that sell it all communi- cate something to buyers. Thus, the entire marketing mix promotion and product, price and place must be CO- ordinated for greatest communication impact. As you might remember from Chapter 9 on branding, creating a consistent appearance is crucial to building a strong brand, and marketing communication is key to doing this. All too often, companies fail to integrate their various communications c channels. Mass- media advertisements say one thing, while a website driven by user- generated data sends a diffferent signal, and dealers' attitudes seem out of sync with everything else. Integrated marketing communications (IMC) – Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products. Under the concept of integrated marketing communications (Mc), the company carefully integrates its many communications channels to deliver a clear, consistent and compelling message about the organization and its brands (Figure 13.2). IMC calls for recognizing all touch points where the customer may encounter the company and its brands. Each brand contact will deliver a message, whether good, bad or indifferent. To help implement integrated marketing communications, some companies appoint a marketing communications director who has overall responsibility for the company's communications efforts. The marketing communications mix Marketing communications mix (or promotion mix) – The specific blend of communication tools that the company uses to persuasively communicate customer value. The marketing communications mix, also known as the promotion mix, is the marketer's bag of tools for communicating with customers and other stakeholders. All of these many tools must be carefully co-ordinated under the concept of integrated marketing communica tions in order to deliver a clear and compelling message. With traditional approach, the five major promotion tools are the following: Advertising: any paid form of non-personal 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. Personal selling: personal presentation by the firm's sales force for the purpose of1 making sales and building customer relationships. Public relations (PR): 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, stories and events. Direct and digital marketing: Engaging directly with targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. Each category involves specific promotional tools used to communicate with consumers For example, advertising includes broadcast, print, Internet, outdoor and other forms. Sales promotion includes discounts, coupons, displays and demonstrations. Personal selling includes sales presentations, trade shows and incentive programmes. Public relations include press releases, sponsorships, special events and web pages. Finally, direct and digital marketing includes direct mail, email, catalogues, online and social media, mobile marketing, and more. One may wonder whether the multitude of communication channels that exist today still fall into any of the five categories. In fact, most of them do, but nonetheless, there aren strong reasons to assume that the marketing communications mix conceptualizations will change in the future, as marketing communication vehicles are developing at a fast pace. We'll now take a closer look at the five major promotion tools. Advertising Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Not only for-profit organizations but also a wide range of not-for-profit organizations, professionals, political parties, authorities and many others use advertising to promote their causes to various target publics. Advertising – Any paid form of non-personal presentation and promotion ofideas, goods or services by an identified sponsor. Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times, something that worked better many decades ago before the (slow but clear) advent of message and media saturation Beyond its reach, large-scale advertising says something positive about the seller's size, popularity and success. Because of advertising's public nature, consumers tend to view advertised products as more legitimate. Advertising is also very expressive - it allows the company to dramatize its products through the skilful use of visuals, print, sound and colour. On the one hand, advertising can be used to build up a long- term image for a product (such as Coca-Cola ads). Advertising has got an advantage in our age of message and media saturation. While most communication tools are designed to talk to consumers where they are, in a way they are expected to like, advertising can be used effectively and efficiently for broad communication. Assume Samsung is introducing a new mobile phone model or Volkswagen is introducing a medium-sized all-electric ID. SU V In either case, it's information that could catch many consumers' attention, and even when they may not buy a new mobile phone or car in the foreseeable future, they may contribute to buyers confirmation that they bought an excellent product. Advertising can trigger quick sales such as when Coop or ICA advertises this week's specials. However, although advertising reaches many people quickly, it is impersonal and cannot be as directly persuasive as can company salespeople. For the most part, advertising can carry on only a one-way communication with the audience, and the audience does not feel that it has to pay attention or respond. Marketers must make four important decisions when developing an advertising programme (see Figure 133): setting advertising objectives, setting the advertising budget, developing advertising strategy (message decisions and media decisions) and evaluating advertising campaigns. Setting advertising objectives Advertising objectives should be based on decisions about the target market, positioning and the marketing mix, which define the job that advertising must do in the total marketing programme. An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classi- fied by primary purpose whether the aim is to inform, persuade or remind (see Table 13.1). Informative advertising is used heavily when introducing anew product category to build primary demand. Thus, early producers of all-electric motor boots, 3D printers or ecological Spaghetti first had to inform consumers about the advantages of the new product. Persuasive advertising becomes more important as competition increases and is normally more focused on emotional appeals. Once a product category is established, companies try to persuade consumers that their brand and product offers the best quality for their money. Some persuasive advertising has become comparative advertising, in which a company directly or indirectly compares its brand with one or more other brands. Comparative advertising has been used for products ranging from soft drinks, beer and pain relievers to computers, batteries, car rentals and credit cards. For example, in its comparative campaign, the car-rental company Avis positioned itself against market-leading Hertz by claiming, 'We try harder* Reminder advertising is important for mature products - t helps to maintain customer rela- tionships and keep consumers thinking about the product. Expensive Coca-Cola television ads primarily build and maintain the Coca-Cola brand relationship rather than inform or persuade customers to buy in the short run. Advertising's goal is to help move consumers through the buying process. Some advertising is designed to move people to immediate action e.g. when price discounts during a limited time period are communicated but many ads also focus on building or strengthening long-term customer relationships. Intensive competition has reduced the use of image and relationship building advertising and turned companies' focus on short-term advertising that convinces and incentivizes buyers to purchase rather than building long-term demand. Developing advertising strategy Advertising strategy consists of two major elements: creating advertising messages and selecting advertising media. High media costs, more-focused target marketing strategies, and the blizzard of new media have promoted the importance of the media-planning func- tion. The decision about which media to use for an ad campaign - television commercials, magazines, influencers, a website or e-mail - may be more critical than the creative elements of the campaign. As a result, more and more, advertisers are orchestrating a closer harmony between their messages and the media that deliver them. The advertising clutter in today's society is a huge headache for advertisers. Until recently, television viewers were pretty much a captive audience for advertisers. Just to gain and hold attention, today's advertising messages must be better planned, more imaginative, more entertaining and more rewarding to consumers. Interruption or disruption as the funda- mental premise of marketing no longer works, says one advertising executive. Instead, you have to create content that is interesting, useful, or entertaining enough to invite [consumers]". According to another, 'Everything is about control. If an ad is interesting to you, you'll have a conversation with the brand. If it's not, it's a waste of time.' Message strategy The first step in creating effective advertising messages is to plan a message strategy - to decide what general message will be communicated to consumers. The purpose of adver- tising is to get consumers to think about or react to the product or company in a certain way. Developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Ideally, advertising message strategy will follow directly from the company's broader strategies. The advertiser must next develop a compelling creative concept or big idea` that will bring the message strategy to life in a distinctive and memorable way. The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers, believable and distinctive they should tell how the product is better than the competing brands. Here, different arguments may be used for different segments. Selecting advertising media The major steps in advertising media selection are () determining reach, frequency, impact and engagement; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing. Determining reach, frequency, impact, and engagement. To select media, the advertiser must determine the reach and frequency needed to achieve the advertising objectives. Reach is a measure of the percentage of people in the target market who are exposed to an ad campaign during a given period of time. For example, the advertiser might try to reach 70 per cent of the target market during the first three months of a campaign. Frequency is a measure of how many times the average person in the target market is exposed to a message. For example, the advertiser might want an average exposure frequency of three. But advertisers want to do more than just reach a given number of consumers a specific number of times. The advertiser also must determine the desired media impact - the qualita tive value of message exposure through a given medium. For example, the same message in one magazine (say, Die Welt) may be more believable than in another (say, the Expressen). For products that need to be demonstrated, television ads or online videos may have more impact than radio messages because they use sight, motion, and sound. Products for which consumers provide input on design or features might be better promoted at an interactive website or social media page than in a direct mailing. More generally, an advertiser wants to choose media that will engage consumers rather than simply reach them. Using any medium, the relevance of ad content for its audience is often much more important than how many people it reaches. For example, when Mazda wanted to preannounce the sale of 100 25th-anniversary models of its iconic Mazda Mx-5 Miata car at the New York International Auto show, it didn't use big-budget, high-reach media. Instead, it began churning out Facebook, Twitter, and Google+ posts directly to its large Mx-5 Miata fan base, directing them to a microsite where they could pre-order the sporty little car. Engaging the right audience in the right media worked well for Mazda, and the limited-e edition Miata model : sold out within only 10 minutes. Media engagement as a measure is still hard to find in most cases. Current media measures are things such as ratings, readership, 'listenership', and click-through rates. However, engagement happens inside the head of the consumer. It's hard enough to measure how many people are exposed to a given television ad, video, or social media post, let alone measure the depth of engagement with that content. Still, marketers need to know how customers connect with an ad and brand idea as a part of the broader brand relationship. Engaged consumers are more likely to act upon brand messages and even share them with others. Thus, rather than simply tracking consumer impressions for a media placement how many people see, hear, or read an ad - Coca-Cola now also tracks the consumer expressions that result, i.e. the behav- ioural engagement with the website, such as a comment, a Like', uploading a photo or video, or sharing brand content on social networks. Today's empowered consumers ofen generate more messages about a brand than a company can For example, Coca-Cola estimates that of the hundreds of millions of views of Coca-Cola-related content on YouTube each year, only about 18 per cent of content is created by Coca-Cola. The other 82 per cent of content is created by engaged consumers. Accordingly, many Coca-Cola marketing campaigns are aimed at sparking brand-related consumer expressions rather than just impressions. Choosing among major media types. As summarized in Table 13.2, the major media types are television; digital, mobile, and social media; newspapers; direct mail; magazines; radio; and outdoor. Each medium has its advantages and its limitations. Media planners want to choose a mix of media that will effectively and efficiently present the advertising message to target customers. Thus, they must consider each medium's impact, message effectiveness, and cost. Traditional mass media still makes up a majority of today's media mixes. However, as mass media costs rise and audiences shrink, companies have now added digital, mobile, and social media that cost less, target more effectively, and engage consumers more fully. Today's marketers are assembling a full mix of paid, owned, earned, and shared media that create and deliver engaging brand content to target consumers. In their efforts to find less costly and more highly targeted ways to reach consumers, marketers are always looking for media channels that are under-explored, i.e. not used by too many. In the best case, these media can save money and provide a way to hit selected consumers where they live, shop, work, and play. Another important trend affecting media selection is the rapid growth in the number of media multitaskers, people who absorb more than one medium at a time. For example, it's not uncommon to find someone watching Tv with a smartphone in hand, tweeting, Snapchatting with friends, and chasing down pricing information on a price comparison website. One recent survey found that 90 per cent of consumers now multitask while watching ry and that millennials and Gen X consumers engage in an average of three additional media activities while watching television, including Internet browsing, text messaging, and reading email. Although some of this multitasking is related to TV viewing such as looking up related product and programme information -most multitasking involves tasks unrelated to the shows or ads being watched. Marketers need to take such media interactions into account when selecting the types of media they will use1 and one should be careful when taking part of studies on media use and the similar - the fact that a group of people watch television 2.5 hours a day does not mean that they pay complete or even significant attention to the television during the entire 2.5 hours. Selecting specific media vehicles. Media planners must also choose the best media vehicles specific media within each general media type. For example, television vehicles include Modern Family and C More. Magazine vehicles include Fokus, Amelia, Marie Claire and Offside. Online and mobile vehicles include Facebook, LinkedIn, Instagram, and YouTube. Media planners must compute the cost per 1,000 persons reached by a vehicle. For example, a full-page advertisement in the newspaper Dagens Nyheter on page 3 in the main section is sEK 338,000. The reach is 508,000 readers for the printed version in addition to 594,000 on the web, in total 1,102,000." It's only the print readers who'll follow the ad on page 3, hence the cost will be 338,000/508,000= SEk o,67 per reader. Most of them will read through the main section where the ad is located. The media planner ranks each newspaper and magazine by cOSt per 1,000 and favours those magazines with the lower cost per 1,000 for reaching target consumers. Media planners must also consider the costs of producing ads for different media. Whereas newspaper ads may cost very little to produce, flashy television ads can be very costly. Many online and social media ads cost little to produce, but costs can climb when producing made-for-the-web video and ad series. In selecting specific media vehicles media planners must balance media costs against several media effectiveness factors. First, the planner should evaluate the media vehicle's audience quality. For an Ä nglamark Maxi disposable diapers ad, for example, Vi Föräldrar magazine would have a high exposure value; men's lifestyle magazine GQ would have a low exposure value. Second, the media planner should consider audience engagement. Readers of Vogue for example, typically pay more attention to ads than do readers of auto motor & sport. Third, the media planner should assess the vehicle's editorial quality. Die Welt and Fokus are more believable and prestigious than Hänt i Veckan or Aftonbladet. Deciding on Media Timing. An advertiser must also decide how to schedule the advertising over time. Suppose sales of a product peak in December and drop in March (for winter outdoor gear, for instance). The firm can vary its advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all year. Most firms do some seasonal advertising. For example, weight-loss products and service marketers tend to heavy up after the first of the year, targeting consumers who let their appetites get the better of them over the holiday season. Weight Watchers, for instance, spends more than a quarter of its annual advertising budget in January, when consumers have enjoyed a few weeks eating, making new year prom- ises and reflected upon how they could improve in the new year. Evaluating advertising effectiveness and return on advertising investment How does a company know if it is spending the right amount on advertising? Some critics claim that large consumer packaged goods firms tend to spend too much on advertising and that business-to-business marketers generally underspend on advertising. They claim that large consumer companies use lots of image advertising without really knowing its effects. They overspend as a form of 'insurance' against not spending enough. On the other hand, business advertisers tend to rely too heavily on their sales forces to bring in orders. They underestimate the power of company and product image in pre-selling to industrial customers. Thus, they do not spend enough on advertising to build customer awareness and knowledge. At the end of the day, industrial buyers are also consumers and influenced by consumer marketing, which may influence their decisions also in their roles as industrial buyers.' Companies such as Coca-Cola and Kraft Foods have built sophisticated statistical models to determine the relationship between promotional spending and brand sales, and to help determine the `optimal investment' across various media. Still, because so many factors affect advertising effectiveness, some controllable and others not, measuring the results of advertising spending remains an inexact science. Advertising accountability and return on advertising investment have become hot issues for most companies. Two separate studies show that advertising effectiveness has fallen 40 per cent over the past decade and that 37.3 per cent of advertising budgets are wasted. This leaves top management and many companies asking their marketing managers, 'How do we know that we`re spending the right amount on advertising?' and *What return are we getting on our advertising investment?" Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. Individual ads can be tested before or after they are run. Before an ad is placed, the advertiser can show it to consumers, ask how they like it, and measure message recall OI attitude changes resulting from it. After an ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, know- ledge and preference, Sales and profit effects of advertising are often much harder to measure. For example, what sales and profits are produced by an ad campaign that increases brand awareness by 20 per cent and brand preference by 10 per cent? One way to measure the sales and profit effects of advertising is to compare past sales and profits with past advertising expenditures. Another way is through experiments. For example, to test the effects of diferent advertising spending levels, Coca-Cola could vary the amount it spends on advertising in differen market areas and measure the differences in the resulting sales and profit levels. However, because so many factors affect advertising effectiveness, some control- lable and others not, measuring the results of advertising spending remains an inexact science, According to a recent study, over 8o per cent of marketers don`t measure return on investment because it's just too difficult to measure. International marketing communication decisions Many companies attempt to support their global brands with highly standardized worldwide advertising, e.g. McDonald's is unifying its creative elements and brand presentation under the familiar Tm lovin' it theme in all of its 100-plus markets worldwide. Most big marketing and advertising campaigns include a large online presence and, in contrast to a few decades ago, most global consumer brands co-ordinate their websites internationally. Connected consumers can now move easily across borders, making it difficult for marketers to roll out adapted campaigns in a controlled, orderly fashion. Although standardization produces many benefits - lower advertising costs, greater global advertising CO- ordination and a more consistent worldwide image it ignores the fact that country markets differ greatly in their cultures, demographics and economic conditions. Getting the balance right - 'think globally but act locally' - is a difficult task and a great challenge for marketers. For example, Apple used I'm a Mac; I'm a PC commercials in some countries. In European markets, it used US versions of the ads, often dubbed in the local language, but it re-scripted and re-shot the ads to fit the Japanese culture: Thus, although advertisers may develop global strategies to guide their overall advertising efforts, specific advertising programmes must usually be adapted to meet local cultures and customs, media characteristics and advertising regulations. So it's range of conditions to take into consideration. Public relations Public relations – Building good relations with the company's various publics by obtaining favourable publicity, building up a good corporate image, and handling heading off unfavourable rumours, stories and events. Another major mass-promotion tool is 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, stories and events. Public rela- tions departments may perform any or all of the following functions: Press relations or press agency: creating and placing newsworthy information in the news media to attract attention to a person, product or service. Product publicity: publicizing specific products. Public affairs: building and maintaining national or local community relations. Lobbying: building and maintaining relations with legislators and government officials to influence legislation and regulation. Investor relations: maintaining relationships with shareholders and others in the financial community. Development public relations with donors or members of non- profit organizations to gain financial or volunteer support. Public relations is used to promote products, people, places, ideas, activities, organiza: tions and even nations. Companies use public relations to build good relationships with consumers, investors, the media and their communities. New York turned its image around when its 'I Love New York! publicity and advertising campaign took root, bringing in millions more tourists. Public relations has been used to rebuild interest in declining commodi- ties such as eggs, apples, potatoes, milk and butter. For example, Arla's Bregott-fabriken campaign reversed a long-standing decline in traditional, butter-based table margarine.? Many of the ads refer to other hot topics. Public relations is very believable news stories, features, sponsorships and events are seem more real and believable to readers than do ads. Public relations can also reach many pros pects who avoid salespeople and advertisements - the message gets to the buyers as 'news' rather than as a sales-directed communication. Like with advertising, public relations can dramatize a company or product. Marketers tend to underuse public relations or to use it as an afterthought. Yet a well-thought-out public relations campaign used with other marketing communications mix elements can be very effective and economical (see the Nordea company case in Chapter 9). The role and impact of public relations Public relations (PR) can have a strong impact on public awareness at a much lower cost than advertising can. The company does not pay for the space or time in the media. Rather, it pays for staff to develop and circulate information and to manage events. If the company develops an interesting story or event, it could be picked up by several different branches of the media, having the same effect as advertising that would cost millions of SEk. And it is likely to have more credibility than advertising. The PR department is often located at corporate headquarters or handled by a third-party agency. Although PR still captures only a small portion of the overall marketing budgets of most firms, it can be a powerful brand-building tool. Two well-known marketing consultants even go so far as to conclude that advertising doesn't build brands, PR does. In their book The Fall of Advertising & The Rise of PR, they proclaim that the dominance of advertising is over, and that PR is quietly becoming the most powerful marketing communications tool: Public relations uses several tools. One of the major tools iS news. PR professionals find or create favourable news about the company and its products or people. Speeches can also create product and company publicity. Another common PR tooI is special events, ranging from news conferences, press tours and grand openings to hot air balloon releases, multi- media presentations or educational programmes designed to reach and interest target publics. Public relations people also prepare written materials to reach and influence their target markets, e.g. annual reports, brochures, articles, and company newsletters and maga- zines. As we discussed in Chapter 5, many marketers are now also designing buzz marketing that takes advantage of social networking processes by getting consumers themselves to spread information about a product to others in their communities. A company's website is another important PR vehicle: consumers and members of other publics often visit websites for information or entertainment. Personal selling Personal selling is the interpersonal arm of the marketing communications mix. However, sales forces not only exist in selling departments of companies: universities use recruiters to attract new students and churches use membership committees to attract new members. Museums, universities and fine arts organizations use fundraisers to contact donors and raise money. The Swedish Museum of Modern Art (Moderna Museet) uses Facebook to reach existing and new target groups for events. And some universities run websites to raise funds from various donators, including local and national companies and research funds, but also other organizations and wealthy people. Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions and actions. It involves personal interaction between two or more people, so that each person can observe the other's needs and char- acteristics and make quick adjustments. Personal selling also allows all kinds of customer relationships to spring up, ranging from matter-of-fact selling relationships to personal friendships. An effective salesperson keeps the customer's interests at heart in order to build a long-term relationship by solving the customer's problems. With personal selling, the buyer usually feels a greater need to listen and respond even if the response is a polite No thank you. Personal selling can give very important feedback to the company; however, it is collected and influenced by the s salesperson collecting its SO sometimes - and too often valuable feedback stays with the salesperson. A sales force requires a longer-term commitment than does advertising – advertising can be turned on and off, but sales force size is harder to change. Personal selling is also the company's most expensive promotion tool, costing companies SEK 2,000-3,500 per sales call.4 Companies may spend more on personal selling than they do on advertising and other communication activities. The people who do the selling go by many names: salespeople, sales representatives, district managers and sales consultants, to name just a few. People hold many stereotypes of salespeople. including some unfavourable ones. 'Salesman' may bring to mind the image of playwright Arthur Miller's pitiable Willy Loman in the drama Death of Salesman or author Meredith Willson's cigar-smoking, backslapping, joke-telling Harold Hill in the film musical The Music Man. These examples depict salespeople as loners, travelling their territories. trying to foist their wares on unsuspecting or unwilling buyers. However, modern salespeople are a far cry from these unfortunate stereotypes. Today, most salespeople are well-educated, well- trained professionals who add value for customers and maintain long-term customer rela- tionships. They listen to their customers, assess customer needs and organize the company's efforts to solve customer problems.12 A salesperson might be largely an order taker, such as the department store salesperson standing behind the counter, or an order getter, whose position demands creative selling and relationship- building for products and services ranging from appli- ances, industrial equipment and airplanes to insurance and information technology services. Consider Boeing, the aerospace giant competing in the rough-and-tumble of the world- wide commercial aircraft market, primarily with Airbus. It takes more than fast talk and a warm smile to sell expensive high-tech aircraft. A single big sale can easily run into massive amounts: a large two-aisle aircraft costs more than sEK 4 billion (the 777-9 list price is $442.2 million) and a one-aisle 737-900er is $112.6 million.13 Boeing salespeople head up an exten- sive team of company specialists - sales and service technicians, financial analysts, plan- ners, engineers - all dedicated to finding ways to satisfy airline customer needs. The selling process is slow - it can take two or three years from the first sales presentation to the day the sale is announced. After getting the order, salespeople must then stay in almost constant touch to make certain the customer remains satisfied. Success depends on building solid, long- term relationships with customers, based on performance and trust. Late deliveries are not uncommon - the Boeing 787 was delayed for several years. And product life cycles typically range from 30 to 50 years! The Boeing 737, the best-selling commercial aircraft in aviation history, was launched in 1967 and another new generation has recently been introduced (the 'Next Generation' that follows after 'Max', which has a poor reputation, all of which have been grounded after 346 people died in two crashes), from the development of the aircraft until the last aircraft is taken out of circulation - could even reach 100 years. The role of the sales force Personal selling is the interpersonal arm of the marketing communications mix. In more complex selling situations in particular, personal selling can be more effective than adver- tising. Salespeople can probe customers to learn more about their problems and then adjust the marketing offer and presentation to fit the special needs of each customer. In companies that sell business products and services, the company's salespeople work directly with customers. In consumer product companies such as Unilever and Adidas, the sales force plays an important behind-the-scenes role. It works with wholesalers and retailers to gain their support and to help them be more effective in selling the company's products. Linking the company with its customers The sales force serves as a critical link between a company and its customers. In many cases, salespeople serve both - the seller and the buyer, which might be a problem since their loyalty is not always completely towards the selling company that employs them. Sales- people represent the company to customers and thus find and develop new customers and communicate information about the c company's products and services. They negotiate prices and terms, and close sales. In addition, salespeople provide customer service and carry out market research and intelligence work. At the same time, salespeople represent customers to the company, acting inside the firm as 'champions' of customers' interests and managing the buyer-seller relationship. In fact, to many customers, the salesperson is the company the only tangible manifestation of the company that they see. Hence, customers may become loyal to salespeople as well as to the companies and products they represent. Co-ordinating marketing and sales Ideally, the sales force and the firm's other marketing functions should work together closely to jointly create value for both customers and the company. However, the marketers some- times feel that salespeople have their 'feet stuck in the mud' whereas salespeople feel that the marketers have their ' heads stuck in the clouds'. A company can take several actions to help bring its marketing and sales functions closer together, thus making them more familiar with each other's ways of thinking and acting. A company can also create joint objectives and reward systems for sales and marketing or appoint marketing-sales liaisons - people from marketing who 'live with the sales force' and help to co- ordinate marketing and sales force programmes and efforts. Recruiting and selecting salespeople At the heart of any successful sales force operation is the recruitment and selection of good salespeople. The performance difference between an average salesperson and a top sales- person can be substantial. In a typical sales force, the top 30 per cent of the salespeople might bring in 60 per cent of the sales. Moreover, poor selection results in costly turnover. When a salesperson quits, the costs of finding and training a new salesperson plus the costs of lost sales - can be very high. What sets great salespeople apart from all the rest? The qualities that buyers dislike most in salespeople include being pushy, late, deceitful, and unprepared or disorganized. The qualities they value most include good listening, empathy, honesty, dependability, thorough- ness and follow-through. In an effort to profile top sales performers, Gallup Management Consulting Group, a division of the company that conducts Gallup polls, has interviewed hundreds of thousands of salespeople. Its research suggests that the best salespeople possess four key talents: intrinsic motivation, disciplined work style, the ability to close a sale and, perhaps most important, the ability to build relationships with customers.6 Super salespeople are motivated from within they have an unrelenting drive to excel. But motiva- tion and discipline mean little unless they result in closing more sales and building better customer relationships. Top salespeople are empathetic; patient; caring; responsive; good listeners. Top performers can put themselves on the buyer's side of the desk and see the world through their customers' eyes. These characteristics, however, come at a price. Other company functions such as controling, HR and I sometimes complain that the best sales- people are poorly organized, don't follow the rules, and don't put in expense reports and attend to other administrative procedures on time. Sales promotion Sales promotion – The most short-term of the marketing communications mix tools, which says to consumers “buy now”. Sales promotion is the most short-term of the marketing communications mix tools. Whereas advertising or personal selling says 'buy`, sales promotions say ' buy now`. It consists of short-term incentives to encourage purchase or sales of a product or service. Examples of sales promotions are found everywhere: t might be an insert in the Sunday newspaper with a coupon offering sEk 50 off every SEK 500 spent at Kappahl, or 10,000 kWh free charging ifyou buy a new all-electric car; it could be an e-mail from an online household appliances website offering free shipping on your next purchase over £1,000; or it could be your local ICA store offering 10 per cent off if you buy at least three ICA Selection products. Sales promotion tools are targeted toward final buyers (consumer promotions), retailers and wholesalers (trade promotions), business customers (business promotions) and members of the sales force (sales force promotions). Several factors have contributed to the rapid growth managers face greater pressures to increase their current sales, and promotion is viewed as an effective short-term sales tool, Secondily, externally, the company faces more competition and competing brands are less differentiated. Increasingly, competitors are using sales promotion to help differentiate their offers. Thirdly, advertising efficiency has declined because of rising costs, media clutter and legal restraints. Finally, consumers have become more deal-oriented, and ever- larger retailers are demanding more deals from manufacturers. The growing use of sales promotion has resulted in promotion clutter, similar to advertising clutter. Sales promotion effects are often short-lived and often are not as effective as adver- tising or personal selling in building long term brand preference and customer relationships. Consumers are increasingly tuning out promotions, weakening their ability to trigger an immediate purchase. Most companies selling to consumers now have loyalty programmes, and the intensive use of promotions makes it difficult to sell products without discounts. The number of promotions an average consumer receives has increased at a fast pace, and it takes a lot of time for the consumer to find out which deals are really good while it Sn also costly for companies to run the incentive programmes. But when competitors do, companies have little choice but to keep the programmes running. Consumer promotions tools Some examples of the wide range of tools in use are as follows: Samples are offers of a trial amount of product. Sampling is the most effective but most expensive way to introduce a new product or to create new excitement for an existing one. Most samples are free, but the company may charge a small amount to offset its cost. The sample might be delivered door-to-door, sent by mail, handed out in a store or kiosk, ached to another product, typically a magazine. A Kicks, Rituals or The Body Shop customer may get samples French cosmetics retailer Sephora offers free samples every time a consumer with loyalty card spends €100, £100 or $100. And the points can be saved for a later opportunity and accumulate to become a greater gift. Coupons are certificates that give buyers a saving when they purchase specified products. They can be used throughout the product life cycle, promoting early trial of a new brand or stimulating sales of a mature brand. However, as result of coupon clutter, redemption rates have been declining in recent years. Thus, most major consumer-g goods companies are issuing fewer coupons and targeting them more carefully. Cash refunds (Or rebates) are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. These are used by ICA, Coop, Circle K, Kicks, Åhléns. and many other major retailers operating in different industries. Price packs offer consumers savings off the regular price of a product. The producer marks the reduced prices directly on the label or package Price packs can be single packages sold at: reduced price (such as two for the price of one), or two related  products banded together (such as a toothbrush and toothpaste). Price packs are very effective – even more so than coupons – in stimulating short-term sales. Premiums are goods offered either free or at low cost as an incentive to buy a product, e.g. a free perfume sample when buying a Cosmopolitan magazine or a children's book when buying a meal at McDonald's. Point-of-purchase (POP) promotions include displays and demonstrations that take place at the point of sale. Contests, sweepstakes and games give consumers the chance to win something, Such as cash, trips or goods, by luck or through extra effort. Marketers can also promote their brands through event marketing, thus creating a brand- marketing event or serving as a sole or participating sponsor of events created by others. Most companies sponsor brand events. Trade promotions can persuade resellers to carry a brand, give it shelf space, promote it in advertising and push it to consumers. Shelf space is so scarce these days that manufacturers often have to offer price-offs, allowances, buy-back guaran- tees, or free goods to retailers and wholesalers to get products on the shelf and, once there, to keep them on it. ICA's strong position with their own private-label brands puts pressure on food manufacturers - Heinz, Felix, Findus etc. - to use trade promotions to promote their positions and maintain their positions on the store shelves. Manufacturers use several trade promotion tools: as for consumers, they use contests, premiums and displays, but they also use straight discounts and allowances in return for the retailer's agreement to feature the manufacturer's products in some way, e.g. prominent product display or front cover exposure in direct marketing, such as ICA Maxi's weekly insert in a newspaper. Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavour or size. They may offer push money -cash or gifts to dealers or their sales forces to push' the manufacturer's goods. With advertising, a common practice is that the manufacturer pays 50 per cent of advertising costs, if the ad reflects the corporate identity. Direct and digital marketing any of the marketing and promotion tools that we've examined in previous chapters were developed in the context of mass marketing, targeting broad markets with standardized messages and offers distributed through intermediaries. Today, however, with the trend towards more narrowly targeted marketing, many companies are adopting direct marketing, thus connecting directly with carefully targeted individual consumers both to obtain an immediate response and to cultivate lasting customer relationships. Using detailed databases, marketers tailor their offers and communications to the needs of narrowly defined segments or even individual buyers. Online book stores blocket.se, adlibris.se, amazon.com have a lot of data from visitors' clicking patterns, and every single transaction is registered. The many forms of direct and digital marketing from direct mail, catalogues, and telephone marketing to online, mobile, and social media all share some distinctive c characteristics. Direct marketing i is more targeted: it's usually directed at a specific customer or customer community, Direct and digital marketing: are immediate and personalized: Messages can be prepared quickly even in real time and tailored to appeal to individual consumers Or brand groups. Finally, they are interactive and allow a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer's response. Thus, direct and digital marketing are well suited to highly targeted marketing efforts, creating customer engagement, and building one- to- one customer relationships. Digital marketing includes many examples of how useful this interactive tool iS. An airline can tailor offers based on the profile and history of the customer, as does Scandinavian Airlines through its EuroBonus frequent flyer programme, When the customer takes particular actions, e.g. visiting a deal-of-the-month page or booking a ticket, the airline can customize further options. If the customer is used to request a bio-fuel option, book Busi- ness Class or choose a vegetarian meal, digital marketing could tailor the booking process to emphasize such offers and options. Online marketing has an inherent disadvantage: the low costs of sending e-mails and text messages may result in companies overusing it, and thus spamming consumers. Many companies are sending text messages towards the end of the month to boost sales before the month's sales figures are calculated and released. But when all companies are doing the same, it irritates potential buyers. The solution is to make sure all communication with the customer adds value - when it does, the company will activate positive customer associations when it gets in contacts with the customer through various digital marketing options. Grass roots marketing communications and user-generated content Direct and digital marketing is interactive – and therefore, consumers will also take part in creating the content. Not too long ago – a few decades or so – companies had a strong and solid power advantage over consumers. Starting with the consumer movement (consum- erism, see Chapter 5), consumers rights became stronger, supported by more legal rights for consumers, more intensive competition, and less consumer acceptance of being poorly treated. The increasing power of consumers has moved the power from companies towards consumers. This is sometimes called the grass roots revolution: consumers increasingly define companies, brands, political parties, the profile of cities, and many other things. This has all been enabled by digitization and the emergence and growth of social media marketing. Companies could take advantage of the situation through using consumer-generated content. Hence, many companies are now tapping consumers for marketing content, message ideas, or even actual ads and videos. Sometimes the results are outstanding; sometimes they are forgettable. If done well, however, user-generated content can incorporate the voice of the customer into brand messages and generate greater customer engagement. Part of the development towards grass roots-driven information and consumer-generated content is that many companies are now tapping consumers for message ideas or actual ads. They are searching existing video sites, setting up their own sites, and sponsoring ad-creation contests and other promotions. Sometimes, marketers capitalize on consumer videos that are already posted on sites hosted by e.g. YouTube. One of the best-known consumer-generated content efforts is the former 'Crash the Super Bowl Challenge' held annually by PepsiCo's Doritos brand. For more than a decade, Doritos invited consumers to create their own 30- second video ads, with winners receiving cash awards and having their ads run during the Super Bowl. Based on the success of the Crash the Super Bowl contest, Doritos now runs new campaigns that create fun fan-made ads and other content throughout the year. The boundary that by tradition separates producers, who create and communicate marketing messages. and consumers, who react to the messages, has become blurred through the emer- gence of grass roots marketing and social media. Consumers create marketing r messages and producers react- while the traditional model still exists too. Although it may sound appealing, there is a risk in trying to create consumer- created videos with a style similar to those uploaded by genuine grass roots web users. First, it is not likely organization. Secondly, consumers might become irritated when they understand that the to be as genuinely non- commercial after having gone through the decision process of a large company constructed and paid for what looks like something created by the man in the street. Chevrolet once ran a promotion for its Tahoe SUV allowing consumers to write their own text for video clips of the vehicle. However, many of the user- created ads contained critical gibes about the big Su y's poor petrol mileage, high operating coSts and harmful environmental impact. In a similar way, Stockholm's public transport – SL – once invited their travellers to take part in the competition design your own SL card. Various suggestions that were harmful to sL were uploaded. The lesson is clear: marketers should be cautious when inviting consumer creative inputs,'8 but if used carefully, it can produce big benefits for relatively little expense. Companies can collect new creative ideas, as well as fresh perspectives on the brand and what it actually means to consumers, and this can boost consumer involvement and get consumers talking and thinking about a brand and its value to them. Grass roots marketing provides many advantages. It can be cost effective as consumers potentially do the job in promoting the company and its brand. If the company manages to convince the desired consumer groups, it can make use of existing social trends and use them to relate the company and its brand to the desired audiences in a convincing way. Influencer marketing In the past, the celebrity culture was to a large extent controlled by entertainment companies, the media and other institutions that paved the way for celebrities to become known by a broader audience. Nowadays people can reach broad audiences through having an interesting message - what is interesting not being defined by entertainment companies but by grass roots! -good timing and a portion of luck. A great example is the Swedish climate activist Greta Thunberg. Although critics argue that she got support from her (well known, at least in Sweden) parents and PR agencies, the basic idea of organizing a climate strike on Fridays was her own. She soon became known all over the world - hat's influencer marketing at its best. Influencer marketing is a rather new concept, but people who have numerous followers, among the masses or within a niche group, have existed for a long time. It was earlier, and is s still sometimes, called opinion leaders. The difference is that an influencer is native to social media platforms. Endorsements from influencers (or opinion leaders) are often a very effective way of communicating with, and convincing, consumers. But the company has to keep track of the person and what she or he is doing, Influencer marketing is a typical co-branding situation so if the influencer is doing something bad, it could harm the company's brand - and the other way around. Grass roots communications can be seen as a reaction towards the strong company domi- nance in marketing communications, and this change has been made possible thanks to digitization. There are a number of types of grass roots communications: Evaluation sites such as Rejta.se, Glassdoor.com and Tripadvisor.com. Web pages that provide goods and services and at the same time contain content clear elements of user evaluation, such as eBay and Booking.com. Online forums, where users exchange information and also by non-users to a large extent can access the information without being logged in, for example, wedding forums, holiday forums, motorcycle forums and house construction forums. Blogs and Twitter, where the blogger shares the information that is disseminated. All these types are essentially separate from, for example, advertising in Aftonbladet or on Facebook, which is soon a variant of traditional advertising, although more tailored to specific template groups and user profiles (more in the case of Facebook than in the case of Aftonbladet). Steps in developing effective marketing communication We now examine the steps in developing an effective integrated communications and promo- tion programme. Identifying the target audience A marketing communicator starts with a clear target audience in mind. The audience may be current users or potential buyers, those who make the buying decision or those who influence it. The target audience will heavily affect the communicator's decisions on what will be said, how it will be said, when it will be said, where it willbe said, and who will say it. Determining the communications objectives Once the target audience has been defined, the marketers must decide what response they seek. In many cases, they willseek a purchase response but they may also look for other responses in the consumer decision-making process. 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, the stages consumers normally pass through on their way to making a purchase. These stages include awareness, knowledge, liking, preference, conviction and purchase (see Figure 13.4). The marketing communicator must first build awareness and knowledge. Once consumers know about our products, We need to know how they feel about it. These emotional stages include liking (feeling favourable about the product), preference (preferring it to other products) and conviction (believing that the product is the best for them). Marketers use a variety of the marketing communications mix tools to create posi- tive feelings and conviction. Finally, members of the target market might be convinced about the product, and then, if the product is available and considered worth the money, make the purchase. Buyer-readiness stages – The stages consumers normally pass through on their way to purchase, including awareness, knowl- edge, liking, preference, conviction and purchase. This model may be used for most types of products; however, the stages are not as clear in cases of emotional products and impulse buying as for durables. Knowing through which stages customers move may be invaluable to the selling company. This model may also explain why some companies fail. Saab was a Swedish car maker that closed down after bankruptcy in 2011. The buyer-readiness stage model gives some explanation to why the company failed, Saab was a car with low brand knowledge in many markets figures suggest that only about 10 per cent of consumers had brand knowledge in Germany and Spain,20 Saab was a good product and many people liked and still like) it - it reflected Scandinavia, it had an appealing design, and an intellectual image, Celebrities such as Jerry Seinfeld and Calista Flockhart (Ally McBeal) were driving Saabs. Liking was, hence, not problem. However, preference means the product iS compared with competing products, and here Saab fell short. Many car buyers preferred Audi, BMW, Jaguar, Mercedes or Volvo. And if they didn't, the conviction may have come With the higher resale value of competi- tors, the higher 'coolness' factor of a Jaguar or the lower costs of owning a Volvo. The last stage, purchase, is a matter of price and availability SO Saab had two choices: increasing the number of dealers in areas with little Or no market coverage or lowering the price. The former may be harmful to the brand unless new dealers provide e high level of quality in facilities and customer care, and the latter may undermine margins and profitability as well as the premium brand ambitions in the long run. Nothing happened and, maybe not surprisingly, many Car buyers who liked Saabs purchased other cars, something that contributed to the failure in making Saab viable again. Designing a message Having defined the desired audience response, the communicator turns to developing an effective message Ideally, the message should get attention, hold interest, arouse desire and obtain action (a framework known as the AIDA model). In practice, few messages take the consumer all the way from awareness to purchase, but the AIDA framework suggests the desirable qualities of a good message. When putting the message together, the marketer must decide what to say (message content) and how to say it (message structure and format). Message content The marketer has to come up with an appeal or theme that will produce the desired response There are three types of appeals: rational, emotional and moral. Rational appeals relate to the audience's selfinterest. They show that the product will produce the desired benefits. Exam- ples are messages showing a product's quality, economy, value or performance. How long a computer might be used without charging its battery, or insurance coverage when buying a holiday trip are typical rational appeals. Emotional appeals attempt to stir up either negative or positive emotions that can motivate purchase. Communicators may use emotional appeals ranging from love, joy and humour to fear and guilt. Emotional messages often attract more attention and create more belief ir the sponsor and brand. 'Brain science has proved [that] consumers feel before they think, and feelings happen fast,' says one expert. 'Real persuasion is emotional in nature.21 Thus, Michelin sells tyres using mild fear appeals, showing families riding in cars and telling parents: Michelin: because SO much is riding on your tyres. 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 or aid to the disadvantaged. And incentives to buy KR Av-labelled food, meaning more considerations taken to workers throughout the supply chain, are driven by moral appeals Message structure Marketers must also decide how to handle three message structure issues. The first is whether to draw a conclusion or leave it to the audience. Research suggests that in many cases, rather than drawing a conclusion, the advertiser is better off asking questions and letting buyers come to their own conclusions. The second message structure issue is whether to present the strongest arguments first Or last. Presenting them first gets strong attention but may lead to an anti-climactic ending. The third message structure 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). Usually, a one-sided argument is more effective in sales presentations except when audiences are highly educated or likely to hear opposing claims, or when the communicator has a negative association to over- come. In this spirit, Heinz ran the message 'Heinz Ketchup is slow good' and Listerine mouthwash ran the message Listerine tastes bad twice a day' In such cases, two-sided messages can enhance the advertiser's credibility and make buyers more resistant to competitor attacks. Message format communicator has to decide on the headline, copy, illustration and colour. To attract atten- tion, advertisers can use novelty and contrast; eye- catching pictures and headlines; distinc- tive formats; message size and position; and colour, shape and movement. If the message is to be broadcast over the radio, the communicator has to choose words, sounds and voices. The 'sound of an ad promoting banking services should be different from one promoting a new movie. If the message is to be carried on television or in person, then all these elements, plus body language, have to be planned. Presenters plan every detail - heir facial expres- sions, gestures, dress, posture and hairstyles. If the message is carried on the product or its package, the communicator has to watch texture, scent, colour, size and shape, For example, one study revealed that people make subconscious judgments about an item wit hin 90 seconds of initial viewing and that up to 9o per cent of that assessment is based on colour. Another study suggests that colour increases brand recognition by up to 8o per cent. Thus, in designing effective marketing communications, marketers must consider colour and other seemingly unimportant details carefully. Choosing communications channels and media The communicator must now select channels of communication. There are two broad types of communication channels - personal and non-personal. Personal communication channels I personal communication channels, two or more people communicate directly with each other: face-to-face, on the phone, via mail or e-mail, through texting or a chat - obviously, it varies how personal the interaction is. Personal communication channels are effective because they allow for personal addressing and feedback Personal communication channels – Channels through which two or more people communicate directly with each other:face-to-face, on the phone, through mail or email, or even through an Internet chat. Some personal communication channels are controlled directly by the company, e.g. company salespeople (although they may be more difficult to control than the employer would wish), while other channels may reach buyers not directly controlled by the company, e.g. independent experts or online buying guides. They might also be word-of-mouth influence, which has considerable effect in many product: areas: neighbours, friends, family members and associates talking to target buyers. Particularly for products that are expensive, risky O highly visible, personal influence carries great weight. Companies can take steps to put personal communication channels to work for them. For example, they can create influencers or opinion leaders for their brands – people whose opinions are sought by others – by supplying influencers with the product on attractive terms or by educating them So that they can inform others. Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. In the early days of buzz marketing, the buzz around various products and campaigns happened more or less without companies planning it. Now, buzz marketing is carefully planned but the result is impossible to plan a plan may succeed or fail depending not only on how the market will receive the campaign (which is very dificult to know beforehand - the collective response from million of consumers is very difficult to forecast). but also on timing, luck and what competitors do. In companies' attempts to create buzz, it is important to disting uish between owned media and earned media - the former representing the company's co-workers, stores, and websites, while the latter includes social media where consumers, without any involvement from the company, view, share, comment, and repost campaigns. Word-of-mouth influence – Personal communication about a product between target buyers and neighbours, friends, family members and associates. Buzz marketing – Cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. Canadian budget airline WestJet once produced a film where they asked passengers before boarding what they would most like as a Christmas gift. The airline co- -workers at the destina- tion airport bought a selection of the desired gifts as the flight moved along its route, and gave them away for free to the passengers when they landed by placing them on the baggage carousel. The YouTube video has received 50 million views since its release. It's a great example of buzz marketing that builds on surprise and emotional messaging. Non-personal communication channels Non-personal communication channels are media that carry messages without personal contact or feedback. Major media include print media (newspapers, maga- zines, direct mail), broadcast media (radio, television), display media (hoardings, signs, posters) and online media (e-mail, company websites. online social and sharing networks). Atmospheres are designed environments that create or reinforce the buyer's leanings toward buying a product. Thus, lawyers' offices and banks are designed to communicate confidence and other qualities that might be valued by clients. Events are staged occurrences that communicate messages to target audiences, e.g. grand openings. shows and exhibits. Communications first flow from television, magazines and other mass media to influencers/ opinion leaders and then to innovators, early adopters and others. Thus, influencers and innovators are crucial steps in carrying messages to people who are less exposed to media. This suggests that mass communicators should aim their messages directly at influencers and innovators, letting them carry the message to others. Mass communication in many cases takes the way through influencers or innovators. Non-personal communication channels - Media that carry messages without personal contact or feedback. Selecting the message source Messages delivered by highly credible sources are more persuasive. Thus, many food companies promote themselves to doctors, dentists and other healthcare providers to motivate these professionals to recommend their products to patients. And marketers hire celebrity endorsers - well-known athletes, actors and musicians - to deliver their messages. However, companies must be careful when selecting celebrities to repre- sent their brands. Picking the wrong spokesperson can result in embarrassment and a tarnished image. Golfer Tiger Woods, who was once called the world's most marketable athlete, had endorsed Nike, Accenture, Buick and a dozen other brands when supermarket tabloid The National Enquirer published a story claiming that Woods had an extramarital affair with nightclub manager Rachel Uchitel. The story began to attract media attention when Woods had a car accident two days later at 2:30 a.m. in his SUV, and he praised his Swedish wife Elin Norde- gren for getting him out of the car, although circumstances suggested they had been having an argument. Soon, over a dozen women claimed in various media outlets that they had had affairs with Woods. Although Woods held a press conference and admitted to infidelity, the image loss was obvious. A few weeks later, Woods announced he would take an indefinite leave from golf, and the majority of the sponsors were reconsidering their endorsement deals. Woods' sponsors were estimated to have lost $5-12 billion in terms of shareholder value just a few weeks after the affair went public - and this shows how difficult it is to find the right partner. Who would have thought about this outcome when they signed contracts with Woods one or a few years earlier? Collecting feedback After sending the message, the communicator must research its effect on the target audience. This involves asking the target audience members whether they remember the message, how many times they saw it, what points they recall, how they felt about the message, and their past and present attitudes toward the product and company. The communicator would also like to measure behaviour resulting from the message -how many people bought a product, talked to others about it, or visited the store. Feedback on marketing communications may suggest changes in the promotion programme or in the product offer itself. Setting the total marketing communications budget and mix In this section, we'll look : at the marketing communications budget- setting process and at how marketers blend the various marketing communication tools into a smoothly func- tioning integrated marketing communications mix. As we will see, one is superior to the other methods. Setting the total marketing communications budget One of the hardest marketing decisions facing a company is how much to spend on promo- tion. John Wanamaker, the department store magnate, once said, I know that half of my advertising iS wasted, but I don't know which half. spent $2 million on advertising, and I don`t know if that is half enough or twice too much. It is not surprising, therefore, that indus- tries and companies vary widely in how much they spend on promotion. Promotion spending may be 10- 12 per cent of sales for consumer- packaged goods, 14 per cent for cosmetics and 1 per cent for industrial machinery. Within a given industry, both low and high spenders only can be found. How does a company decide on its marketing communications budget? Here, we look at four common methods used to set the total budget for advertising: the affordable method, the percentage-of-sales method, the competitive-parity method, and the objective-and-task method. Affordable method Affordable method – Setting the marketing communications budget the level management thinks the company can afford. Some companies use the affordable method: they set the marketing communications budget at the level they think the company can afford. Small businesses often use this method, reasoning that the company cannot spend more on advertising than it has. Unfortunately, this method of setting budgets completely ignores the effects of promotion on sales. It tends to place promotion last among spending priorities, even in situations in which advertising is critical to the firm's success. Percentage-of-sales method Percentage-of-sales-method – Setting their marketing communications budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. Other companies use the percentage-of-sales method, setting their marketing communica- tions budget at a certain percentage of current or forecasted sales. This method has advan- tages: it is simple to use and helps management think about the relationships between promo- tion spending, selling price and proft per unit. However, this method wrongly views sales as the cause of promotion rather than as the result. Although studies have found a positive correlation between promotional spending and brand strength, this relationship often turns out to be effect and cause, not cause and effect. Stronger brands with higher sales can afford he biggest advertising budgets. Thus, the percentage-of-sales budget is based on availability of funds rather than on opportunities. Because the budget varies with year-to-year sales long-range planning is difficult. Finally, the method does not provide any basis for choosing specific percentage, except what has been done in the past or what competitors are doing.Ir many cases, companies will need promotion spending most when sales are slacking meaning a high percentage of current sales while in periods of great sales result, it may not need much marketing communications at all. Competitive-parity method Competitive-parity-method – Setting their marketing communications budgets to match competitors' outlays. Still other companies use the competitive-parity method, setting their marketing commu- nications budgets to match competitors' outlays. They monitor competitors' advertising or get industry marketing communications spending estimates from publications or trade associa- tions, and then set their budgets based on the industry average. Two arguments support this method. First, competitors budgets represent the collective wisdom of the industry. Second spending what competitors spend helps to prevent promotion wars. Unfortunately, neither argument i is valid. There are no grounds for believing that the competition has a better idea of what a company should be spending on promotion than does the company itself. Companies differ greatly, and each has its own special promotion needs - and competitors may use a poor method, unaware of the criticism indicated in this section. Objective-and-task method The most logical budget-setting method is the objective-and-task method, whereby the company sets its marketing communications budget based on what it wants to accomplish with marketing communications. This budgeting method entails (1) defining specific commu- nication objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. This method forces management to spell out its assumptions about the relationship between money spent and communication results. But it is also the most difficult method to use. Suppose Arla wants 85 per cent awareness for its ecological butter at he end of next year. What specific advertising messages and media schedules should Arla use to attain this objective? How much would these messages and media schedules cost? Arla must consider such questions, even though they are difficult to answer. Objective-and-task method – The company setting its marketing communications budget based on what it wants to accomplish with marketing communications. Marketing communications mix strategies The concept of integrated marketing communications suggests that the company must blend the promotion tools carefully into a coordinated marketing communications mix. But how does the company determine what mix of communication tools it will use? Companies within the same industry differ greatly in the design of their marketing communication mixes. And each tool has unique characteristics and costs. Marketers must understand these characteristics in shaping the communication mix. Marketers can choose from two basic marketing communications mix strategies – push promotion or pull promotion. Figure 13.5 contrasts the two strategies. The relative emphasis on the specific promotion tools difers for push and pull strategies. A push strategy involves pushing' the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotion) towards channel members to induce them to carry the product and to promote it to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising and consumer promotion) towards final consumers to induce them to buy the product. If the pull strategy is effective, consumers will then demand the product from stores, who will in turn demand it from producers. Thus, consumer demand 'pulls' the product through the channels. Push strategy – A marketing communication strategy that involves "pushing' the product through marketing channels to final consumers. The producer directs its marketing activities towards channel members o induce them to carry the product and promote it to final consumers. Pull strategy – A marketing communication strategy in which the producer directs its marketing activities towards final consumers to induce them to buy the product. Ifthe pull strategy is effective, consumers will then demand the product from channel members, who will in turn demand it from producers. Companies consider many factors when designing their marketing communications mix strategies, including type of product/market and the product life-cycle stage. For example, the importance of different promotion tools varies between consumer and business markets. Business-to-consumer companies usually pull' more, putting more of their funds into adver- tising, followed by sales promotion, personal selling and then public relations. By contrast, business-to-business marketers tend to ush' more, putting more of their funds into personal selling, followed by sales promotion, advertising and public relations. In general, personal selling is used more heavily with expensive and risky goods and in markets with fewer and larger sellers consider an airline ordering 30 Airbus A350XWB aircraft. The effects of different promotion tools also vary with stages of the product life cycle, In the introduction stage, advertising and public relations are good for producing high awareness, and sales promotion is useful in promoting early trial. Personal selling must be used to get the trade to carry the product. In the growth stage, advertising and public relations continue to be powerful influences, whereas sales promotion can be reduced because fewer incentives are needed. In the mature stage, sales promotion again becomes important relative to advertising. Buyers know the brands, and advertising is needed only to remind them of the product. In the decline stage, advertising is kept at a reminder level, public relations are dropped, and salespeople give the product only a little attention. Sales promotion, however, might continue to be strong. The shifting marketing communications model It is likely that we will see a gradual shift to the new marketing communications chan- nels. Broadcast television and other mass media will still capture significant share of the marketing communications budgets of most major marketing firms, a fact that isn't likely to change quickly. Although some may question the future of the 30-second TV ad spot, it's still very much in use today, and for some programmes -Mello, Let's Dance, the Olympic Games, World Championship and other major events that people watch in real time – it will remain so. Thus, it seems likely that the new marketing communications model will consist of a shifting mix of both traditional mass media and a wide array of exciting, new, more targeted more personalized media. The challenge for marketers is to bridge the 'media divide' that too often separates traditional creative and media approaches from new interactive and digital ones. Challenges in the contemporary marketing communications landscape Perhaps no other area of marketing is changing so profoundly as marketing communica tions. These are therefore both exciting and scary times for marketing communicators. In past decades, marketers perfected the art of mass marketing - seling highly standardized products to huge numbers of customers. In the process, they developed effective mass- -media communications techniques to support these strategies. Large companies now routinely invest heavily in television, magazine or other mass-media advertising, reaching tens of millons of customers with a single advertisement. Today, however, marketing managers face Several major factors are changing the face of today's marketing communications. Consumers some new marketing communications realities. are better informed and communicate more with other consumers. Rather than relying on marketer-supplied information, they use social media, and other technologies to find informa. tion on their own. They can connect easily with other consumers to exchange brand-related information or even create their own brand messages and experiences. As mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programmes designed to engage customers and build customer relationships in more narrowly defined markets. Advances in communi- cations technology have given companies exciting new media for interacting with targeted consumers. Today's marketers can amass detailed customer information, keep closer track of customer needs, and tailor their offerings to narrowly defined target groups. At the same time. consumers have more control over the nature and timing of messages they choose to send and receive. Just as mass marketing once gave rise to a new generation of mass-media communications, digitization and social media have given birth to a more targeted, social, and engaging marketing communications model. Although network television, magazines, newspapers, and other traditional mass media remain important, their dominance is declining. In their place, advertisers are now adding a broad selection of more specialized and highly targeted media to engage smaller customer communities with more personalized, interactive content. Rather than using old approaches that interrupt customers and force-feed them mass messages, new media formats let marketers reach smaller communities of consumers in more engaging ways. For example, hink about television viewing these days. Consumers can now watch their favourite programmes on just about anything with a screen, whenever and wherever they wish. And some programmes are being produced only for online viewing Rather than just creating and placing 'Tv ads', print ads' or Snapchat branded story ads', many marketers now view themselves more broadly as content marketing managers. As such, they create, inspire, and share brand messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared communication channels. These chan- nels include media that are both traditional and new as well as controlled and not controlled. It's about communications context and channels now, rather than just the message itself, and it's about mapping the customer journey to start a conversation with consumers, one that leads to engagement, purchase, loyalty, and advocacy at different touch points against this integrated journey. Communication and message saturation In designing marketing communications, marketers must be aware about the communication and message saturation that characterize contemporary markets. Hence, consumers today are clearly contradicted by all the marketing communications that are directed at them. This development is the result of several parallel changes in the market environment: The commercialization of more and more sectors in society has increased the message intensity. In the case of Sweden, for instance, television, pharmacy, pre-schools, schools, upper secondary schools, health centres, car inspection, telephony, electricity, and passenger transport have been commercialized since the 1990s. More options to consumers: more products and brands to choose from. This has contributed to companies designing their offers the outperform competition. In the long run, this development is great for consumers who get more opportunities and more attractive offers. Against the background of the above changes, companies have become more aggressive in their marketing communications Digitization enables price comparisons and makes market forces more obvious for companies and consumers while forcing under- performing companies out of the market. Communicating in a polarized world Marketing communications contributes to polarization, and polarization has a strong influ- ence on marketing communications. Like many other central societal characteristics, things are interwoven and difficult to separate. It's clear, however, that marketers have an impact on society in this sense. What is polarization, and what does it mean from a communications perspective? Polarization is the division into sharply contrasting groups, each representing strong opin- ions about the other group and its opinions. Meanwhile, companies and their marketers segment markets in order to find a better match between what the company offers and what consumers want. Segmenting means dividing people into different groups - with a critical eye, one can say that dividing consumers into categories contributes to divisions between "us' and *them'. Looking around us, it is obvious that we constantly make such categoriza- tions and use them - not only marketers but they contribute. Categorizations contribute towards polarization, when differences between different groups become emphasized and also supported with arguments through the messages that are used for each segment, hence building distances between groups rather than attempting to make consumers understand each other. In contemporary society, people live very different types of lives. Some consumers live hectic lives in metropolitan areas, other calmer lives in the countryside. Some have big families and many friends, some others have few opportunities to socialize. Some strive for material belong- ings, others for other values. In this wide variety of lifestyles. segmentation and marketing communications create categorizations that contribute to putting labels on groups of people, and hence to polarization. When particular products, clothing styles, vacation destinations, car brands, and suburbs are associated with particular types of people, that's partly the results of marketers' efforts, and partly of other sociological, social, and psychological mechanisms While this is a huge opportunity for marketers, one should also be aware that it might contribute to a society where not everybody has similar opportunities and chances. Mean- while, market segmentation and market communications might contribute to a better society by giving consumers with limited resources the opportunity to buy products that fulfil their needs at reasonable prices, it contributes to competition, it may give consumers more power through making them more informed and aware, and it has the potential to increase the matching between product offers and consumer needs and preferences. An example of how market segmentation and marketing communications contributes to polarization is the divide between metropolitan and rural to urbanized areas that has existed for many decades, and still exists. Through urbanization, the divide grows over time - and marketers may contribute, through talking about consumers as 'metro consumers' and `rural consumers'. Urbanization is multifaceted and reflects not only the concentration of people in metropolitan areas, but also the concentration of entrepreneurial activities, cultural life, innovations, retailing, media coverage and popular culture.26 Meanwhile, practicing marketers design retail strategies for various-sized areas, hence giving consumers in metropolitan and rural areas, respectively, the opportunity to shop in different retail environments At the same time as polarization is a fact to consider, filter bubbles contribute to intellectual isolation when individuals' and groups of peoples' nformation lows are selective while the individual remains unaware of this selection of information. For instance, a right-wing entrepreneur living in a medium-sized city in Northern Sweden loves private health care, the Conservative Party, drives a Mercedes-Benz and dislikes public television. Through the strong growth of social media, and the involvement of companies such as Facebook and Google, the entrepreneur will end up surfing websites that systematically criticize public television, that praise Mercedes-Benz, that strongly criticize public health care, and (over)emphasizes the crisis of Social Democrats all over Europe. Without any information about the change in infor- mation flows from the time a few decades ago when public television and major newspapers provided the same content to the entrepreneur as to the factory workers, librarians, nurses, cultural workers and brokers, the entrepreneur becomes increasingly convinced that his opin- ions are right, well supported by facts and increasingly popular. Meanwhile, a cultural worker in Western Sweden may be increasingly convinced that the Conservatives are in a crisis, that climate activists are winning over their critics, that private health care is just about to perish, and that Mercedes-Benz is out of fashion since people are increasingly sharing (smaller and cheaper) cars. To a great extent, the entrepreneur as well as the cultural worker live in filter bubbles. At the end, it becomes increasingly difficult for people to get along with each other - their reaction might be to remove friends, contents and notifications from people and organiza tions that don't agree with their opinions. Facebook, Amazon, Google and other giant compa- nies heavily involved in our information flows will contribute to this development and so will marketers. Again, polarization is an opportunity for marketers to create increasingly different offers, but that may contribute to an even stronger polarization. SUMMARY In this chapter you 've learned how companies use integrated marketing communications (IMC). Companies must clearly and persuasively communicate consumer value to current and prospective customers To do this, they must blend five marketing communications mix tools, guided by a well-designed and implemented inte grated marketing communications strategy. A company's total marketing communications mix= also called its marketing communications mix- consists of the specific blend of advertising, personal selling, sales promotion, public relations and direct and digital marketing tools that the company uses to persua- sively communicate customer value. Recent shifts towards targeted or one-to-one marketing, coupled with advances in information and communication technology, have had a dramatic impact on marketing communications. Thus, marketing communicators have a