Ch12 Promotion Mix PDF

Promotion Mix • A promotion mix, or marketing communications mix, is a specific blend of promotion tools: • Advertising • Sales promotion • Personal selling • Public relations (PR) • Direct and digital marketing Copyright © 2017 Pearson Education, Ltd. 12 - 3 Advertising - Any paid form of nonper...

Promotion Mix • A promotion mix, or marketing communications mix, is a specific blend of promotion tools: • Advertising • Sales promotion • Personal selling • Public relations (PR) • Direct and digital marketing Copyright © 2017 Pearson Education, Ltd. 12 - 3 Advertising - Any paid form of nonpersonal 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 customer interactions by the firm’s sales force for the purpose of engaging customers, making sales, and building customer relationships. Public relations (PR) - Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Direct and digital marketing - Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. 3 New Marketing Communications Model • Factors changing the face of today’s marketing communications: • Changing consumers • Changing marketing strategies • Advancements in digital technology Copyright © 2017 Pearson Education, Ltd. 12 - 5 Several major factors are changing the face of today’s marketing communications. First, consumers are changing. In this digital, wireless world, consumers are better informed and more communications empowered. Rather than relying on marketer-supplied information, they can use the Internet, social media, and other technologies to find information on their own. Second, marketing strategies are changing. As mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programs designed to engage customers and build customer relationships in more narrowly defined micromarkets. Finally, sweeping advances in digital technology are causing remarkable changes in the ways companies and customers communicate with each other. 5 New Marketing Communications Model • Marketers reach smaller consumer segments in interactive and engaging ways. • Mix of traditional mass media and a wide array of online, mobile, and social media • Content marketing managers create, inspire and share brand messages and conversations. Copyright © 2017 Pearson Education, Ltd. 12 - 6 In the new marketing communications world, 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 interactive, engaging ways. The new marketing communications model will consist of a shifting mix of both traditional mass media and a wide array of online, mobile, and social media that engage highly targeted consumer communities in a more-personalized way. Rather than just creating and placing “TV ads” or “print ads” or “Snapchat branded story ads,” many marketers now view themselves more broadly as content marketing managers. They create, inspire, and share brand messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared communications channels. These channels include media that are both traditional and new, controlled and not controlled. 6 Figure 12.1 - Integrated Marketing Communications Copyright © 2017 Pearson Education, Ltd. 12 - 7 Integrated marketing communications (IMC) refers to carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands. 7 Nature of the Promotion Tools Promotion tool Description Advertising • • • • • • Reaches masses of buyers at a low cost per exposure Builds a long-term image for a product Can trigger quick sales Has a public nature and is viewed as legitimate Very expressive Impersonal and lacks the direct persuasiveness of salespeople Personal selling • • • • Personal interaction between two or more people Allows all kinds of customer relationships to spring up Buyer feels a greater need to listen and respond Most expensive promotion tool Copyright © 2017 Pearson Education, Ltd. 12 - 8 Each promotion tool has unique characteristics and costs. 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. Because of advertising’s public nature, consumers tend to view advertised products as more legitimate. Advertising is also very expressive. On the one hand, advertising can be used to build up a long-term image for a product. On the other hand, advertising can trigger quick sales. Advertising also has some shortcomings. Although it reaches many people quickly, advertising is impersonal and lacks the direct persuasiveness of company salespeople. Personal selling involves personal interaction between two or more people, so each person can observe the other’s needs and characteristics 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. Personal selling is also the company’s most expensive promotion tool. 8 Nature of the Promotion Tools Promotion tool Description Sales promotion • • • • Wide assortment of tools with unique qualities Attracts attention and offers incentives to purchase Used to dramatize product offers and boost sales Invites and rewards quick response but has shortlived effects Public relations • • • • Very believable to readers Can dramatize a company or product Reaches many prospects Effective and economical when well thought out Direct and digital marketing • More targeted and interactive • Immediate and personalized ‫ من البريد‬- ‫جميع أشكال التسويق المباشر والرقمي‬ ‫ في بعض‬- ‫المباشر والكتالوجات والتسويق عبر الهاتف إلى اﻹنترنت والهاتف المحمول والوسائط اﻻجتماعية‬ ‫ وخلق مشاركة‬، ‫ فالتسويق المباشر والرقمي مناسب تما ًما للجهود التسويقية عالية اﻻستهداف‬.‫الخصائص المميزة‬ .‫ وبناء عﻼقات العمﻼء الفردية‬، ‫العمﻼء‬ Copyright © 2017 Pearson Education, Ltd. 12 - 9 Sales promotion includes a wide assortment of tools like coupons, contests, discounts, premiums, and others, all of which have many unique qualities. They attract consumer attention, offer strong incentives to purchase, and can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. However, sales promotion effects are often short lived. Public relations (PR) involves news stories, features, sponsorships, and events that seem more real and believable to readers than ads. PR can also reach many prospects who avoid salespeople and advertisements. It can dramatize a company or product. A well-thought-out public relations campaign used with other promotion mix elements can be very effective and economical. The many forms of direct and digital marketing—from direct mail, catalogs, and telephone marketing to online, mobile, and social media—all share some distinctive characteristics. Direct marketing is more targeted: It’s usually directed to a specific customer or customer community. Direct marketing is immediate and personalized. Direct marketing is interactive. Thus, direct and digital marketing are well suited to highly targeted marketing efforts, creating customer engagement, and building one-to-one customer relationships. 9 Figure 12.2 - Push versus Pull Promotion Strategy Copyright © 2017 Pearson Education, Ltd. 12 - 10 This figure contrasts the two basic promotion mix strategies: push promotion versus pull promotion. The relative emphasis given to the specific promotion tools differs for push and pull strategies. A push strategy refers to a promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members that in turn promote it to final consumers. A pull strategy refers to a promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that pulls the product through the channel. Business-to-consumer companies pull more, putting more of their funds into advertising, followed by sales promotion, personal selling, and then public relations. Business-to-business marketers tend to push more, putting more of their funds into personal selling, followed by sales promotion, advertising, and public relations. 10 Figure 12.3 Major Advertising Decisions Copyright © 2017 Pearson Education, Ltd. 12 - 12 This figure shows the four important decisions made by marketing management when developing an advertising program. These decisions include setting advertising objectives, setting the advertising budget, developing advertising strategy, that is, message decisions and media decisions, and evaluating advertising campaigns. 12 Table 12.1 - Possible Advertising Objectives Copyright © 2017 Pearson Education, Ltd. 12 - 13 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 classified by their primary purpose which is, to inform, persuade, or remind. This table lists the examples of each of these specific objectives. Informative advertising is used heavily when introducing a new product category. Persuasive advertising becomes more important as competition increases. And, reminder advertising is important for mature products; it helps to maintain customer relationships and keep consumers thinking about the product. 13 Methods of Setting the Advertising Budget Affordable Method Percentage-ofSales Method CompetitiveParity Method Objective-andTask Method Copyright © 2017 Pearson Education, Ltd. 12 - 14 An advertising budget refers to the dollars and other resources allocated to a product or a company advertising program. There are four common methods used to set the total budget for advertising. The affordable method sets the promotion budget at the level management thinks the company can afford. The percentage-of-sales method refers to sets the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. The competitive-parity method sets the promotion budget to match competitors’ outlays. The objective-and-task method involves developing the promotion budget by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget. 14 Methods of Setting the Advertising Budget • The affordable method sets the promotion budget at the level management thinks the company can afford. • The percentage-of-sales method refers to sets the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. • The competitive-parity method sets the promotion budget to match competitors’ outlays. • .‫ت طريقة التكافؤ التنافسية هي ميزانية ترويج لمطابقة نفقات المنافسين‬ • The objective-and-task method involves developing the promotion budget by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget. Copyright © 2017 Pearson Education, Ltd. 15 Advertising Strategy • Accomplishes the company’s advertising objectives • Major advertising strategy elements: • Creating advertising messages • Selecting advertising media Copyright © 2017 Pearson Education, Ltd. 12 - 16 An advertising strategy is the strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media. 16 Creating the Advertising Message and Brand Content • • • • • Breaking through the clutter ‫الفوضى‬ Merging ‫ دمج‬advertising and entertainment Message and content strategy Message execution Consumer-generated content Copyright © 2017 Pearson Education, Ltd. 12 - 17 Clutter in television and other ad media has created an increasingly hostile advertising environment. Many marketers have subscribed to a new merging of advertising and entertainment, called Madison & Vine. It represents the merging of advertising and entertainment to create new avenues for reaching customers with more engaging messages. Advertainment aims to make ads so entertaining that people want to watch them. Brand integrations (or branded entertainment) involve making the brand an inseparable part of some other form of entertainment or content. The first step in creating effective advertising messages is to plan a message strategy – the general message that will be communicated to consumers. 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. The message can be presented in various execution styles: slice of life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, and testimonial evidence or endorsement. Consumer-generated content can incorporate the voice of the customer into brand messages and generate greater customer engagement. 17 Selecting Advertising Media • Advertising media: Vehicles through which advertising messages are delivered to their intended audiences • Steps in advertising media selection: • Determining reach, frequency, impact and engagement • Choosing among major media types • Selecting specific media vehicles • Choosing media timing Copyright © 2017 Pearson Education, Ltd. 12 - 18 Four steps are involved in media selection. 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 exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average person in the target market is exposed to the message. The advertiser also must determine the desired media impact of message exposure through a given medium. An advertiser wants to choose media that will engage consumers rather than simply reach them. Media planners must consider each medium’s impact, message effectiveness, and cost. An 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. Media planners must also choose specific media within each general media type. In selecting specific media vehicles, media planners must balance media costs against several media effectiveness factors like audience quality, audience engagement, and editorial quality. An advertiser must also decide how to schedule the advertising over time. The firm can vary its advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all year. 18 Profiles of Major Media Types Medium Television Advantages • Good mass-marketing coverage • Low cost per exposure • Combines sight, sound, and motion • Appealing to the senses • High selectivity Digital, mobile, and • Low cost social media • Immediacy ‫فورية‬ • Engagement capabilities Limitations • High absolute costs • High clutter • Fleeting exposure ‫التعرض‬ ‫له عابر‬ • Less audience selectivity • Potentially low impact • High audience control of content and exposure • ‫سيطرة جمهور عالية على‬ ‫المحتوى والتعرض‬ Copyright © 2017 Pearson Education, Ltd. 12 - 19 This table lists the advantages and limitations of two major media types: television and digital, mobile, and social media. 19 Profiles of Major Media Types Medium Advantages Newspapers • • • • Direct mail Flexibility Timeliness Good local market coverage Broad acceptability and high believability • High audience selectivity • Flexibility • No ad competition within the same medium • Allows personalization Limitations • • • • • Copyright © 2017 Pearson Education, Ltd. Short life Poor reproduction quality Small pass-along audience Relatively high cost per exposure Junk mail image 12 - 20 This table lists the advantages and limitations of two major media types: newspapers and direct mail. 20 Profiles of Major Media Types Medium Advantages Magazines • High geographic and demographic selectivity Credibility and prestige High-quality reproduction Long life and good pass-along readership • • • Long ad purchase lead time High cost No guarantee of position • Good local acceptance • High geographic and demographic selectivity • Low cost • • Audio only Fleeting exposure ‫تعرض‬ ‫عابر‬ Low attention Fragmented audiences ‫مجزأة أو منتشرة‬ • • • Radio Outdoor ‫في الهواء‬ ‫الطلق‬ Limitations • • • • • • • Flexibility • High repeat exposure • Low cost • Low message competition Copyright © 2017 Pearson Education, Ltd. Good positional selectivity Little audience selectivity Creative limitations ‫قيود ابداعية‬ 12 - 21 This table lists the advantages and limitations of three major media types: magazines, radio, and outdoor. The mix of media must be reexamined regularly. Today’s marketers want to assemble a full mix of paid, owned, earned, and shared media that create and deliver brand content to target consumers. 21 Evaluating Advertising Effectiveness & Return on Advertising Investment • Return on advertising investment: Net return on advertising investment divided by the costs of the advertising investment • Advertisers should regularly evaluate • Communication effects • Sales and profit effects Copyright © 2017 Pearson Education, Ltd. 12 - 22 Measuring advertising effectiveness and the return on advertising investment has become a hot issue for most companies, especially in a challenging economic environment. Return on advertising investment refers to the net return on advertising investment divided by the costs of the advertising investment. Advertisers should regularly evaluate two types of advertising results: the communication effects and the sales and profit effects. Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. After an ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, knowledge, and preference. Sales and profit effects of advertising are often harder to measure. 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. Because so many factors affect advertising effectiveness, some controllable and others not, measuring the results of advertising spending remains an inexact science. 22 Organizing for Advertising • Small firms may use their sales department staff. • Large companies may have their own advertising departments. • Advertising agency: Assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs Copyright © 2017 Pearson Education, Ltd. 12 - 23 Different companies organize in different ways to handle advertising. In small companies, advertising might be handled by someone in the sales department. Large companies have advertising departments whose job it is to set the advertising budget, work with the ad agency, and handle other advertising not done by the agency. An advertising agency is a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs. Agencies also bring an outside point of view to solving the company’s problems, along with lots of experience from working with different clients and situations. Most large advertising agencies have the staff and resources to handle all phases of an advertising campaign for their clients. Large brands commonly employ several agencies that handle everything from mass-media advertising campaigns to shopper marketing and social media content. 23 International Advertising Decisions • Degree of adaptation • Standardization benefits • Lower advertising costs • Greater global advertising coordination • More consistent worldwide image • Standardization drawbacks ‫عيوب التوحيد‬ • Ignores the fact that country markets differ in their cultures, demographics, and economic conditions Copyright © 2017 Pearson Education, Ltd. 12 - 24 International advertisers face many complexities not encountered by domestic advertisers. The most basic issue concerns the degree to which global advertising should be adapted to the unique characteristics of various country markets. Standardization produces many benefits like lower advertising costs, greater global advertising coordination, and a more consistent worldwide image. But it also has drawbacks. It ignores the fact that country markets differ greatly in their cultures, demographics, and economic conditions. Thus, most international advertisers think globally but act locally. They develop global advertising strategies that make their worldwide efforts more efficient and consistent. 24 Problems Faced by Global Advertisers • Countries differ in • Media costs and availability • Advertising practices • Diversity between countries requires advertisers to adapt their campaigns to meet local • Cultures and customs • Media characteristics • Regulations Copyright © 2017 Pearson Education, Ltd. 12 - 25 Global advertisers face several special problems. For instance, advertising media costs and availability differ vastly from country to country. Countries also differ in the extent to which they regulate advertising practices. Many countries have extensive systems of laws restricting how much a company can spend on advertising, the media used, the nature of advertising claims, and other aspects of the advertising program. Such restrictions often require advertisers to adapt their campaigns from country to country. 25 Functions of Public Relations (PR) Departments Press relations or press agency Product publicity Public affairs Lobbying ‫الضغط والتأثير‬ Investor relations Development Copyright © 2017 Pearson Education, Ltd. 12 - 27 PR 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 relationships. Lobbying - Building and maintaining relationships with legislators and government officials to influence legislation and regulation. Investor relations -Maintaining relationships with shareholders and others in the financial community. Development -Working with donors or members of nonprofit organizations to gain financial or volunteer support. 27 Functions of Public Relations (PR) Departments • Press relations or press agency - Creating and placing newsworthy information ‫ معلومات اخبارية‬in 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 relationships. • Lobbying - Building and maintaining relationships with legislators and government officials to influence legislation and regulation. • Investor relations -Maintaining relationships with shareholders and others in the financial community. • Development -Working with donors or members of nonprofit organizations to gain financial or volunteer support. Copyright © 2017 Pearson Education, Ltd. 28 Public Relations • Promotes products, people, ideas, organizations, and nations • Builds good relations with consumers, investors, the media, and communities • Rebuilds interest in commodities for trade associations Copyright © 2017 Pearson Education, Ltd. 12 - 29 Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations. Companies use PR to build good relations with consumers, investors, the media, and their communities. Trade associations have used PR to rebuild interest in commodities such as eggs, apples, potatoes, onions, and even chocolate milk. For example, the Milk Processor Education Program (MilkPEP), known for its successful “Got Milk?” campaign in previous years, created a strong PR campaign to promote the health benefits and boost consumption of chocolate milk: 29 Role and Impact of PR • Strong impact on public awareness at a lower cost than advertising • Power to engage consumers and make them part of the brand’s story • Despite its potential strengths, public relations has limited and scattered use. ‫ فإن العﻼقات العامة لها استخدام‬، ‫رغم قوتها المحتملة‬ .‫محدود ومتناثر‬ • Powerful brand-building tool Copyright © 2017 Pearson Education, Ltd. 12 - 30 Public relations can have a strong impact on public awareness at a much lower cost than advertising. When using public relations, the company pays for a staff to develop and circulate information and manage events. Public relations has the power to engage consumers and make them a part of the brand story and its telling. Despite its potential strengths, public relations has limited and scattered use. This situation is changing, however. Although public relations still captures only a small portion of the overall marketing budgets of most firms, PR can be a powerful brand-building tool. PR should work hand in hand with advertising, within an integrated marketing communications program, to help build customer engagement and relationships. 30 Major Public Relations Tools News Special events Written materials Audiovisual materials ‫المواد‬ ‫السمعية البصرية‬ Corporate identity materials ‫مواد هوية‬ ‫الشركة‬ Public service activities Copyright © 2017 Pearson Education, Ltd. 12 - 31 Public relations uses several tools. PR professionals find or create favorable news about the company and its products or people. Another PR tool is special events, like news conferences and speeches, brand tours, and grand openings, laser light shows, multimedia presentations, or educational programs designed to reach and interest target publics. PR also involves the preparation of written materials like annual reports, brochures, and company newsletters and magazines to reach and influence target markets. Audiovisual materials, such as DVDs and online videos, are also being used increasingly as communication tools. Corporate identity materials can also help create a corporate identity that the public immediately recognizes. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company cars and trucks all become marketing tools when they are attractive, distinctive, and memorable. Finally, companies can improve public goodwill by contributing money and time to public service activities. 31