CH-1-4 Integrated Marketing Communications – Advertising and Promotion: An Integrated Marketing Communications Perspective : Book Guide

This Document Contains Chapters 1 to 4 Chapter 1 Integrated marketing communications Answers to Review Questions 1. Why is marketing communication important for communicating value to consumer? Communicating value is a central tenet in the definition of marketing, so it is imperative for marketers to use marketing communication tools effectively to influence consumers’ value perceptions via product, price and distribution messages. Message about product include how the produce fulfills needs via its characteristics, brand identity, and brand equity. Marketing communication plays a prime role it showing consumers the key delivery of value (e.g., Keg example of offereing superior dining and food quality). Brand identity is a combination of the name, logo, symbols, and packaging design that is experienced at any point of contact that consumer has with a brand via marketing communication. This assists consumers in understanding how it fulfills their needs and contributes greater value. The combined effect of these two points contributes to brand equity where consumers see a brand as superior. Marketers go beyond traditional media advertising to communicate value. Consumers have contact with or receive information about a brand through in-store media such as point-of-purchase displays; articles they read, see and/or hear in the media. Companies build brands that via interactive media like web sites to communicate with customers or text messaging to mobile phones. Companies are also turning to branded entertainment as a way of connecting with consumers and making their products and services part of movies and television shows. Marketers are creating short films and other forms of entertainment that can be shown on their web sites. 2. How do smartphone brands use each marketing communication tool for communicating messages? Advertising on TV allows smartphones to set an overall image for the brand, and these video messages can be linked anywhere virtually to allow greater exposure to digitally-based target audiences. Additional product or service messages communicate salient attributes or benefits at the most relevant point in time (e.g., new featured with updated phone launch). Price promotions are featured on older models when updated smartphones are released. Often smartphone brands are involved with public relations activities for noteworthy causes to enhance their profile. As expected, smartphone brands have an extensive digital presence with websites for comparison purposes and customer service explanations. Social media communication for a variety of purposes have occurred in which student can readily identify and explain their potential effectiveness. This questions permits the opportunity to explore a complete IMC plan for an individual brand to see all the decisions in action for a product that it seems virtually all students have experience with. 3. Illustrate how integrated marketing communications differs from traditional advertising and promotion. What are the reasons more marketers are taking an IMC perspective to their advertising and promotional programs? IMC differs from traditional advertising and promotion in that it recognizes the value of using a variety of communication tools rather than just relying primarily on media advertising which might be supplemented with tactical promotions. IMC involves coordinating all a company’s promotional elements, as well as marketing activities, in a synergistic manner to send a consistent message to the target audience. While traditional advertising relies primarily upon the use of ads through the mass media to communicate with the target audience, IMC recognizes that consumers’ perceptions of a company and/or its brands are a synthesis of the bundle of messages or contacts they have with the firm. These contacts include media advertisements, packaging, sales promotion, messages received through interactive media such as web sites and other digital media, point-of-purchase displays, and other forms of communication. The IMC approach seeks to have all of a company’s marketing and promotional activities project a consistent, unified message and/or image to the market and consider which particular element of the promotional mix is the most effective way to communicate with customers in the target audience. Probably the most fundamental reason is that marketers are recognizing the value of strategically integrating the various communication functions rather than having them operate autonomously. By coordinating their marketing communication efforts, companies can avoid duplication, take advantage of synergy among various communication tools, and develop more efficient and effective marketing communication programs. 4. What parts of the IMC planning model are similar to and different from a marketing planning model? Similarities include the need for a situational analysis, setting of objectives, the development of programs that have both strategic and tactical elements, and finally the implementation and control phases. The differences include the domain (communication vs. marketing mix), the specificity of the situation analysis is related to the communication problem or opportunity. 5. How is the structure of the book consistent with the content of an IMC plan? An IMC plan should begin with an understanding of advertisers agency partners, and a decision of the target audience (Chapter 3) and an understanding of how the audience would receive the message (Chapter 4) so that the brand manager can set IMC objectives (Chapter 5) to direct the brand positioning strategy (Chapter 6). This strategic orientations give direction for the creative strategy (Chapter 7) and creative tactics (Chapter 8) of the message, which can be evaluated (Chapter 9), and planned (Chapter 10) and delivered via media (Chapters 11, 12, 13), or strengthened via sales promotion (Chapter 14), public relations (Chapter 15), directed marketing (Chapter 16) and the internet (Chapter 17). Ethical guidance of all decisions of the plan is summarized (Chapter 18). Answers to Application Questions 1. Consider how a university or college communicates value in its marketing communication to its prospective students and current students. In what ways are the two approaches similar or different? Communication to current students is done extensively via online portals. Information regarding courses, educational resources etc. are at students’ fingertips on a second-by-second basis. Any activities of culture, sport or education origin are easily obtained via numerous digital avenues (website, social media). Essentially, marketing communication via students is a strong representation of what occurs with long-term, repeat purchasing consumers in a relationship marketing setting. In contrast, communication to prospective students occurs via personal communication via high-school visits and campus visists, direct mail of brochures etc., and online communication to the public portions of the institutions website as students shop around for the best fit for their needs. The idea of this question is for students to see that there are unique messages and media directed to customer and non-customers, although there still remains considerable overlap since an institution would want to project a consistent overall image to both groups. 2. Identify all the possible marketing communication tools that a favourite brand or performance artist is using. Try to explain why these tools were selected. In what ways did the tools support one another? How dis thy not support one another? Was each tool effective or ineffective? This application question encourages students to put into context all the marketing communication that they would have been most exposed to, and therefore, more likely to be able to apply the concepts of this chapter. Instructors are encouraged to ensure that students find as many IMC tools used as possible, and push them to fully explain how the tools work or do not fit together. The question also begins the task for students to try and figure out what effectiveness is and how to estimate it prior to seeing the actual concepts in chapters 4 and 5. 3. Find examples where all promotional tools have the same “look” and “feel” and others where there is a different look and feel. Why did these decisions occur based on relevant situation analysis variables? Instructors can find good examples to show such at Telus and Koodo where there is consistent imagery for the phone service. Telus is especially good to reference since it had a consistent nature creative for its phone, but has now decided to us different creative for its TV service and other aspects of its marketing communication in terms of public relations and customer service. Thus, this shows how some parts of the plan is consistent while others is different. The explanation is largely due to different competitive spaces, the nature of consumer adoption of technology, and the company’s maturity as it develops into a full-fledged telecommunications organization. 4. Why is it important for those who work in the field of promotion to have an appreciation for and understanding of all elements of the promotional mix and not just the one in which they specialize? Marketers use many promotional tools to communicate with their customers. The promotional mix elements have to be viewed as component parts of an integrated marketing communications program. An individual promotional activity such as advertising or sales promotion cannot be managed without considering its relationship to other promotional mix elements. Individuals working in various areas of advertising and promotion are expected to understand and use a variety of marketing communication tools, not just the one in which they specialize. For example, advertising agencies no longer confine their services to creating and placing ads. Many agencies are involved in sales promotion, public relations, direct marketing, event sponsorship and other communication areas. Thus, it is important for those who work in advertising and promotion, either on the agency or client side, to understand and appreciate the value and limitations of all the promotional mix elements and how they can be combined to develop an effective program of integrated marketing communications. 5. How does one of your favourite brands link or integrate its different IMC communication tools? Is it done effectively? Students can address the digital connections here with advertising. For example, what messages and media are used to persuade consumers to investigate online brand communication via social media or websites. Students also might want to observe the connections of the brand’s commitment to a social cause with its social media activities. Similarly, investigations to a contest or another sales promotion might be useful with its connection to Facebook or Instagram. The important point is for students to actively see how brands are connecting their communication for exposure to consumers. Additional Questions (not shown in text) A. Consider all the marketing communication tools (i.e., advertising, sales promotions, public relations, direct marketing, Internet marketing, and personal selling) that are used to market a new car that a graduating student might be expected to buy. Explain why each tool would be effective to create awareness. Integrated marketing communications play a very important role in the marketing of automobiles. Many consumers, particularly young people, base their purchase decisions on product related attributes such as price, quality, reliability, durability and performance, as well as on factors such as style and brand image. A variety of IMC tools are used to provide consumers with information about new cars as well as to create an image that will appeal to the target market for the car. Advertising on television as well as in magazines can play an important role in providing, creating and reinforcing an image of a car that is cool, fun, and hip to drive. Direct marketing can be used to build a database of customers who enter a contest on the car maker’s web site and/or request more information about the car. These customers can be sent information about the car and occasionally receive direct mail pieces. The customer can be taken on a cyber journey to learn more about the car. The car maker can also mail a DVD to consumers who request more information about the car. The car maker can also generate a considerable amount of publicity through press releases and various public relations activities. Finally, promotional efforts can be extended to the dealerships to support the personal selling effort. B. Why would brands combine their advertising message and sales promotion offer in the same print ad? Many free-standing inserts in newspapers contain ads with coupons. Consumers may perceive them as “ads”, despite the fact that it contains a discount on their next purchase. These types of ads have a communication effect on consumers because they provide information and/or imagery. They also provide an incentive to buy which is a basic objective of sales promotion. Brands combine advertising and sales promotion to achieve multiple objectives for both communication and for behavioural change/reinforcement. C. What is meant by the concept of integrated marketing communications? How might a firm that is using integrated marketing communications differ from one that looks at advertising and promotion in a more traditional way? Integrated marketing communications is a concept of communications planning that involves coordinating the various promotional elements and other marketing activities that communicate with a firm’s customers. Companies who use integrated marketing communications recognize the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines including advertising, direct response, sales promotion, and public relations and combining them to provide clarity, consistency, and maximum communications impact. Companies that view advertising and promotion in a more traditional way often build barriers around various marketing and promotional functions and plan and manage them separately with different budgets, different views of the market, and different goals and objectives. These companies may be sending different messages to the market through their various marketing and promotional activities or relying primarily on one promotional mix element such as media advertising. Companies who take the IMC approach identify the most appropriate and effective methods to contact and communicate with their customers. D. What are customer contact points? Select a company or brand and discuss the various contact points which marketers can use to reach consumers of this product. Customer contact points are each and every opportunity the consumer has to see or hear about the company’s product/brand or have an experience or encounter with it. These contact points can be created by the company and include planned messages delivered through media advertising, packages, collateral materials, in-store displays, and public relations activities. They also can come from interactions with the brand that occur during the process of buying or using the brand as well as from information that consumers receive from word-of-mouth messages. Marketers must determine how important the various contact tools are for communicating with their target audience and how they can be combined to form an effective IMC program. Students should be encouraged to select a company or brand and discuss the various ways consumers come into contact with it. They might use IMC Contact tools shown in Figure 1-5 of the chapter as a framework for conducting the contact point analysis. You might also ask them to discuss which contacts points are most effective or influential in shaping consumers’ impressions of the company or brand. For example, media advertising may be the most important influence for an image-laden product such as clothing or cosmetics while information from a web site may be the most important influence for a high tech brand such as a consumer electronics product. E. Discuss the way various aspects of product planning and strategy relate to advertising and promotion. Product planning involves a number of decision areas that relate to advertising and promotion. First of all, a product (or service) should be viewed as a bundle of benefits or values that satisfies the needs of the consumer. These needs are not just functional but may include social and psychological benefits as well. Advertising is used not only to communicate functional attributes and characteristics but also to stress symbolic features such as brand image, which is often more important than functional or utilitarian attributes. Product planning also involves branding and packaging decisions. Choosing a brand name is very important from a promotional perspective because of the role brand names play in communicating product attributes and meaning. Decisions to line extend brand names to new products are also relevant to advertising. Packaging has become increasingly important, particularly in our self-service retailing environment. With thousands of items competing for consumers’ attention and many purchase decisions being made at the point-of-purchase, packaging has become an important aspect of product strategy. Design factors such as size, shape, color and lettering all communicate with consumers and create impressions that contribute to and/or reinforce brand image. Packages may also carry sales promotion messages such as coupons, information on contests or sweepstakes or premium offers. F. Sports sponsorship, a public relations tool, continues to grow at an increasing degree in the IMC plans or major brands. Explain how this is a good investment of marketing resources. Publicity refers to nonpersonal communication regarding an organization, product, service or idea that is not directly paid for nor run under identified sponsorship. Public relations is a management function that among other things attempts to control and manage the nature of the publicity an organization receives. Publicity and public relations differ from other elements of the promotional mix in that their role is often more supportive in nature rather than being the lead elements of a promotional program, although there are exceptions to this. Sports sponsorship is advantageous since it generally has the benefits of both public relations and publicity. The imagery with all the communication of the sponsorship acts positively for public relations purposes while the extensive media coverage provides additional exposure from a publicity perspective. Investing in one tool, and having the effects of another makes for a good investment as it increases frequency and possibly reach depending upon the extensiveness of the publicity. In general, it should provide a more positive ROI. G. Will newer direct media like e-mail and smartphones eventually replace direct mail in the future? Direct marketing is a system of marketing by which an organization communicates directly with its target audience with the goals of generating a response and/or a transaction. It involves a variety of activities including the development management of a database and the use of direct-response media. Direct communication has grown due to many factors. One major factor is changing lifestyles, particularly the increase in two-income households which has resulted in greater discretionary income but less time for traditional in-store shopping. The availability of credit cards and toll-free numbers has also facilitated the purchase of products and services from direct-response ads. Advances in technology is another factor that is contributing to the growth of direct marketing as many marketers are using computers to develop and better manage their data bases and improve the efficiency of their direct marketing programs. The rapid growth of the Internet is another factor contributing to the growth of direct marketing as companies are encouraging consumers to visit their web sites and place orders online. So clearly, direct communication is a mainstay of marketing and the question of whether the direct-response media will move from mail arriving at one’s household to completely electronic, and more individual appears possible. Students who are heavy users of electronic communication will likely figure this is bound to happen since they so much exposure to this compared to direct mail. And with the green movement, some might consider that less paper will even more fully desired in the future. Other students will note the importance of the database for direct communication to occur and suggest that a full change over will be extremely difficult since the addresses are not as available or linked easily with postal mailing areas. As this suggests, it is an interesting debate to consider what the future holds. H. Describe how can the Internet be used to execute the IMC tools described in this chapter? The Internet is having a tremendous impact on the way companies design and implement their entire business and marketing strategies as well as their integrated marketing communications programs. Companies ranging from large multinational corporations to small local firms have developed websites to promote their products and services by providing current and potential customers with information, building images for their companies and brands and even selling their products or services directly over the Internet. While many view the Internet as an advertising or promotional medium, it really is a marketing communications tool that can be used to execute all elements of the promotional mix. Companies can advertise on the Internet by running banner ads or sponsorships on the websites of other companies or organizations. Marketers can offer sales promotion incentives such as coupons over the internet and they can offer contests and sweepstakes online and encourage consumers to visit their web sites to enter them. Many companies are using the Internet for direct marketing have made the Internet a major part of their direct-marketing efforts and encourage consumers to visit their websites to view their merchandise and to place orders online. Companies are also using the Internet for publicity and public relations activities as many activities such as the sending of press releases can now be done online. Many companies also maintain press releases on their web sites which can be accessed by the media and other relevant publics to learn more about these companies and their products and services. I. Discuss the role integrated marketing communications plays in relationship marketing. How might the customization of advertising and other forms of marketing communication be possible? Relationship marketing is the process of creating, maintaining and enhancing long-term relationships with individual customers as well as other stakeholders for mutual benefit. Integrated marketing communications can play an important role in relationship marketing. Various integrated marketing communications tools such as advertising, sales promotion, public relations, direct marketing, interactive and Internet marketing, and personal selling can be used to create more effective and efficient ways of reaching customers and building and maintaining a relationship with them. Many companies are using media advertising to position themselves as organizations that want to build and maintain relationships with customers rather than just sell to them. They are also striving to understand their customers’ needs and preferences and developing marketing communications that are tailored to those desires. They are delivering differentiated messages to target audiences through established and new media channels based on customer characteristics (demographics, life-style, and purchase information) and tracking relationships to monitor the cost of acquiring customers and the lifetime value of their purchases. The mass customization of advertising and other forms of marketing communication is becoming practical with the development of new technology. With respect to advertising, new digital-TV recording devices or personal video recorders (PVR) save programs to a massive hard drive that can hold up to 100 hours of programming. Using a phone line, users can download programs schedules and choose shows they want to watch when they want to watch them. Content providers will be able to push programming directly to end-users, potentially on a pay-per-view basis. PVR companies will be able to take certain commercials out of a program and replace theme with ads that are of more interest to specific types of TV viewers. Viewers may also be able to click on ads that are of interest to them or to purchase products right off of the television screen. Mass customization of other forms of marketing communication is already taking place, particularly through the Internet. Many marketers now have web sites where consumers can choose specific content areas that are of interest to them, request information, communicate their comments and have their questions answered. IMC Exercise This exercise is designed to give the student the opportunity to think more about the concept of integrated marketing communications and how it might be used by a company. Choose a specific company and discuss how this firm can use the concept of integrated marketing communications in developing a promotional program for one of its products or services. You should analyze all of the company’s promotional mix elements including advertising, direct marketing, interactive media, sales promotion, publicity/public relations and personal selling and discuss how each one is used in the marketing communications program. You should also consider how other marketing mix elements such as the brand name, package, price and other factors communicate with the company’s target audience. Is this company using all of the promotion mix tools in its marketing communications program? Are they integrated and sending a consistent image and message? IMC Comprehensive Project The purpose of the IMC comprehensive project is to have each student (or student teams) develop an integrated marketing communications plan for a product or service as they proceed through the course. The text is built around a detailed model of the IMC planning process that is presented in Figure 1-7 that can be used as a framework for this plan. Students can update their plan as each chapter and topic area is covered. This will encourage the students to apply the course material and develop an appreciation for the process a product manager, account executive or marketing communications manager goes though in developing a promotional plan. The project will also help students gain an appreciation for the various sources of information available that can be used as part of the promotional planning process. By the end of the course each student (or team) should have a detailed notebook containing the plan for his/her product or service that can be turned in for evaluation. Specific assignments for the IMC project will be presented with each chapter. These IMC project assignments can be given as a general guideline of what they should be covering in this section of the plan. IMC Project Assignment for Chapter 1 The assignment for Chapter 1 is to familiarize you with the IMC planning process presented in Figure 1-7. Students should study the IMC planning model so they can gain some insight as to what will be involved in developing the IMC project. Each student or team should choose a national, regional or local brand a product or service for which they will be developing their IMC plan. You should submit your choice to the instructor with a brief statement as to why you have chosen this particular brand. Your instructor should approve your choice before you begin working on the project. Chapter 2 Organizing for integrated marketing communications Answers to Review Questions 1. How are the characteristics of a full-service agency contrasted with the characteristics of specialized communication agencies? Full service agencies provide their clients with services including planning, creating and producing the advertising, account planning, marketing research, developing media strategies and selecting and purchasing media. Some full service agencies also provide non-advertising related services including strategic market planning, direct marketing, promotional programs, interactive marketing and web site design, and public relations. The importance of the services provided by a full service agency will depend upon the client. Some companies want agencies that are very strong in the creative area and can develop ads that strike a responsive chord with consumers. Companies that are competing in markets where brand image and identity is very important may put a major emphasis on creative capabilities in selecting and agency. Some companies want agencies that are very strong in media strategy and buying and can maximize their media expenditures. Specialized agencies offers particular services that clients may value over the same service provide by a full service agency due to stronger competency. For example, creative boutiques have developed in response to some companies’ desires to use only the creative talent of agency. These smaller agencies often turn out excellent creative work and do not have the bureaucracy and politics of larger agencies. Many companies also feel that by working with a smaller creative boutique they can get more attention and better access to creative talent than they would at a larger agency. Another reason why a company might use a creative boutique is that there are companies available to handle other parts of the advertising and promotional program. Similarly, media specialist companies provide an important service by specializing in the analysis and purchasing of media time and space. Also, because media specialist companies purchase large amounts of time and space, they often receive large discounts and can save a client money on media purchases or provide them with more exposure from a media budget. Many agencies, as well as their clients, have recognized that it is very difficult to staff and operate a media department that can provide the same level of service as media specialist companies. Thus, agencies have been unbundling media buying from the services they offer clients. 2. Why is compensating with the performance by results approach optimal in comparison with other methods? Agencies are historically compensated in three ways: through commissions from the media, fee arrangement or percentage charges. Compensating agencies through media commissions occurs when the agency receives a specified commission from the media on any advertising time or space it purchases for the client. Under the fixed-fee method the agency charges a basic fee for all of its services and credits to the client and credits any media commissions earned. Agencies are also compensated through a fee-commission combination, whereby the media commissions received by the agency are credited against the fee. The cost-plus system occurs when the client agrees to pay the agency a fee based on the cost of its work plus some agreed-on profit margin. These methods have given way to an improved performance-based system where advertisers use incentive-based systems where agency compensation is tied to performance. The performance measures may include objective measures such as sales and/or market share as more subjective measures such as evaluations of the agency’s creative work. As more marketers adopt an integrated marketing communication perspective and move away from traditional mass media, changes in compensation systems are taking place. This may include a combination of compensation systems such as a negotiated set fee or media commission rate as well as incentives. There are several reasons why many companies are moving away from the traditional 15 percent commission system and using an incentive-based method of compensating their agencies. One of the major reasons for this change is that companies are demanding greater accountability from their agencies and feel that an incentive-based compensation system is one way of achieving this. Companies feel that if agencies really want to be true partners, they will be willing to share in the sales performance of the product or service with them. For many companies, advertising plays a major role in determining the sales success of their product or service. Incentive-based compensation systems also encourage agencies to look beyond traditional mass media advertising and to consider how other IMC tools that might be more effective in driving sales. There are a number of reasons why an agency might be reluctant to accept an incentive-based compensation system. A system in which the agency is compensated based on the brand’s performance in the marketplace has the potential to be a fair system, but may be fraught with problems as well. If the basis for evaluation is tied to communications objectives (as will be discussed later in this text) the system has may be acceptable to the agency. On the one hand, tying the compensation to market performance measures such as brand share and/or sales could be unfair. As the student will learn later in this text, it is very difficult—if not impossible—to tie market share and sales figures directly to advertising. For example, while the advertising may be working very well, other marketing variables may hinder sales and/or market share performance. Excellent advertising will not compensate for poor product quality, over pricing or a poor distribution system. Thus, if one were to see poor performance of the brand in the marketplace, the advertising agency might be punished for problems beyond their control. On the other hand, many agencies see incentive based compensation methods as a way of differentiating themselves and proving to clients that they are confident in their ability to develop advertising that will have a favorable impact on sales. Since clients are expecting more accountability from their advertising and promotional programs, and agencies may feel that their willingness to work under an incentive based compensation system will increase their likelihood of getting a company’s advertising business. 3. What are the similar and dissimilar functions of each of the specialized marketing communication agencies? All agencies share a similar function of providing marketing communication recommendations to resolve the communication issue faced by its client. Each is also tasked with offering a customized service with expertise that may not be readily found elsewhere. Furthermore, each has a responsibility of ensuring that their staff is well versed in the latest trends and tools to provide optimal service. While the core service may be consistent to some degree, each agency offers a specialty that others cannot match and this specialization suggests different processes for delivering service and a unique skill-set to ensure client satisfaction. 4. What are the issues of using one full-service agency versus multiple specialized agencies? Some marketers prefer to have all of their IMC activities performed by one agency rather than using multiple agencies that specialize in various areas such as direct marketing, sales promotion, interactive marketing, and public relations. These companies feel that by having all of the IMC functions performed by one agency makes it easier to develop and implement a consistent and uniform program where everyone is working with the same information and toward the same goals and objectives. They also feel that giving one agency control of entire IMC program achieves greater synergy among each of the communication elements. It also makes it easier for the client when all of the promotional elements such as advertising, direct mail, event marketing, sales promotion, interactive marketing and public relations are handled by one large agency. Answers to Application Questions 1. The chapter distinguished between full service and specialized agencies. Using Figure 2-1 as a guide for different agency names based in Canada, examine the websites of different types of marketing communication agencies. Identify which type of services each type offers. Using the websites as the main source of information, which agencies would be best suited to be hired? This Internet application questions encourages students to investigate and see what creative work is done by different agencies. In doing so, the services offered by each should be readily seen, thus demonstrating what is occurring in the field. The part of the questions suggests to students early on that they can and should be thinking critically of all marketing communication recommendations that they observe while studying this material. 2. Which type of compensation system that an agency faced most often from its clients is an environment where a young advertising graduate would most like to work? This is a projective question where students could be describing where they would like to work in the industry. Some might like the pay by performance approach since they enjoy the added pressure and this system places on the creative supplier. Presumably, the environment might be a bit more entrepreneurial and offer great opportunity for career advancement. Others who have certain skills may appreciate the fixed fees, noting that they would like to be recognized for producing their work. Whatever the answer, the key point is for student to look at all facets of how an agency operates to decide where they may like to consider working. 3. Again, using Figure 2-1 as a guide for different agency names based in Canada, examine the websites of different specialized marketing communication agencies. Identify which type of services each type offers. Using the website as the main source of information, which agency would you be best suited to be hired? This exercise is an opportunity to achieve the goal of introducing students to all sources of marketing communication services. It is much like question 1 and can be a useful exercise for in-class discussion or mini-presentations where students showed each other the work of different agencies. 4. Given the evaluation of different agencies in the above questions, which approach is recommended for smartphone brands? For breakfast cereal brands? For energy drink brands? Multiple agencies could be suitable for smartphone brands since there are so many target audiences to direct marketing communication towards across a multitude of segmentation variables with a product still in a growth phase. This could suggest more focused campaigns requiring customized IMC tools to provide a convincing message. Breakfast cereal is a mature product category with less opportunity or need for multiple target audiences. Combined with the fact that many brands have existed for decades, a single agency with one point of contact for all marketing communication may be more suitable. Energy drinks present and interesting option to consider both options, however, in the case of Red Bull and all of their varied marketing communication activities, it suggests a multiple agency approach. While the Sid Lee vignette mentions the agency’s involvement with Red Bull the vast international operations of Red Bull would suggest it using numerous agencies. Additional Questions (not in text) A. Discuss some of the reasons why traditional advertising agencies have been developing more IMC capabilities. What changes might these agencies have to make to improve their service? IMC capabilities because their clients are shifting more and more of their promotional dollars away from mass media advertising to other areas of marketing communication such as direct marketing, public relations, sales promotion, the Internet and event marketing and sponsorships. By expanding their capabilities, traditional agencies can offer a full range of IMC services and provide a total communications solution to their clients. By expanding their IMC capabilities and services, traditional agencies can also make money from other areas of their clients promotional spending. The greatest change that traditional agencies have to make to improve their IMC capabilities is to develop or acquire expertise in these other areas. Traditionally agencies have been experts in areas related to advertising including creative and media. To expand their IMC capabilities agencies have to offer a broader range of services and develop expertise in other areas. Many agencies have been acquiring these capabilities by purchasing companies such as interactive agencies, public relations and direct marketing firms or promotional agencies. Others have been working to develop these IMC skills internally through their hiring and training processes. The decision as to whether to expand service offerings may not be as easy to make as one might wish. The changes in the advertising marketplace—that is monies shifting from advertising to direct marketing, promotions and other areas may necessitate this expansion just to survive. Certainly the trend, even among smaller agencies, to provide these services is evidence that they recognize that they need to bring these monies “in house.” Beyond the requirement of the agency side, the client is now becoming more sophisticated and demanding. These clients are now recognizing the need to provide an integrated communications mix, and if it is not provided by their agency they will seek such services elsewhere. While all advertising agencies may not necessarily become full service or super agencies, they may eventually have to form working relationships with other collateral agencies or face losing business. Many smaller agencies have already established such working relationships, and have found them to be of benefit to the agency as well as the client. B. Discuss the pros and cons of using an in-house agency. What are some of the reasons why companies might change from using an in-house agency and hire an outside agency? Some of the reasons why firms use in-house agencies include: (1) cost savings; (2) control; and (3) increased ability to coordinate marketing and promotional activities. Negative aspects include: (1) internal employees may have less experience and inferior skills than their external counterparts; (2) they may be less objective about the product and its capabilities; and, (3) they may be less flexible with respect to what they are willing and able to do with the product and/or brands programs. Companies often use an in-house agency when they have sufficient and capable staff to conduct the advertising and promotional activities themselves; they have a very large advertising and promotional budget and wish to save the costs of fees and commissions; and/or when they believe that the ability to coordinate and control the promotional activities is more feasible with this design. Companies change from using an in-house agency and hire an outside agency for various reasons. Many marketers feel that the use of an outside agency provides greater objectivity with respect to the advertising. When an in-house agency is used, management may get too close to the advertising process and product and lose its objectivity when evaluating the ads. Outside agencies can provide a more objective perspective on the market and business that is not subject to internal biases and politics. Companies often move from in-house to outside agencies as they become larger and their advertising and other marketing communication needs become greater. Rather than continuing to expand the in-house agency, many companies will move to using an outside agency that has the various services and expertise needed by the company. It should be noted that perhaps the major reason why outside agencies are used is that they provide the client with the services of highly skilled individuals who are specialists in the advertising area. Outside agencies also offer more flexibility to an advertiser as they can always switch agencies and hire a new one if they are dissatisfied with the work being done. It is much more difficult to terminate an in-house agency and hire new personnel to replace them. C. Discuss the various reasons why marketers often choose to switch advertising agencies. Find an example of a company that has recently changed advertising agencies and analyze the reasons given for the change. The relationship between a client and an agency is influenced by a variety of factors. These include perspectives on compensation policies, the demands clients place on agencies, the level of service the agency provides, the personalities of agency and client personnel, the performance of the client’s product or service, the perceived quality of the agency work in various areas (including account planning and management, creative, media, use of non-traditional media), and changes in the competitive situation. Changes in top management of a client may also affect the agency client relationship. New management may prefer a particular agency or certain approach to advertising and promotion which can affect the client’s relationship with the agency. An advertiser may decide to switch agencies for a number of reasons. These reasons can apply to long-term clients as well. When marketers are having problems such as stagnant or declining sales or losses in market share they will often look to advertising. Often the problems are blamed on advertising agencies. In the competitive world or advertising, agencies are always looking for new business and major advertisers know they can attract a great deal of interest and attention when they put their accounts up for review. IMC Exercise Find several examples of companies who have switched advertising agencies recently. Conduct some library research using sources such as Marketing Magazine, Strategy Magazine, The National Post, Advertising Age, AdWeek and The Wall Street Journal to determine the reasons why the company decided to change agencies and their rationale for choosing their new agency. Discuss the implications of your findings with respect to client-agency relationships. Find examples of advertising and other promotional programs that were developed by the old agency and examples of ads developed by the new agency. Do you think the advertising campaign and messages being developed by the new agency are better and/or more appropriate for the company than those of the old agency? Why or why not? IMC Comprehensive Project The assignment for this chapter is for the students to determine how they will organize for advertising and promotion both internally and externally. IMC Project Assignment for Chapter 2 Your assignment at this stage of the project is to determine how you will organize your company for advertising and promotion. You must develop an internal organization chart and specify whether you are going to use a centralized or decentralized system and whether you will use an in-house agency or hire an outside agency. If you decide to hire an outside agency you should specify what type of criteria you will use for selecting an agency. Do you plan on using a full service agency or a creative boutique? What type of agency compensation system do you plan to use and why? How will you evaluate the performance of the agency? Attention should also be given as to whether you will be using any specialized marketing communication services such as direct-response agencies, sales promotion agencies and public relations firms. Would you prefer to use a large agency that has all of these integrated services capabilities? Chapter 3 Consumer behavior and target audience decisions Answers to Review Questions 1. What are the stages of the consumer decision-making model? Why are they important for planning marketing communication? Marketing communication can be directed to each stage of the model. Ads can highlight need recognition initially (e.g., TV) while additional information can be found at the brand’s website (e.g., information search). Comparisons with other brands could be obtained at independent review website (e.g. JD Power) that influence the alternative evaluation stage. Finally, direct communication on mobile devices indicating a promotional offer from GPS alerts could influence purchase while direct mail pieces can maintain satisfaction levels after purchase. Furthermore, the nature of the message can evolve at each stage as well. Thus, the model is useful for planning the basic marketing communication decisions of message and media, that can be extended to other IMC tools including events etc. 2. What are the primary psychological processes associated with each stage of the consumer decision-making model? How does marketing communication influence each stage? Motivation is relevant since it gives direction for consumers to take action. The decision-making process starts with need recognition stage where consumers understand the requirement to take action to resolve their consumption situation. Marketing communication draws attention of the many reasons why consumers may want to consider buying a good or service such as dissatisfaction, or sensory enjoyment. Perception occurs in the information search stage where consumers sense, select, interpret and retain information. Marketing communication is active for all four aspects of the perceptual system. Messages include attention getting properties so they are noticed. Body copy and headlines in print ads for example assist in allowing consumers to select information. Video associated with a TV message tell a story so that consumers are able to interpret and understand how the product fulfills needs. Finally, concluding message points like voice-over or supers encourage consumers to remember the message just presented. Attitudes formation is relevant at the alternative evaluation stage since consumers are incorporating all the information received to fully understand how much they like or value each brand. All facets of marketing communication should continually reinforce or establish the consumers’ attitude to the brand with the appropriate balance of visual and verbal information. Integration occurs more readily at the purchase decision stage as consumers must ultimate pay for the good and service, and therefore tradeoff all the information received and conflicting attitudes to each brand to make a conclusion on which brand will fulfill needs. Marketing communication tries messages that will allow consumers to rely on overall assessment of their evaluation so that decision can be made more quickly and easily. Finally, satisfaction is a feature of post-purchase evaluation since it is the ultimate outcome of marketing. At this stage consumer assess whether the product performance met expectations or is sufficient compared to another standard of comparison. Marketing communication tries to reassure consumers that their decision was sound and that they should feel good about their purchase (e.g., follow up letters from car manufacturers). 3. How do the stages of the consumer decision-making model differ with the three types of problem solving? The three variations of the decision making process are (1) routine response, (2) limited problem solving and (3) extensive problem solving. Marketing communications will differ in each. Routine response behaviours are close to habits. As a result, they require little external search (if any) and there is little or no reliance on communications. The role of advertising and promotions is more of one of reinforcement, and of reminding the consumer that it is time to purchase. The role of providing information for evaluation is minimal. Limited problem solving involves both internal and external search behaviours. As a result, the role of marketing communications increases. Consumers are more likely to have recognized the problem, and are using advertising and other forms of communication to provide information for evaluation. Consumers are also more likely to employ a variety of sources of information in the process, and the marketer wants to be sure that his/her product is considered in the evoked set. The consumer’s most extensive use of communications is likely to occur in the extensive problem solving situation. Decisions are given much more thought, external search is more involved, and there is a much greater reliance on advertising, sales persons, friends, family, etc. as input into the decision. As a result, the responsibility of communications is increased as the marketer wants to have the information readily available to consumers when and where they want it. 4. When defining a target audience for communications, why is it a good idea to use consumer behaviour with respect to your brand as the primary variable before using variables such as demographics or lifestyle? The behavioural variable is considered first for two reasons. First, it links the communication plan to the marketing plan more specifically. Secondly, actual behaviour signals or leads to sales, something to which most advertising campaigns hope to achieve as an end result. Most good advertising reflects the underlying purchase motive of the target audience. The purchase motive is related to behaviour because consumers act upon their needs during a goal seeking decision process. Thus, the expected behaviour of the target audience is a prime consideration. 5. What are the five customer groups? Explain in terms of beverage products like soft drinks or beer. From the point of view of Coca-Cola, advertising could be directed to those who only drink Coca-Cola when drinking a cola product (e.g., brand loyals). Alternatively, the brand could target those who regularly switch between Coca-Cola and Pepsi (e.g., favourable brand switchers). Looking at the other side of customer groups, Coca-Cola could target Pepsi drinkers (e.g., other brand loyals) or those who drink Pepsi and RC Cola, or perhaps a generic cola product like PC (e.g., other brand switchers). Finally, those who do not drink cola may be targeted (e.g., new category users), or those who do not even drink soft drinks (e.g., new category user). Of course these two non-category user groups are derived from different market partitions. An important point to note is that specific brands should be identified so that there is an application of the model. 6. Why is a complete profile of a target audience important for marketing communication? A complete profile of a target audience is necessary for message, media and IMC tool decisions. Knowing the background of the target audience in terms of specific segmentation variable (e.g., psychographic) allows the planner to know how to construct the persuasive message with accurate visuals and imagery that will resonate. Similarly, knowing the background on variables like geography or usage allows managers to know which media and media vehicles to use to reach the target audience for exposure purposes. Finally, knowing other variables like lifestyle allows the planner to estimate the correct IMC tool to use in terms of public relations or social media. Answers to Review Questions 1. Explain the difference between functional, experiential and psychological benefits. Why might the messages recommended in the IMC plan for smartphones focus on each separately or together? Functional benefits are concrete outcomes of the product’s characteristics while experiential benefits are related to how consumers feel through product usage. Managers deciding upon the messages can select either to emphasize or show the connection between the two. Auto commercials are a good way to explore this connection. For many aspects, instructors can highlight ads that show how a safety feature works for example (functional). Another ad might show the reassurance (feelings) of the safety feature. Finally, a third ad could show both parts and make a clear connection between the two. It is important for students to see that for virtually any message, there is an alternative that could have been considered which opens debate as to whether the most effective was selected. 2. How are ads or brand messages experienced in social media influenced by consumer’s selective perception system? Hopefully, student apply the perception concepts appropriately and realize that the first step of communication is the same no matter what media is used to deliver the message. There are is still the availability of selective exposure where consumers will actively avoid messages. Selective attention is no doubt still relevant as consumers will decide what stimuli to attend to and what stimuli not to attend to. 3. Considering a group purchasing situation you have previously experienced, like going out for the evening. What role did each person play during pre-purchase, purchase, consumption, and post-purchase. Research has shown that the family can both directly and passively influence the consumer decision process. The amount of influence they may exert will depend on the product category, the level of involvement of various family members with the product or product class, relative resource contributions, etc. Family members may also assume various roles in the decision process, such as: Initiator—different family members may initiate the purchase decision process. For example, a teenager who is very much into music may request the family consider the purchase of a new music system. The mother or the father may initiate the idea for a new family car, etc. Information provider—different levels of expertise in product categories may lead to various family members assuming the role of information provider. For example, as teenagers become more involved with the Internet, they may be called upon to provide information into a variety of areas. For example, they may be asked to search the Internet for vacation destination, music equipment or other products or services and provide information back to the family. The father may be the primary information provider for the family car, while the mother may have most of the input on furniture. The influencer—each family member may have their own criteria in mind in the purchase decision process. The father may want an economical car, the mother an SUV for functional purposes, the children something more sporty to impress their friends. Again, depending on their involvement and expertise, various family members may be able to exert more or less influence. Another example might be a stereo system. If the teenager is more involved in music than other family members, they may have more interest and be more able to exert more influence than those with less product expertise. The decision maker—who actually makes the purchase decision? It used to be that the mother had influence at various stages for autos, but the father actually made the final decision. In many families, this is no longer the case. In two car families, the mother may have her car, and the father his, both of whom made the decision as to what it would be. In families where children work, they may actually purchase their own cars, preferring to do so to make their own decisions rather than have the parents make it for them. The purchasing agent—regardless of the various roles assumed, the parent(s) may actually be the purchasing agent. When children are not of age to make the purchase, do not qualify for financing, or for other reasons, the parent may act as the purchasing agent to expedite or culminate the purchase decision. The consumer—in the case of the family car, vacation or stereo all family members may ultimately be consumers. For other products, perhaps computers, all may use the product, but some may use it more than others. In others, some family members may be involved in the decision making process, but never use the product (the child researches the vacation, but doesn’t actually go along). 4. In what situations is the target audience and the target market the same? In what situations is the size of the target audience larger or smaller than the target market? The target market is the focus of the entire marketing mix while the target audience is the focus of a particular communication tool or part of a communication program. In many instances, the target audience is smaller than the target market. For example, if a firm runs an ad and promotion to entice consumers to switch to their brand, they are not reaching the complete target market since this would include its own customers. For small firms or firms with a brand new product, both the target market and target audience may be exactly the same. In this case, the firm is not trying to advertise to a particular target audience to increase their usage or alter their purchasing behaviour. The target audience is often larger than the target market for a product in many public relations activities. By their very nature, public relations often times attempt to influence a broad community, of which many of the people would not be actual purchasers of the product. 5. Examine the ads in this chapter and identify the target audience the ad is directed toward using the model of five customer groups. Suggest other relevant segmentation variables to further profile the target audience. Also identify the relevant segmentation variable to pinpoint the target market. This question raises the point that marketers use a variety of segmentation variables to identify their target market, and that many can be considered for executing their marketing strategy. Likely, students will be able to observe that some variables tend to be more common. Furthermore, while a variable or two may be used for segmenting, additional variables are relevant to further describe the market to give more precision for the marketing decisions. For target audience, if students adhere to the R&P idea, they will begin to realize that the customer status (i.e., customer or non-customer) is a strong way to begin one’s promotional planning since the content of the message can be executed more exactly to influence the next purchase. 6. Which segmentation variables are more useful or appropriate for profiling a target market for an automobile like the Mini? Similarly, which are more useful or appropriate for profiling the target audience for an automobile like the Mini? This question raises extends the points made in question 5 with an additional application with a particular brand. The exact target market variables selected is reasonably varied and the point to make is that the student should use some information to make a logical conclusion. One might suggest that personality or values may play a prominent role, as would geography as city a consumer maybe most likely. Mini has such low volume it must resort to always targeting new customers in its communication, so it will likely try to attract other brand switchers. Although a good case could be made that much of their advertising encourages those with a certain personality to purchase a brand new car for the first time. Additional Discussion Questions (not in text) A. Explain how consumers might engage in each of the processes of selective perception described in the chapter. Provide examples. Consumers may engage in selective perception for a variety of reasons, and in a number of different ways including: Selective exposure – Consumers may selectively decide what they will allow themselves to be exposed to. For example, if a consumer knows information will be provided that may lead to dissonance or the potential for inconsistency, they may consciously avoid the information. If one just purchased a new Ford, having selected this model over Chevrolet, they may avoid advertisements for Chevy’s to not create further dissonance. Changing stations during commercial breaks on television or radio, or leaving the room, skipping over ads in magazines, or simply ignoring banner ads are all forms of selective exposure. On the other hand, consumers may actually seek out information as well. Accessing the Internet to obtain more information, reading Consumer Reports, etc. are also forms of selective exposure. Selective attention—some consumers may stay in the room during commercials, but not pay attention to them. Consumers will be more inclined to pay attention to ads when they are in a search and/or evaluation stage of the decision process and the ad is relevant to this decision. For example, if you were in the market for a new car stereo, you might be more inclined to pay attention to commercials, print ads and publicity regarding brands, sales, etc. Once the purchase has been made, the consumer may engage in selective attention to these messages. Selective comprehension—there is no guarantee that the information provided by an advertiser will be comprehended in the manner intended. Consumers may distort information to meet their needs, or take away a different meaning than intended. For example, a consumer is torn between two attractive alternative automobiles. One gets 9.2 litres per 100 kilometres highway, the other 7.8. Depending on which car is purchased, the differences in gas mileage may be distorted. If the higher of the two was bought, the 9.2 may be made out to be significantly higher than 7.8. If the lower mpg car was purchased, the difference would seem to be much less. Selective retention—using the example of the two cars just above, what is remembered may be a result of selective retention. “Oh, I don’t remember the difference in mpg, but I recall it was only slightly higher” or “I remember there was a significant difference. My car got 1.4 litres per 100 kilometres more, and over a year this would amount to $200 in savings”. Consumers have a tendency to forget that information that is inconsistent or contrary to what they want to believe, and may be more likely to recall that that reinforces their existing beliefs, values, and/or attitudes. B. After buying a new car, a customer receives many pieces of direct mail such as a driving magazine or information on automobile care from the manufacturer. Explain why this is effect or ineffective communication. This is likely to be very effective communication as it contributes to building the relationship between the care company and its current customer. The customer is further informed about the features and benefits of their purchase and the customer receives important information for maintaining the value of their asset in a very significant financial investment. Most customers would likely be interested in articles or pictures of newer car models despite owning their current car since the purchase is typically extensive problem-solving activity that one would like to be prepared for. C. Analyze the purchase of a cereal from a family decision making perspective. Discuss the roles various family members would play in the decision process and how advertising and promotion could be used to influence them. The purchase of a brand of cereal often involves the influence and actions of multiple family members. If there are children in the household, they are likely to be the primary users or consumers of the cereal and may also be influencers as well if they make their preferences known to their parents. One of the parents may be the actual purchaser of the cereal since they do the shopping for the family. The parent(s) may take the influence of the children into consideration when making the purchase. They may, however, ignore the children’s influence if they do not agree with it (for example the parents may not want to purchase cereal that has a lot of sugar). Advertising will be directed to various family members. Ad for adult cereal may appear on adult-oriented TV shows or in magazines. Commercials for cereals targeted to children will appear on children’s programming such as cartoon shows. Sales promotion efforts such as coupons are likely to be targeted toward the mother either through flyers in newspapers. D. Use the basic model of consumer decision making to analyze the purchase process a consumer would go through in purchasing a laundry detergent versus a new computer. Discuss the role advertising and other forms of promotion would play at each stage of the decision process. The purchase of laundry detergent would be characterized by routine response behaviour since this is a product the consumer has probably purchased many times before. The decision making process would consist of little more than recognizing that one is running low on detergent and replenishing the supply during a shopping trip. The consumer will spend little effort engaging in external search or alternative evaluation as the purchase process for such products is relatively automatic. Decision making will be minimal if the consumer is loyal to a particular brand of detergent. If the consumer is not loyal to any particular brand, s/he may be influenced at the actual point-of-purchase through shelf displays, price deals or other types of promotion. Advertising will be important in getting a brand of detergent into the consumers evoked set and keeping it there. For a new brand, advertising may be particularly important in generating awareness and interest. Sale promotion techniques such as samples and coupons will also be used to encourage consumers to try new brands or switch brands. The purchase of a new computer will be characterized by limited or extended problems solving, depending on the consumers level of prior knowledge or familiarity with alternative brands. The consumer will go through each stage of the consumer decision making process and spend considerable time and effort on external information search and in identifying and evaluating alternatives. Advertising will play a very important role in providing consumers with information about computers and what they should be looking for in evaluating various alternatives. Direct marketing may also be used to send consumers information that will be helpful in evaluating a brand and making the purchase decision. Personal selling efforts by in-store sales personnel will also be very important since consumers may rely on knowledgeable sale people to learn about the various alternatives and make a choice. E. Explain how reference groups influence buyers’ behaviours. Give an example of how both aspirational and disassociateive groups might have an impact. Reference groups are defined as “two or more individuals who share a set of norms”. As such, these groups can be both aspirational—those to which one might wish to aspire—to disassociative—those to which one does not wish to be associated. As such, these groups may pose both a boon and a threat to marketers. For example, aspirational reference groups may serve as a goal, or an image to which consumers might aspire. The growth of the athletic shoe market—particularly the expensive basketball shoes like Nike Air- have benefited, as young athletes aspire to play like pros. People aspire to own certain types of cars, or live in certain areas to let others know that “they have arrived”. On the flip side, disassociative groups can also be motivating. Many of use do not wish to be identified with the likes of drug users or alcoholics. Obesity has almost become an obsession, as consumers join health clubs, jog and purchase diet pills and programs so as not to be seen as fat. These disassociative groups then serve as a group which is to be avoided through the purchase of products, services or just specific behaviours. Finally, disassociative reference groups can hurt marketers. Many auto buyers see the Volvo as a family car of someone in the suburbs or the BMW as a “Yuppie” car. Others see specific name brands as associated with “snobs”, etc., and (whether these true or not) do not wish to purchase these brands and become affiliated with these groups. F. Explain how the screening processes involved in selective perception might impact a viewer of TV commercials. Consumers may engage in a screening process known as selective perception. This process may be enacted through selective exposure, selective attention, selective comprehension, and/or selective retention. The problem that this screening process may present is that the advertisers’ ad may not have the impact desired due to the fact that these processes are being enacted. For example, viewers may decide not to expose themselves to the information provided in an ad or commercial by skipping over it, changing stations, etc. Even if the consumer is exposed to the ad, there is no guarantee that he or she will attend to it. Consumers may pay attention to some ads, while ignoring others, or may pay attention only to information that is considered relevant or of interest to them. Consumers may also distort or comprehend information provided in ads in a way other than the advertiser intended, again in an attempt to support their previously held beliefs. Finally, consumers do not retain all of the information provided in the ads, perhaps even selectively forgetting discrepant information. Consumers may use selective screening processes to assure themselves that they made the proper decisions by selecting only supportive information, and screening out any information that might create dissonance or conflict. Perhaps the most effective way for advertisers to avoid the selective perception processes is to design more effective advertisements. By more effective we mean more interesting, more attention-getting, and more informative ads. Given the high volume of ads to which the consumer is exposed, it is critical that the ad break through the clutter. If the ad is not noticed and does not attract the interest of the viewer, higher order processing (comprehension and retention) will never take place. G. How is it possible for a brand to communicate to both customers and non-customers in an IMC plan? Brands can select different media for advertising or different IMC tools entirely to reach customers and non-customers. For example, if a customer’s personal information is in a data-base, customized promotional offers or advertising messages can be delivered directly. Alternatively, television or other media that reaches a wider audience that would include many non-customers can be used to attract those not currently buying the brand. In each of these cases, the selling message can be tailored specifically. For example, references to past experiences can be part of the message to customers while messages to non-customers might make competitive references or mention sources of dissatisfaction for those considering switching from their current brand. H. Discuss the three variations of the consumer decision-making process. What is the importance of communications in each type? The three variations of the decision making process are (1) routine response, (2) limited problem solving and (3) extensive problem solving. Obviously, the role of marketing communications will differ in each. Routine response behaviours are close to habits. As a result, they require little external search (if any) and there is little or no reliance on communications. The role of advertising and promotions is more of one of reinforcement, and of reminding the consumer that it is time to purchase. The role of providing information for evaluation is minimal. Limited problem solving involves both internal and external search behaviours. As a result, the role of marketing communications increases. Consumers are more likely to have recognized the problem, and are using advertising and other forms of communication to provide information for evaluation. Consumers are also more likely to employ a variety of sources of information in the process, and the marketer wants to be sure that his/her product is considered in the evoked set. The consumer’s most extensive use of communications is likely to occur in the extensive problem solving situation. Decisions are given much more thought, external search is more involved, and there is a much greater reliance on advertising, sales persons, friends, family, etc. as input into the decision. As a result, the responsibility of communications is increased as the marketer wants to have the information readily available to consumers when and where they want it. I. What are some factors one must consider in determining how to segment the market? A number of factors must be considered in the segmentation process. The more the market is segmented, the more precise is the marketers’ understanding of it. However, the more segmented it becomes, the less individuals there are in each segment. Marketers must determine how far to take this process. Secondly, the marketer must consider whether the segment will support a marketing effort. There is always a trade-off between knowledge and specialized program offerings and the ability of the market to support such efforts. Marketers must also determine if the segment is accessible. That is can the segment be reached with a communications program, can the organization offer such a program, and can it afford to do so? Finally, once a segment has been determined, the marketer must establish the basis upon which it will compete in that market. A number of segmentation strategies might be considered. J. In what way are French-speaking and English-speaking consumers the same target market for a brand but different target audiences. A product that has gender as the key segmentation variable (i.e., shaving products) will not require language as a segmentation variable for the overall marketing strategy. However, market research might suggest different loyalty patterns between languages/cultures within Canada. For instance, a brand may find strong brand loyalty among French-speaking consumers and concentrate of stronger repeat purchasing with its current customers. In contrast, a brand may experience more switching among English-speaking consumers and concentrate of re-trial with those that have moved away from the brand recently. K. Explain the concept of an evoked set. Why is this concept important to marketers? Give examples of an evoked set, and how marketers might attempt to influence consumers to gain consideration. When one considers the numerous options for purchase in almost any product category, the choices may become overwhelming. One way that consumers manage this situation is to consider only a subset of the alternatives available, leading to an evoked set. Often referred to as a consideration set, this subset of brands are those that will be actively considered in the purchase decision process. This is an important concept for marketers to understand, in that if their brand does not get included in the evoked set, it is not likely to be purchased. Or, should the consumer become dissatisfied with a brand currently in the evoked set, it might be removed, eliminating it from future purchase consideration. Consider the purchase of a new car. The choice of alternatives runs from low end entries like Hyundai, Kia, etc. to expensive luxury and sports cars—not to mention SUV’s and others. It is highly unlikely that a consumer would consider the entire range of possibilities. The list would be narrowed down given decision criteria to a much smaller grouping, based on purchase criteria. It may lead to consideration of only Japanese cars, American cars or German cars. It might be limited based on price or past experiences. Whatever the criteria used, the entire list of cars will not be considered. Marketers attempt to gain entry into the evoked set through positioning against others in the category, marketing communications and other marketing tools. Their goal is to get the brand/product to be considered. In other instances, the marketer is concerned with maintaining customer satisfaction, recognizing that consumers will buy again, and may or may not consider the existing product in the evoked set. L. How is it possible for a brand to communicate to both customers and non-customers in an IMC plan? Brands can select different media for advertising or different IMC tools entirely to reach customers and non-customers. For example, if a customer’s personal information is in a data-base, customized promotional offers or advertising messages can be delivered directly. Alternatively, television or other media that reaches a wider audience that would include many non-customers can be used to attract those not currently buying the brand. In each of these cases, the selling message can be tailored specifically. For example, references to past experiences can be part of the message to customers while messages to non-customers might make competitive references or mention sources of dissatisfaction for those considering switching from their current brand. IMC Exercise Have the class collect ads that reflect some of the aspects of consumer behaviour discussed in the text such as stages of the decision process, Have them bring the ads to class and explain which aspect it reflects and how marketers might be appealing to this particular aspect of consumer behaviour. Each of the so-called generations—Generation Y and X have their own unique values, lifestyles, etc. Have students discuss these, and then bring in examples of ads designed to appeal to each. IMC Comprehensive Project At this stage of the project students should be analyzing the consumer decision making process for their product or service and considering different segmentation variables that will be useful. IMC Project Assignment for Chapter 3 Analyze the marketing situation analysis for the product or service you have chosen. You can use the marketing and promotions process model shown in Figure 3-5 as well as some of the factors shown in Figure 1-5 from Chapter 1 as a guideline to conduct your situation analysis. For the consumer analysis, describe the consumer decision process for your product/service as shown in Figure 3-1. Explain what factors are relevant at each stage. What are the implications of your situation analysis for the development of your IMC plan? How will the market for your product/service be segmented? Which segments will be targeted and why? What will be your target audience for your IMC programs? Chapter 4 Communication response models Answers to Review Questions 1. Recall the elements of Figure 1 and identify them for all aspects on an IMC plan – advertising, sales promotion, direct marketing, public relations, and Internet marketing. The various elements of the communications process include the sender or source, the message, the channel, the receiver, noise and feedback. The sender or source of a communication is the person or organization that has information to share with another person or group. The source may be an individual such as a salesperson or spokesperson who appears in a company’s advertisements or a nonpersonal entity such as a company or organization itself. The message is the information or meaning the source hopes to convey and may be verbal or nonverbal, oral, written or symbolic. The channel is the method by which the communication travels from the source or sender to the receiver. At the broadest level there are two types of channels, personal and nonpersonal. Personal channels generally involve direct interpersonal contact with the receiver while nonpersonal channels carry a message without interpersonal contact between the sender and receiver. Nonpersonal channels are generally referred to as the mass media. The receiver is the person(s) with whom the sender shares thoughts or information. Generally receivers are the customers in the target market or audience who read, hear, and/or see the marketer’s message. Noise refers to extraneous factors in the communications process that can distort or interfere with the communication of a message. Errors or problems in that occur in the encoding of the message, distortions in the transmission of the message, and distractions at the point of reception are possible sources of noise. Feedback refers to the part of the receiver’s response that is communicated back to the sender and may take a variety of forms such as response hierarchy measures including awareness, knowledge, attitudes, purchase intentions, preferences and behaviour. The form of feedback of ultimate interest to marketers is, of course, sales. Students should be encouraged to find an example of a current advertising campaign and to analyze it with respect to various elements of the communications process. They might evaluate the source being used as a spokesperson in the campaign, the type of message being used, the various channels or media where the ads appear, the target audience for the campaign, and the type of feedback that might be used to monitor the effectiveness of the campaign. 2. Explain why the three response models of Figure 4-2 are limited in planning for an IMC campaign? The three models assume a strict order of cognition, affect, and behaviour, something a major review article in Journal of Marketing cited in the chapter suggests is not supported in numerous studies. In addition, the models do not indicate when the stages are occurring, such as when the message is received (i.e., watching television) or when consumers are going about their day-to-day lives. Both of these criticisms are addressed in the subsequent models presented in the chapter. Another way to see how the models are in effective is to consider the following. Each of the response processes could occur at each of the decision-making stages. For example, consumers could see some ads while at the need recognition stage and have a cognitive and affective response and then plan to look at the product in the store. This decision towards a store visit is the behaviour which is actually occurring at the information search stage, the one after the need recognition stage. Consumers could receive a brochure at the store, read it at home and continue along in their information search stage. Again, responding to the communication occurred while in a particular stage of the decision-making process. 3. Explain what is meant by a central versus peripheral route to persuasion and the factors that would determine when each might be used by consumers in response to an advertisement. Under the central route to persuasion the message recipient is viewed as a very active and involved participant in the communications process whose ability and motivation to process a message are very high. The recipient will pay close attention to message content and will carefully scrutinize the communication for the cogency or quality of the message claims. Under the peripheral route to persuasion the message recipient is viewed as lacking the motivation or ability to process the message and is not likely to engage in any detailed level of cognitive processing. Rather than thinking about or evaluating the information content of the message, the receiver will rely on “peripheral cues” such as an attractive source or other executional factors. Factors that would determine when each might be used by consumer in response to an advertisement include the involvement level of the consumer which will be a function of the nature of the product being purchased, the importance of the product/service being purchased to the individual, the needs of the individual, and the motivation and ability of the consumer to process the message. 4. What are the key difference between the traditional response models and the response model shown in Figure 4-7? The primary difference is that the former assumes a similar cognition-affect-behaviour response sequence while the latter presents a contingency model where by the sequence is influenced by the topical involvement and the perceived product differentiation. The key implication of the sequence change is that advertising and promotion play different roles and have different primary effects depending upon whether the consumer responded one way versus the other. The R&P model build on the previous models by clearly articulating the difference between the immediate reactions of the receiver while experiencing the message and the longer-term results of the communication of the brand. Consequently, there is a need to conceptually represent both dimensions of attitude theory at both places in time. 5. Why is it important to use a response model that is more applicable to managerial decision making? Planning for advertising is dependent on understanding how the target audience will respond to the marketing communication message, however a manager needs to translate or view these responses as potential options to influence when making marketing communication decisions. Furthermore, marketers require a degree of parsimony in using an approach that is clear for focus decision-making. Academic contingencies and fine embellishments of model may help explain some variation across major samples to generalize theory, but in the end a manager needs to make concrete decisions. Answers to Applied Questions 1. Consider ads found in social media like Facebook, Twitter and YouTube and assess whether the model in Figure 4-1 is useful for explain how marketing communication works in these digital contexts. As argued in the text, Figure 4-1 still stands the test of time and is still very applicable for digital media since it has the clear feedback and response mechanism. Students should be able to apply all aspects of the model to any form of digital communication, it is only a matter of seeing how it work by thinking through problem like this to see that the key parts remains. 2. Assume that you are the marketing communications manager for a brand of paper towels. Discuss how the low involvement hierarchy could be of value in developing and advertising and promotion strategy for this brand. For a company selling a low-involvement product such as a paper towel, the consumer is likely to go through a learndo feel response hierarchy whereby some minimal level of awareness or passive learning may precede purchase and attitudes are formed after using the product. An advertiser of a low involvement product must recognize that consumers are less likely to give attention to actual message content and may focus more on non-message elements such as music, characters, slogans or jingles. Advertisers may want to use catchy slogans or jingles that will stick in consumers’ minds and become salient when they are in the actual purchase situation. The use of short messages and heavy repetition schedules will also be important. Advertisers may also use VIPs or visual image personalities that may lead to more involvement with and higher identification and retention of advertisements. Sales promotion techniques such as sampling and coupons may also be used to encourage first time trial. Point-of-purchase displays and advertising might also be used to encourage trial of the brand. If the product performs well the consumer should form a favorable attitude the probability of repurchasing it will increase. 3. Select an ad you think would be processed by a central route to persuasion and one where you think the peripheral processing would occur. Show the ads to several people and ask them to write down the thoughts they have about each ad. Analyze their thoughts using the cognitive response categories discussed in the chapter. Under the central route to persuasion the message recipient is viewed as a very active and involved participant in the communications process whose ability and motivation to process a message are very high. The recipient will pay close attention to message content and will carefully scrutinize the communication for the cogency or quality of the message claims. Under the peripheral route to persuasion the message recipient is viewed as lacking the motivation or ability to process the message and is not likely to engage in any detailed level of cognitive processing. Rather than thinking about or evaluating the information content of the message, the receiver will rely on “peripheral cues” such as an attractive source or other executional factors. Students should be encouraged to select examples of advertisements that they feel are representative of each route to persuasion and to explain why the ads would be processed either centrally or peripherally. They should also show the ads to some friends and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples they have chosen of ads that might be processed by a central or peripheral route and have the class analyze the cognitive responses they gathered for these ads. 4. Find an example of a print ad and evaluate it using the cognitive response model shown in Figure 4-4. Identify the specific types of cognitive responses that the ad might elicit from consumers and discuss why these might occur. Students should be encouraged to find a print ad and evaluate it using the cognitive response model shown in Figure 4-4. They might show the ad to their friends or fellow students and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples of ads they have chosen and present their analysis of the cognitive responses given in reaction to these ads. They might also discuss why these responses were generated. For example, source bolsters might be given to a trustworthy or likeable spokesperson while source derogations might occur if the source is not liked or is unattractive. Message related thoughts might be generated if there is a lot of information presented in the ad or the position advocated is not agreed upon by the message recipient. Ads that use a great deal of imagery might generate more execution related thoughts. 5. Red Bull has numerous IMC activities including its TV advertising, events, and promotional activities. Check the Red Bull website and any other online material for background, and apply them to the matrix in Figure 4-8 to validate whether each activity assists in planning for IMC. Red Bull presents an interesting example to apply Figure 4-8. Across many of its IMC tools there is a distinct source, message and channel to a multitude of target audiences. For example the imagery of its TV ads with cartoons is distinctly different that the imagery of Red Bull Crashed Ice. Furthermore, the exposure procedures and the type of processing and resulting communication effects are correspondingly appropriate for each tool as well. In short this planning matrix allows managers to see which are the controllable decisions to effect an influence on outcomes that the manager deems important. Additional Discussion Questions (not in text) A. What is meant by encoding? Discuss how the encoding process differs for radio versus television commercials. Encoding refers to the process by which the sender of a communication puts thoughts, ideas, or information into a symbolic form using words, symbols, pictures and the like. The encoding of a television commercial involves the use of visual images, sound, motion, color, and words, which provide advertisers with the opportunity to develop very creative messages. The encoding of a radio commercial is limited to the use of sound, which usually comes in the form of words read by an announcer and/or music. However, some astute advertisers may use a process called image transfer whereby the images from a TV commercial are planted in a radio spot by using similar, or even the same, audio portion. The idea is that when consumer hears the radio message, they will make the connection to the TV commercial thus reinforcing the video images. B. What is meant by involvement in terms of advertising and consumer behaviour? How might marketers determine the degree of involvement consumers have with their products and services? Involvement can be viewed as the amount of personal relevance a product or service, purchase decision or even an advertisement has to a consumer. Involvement is a function of various person factors (needs, interest, values), object or stimulus factors (differentiation among alternatives, source or content of communication) and situational factors (purchase use or occasion). Scales have been developed to measure involvement with products and services and can be used by marketers. For example, Judith Zaichkowsky developed a personal involvement inventory that uses 20 semantic differential items to measure the construct. (See “Measuring the Involvement Construct,” Journal of Consumer Research, Vol. 12, December 1985, pp. 341-352. C. Find an example of a print ad and evaluate it using the cognitive response model shown in Figure 4-4. Identify the specific types of cognitive responses that the ad might elicit from consumers and discuss why these might occur. Students should be encouraged to find a print ad and evaluate it using the cognitive response model shown in Figure 4-4. They might show the ad to their friends or fellow students and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples of ads they have chosen and present their analysis of the cognitive responses given in reaction to these ads. They might also discuss why these responses were generated. For example, source bolsters might be given to a trustworthy or likeable spokesperson while source derogations might occur if the source is not liked or is unattractive. Message related thoughts might be generated if there is a lot of information presented in the ad or the position advocated is not agreed upon by the message recipient. Ads that use a great deal of imagery might generate more execution related thoughts. D. Why are personal channels of communication often more effective than nonpersonal channels? Personal channels of communication are often more effective because information received from a personal source tends to be more persuasive than is information received from nonpersonal channels such as the mass media. A message from a personal source, such as a salesperson, can be more flexible and powerful than a nonpersonal message. When a personal channel is used, the communicator can adapt the presentation to the specific needs of the receiver and can respond to his/her reactions. Consumers also often tend to have more confidence in personal communication via social channels (i.e. word-of-mouth) since these sources are often viewed as more trustworthy and unbiased and information from a personal source is perceived as more concrete and vivid. E. Discuss how the advertising and promotional implications differ for companies selling high- versus low-involvement products. For a company selling a high-involvement product the consumer is likely to go through a standard learning or learn  feel  do response hierarchy. Advertisements for high involvement products are usually very detailed and informative and provide the consumer with a great deal of information that can be used for decision-making purposes. Informational displays at point-of-purchase or presentations by salespersons in the store can also be valuable and effective sources of information. For a company selling a low-involvement product the consumer is likely to go through a learndo feel response hierarchy whereby some minimal level of awareness or passive learning may precede purchase and attitudes are formed after using the product. An advertiser of a low involvement product must recognize that consumers are less likely to give attention to actual message content and may focus more on non-message elements such as music, characters, slogans or jingles. Advertisers may want to use catchy slogans or jingles that will stick in consumers’ minds and become salient when they are in the actual purchase situation. The use of short messages and heavy repetition schedules will also be important. Advertisers may also use VIPs or visual image personalities that may lead to more involvement with and higher identification and retention of advertisements. Sales promotion techniques such as sampling and couponing may also be used to encourage first time trial. If the product performs well the consumer should form a favorable attitude the probability of repurchasing it will increase. F. Discuss the various forms feedback might take in the following situations: • A consumer has just watched an infomercial for a revolutionary new exercise machine on late-night television. In a direct-response advertising situation such as this, feedback occurs in the form of an immediate action by the viewer such as calling an 800 number to purchase the product or requesting additional information such as a product brochure or video. Direct-response advertisers generally measure effectiveness on the basis of number of inquiries and actual sales generated by the messages. • An avid book reader has just logged onto the website of a company such as Amazon.com. First of all, the hit or visit to the website will be recorded. These company can also measure the various content areas visited on the site as well as click throughs to banner ads and other links. Of course the main type of feedback these e-tailers are interested in is sales. They can track whether a purchase was made as well as the number, type and title of the books. Those who have made a purchase may also provide feedback in the form of online ratings and reviews of books that can be shared with other consumers. • TV viewers watching a show one evening see a commercial for Calvin Klein jeans. In this mass communications situation feedback is not readily observable since the marketer is not in direct contact with the message recipients. Feedback can be obtained through research-based methods such as measuring recall or recognition of the ad as well as measuring affective and cognitive reactions to either the ad or the product. IMC Exercise Choose a print ad from the newspaper or a magazine and evaluate them using the various elements of the basic communications model presented in this chapter. Your analysis should address the following areas: • a discussion of the source used in advertisement and why s/he is or is not appropriate for the message • the way in which the message is encoded including the use of visual and verbal elements. • a discussion of the channel or medium in which the ad was placed, such as the particular newspaper or magazine, and why this publication was chosen by the advertiser. • the process by which the message might be received or decoded by the target audience. Choose one of the response hierarchy models discussed in the chapter and discuss how the source and message might influence various stages of the model. What type of feedback that the advertiser might use to evaluate the effectiveness of the message. What is your overall opinion of this ad from a marketing communications perspective? What changes, if any, would you recommend to improve the communication effectiveness of the ad? IMC Comprehensive Project Students should be encouraged to consider how an understanding of communications and the response process can be of value in developing the IMC plan for the product or service they have chosen. The specific assignment is as follows: IMC Project Assignment for Chapter 4 Use the information from this chapter to analyze how consumers in the target audience for your product or service will respond to various elements of your IMC program such as advertising, sales promotion, direct marketing or your web site. Which of the response hierarchy models discussed in the chapter is most applicable for this product or service? Specify the various stages in the response process through which consumers will have to pass before purchasing your product or service. Solution Manual for Advertising and Promotion: An Integrated Marketing Communications Perspective George E. Belch, Michael A. Belch, Michael A. Guolla 9780070891302