CH-17-18 Designing and Managing Integrated Marketing Communications – Marketing Management: A South Asian Perspective : Chapter Notes

This Document Contains Chapters 17 to 18 Chapter 17 Designing and Managing Integrated Marketing Communications LEARNING OBJECTIVES What is the role of marketing communication? How does marketing communications work? What are the major steps in developing effective communication? What is the communications mix and how should it be set? What is an integrated marketing communications program? CHAPTER SUMMARY Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible to target customers. Companies must also communicate with present and potential stakeholders and the general public. The marketing communications mix consists of eight major modes of communication: advertising; sales promotion; public relations and publicity; events and experiences; direct marketing; interactive marketing; word-of-mouth marketing; and personal selling. The communications process consists of nine elements: sender, receiver, message, media, encoding, decoding, response, feedback, and noise. To get their messages through, marketers must encode their messages in a way that takes into account how the target audience usually decodes messages. They must also transmit the message through efficient media that reach the target audience and develop feedback channels to monitor response to the message. Developing effective communications involves eight steps: (1) Identify the target audience, (2) determine the communications objectives, (3) design the communications, (4) select the communications channels, (5) establish the total communications budget, (6) decide on the communications mix, (7) measure the communications results, and (8) manage the integrated marketing communications process. In identifying the target audience, the marketer needs to close any gap that exists between current public perception and the image sought. Communications objectives may involve category need, brand awareness, brand attitude, or brand purchase intention. Formulating the communication requires solving three problems: what to say (message strategy), how to say it (creative strategy), and who should say it (message source). Communications channels may be personal (advocate, expert, and social channels) or nonpersonal (media, atmospheres, and events). Although other methods exist, the objective-and-task method of setting the promotion budget, which calls upon marketers to develop their budgets by defining specific objectives, is typically most common. In choosing the marketing communications mix, marketers must examine the distinct advantages and costs of each communication tool and the company’s market rank. They must also consider the type of product market in which they are selling, how ready consumers are to make a purchase, and the product’s stage in the product life cycle. Measuring the effectiveness of the marketing communications mix involves asking members of the target audience whether they recognize or recall the communication, how many times they saw it, what points they recall, how they felt about the communication, and their previous and current attitudes toward the product and the company. Managing and coordinating the entire communications process calls for integrated marketing communications (IMC): marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines and combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of discrete messages. OPENING THOUGHT Perhaps, the most challenging aspect of this chapter is the section on the nine elements of the communications process: sender, receiver, message, media, encoding, decoding, response, feedback, and noise. Students not previously exposed to these concepts in other marketing or communications’ courses will find these concepts somewhat difficult to fully understand and perceive without good use of examples and trial. The instructor is encouraged to use examples gleaned from advertisers Web sites, advertisers, television or print commercials to demonstrate via dissection these concepts, especially encoding and decoding. The remainder of the chapter covers material previously reviewed such as identifying the target market, and designing the marketing message. What is different in this chapter is the integration of all of the communication’s “mix” or elements of communicating to the target audience in a consistent and effective manner. Finally, the coordination and integration of all of the elements of the communications mix and their effect/affect on the total message (evaluation of their effectiveness) remains a challenge to prove. The fact is that the concept of the combined effectiveness of the integration of all marketing communications is difficult to prove in the real business world. Instructors are encouraged to use examples of non-effective communication(s) to highlight what the “possibilities” could be with an integrated marketing communications process. TEACHING STRATEGY AND CLASS ORGANIZATION PROJECTS At this point in the semester-long marketing plan project, students should have agreed upon their integrated marketing communications matrix. The instructor is encouraged to evaluate the submissions vis-à-vis the material presented in this chapter. In reviewing the submissions, the instructor should evaluate the continuity of the message across all possible communication media (students will tend to concentrate their media to television or the Internet and exclude other forms such as personal selling and radio). With the instructor’s guidance and attendance, set up a field trip to a local advertising agency in the community to gather from the agency’s management, their (ad agency) views on the topic of integrated marketing communications. Especially, what services have their clients’ requested that the ad agency perform to build an integrated marketing communications program? Today, many progressive ad agencies are including among their services: print, marketing intelligence, personal selling training, and strategy development in their portfolios. Marketing Plan: Every marketing plan must include a section showing how the company will use marketing communications. The question is not whether to communicate, but rather what to say, to whom, how to say it, how often, and which promotional tools to use. Get students to plan the integrated marketing communications for their product or service. They should also review the strategies previously documented in the marketing plan for the targeting, positioning, branding, product management, pricing, and distribution of their product or service. Get students to answer these questions: What audience(s) should be targeted by the integrated marketing communications plan? What image should be created for the product or service? What objectives are appropriate for the initial communications campaign? What message design and communication channels are likely to be most effective for the target audience? Which promotional tools would be most effective in the promotional mix? Why? How should the amount of the marketing communications budget be decided? Get students to summarize their answers in a written marketing plan or type them into the Marketing Mix section of Marketing Plan Pro. ASSIGNMENTS The opening vignette of this chapter is about how LV engaged in an unusual marketing communications in China. Get students to research the campaign have them share their impressions on the campaign’s effectiveness with the target market. This chapter states that the marketing communications mix consists of six major modes of communication and that every brand contact delivers an impression that can strengthen or weaken a customer’s view of the company. In small groups, have the students select a company and see if its messages are consistent across all major modes of media: advertising, sales promotion, events, and experiences, public relations, direct marketing, and personal selling. The starting point in planning marketing communications is an audit of all the potential interactions that customers in the target market may have with the brand and the company. Students should select a brand of their choosing and in their papers “map” out or create an audit of all the potential interactions that customers in the target market have with the brand and company. Students should, for the purpose of this assignment, assume that they are a member of the target market. Have the students read the following sources listed in the Marketing Insight: “Celebrity Endorsements as a Strategy,” Chris Isidore, “Yo! Yao Stands Alone,” CNN Money, 28 February 2003; “Yao Ming Signs New Endorsement,” People’s Daily Online, 14 April 2005; Milton Sau, “Goodbye Britney, Hello Yao Ming,” TODAY, 30 December 2005, p. 17; “The World: Insider’s View—China,” Campaign, 3 March 2006, p. 19; “Critics Be Damned, Brand Aamir Still Branding Strong,” The Economic Times, 3 June 2006; Ella Fitzsimmons, “Western Stars Struggle to Crack China,” Media Asia, 7 May 2008; Steve McKee, “The Trouble with Celebrity Endorsements: Celebrity Spokespeople are Expensive and Risky, and They Don’t Always Pay Off,” , 17 November 2008; Tania Branigan, “China and the Cult of ‘Celebrity’ Advertising,” www.guardian.co.uk, 5 September 2010. After reading these articles, ask the students to take a position: For or against using celebrities as endorsers. Have students research the Toyota Prius and the various marketing campaigns undertaken since its worldwide launch in 2000 and in small groups collect as many “copies” of the advertising that Toyota used. Secondly, find news stories that were run that mentioned the product and finally, collect other information off the Web site about the product. Once this information has been collected, compare, contrast, and form an opinion (based on the material in this chapter) on why this campaign was so successful? END-OF-CHAPTER SUPPORT MARKETING DEBATE—Has TV Advertising Lost Power? Long deemed the most successful medium, television advertising has received increased criticism for being too expensive and, even worse, no longer as effective as it once was. Critics maintain that consumers tune out too many ads by zipping and zapping and that it is difficult to make a strong impression. The future, claim some, is with online advertising. Supporters of TV advertising disagree, contending that the multisensory impact of TV is unsurpassed and that no other media option offers the same potential impact. Take a position: TV advertising has faded in importance versus TV advertising is still the most powerful advertising medium. Pro: Marketing managers must begin with an identified target market and the strategic direction of the brand before choosing the advertising program. The selection of TV advertising as the medium should be as a function of: the mission, money, message, media, and measurement. In addition, the marketing manager must understand where the product is in its product life cycle and how the hierarchy of effects affects his products. If these factors are known then the marketing manager can decide if informative advertising, persuasive advertising, reminder advertising, or reinforcement advertising is necessary. Television through its multisensory impact is the best medium for these advertising conditions. In addition to the product’s life cycle, the product’s market share and consumer base, competition and clutter, advertising frequency, and product substitutability affects decisions to use TV. Properly designed and executed TV programs can improve brand equity by vividly demonstrating product attributes and persuasively explaining consumer benefits, portraying user and usage imagery, brand personality, and other brand intangibles. Critics of TV advertising may be focusing on the “messenger” rather than on the “message.” Con: Consumers have changed. We are now into the fourth generation of consumers using TV as a marketing communications medium. The proliferation of new technologies has shifted the “power” to the viewer rather than the “transmitter.” Current generations receive information through numerous media channels: the Internet, cell phones, satellite, cable, radio, and others. The influence that TV once had to stimulate, interest, and build brand loyalty due to its exclusivity is gone. Today, buyers are more likely to review product performance on the Internet or to ask opinion leaders than they are to “act” because they saw a clever commercial. As a result, with the exception of certain product categories or product lines, TV advertising no longer reaches target consumers. More importantly, TV commercials do not reach opinion leaders who are increasingly influencing consumer-buying decisions on a greater scale. To reach this important group, companies must target messages through combinations of other media and product usage. MARKETING DISCUSSION Pick a brand and go to its Web site. Locate as many forms of communications as you can find. Conduct an informal communications audit. What do you notice? How consistent are the different communications? Suggested Response: Student answers will differ depending upon their favorite Web sites. I visited Nike’s website and found various forms of communication, including product descriptions, promotional banners, social media links, and customer support. The communications are consistent, reinforcing the brand’s focus on innovation, performance, and inspiration across all touchpoints. Marketing Lesson: RED BULL What are Red Bull’s greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share? Suggested Answer: Red Bull’s greatest strength has to be its integrated marketing communications mix and their ability to reach a select target market with success. A second strength is their integrated marketing communications mix that eschews traditional forms of media—mass media and print. Red Bull’s greatest weakness will be its ability to reach their target market influencers, decision makers amongst increased advertising spend by the major beverage kings. Red Bull's greatest strengths lie in its strong brand equity, distinctive marketing strategies, and loyal consumer base. However, increased competition from established giants like Coca-Cola, Pepsi, and Monster poses risks of market saturation, pricing pressures, and potential erosion of market share in the energy drink category. Should Red Bull do more traditional advertising? Why or why not? Suggested Answer: Student answers will vary but good students will note that as a product moves through its product life cycle, advertising messages and media must adapt to meet the changing demographics and demands of its target market. So, as Red Bull’s target market (young adults) age they’ll be looking for their product in and through traditional media and traditional marketplaces featuring traditional media. Red Bull's current success is largely due to its unconventional marketing strategies, focusing on extreme sports sponsorships and viral content, which resonate with its target audience. Traditional advertising may not align with its brand identity and could dilute its unique positioning. Instead, Red Bull should continue innovating in experiential marketing and digital media to maintain authenticity and engagement with its consumer base. Discuss the effectiveness of Red Bull’s sponsorships, for example, Bull Stratos. Is this a good use of Red Bull’s marketing budget? Where should the company draw the line? Suggested Answer: Student answers will vary by opinion and good students will not that it would only take one fatality or disaster to negate all the good public opinion, and goodwill built up by Red Bull’s sponsorship’s in the past. Recent newspaper stories have commented that Red Bull has “pulled” this Stratos stunt for the time being. Red Bull's sponsorships, such as Bull Stratos, are highly effective in creating brand buzz and reinforcing its image as an adventurous and innovative brand. These stunts generate widespread media coverage and engage audiences globally. However, Red Bull should ensure such investments align with its brand values and resonate with its target demographic to maximize returns on its marketing budget without compromising authenticity or overextending into unrelated ventures. Marketing Lesson: PROCTER & GAMBLE What do you think was P&G’s communication objective when it sponsored the online soap opera? Suggested Answer: P&G’s communication objective was to reach its target audience through embedded commercials, since Chinese consumers spend more time online then watching traditional TV. P&G’s communication objective in sponsoring the online soap opera was to enhance brand visibility and build emotional connections with consumers through engaging, serialized content. This strategy aimed to increase brand loyalty and drive consumer engagement by integrating their products seamlessly into the storyline. How would you evaluate the effectiveness of this communications campaign? Suggested Answer: Based on the audiences’ response to the show’s first season, the communications campaign has clearly been effective. It seems Chinese consumers do not view embedded commercials as advertising at all. To evaluate the effectiveness of the campaign, assess metrics like increased brand awareness, consumer engagement levels, and any uplift in sales or product trials linked to the soap opera sponsorship. Additionally, analyze audience feedback and brand sentiment to gauge emotional impact and resonance. What possible problems do you think can arise from using online soap operas as a communication tool? Suggested Answer: Student answers will vary, but good students will probably state that if product placements in online soap operas become blatant, audiences would find the shows distracting and distasteful. Possible problems include potential mismatches between the soap opera’s content and the brand’s image, which could dilute brand messaging, and the risk of audience disengagement if the soap opera fails to capture or retain viewer interest. DETAILED CHAPTER OUTLINE Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible to target customers. Companies must also communicate with present and potential stakeholders, and with the general public. For most marketers, therefore, the question is not whether to communicate but rather what to say, how and when to say it, to whom, and how often. Consumers can turn to hundreds of cable and satellite TV channels, thousands of magazines and newspapers, and millions of Internet pages. They are taking a more active role in deciding what communications they want to receive as well as how they want to communicate to others about the products and services they use. To effectively reach and influence target markets, holistic marketers are creatively employing multiple forms of communications. Done right, marketing communications can have a huge payoff. THE ROLE OF MARKETING COMMUNICATIONS Marketing communications is the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the products and brands that they sell. Marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers. Marketing communications also work for consumers when they show how and why a product is used, by whom, where, and when. Marketing communications allows companies to link their brands to other people, places, events, brands, experiences, feelings, and things. THE CHANGING MARKETING COMMUNICATIONS ENVIRONMENT Technology and other factors have profoundly changed the way consumers process communications and even whether they choose to process the information. The rapid diffusion of multipurpose smart phones, broadband and wireless Internet connections, and ad-skipping digital video recorders have eroded the effectiveness of the mass media. Consumers not only have more choices of media, they can also decide whether and how they want to receive commercial content. MARKETING COMMUNICATIONS AND BRAND EQUITY In this new communications environment, although advertising is often a central element of a marketing communications program, it is usually not the only one—or even the most important one—in terms of building brand equity and driving sales. Marketing Communications Mix The marketing communications mix consists of eight major modes of communication: Advertising Sales promotion Events and experiences Public relations and publicity Direct marketing Interactive marketing Word-of-mouth marketing Personal selling Table 17.1 lists numerous communication platforms. Every brand contact delivers an impression that can strengthen or weaken a customer’s view of the company. Marketing communication activities contribute to brand equity and drive sales in many ways: by creating brand awareness, forging brand image in consumers’ memories, eliciting positive brand judgments or feelings, and strengthening consumer loyalty. Marketing Communication Effects The way brand associations are formed does not matter. Marketing communication activities must be integrated to deliver a consistent message and achieve the strategic positioning. The starting point in planning marketing communication is an audit of all the potential interactions that customers in the target market may have with the company and all its products and services. Marketers need to assess which experiences and impressions will have the most influence at each stage of the buying process. Armed with these insights, they can judge marketing communications according to their ability to affect experiences and impressions, build customer loyalty and brand equity, and drive sales. From the perspective of building brand equity, marketers should be “media neutral” and evaluate all the different possible communications options according to effectiveness criteria (how well does it work) as well as efficiency considerations (how much does it cost). THE COMMUNICATION PROCESS MODELS Marketers should understand the fundamental elements of effective communication. Two models are useful: a macro-model and a micromodel. Figure 17.1 shows a macro-communication model with nine elements. Two elements represent the major parties in a communication—sender and receiver. Two represent the major communication tools—message and media. Four represent major communication functions—encoding, decoding, response, and feedback. The last element in the system is noise (random and competing messages that may interfere with the intended communication). The model emphasizes the key factors in effective communication: Senders must know what audiences they want to reach and what response they want to get. They must encode their messages so that the target audience can decode them. They must transmit the message through media that reaches the target audience. 4) They must develop feedback channels to monitor the responses. The more the sender’s field of experience overlaps with that of the receiver, the more effective the message is likely to be. Micromodel of Consumer Responses Micromodels of marketing communication concentrate on consumers’ specific responses to communications. Figure 17.2 summarizes four classic response hierarchy models. These models assume that the buyer passes through a cognitive, affective, and behavioral stage, in that order. This “learn-feel-do” sequence is appropriate when the audience has a high involvement with a product category perceived to have high differentiation. An alternative sequence, “do-feel-learn” is relevant when the audience has high involvement but perceives little or no differentiation within the product category. A third sequence, “learn-do-feel” is relevant when the audience has low involvement and perceives little differentiation within the product category. By choosing the right sequence, the marketers can do a better job of planning communications. Here we will assume that the buyer has high involvement with the product category and perceives high differentiation within the category. We will illustrate the hierarchy-of-effects model (in the second column of Figure 17.2). Awareness Knowledge Liking Preference Conviction Purchase To increase the odds for a successful marketing communications campaign, marketers must attempt to increase the likelihood that each step occurs. For example, from an advertising standpoint, the ideal ad campaign would ensure that: The right consumer is exposed to the right message at the right place and at the right time. The ad causes the consumer to pay attention to it but does not distract from the intended message. The ad properly reflects the consumer’s level of understanding about the product and the brand. The ad correctly positions the brand in terms of desirable and deliverable points-of-difference and points-of-parity. The ad motivates consumers to consider purchase of the brand. The ad creates strong brand associations to all of these stored communication effects so that they can have an effect when consumers are considering making a purchase. DEVELOPING EFFECTIVE COMMUNICATION Figure 17.3 shows the eight steps in developing effective communication. We begin with the basics: identifying the target audience, determining the objectives, designing the communication, selecting the channels, and establishing the budget. IDENTIFY THE TARGET AUDIENCE The process starts with a clear target audience in mind. Potential buyers of the company’s products Current users, deciders, or influencers Individuals, groups, or particular publics General public The target audience is a critical influence on the communicator’s decisions on: What to say How to say it When to say it Where to say it To whom to say it Though we can profile the target audience in terms of any of the market segments identified in Chapter 8, it is often useful to define a target audience in terms of usage and loyalty. Is the target new to the category or a current user? Is the target loyal to the brand, loyal to a competitor, or someone who switches between brands? If the target is a brand user, is he or she a heavy or light user? DETERMINE THE COMMUNICATION OBJECTIVES Communication objectives can be set at any level of the hierarchy-of-effects model. A) Rossiter and Percy identify four possible objectives: Category need Brand awareness Brand attitude Brand purchase intention DESIGN THE COMMUNICATION Formulating the communication to achieve the desired response will require solving three problems: what to say (message strategy), how to say it (creative strategy), and who should say it (message source). Message Strategy In determining message strategy, management searches for appeals, themes, or ideas that will tie into the brand positioning and help to establish points-of-parity or points-of-difference. A) Some of these may be related directly to product or service performance: Quality Economy Value of the brand Where others may relate to more extrinsic considerations: Contemporary Popular Traditional John Maloney saw buyers as expecting one of four types of reward from a product: Rational Sensory Social Ego satisfaction Creative Strategy Communication effectiveness depends on how a message is being expressed as well as the content of the message itself. An ineffective communication may mean that the wrong message was used or the right message was expressed poorly. Creative strategies are how marketers translate their messages into specific communication. Creative strategies can be broadly classified as either “informational” or transformational appeals. Informational Appeals An informational appeal elaborates on product or service attributes or benefits. A) Examples are: Problem solution ads Product demonstration ads Product comparison ads Testimonials B) Informational appeals assume very rational processing of the communication on the part of the consumer—logic and reason “rule.” C) There are three types of informational appeals: Conclusion drawing One-versus two-sided arguments Order of argument presentations Transformational Appeals A transformational appeal elaborates on a non-product-related benefit or image. A) It might depict: What kind of person uses a brand What kind of experience results from using the brand Transformational appeals often attempt to stir up emotions that will motivate purchase. Communicators use negative appeals such as: Fear Guilt Shame Messages are most persuasive when they are moderately discrepant with what the audience believes. Communicators also use positive emotional appeals such as: Humor Love Pride Joy Motivational or “borrowed interest” devices are often employed to attract consumer attention and raise their involvement with an ad. Borrowed interest techniques are thought to be necessary in the tough new media environment characterized by low involvement consumer processing and while competing with ad and programming clutter. Attention getting tactics are often too effective and distract from brand or product claims. One challenge in arriving at the best creative strategy is figuring out how to “break through the clutter” to attract the attention of the consumer—but still be able to deliver the intended message. The magic of advertising is to bring concepts to life in the minds of the consumer target. Message Source Messages delivered by attractive or popular sources can potentially achieve higher attention and recall. What is important is the spokesperson’s credibility. The three factors underlining credibility are: Expertise Trustworthiness Likability – Expertise is the specialized knowledge the communicator possesses to back the claim. Trustworthiness is related to how objective and honest the source is perceived to be. – Friends are trusted more than strangers or salespeople, and people who are not paid to endorse a product are viewed as more trustworthy than people who are paid. – Likability describes the source’s attractiveness. Qualities like candor, humor, and naturalness make a source more likable. The most highly credible source would be a person who scores high on all three dimensions. Marketing Insight: Celebrity Endorsements as a Strategy A well-chosen celebrity can draw attention to a product or a brand. Celebrities can play a strategic role for their brands; using celebrities poses certain risks. If a person has a positive attitude toward a source and a message, or a negative attitude toward both, a state of congruity is said to exist. The principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but, in the process, might lose some esteem with the audience. Marketing Insight: Collectivism, Consensus Appeals and Credibility Individualism-collectivism is perhaps the most central dimension in cultural variability identified in cross-cultural research. Members of individualistic cultures (e.g., Western countries such as the U.S., Canada, and Australia) tend to hold an independent view of the self that emphasizes separateness, internal attributes, and the uniqueness of individuals. In contrast, members of collectivistic cultures (e.g., Asian countries such as Hong Kong, Taiwan, and Japan) tend to hold an interdependent view of the self that emphasizes connectedness, social context, and relationships. SELECT THE COMMUNICATION CHANNELS Selecting efficient channels to carry the message becomes more difficult as channels of communication become more fragmented and cluttered. Communication channels may be personal and non-personal. Personal Communication Channels Personal communication channels involve two or more persons communicating directly faceto-face, person to audience, over the telephone, or through email. Personal communication channels derive their effectiveness through individualized presentation and feedback. Advocate channels consist of company salespeople contacting buyers in the target market. Expert channels consist of independent experts making statements to target buyers. Social channels consist of neighbors, friends, family members, and associates talking to target buyers. Personal influence carries especially great weight in two situations: With products that are expensive, risky, or purchased infrequently. Where the product suggests something about the user’s status or taste. Non-personal (Mass) Communication Channels Non-personal communication channels are communications directed to more than one person and includes media, sales promotions, events, and publicity. Much of the recent growth of nonpersonal channels has been with events and experiences. A company can build its brand image through creating or sponsoring events such as sports. Not only do event marketers sponsor sports events, they also sponsor the arts and zoos, especially for entertaining clients and employees. Companies are searching for better ways to quantify the benefits of sponsorship and are demanding greater accountability from event owners and organizers. They are also creating events designed to surprise the public and create a buzz. Events can create attention, although whether they have a lasting effect on brand awareness, knowledge, or preference will vary considerably depending on the quality of the product, the event itself, and its execution. Integration of Communication Channels Mass communication affects personal attitudes and behavior through a two-step process. Ideas often flow from radio, television, and print to opinion leaders and from these to the less media-involved population groups. This two-step flow has several implications. First, the influence of mass media on public opinion is not as direct, powerful, and automatic as supposed. It is mediated by opinion leaders—people whose opinions are sought or who carry their opinions to others. Second, the two-step flow challenges the notion that consumption styles are primarily influenced by a “trickle-down” or “trickle-up” effect from mass media. People interact primarily within their own social groups and acquire ideas from opinion leaders in their groups. Third, two-step communication suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others. ESTABLISH THE TOTAL MARKETING COMMUNICATION BUDGET One of the most difficult marketing decisions is determining how much to spend on promotion. Industries and companies vary considerably in how much they spend on promotion. Companies decide on the promotion budget in four common ways: Affordable Method Some companies set the promotion budget at what they think the company can afford. This method completely ignores the role of promotion as an investment and the immediate impact on sales volume. It leads to uncertain annual budget, and makes long range planning difficult. Percentage-of-Sales Method Some companies set promotion expenditures at a specified percentage of sales (current or anticipated) or the sales price. Supporters of the percentage-of-sales method see a number of advantages. Promotion expenditures will vary with what the company can “afford.” It encourages management to think of the relationship among promotion cost, selling price, and profit per unit. It encourages stability when competing firms spend approximately the same percentage of their sales on promotion. The percentage-of-sales method has little to justify it. It views sales as the determiner of promotion rather than as the result. It leads to a budget set by the availability of funds rather than by market opportunities. It discourages experimentation with countercyclical promotion or aggressive spending. Year-to-year sales fluctuations interfere with long-range planning. There is no logical basis for choosing the specific percentage. It does not encourage building the promotion budget by determining what each product and territory deserves. Competitive-Parity Method Some companies set their promotion budget to achieve share-of-voice parity with competitors. A) Two arguments are made in support of the competitive-parity method. Competitors’ expenditures represent the collective wisdom of the industry. Maintaining competitive parity prevents promotion wars. Neither argument is valid. Objective-and-Task Method The objective-and-task method calls upon marketers to develop promotion budgets by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget. The objective-and-task method has the advantage of requiring management to spell out its assumptions about the relationship among dollars spent, exposure levels, trial rates, and regular usage. DECIDING ON THE MARKETING COMMUNICATIONS MIX Companies must allocate the marketing communication budget over the six major modes of communications—advertising, sales promotion, public relations and publicity, events and experiences, personal selling, and direct marketing. Within the same industry, companies can differ considerably in their media and channel choices. Companies are always searching for ways to gain efficiency by replacing one promotional tool with others. Marketing Insight: Marketing Communication and the Urban Chinese Consumer Reports some research findings on the advertising and promotional attitudes of mainland consumers. Nielsen categorized urban Chinese consumers into five groups, each with different advertising and promotion preferences: the Adventurous, the Worker Bees, the Value Hunters and the Laggards. CHARACTERISTICS OF THE MARKETING COMMUNICATIONS MIX Each communication tool has its own unique characteristics and costs. Advertising Advertising can be used to build up a long-term image for a product or trigger quick sales. A) Advertising can reach geographically dispersed buyers. Certain forms of advertising require large budgets; others do not. Just the presence of advertising might have an effect on sales. Consumers might believe that the advertised brand must offer a “good value.” Because of the many forms of advertising, it is difficult to make generalizations however, the following qualities can be noted: Pervasiveness Amplified expressiveness Impersonality Sales Promotion Companies use sales-promotion tools to draw a stronger and quicker buyer response, including short-run effects such as highlighting product offers and boosting sagging sales. A) Sales-promotion offers three distinct benefits: Communication Incentive Invitation Public Relations and Publicity Marketers tend to underuse public relations, yet a well-thought-out program coordinated with the other promotion-mix elements can be extremely effective. A) The appeal of public relations and publicity is based on three distinctive qualities: High credibility Ability to catch buyers off guard Dramatization Events and Experiences A) There are many advantages to events and experiences: Relevant Involving Implicit Direct and Interactive Marketing Direct and interactive marketing takes many forms—over the phone, online, or in person. They share three distinctive characteristics. Direct and interactive marketing messages are: 1) Customized Up-to-date Interactive Word-of-Mouth Marketing Word of mouth also takes many forms online or off-line. Three noteworthy characteristics are: Credible Personal Timely Personal Selling Personal selling is the most effective tool at the later stages of the buying process, particularly in building up buyer preference, conviction, and action. Personal selling has three distinctive qualities: Personal interaction Cultivation Response FACTORS IN SETTING THE MARKETING COMMUNICATIONS MIX Type of Product Market Communication allocations vary between consumer and business markets. Consumer markets tend to spend comparatively more on sales promotion and advertising. Business marketers tend to spend comparatively more on personal selling. In general, personal selling is used more with: Complex Expensive Risky goods In markets with fewer and larger sellers. Although advertising is used less than sales calls in business markets, it still plays a significant role: Advertising can provide an introduction to the company and its products. If the product has new features, advertising can explain them. Reminder advertising is more economical than sales calls. Advertisements offering brochures and carrying the company’s phone number or web address are an effective way to generate leads for sales representatives. Sales representatives can use copies of the company’s ads to legitimize their company and products. Advertising can remind customers how to use the product and reassure them about their purchase. Advertising combined with personal selling can increase sales over personal selling alone. Personal selling can also make a strong contribution in consumer goods marketing. An effectively trained company sales force can make four important contributions: Increased stock position Build enthusiasm Conduct missionary selling Manage key accounts Buyer-Readiness Stage Communication tools vary in cost-effectiveness at different stages of buyer readiness. Figure 17.4 shows the relative cost-effectiveness of three communication tools. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling, sales promotion, and somewhat by advertising. Product Life-Cycle Stage A) In the introduction stage: Advertising and publicity have the highest cost-effectiveness Followed by personal selling to gain distribution coverage Sales promotion to induce trial B) In the growth stage: Demand has its own momentum through word-of-mouth C) In the maturity stage: 1) Sales promotion Advertising Personal selling all grow more important in that order. D) In the decline stage: 1) Sales promotion continues to grow strong 2) Advertising and publicity are reduced 3) Salespeople give the product only minimal attention MEASURING COMMUNICATION RESULTS Senior managers want to know the outcomes and revenues resulting from their communications investments. Too often, communications directors supply only outputs and expenses. After implementing the communication plan, the communications director must measure its impact on the target audience. Members of the target audience are asked: Whether they recognize or recall the message. How many times they saw it. What points they recall. How they felt about the message. Previous and current attitudes toward the product and the company. The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it. Figure 17.5 provides an example of good feedback measurement. MANAGING THE INTEGRATED MARKETING COMMUNICATIONS PROCESS Many companies still rely on only one or two communication tools. This practice persists in spite of the fragmenting of mass markets into a multitude of minimarkets, each requiring its own approach; the proliferation of new types of media; and the growing sophistication of consumers. The wide range of communication tools, messages, and audiences makes it imperative that companies move toward integrated marketing communications. Companies must adopt a “360-degree view” of consumers to fully understand all the different ways that communications can affect consumer behavior in their daily lives. The American Association of Advertising Agencies defines integrated marketing communications (IMC) as “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” This planning process evaluates the strategic roles of a variety of communications disciplines—for example, general advertising, direct response, sales promotion, and public relations—and skillfully combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of messages. Media companies and ad agencies are expanding their capabilities to offer multi-platform deals for marketers. These expanded capabilities make it easier for marketers to assemble various media properties—as well as related marketing services—in an integrated communication program. COORDINATING MEDIA Media coordination can occur across and within media types, but marketers should combine personal and non-personal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact. Promotions can be more effective when combined with advertising. Many companies are coordinating their online and off-line communications activities. Web addresses in ads (especially print ads) and on packages allow people to more fully explore a company’s products, find store locations, and get more product or service information. IMPLEMENTING IMC A few large ad agencies have now substantially improved their integrated offerings. To facilitate one-stop shopping, these agencies have acquired promotion agencies, public relations firms, package-design consultancies, Web site developers, and direct-mail houses. They are redefining themselves as communications companies that assist clients to improve their overall communications effectiveness by offering strategic and practical advice on many forms of communication. Integrated marketing communications can produce stronger message consistency and help build brand equity and create greater sales impact. It forces management to think about every way the customer comes in contact with the company, how the company communicates its positioning, the relative importance of each vehicle, and timing issues. It gives someone the responsibility—where none existed before—to unify the company’s brand images and messages as they come through thousands of company activities. IMC should improve the company’s ability to reach the right customers with the right messages at the right time and in the right place. Marketing Memo: How integrated is your IMC program? In assessing the collective impact of an IMC program, the overriding goal is to create the most effective and efficient communication program possible. The following six criteria can be used to help determine whether communication is truly integrated: Coverage; Contribution; Commonality; Complementarity; Versatility; and Cost. Chapter 18 Managing Mass Communications: Advertising, Sales Promotions, Events, and Public Relations LEARNING OBJECTIVES In this chapter, we will address the following questions: What steps are required in developing an advertising program? How should sales promotion decisions be made? What are the guidelines for effective brand-building events and experiences? How can companies exploit the potential of public relations and publicity? SUMMARY Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertisers include not only business firms but also charitable, nonprofit, and government agencies. Developing an advertising program is a five-step process: (1) Set advertising objectives; (2) establish a budget; (3) choose the advertising message and creative strategy; (4) decide on the media; and (5) evaluate communication and sales effects. Sales promotion consists of mostly short-term incentive tools, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. In using sales promotion, a company must establish its objectives, select the tools, develop the program, pretest the program, implement and control it, and evaluate the results. Events and experiences are a means to become part of special and more personally relevant moments in consumers’ lives. Events can broaden and deepen the sponsor’s relationship with its target market, but only if managed properly. Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall Public relations (PR) includes a variety of programs designed to promote or protect a company’s image or its individual products. Marketing Public Relations (MPR), to support the marketing department in corporate or product promotion and image making, can affect public awareness at a fraction of the cost of advertising and is often much more credible. The main tools of PR are publications, events, news, community affairs, identification media, lobbying and social responsibility. OPENING THOUGHT Students will be familiar with the major forms of advertising. What might present challenges to some students will be the ideas surrounding the five-step process involved: set advertising objectives, establish a budget, choose the advertising message and creative strategy, decide on the media, and evaluate the effects. The instructor is encouraged to present examples of differing advertising campaigns and differing forms of communication (print, electronic, Web-based, billboards, etc.) to show the various opportunities and complexities involved. The instructor is encouraged to use events and experiences (sponsorships of university or college events are good examples to use) to demonstrate the effectiveness (or ineffectiveness) of this media to build brand equity. Public relations and MPR might be new material to students and the instructor is encouraged to use professional public relations officers (university or college representatives) as guest speakers to explain current developing practices and procedures in this evolving specialty. TEACHING STRATEGY AND CLASS ORGANIZATION PROJECTS At this point in the semester-long project, students should submit their advertising program complete with objectives, budget, advertising message and creative strategy, media decisions, and sales and promotional materials. Sponsorships are an integral part of business today. The support of college and university’s teams by various sporting goods companies and local vendors add needed revenues to colleges and universities. In this project, students are to contact their college or university’s sports management program and try to discover the dollar amount that sponsorships add to the university. Secondly, contact as many of these local sponsors as possible and try to see how these sponsors quantify their expenditures (to the college and university) in terms of brand awareness, purchase intent, or consumer product decision-making. Marketing Plan: Advertising, sales promotion, and public relations are among the most visible outcomes of any marketing plan. These mass communications tools provide support for branding, product, pricing, and distribution strategies. Get students to start planning promotional support for launching their product or service. After reviewing their earlier marketing mix decisions and current situation as a new player in the market, they should respond to the following questions about their promotion strategy: Should advertising be used to support the product or service introduction? If so, what advertising goals should be set, and how will the results be measured? What message(s) should be communicated to the target audience? What media are most appropriate, and why? Should consumer or trade promotion or both be used? Should public relations be used to promote the product or service? If so, what objectives should be set for the public relations program(s)? Get students to summarize their answers in a written marketing plan or type them into the Marketing Mix section of Marketing Plan Pro. ASSIGNMENTS Organizations handle advertising in differing ways. In this assignment, students should contact different size companies in their community (one large, one medium, and one small company) and find out who is responsible for working with their ad agencies and how (and where) did they receive their training in developing advertising messages. Was or did their training primarily consist of “on-the-job” training? Experience learned from previous positions in larger firms? Or is their understanding of the operation of advertising more of a “learn as I go” process? In compiling their data, can the students identify any common elements? Can we draw any inference from or about advertising from the data? In small groups, have the students create an advertising campaign for a product/service of their choosing, including ad copy and creative execution (mock-up print ads, a “homemade” television commercial for example). This campaign should contain each of the elements of the chapter material and most importantly, define the 5Ms objectives. The remainder of their class members should evaluate each group member as to the effectiveness of their campaign. It has been suggested that over 70 percent of all buying decisions are made in the store and as a result, point-of-purchase advertising has grown in its appeal. Students should give three examples of point-of-purchase advertising that they have recently come across (ads in-store, personal selling by a cosmetic counter salesperson, etc.) and comment on the effectiveness to them of this type of advertising. Did they buy the product? Did the advertising annoy them? Moreover, in the role of a marketing executive, would the student recommend spending part of their advertising budget on this form of media? In the Marketing Memo entitled, Print Ad Evaluation Criteria, the author lists seven questions that should be answered in the affirmative concerning the executional elements of print advertising. Have the students select two print advertisements, then ask them to evaluate each of them in regards to the criteria stated in the Marketing Memo. This assignment should be a favorite one for the students to complete. Breaking the class up into groups, assign a different television channel (cable and network) to each group. Have the students’ record all the television commercials shown during prime time for a particular night (say for a Thursday night). After watching the commercials, students should list their favorite ones, their not so favorite ones, and the ones that annoyed them the most. Have the students share their commercials with the other class members and see if the other members share the same opinion(s). Finally, in light of the advertising objectives presented in this chapter, can the students “pick out” the message of the ad? Events, experiences, and sponsorship advertising is increasing. The chapter outlines eight reasons given for sponsoring events. Students should choose an event or sponsorship (recent activity on campus, attendance by students at an event, etc.) and evaluate how effective they feel the event is/was towards achieving these eight objectives. Students should also be able to comment on why they feel that the sponsorship event did not achieve some of these stated objectives. END-OF-CHAPTER SUPPORT Marketing Debate: Should Marketers Test Advertising? Advertising creatives have long lamented ad pretesting. They believe that it inhibits their creative process and results in much sameness in commercials. Marketers, on the other hand, believe that ad pretesting provides the necessary checks and balances to ensure that an ad campaign will connect with consumers and be well received in the marketplace. Take a position: Ad pretesting is often an unnecessary waste of marketing dollars versus Ad pre-testing provides an important diagnostic function for marketers as to the likely success of an ad campaign. Pro: Most advertisers try to measure the communication effect of an ad—that is, its potential effect on awareness, knowledge, or preference. They would also like to measure the ad’s sales effect. Communication-Effect Research called copy testing seeks to determine whether an ad is communicating effectively. Marketers should perform this test both before an ad is put into media and after it is printed or broadcast. Many advertisers use posttests to assess the overall impact of a completed campaign. If a company hoped to increase brand awareness from 20 percent to 50 percent and succeeded in increasing it to only 30 percent, then the company is not spending enough, its ads are poor, or it has overlooked some other factor, giving them valuable information at a reasonable cost. Con: Pretest critics maintain that agencies can design ads that test well but may not necessarily perform well in the marketplace. Proponents of ad pretesting maintain that useful diagnostic information can emerge and that pretests should not be used as the sole decision criterion anyway. Widely acknowledged as being one of the best advertisers around, Nike is notorious for doing very little ad pretesting. MARKETING DISCUSSION What are some of your favorite TV ads? Why? How effective are the message and creative strategies? How are they building brand equity? Suggested Response: Student answers will differ depending upon their favorite TV commercials but all answers should cover the major points of this chapter. One of my favorite TV ads is Apple's "Get a Mac" campaign, which effectively uses humor and clear comparisons to highlight the advantages of Mac over PC. The message and creative strategies build brand equity by emphasizing Apple’s innovation and simplicity, strengthening its identity as a premium and user-friendly brand. Marketing Lesson: COCA-COLA What does Coca-Cola stand for? Is it the same for everyone? Explain. Suggested Answer: Because Coke believed early on that to gain worldwide acceptance, it needed to connect emotionally and socially with the masses and be “at arm’s length” with everyone. Coco-Cola must understand and recognize that “refreshment” means different things to different people around the world. One of Coke’s strengths is how well it weaves the soft drink, Coke, into people’s definitions of refreshment no matter where in the world they live. Coca-Cola stands for refreshment, happiness, and a sense of togetherness, promoting a positive emotional experience. While the core brand values are consistent globally, individual perceptions can vary based on personal experiences and cultural contexts. Coca-Cola has successfully marketed to billions of people around the world. Why is it so successful? Suggested Answer: Coke has created a highly-current, uplifting global campaign that translates well into different countries, languages, and cultures. Coke’s advertising has primarily focused on the product’s ability to quench thirst. Coca-Cola’s success stems from its consistent brand messaging, extensive global distribution, and innovative marketing strategies that resonate emotionally with diverse audiences. Additionally, its strong focus on creating memorable, culturally relevant advertising campaigns has bolstered its universal appeal. Can Pepsi or any other company ever surpass Coca-Cola? Why or why not? What are Coca-Cola’s greatest risks? Suggested Answer: Student answers will vary based on their personal opinions and “tastes.” Coke’s greatest risks have to be the managing of its mass communications strategy and reaching the brand’s target market—it is so massive that the right media and marketing message is critical. Pepsi or another company could potentially surpass Coca-Cola by innovating faster or capturing market trends more effectively. However, Coca-Cola’s greatest risks include maintaining brand relevance amid changing consumer preferences and potential disruptions in global supply chains. What should Coca-Cola do regarding sports sponsorship such as the FIFA World Cup? Suggested Answer: Student answers will vary. Coca Cola could continue with the sponsorship but should ensure that the internal management of how it secures sponsorship rights is “aboveboard” and that some form of PR is used to counter allegations, especially those that are unfounded. Coca-Cola should continue leveraging high-profile sports sponsorships like the FIFA World Cup to enhance brand visibility and engage with global audiences, while also investing in localized and sustainable initiatives to resonate with diverse markets and address emerging consumer values. Marketing Lesson: GILLETTE Gillette has successfully convinced the world that “more is better” in terms of number of blades and other razor features. Why has that worked in the past? What is next? Suggested Answer: The company’s impressive marketing knowledge and campaigns have helped it reach an international level of success. Gillette uses one global marketing message around the world and is closely aligned with sports and sports figures worldwide. Gillette’s “more is better” approach worked due to its emphasis on technological innovation and superior performance, which appealed to consumers seeking enhanced shaving experiences. Going forward, Gillette may need to focus on sustainability, personalization, and addressing emerging consumer needs for eco-friendly and customized grooming solutions. Some of Gillette’s spokespeople such as Tiger Woods and Thierry Henry have run into controversy after becoming endorsers for the brand. Does this hurt Gillette’s brand equity or marketing message? Explain. Suggested Answer: In the long-run these spokespeople should not hurt the brand’s equity due to the extensive use of sport figures world-wide, and the integrated marketing communication strategy—aligning itself with not only sport figures but musicians, video games, and movies/videos. Yes, controversies involving Gillette’s spokespeople can damage brand equity by associating the brand with negative perceptions, which undermines its marketing message of trust and reliability. Such issues can erode consumer confidence and affect the brand’s overall reputation. In Asia, where cheaper razors are available, why should Asian men buy Gillette? What should Gillette do to appeal to Asian men? Suggested Answer: Asian men should buy from Gillette because of the innovation that has gone into producing its quality products. Gillette should recognize their target consumers’ differences in Asia and not expect low prices to be sufficient to win this segment over. Research should be done to understand the context in which people in Asia use shaving products. This way Gillette would be able to appeal to Asian men based on form and functionality. Asian men should buy Gillette for its perceived superior quality, advanced technology, and brand prestige. To appeal to this market, Gillette should emphasize product innovation, affordability, and localized marketing strategies that address specific grooming needs and preferences in the region. Can Gillette ever become as successful at marketing to women? Why or why not? Suggested Answer: Yes, the strategies, tactics, and communication message used to market to me, Gillette can begin to market to women—women who buy personal care products for “their man”! Gillette can become as successful at marketing to women by tailoring products and messaging to their specific needs and preferences, but achieving this will require overcoming entrenched gender stereotypes and investing in targeted, innovative campaigns. DETAILED CHAPTER OUTLINE Although there has been an enormous increase in the use of personal communications by marketers in recent years, due to the rapid penetration of the Internet and other factors, the fact remains that mass media, if used correctly, is still an important component of a modern marketing communications program. The old days of “if you build a great ad, they will come,” however, are long gone. To generate consumer interest and sales, mass media must often be supplemented and carefully integrated with other communication; other marketers are trying to come to grips with how to best use mass media in the new—and still changing—communication environment. DEVELOPING AND MANAGING AN ADVERTISING PROGRAM Advertising can be a cost-effective way to disseminate messages, whether to build a brand preference or to educate people. In developing an advertising program, marketing managers must always start by identifying the target market and buyer motives. They can then make the five major decisions known as “the five Ms”: Mission: What are the advertising objectives? Money: How much can be spent? Message: What message should be sent? Media: What media should be used? Measurement: How should the results be evaluated? These decisions are summarized in Figure 18.1 and described in the following sections. SETTING THE OBJECTIVES The advertising objectives must flow from prior decisions on target market, brand positioning, and the marketing program. An advertising goal (or objective) is a specific communication task and achievement level to be accomplished with a specific audience in a specific period of time. Advertising objectives can be classified according to whether their aim is to: 1) Inform Persuade Remind Reinforce Each aim at different stages in the hierarchy of effects discussed in Chapter 17. Information advertising aims to create brand awareness and knowledge of new products or new features of existing products. Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service. Reminder advertising aims to stimulate repeat purchase of products and services. Reinforcement advertising aims to convince purchasers that they made the right choice. The advertising objective should emerge from a thorough analysis of the current marketing situation. DECIDING ON THE ADVERTISING BUDGET How does a company know if it is spending the right amount? Although advertising is viewed as a current expense, part of it really is an investment in building brand equity. Factors affecting budget decisions Here are five specific factors to consider when setting the advertising budget: Stage in the product life cycle Market share and consumer base Competition and clutter Advertising frequency Product substitutability Advertising Elasticity The predominant response function for advertising is often concave but can be S-shaped. When consumer response is S-shaped, some positive amount of advertising is necessary to generate any sales impact, but sales increases eventually flatten out. DEVELOPING THE ADVERTISING CAMPAIGN In designing and evaluating an ad campaign, marketers employ both art and science to develop the message strategy or positioning of an ad—what the ad attempts to convey about the brand, its creative strategy and how the ad expresses the brand claim. Message Generation and Evaluation Advertisers are always seeking “the big idea” that connects with consumers rationally and emotionally, sharply distinguishes the brand from competitors, and is broad and flexible enough to translate to different media, markets, and time periods. Fresh insights are important for avoiding using the same appeals and position as others. A good ad normally focuses on one or two core selling propositions. Creative brief Positioning statement It includes considerations such as key message, target audience, communications objectives (to do, to know, to believe), key brand benefits, supports for the brand promise, and media. Marketing Insight: Advertising Guidelines for Modern Asia As Asian markets become more sophisticated, so too will regional advertising. Jim Aitchison, who has worked in Asian advertising for over 20 years, gave the following insights about advertising in the region: There is no such thing as a “typical” Asian campaign. There is no such thing as a “typical” Asian consumer. The best work adheres to the universal truths of advertising. The best work is true to its own culture. Humor appears to be a successful tool in Asia. Asians respond to beautiful executions and craft. Creative Development and Execution The ad’s impact depends not only on what is said, but often more importantly, on how it says it. Execution can be decisive. Every advertising medium has specific advantages and disadvantages. Television Ads Television is generally acknowledged as the most powerful advertising medium and reaches a broad spectrum of consumers. TV advertising has two particularly important strengths. First, it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits. Second, it dramatically portrays user and usage imagery, brand personality, and other brand intangibles. Because of the fleeting nature of the message and the potentially distracting creative elements, product-related messages and the brand itself can be overlooked. Print Ads Print media offers a stark contrast to broadcast media. Print media can provide much detailed product information and can also effectively communicate user and usage imagery. However, the static nature of the visual images makes it difficult to provide dynamic presentations or demonstrations. It can also be a fairly passive medium. The two main print media—newspapers and magazines—have many of the same advantages and disadvantages. Newspapers are timely and pervasive. Magazines are more effective at building user and usage imagery. E) Researchers studying print advertisements report that the: Picture Headline Copy (are important in that order) Marketing Memo: Print Ad Evaluation Criteria This marketing memo lists the 7 questions marketers should consider when evaluating whether or not their printed ad was executed for effectiveness: 1) Is the message clear at a glance? Can you quickly tell what the ad is about? 2) Is the benefit in the headline? Does the illustration support the headline? Does the first line of the copy support or explain the headline and the illustration? Is the ad easy to read and follow? Is the product easily identified? Is the brand or sponsor clearly identified? Radio Ads Radio is a pervasive medium. Radio’s main advantage is flexibility: Stations are very targeted. Ads are relatively inexpensive to produce and place. 3) Short closing allow for quick response. Radio is particularly effective in the morning. It allows a company to achieve a balance between broad and localized market coverage. The obvious disadvantages of radio are: The lack of visual images. Relatively passive nature of the consumer processing that results. Legal and Social Issues Advertisers and their agencies must be sure advertising does not overstep social and legal norms. Public policy makers have developed a substantial body of laws and regulations to govern advertising. Must not make false claims Must avoid false demonstrations The problem is how to tell the difference between deception and “puffery”— simple exaggerations not intended to be believed that are permitted by law. To be socially responsible, advertisers must be careful not to offend the general public as well as any ethnic groups, racial minorities, or special-interest groups DECIDING ON MEDIA AND MEASURING EFFECTIVENESS After choosing the message, the advertiser’s next task is to choose the media to carry it. The steps here are deciding on desired reach, frequency, and impact; choosing among major media types; selecting specific media vehicles; deciding on media timing; and deciding on geographical media allocation. Then the results of these decisions are evaluated. DECIDING ON REACH, FREQUENCY, AND IMPACT Media selection is finding the most cost-effective media to deliver the desired number and type of exposures to the target audience. What do we mean by the desired number of exposures? Presumably, the advertiser is seeking a specified advertising objective and response from the target audience—for example, a target level of product trial. The rate of product trial will depend, among other things, on the level of brand awareness. Suppose the rate of product trial increases at a diminishing rate with the level of audience awareness, as shown in Figure 18.2(a). If the advertiser seeks a product trial rate of (say) T*, it will be necessary to achieve a brand awareness level of A*. The next task is to find out how many exposures, E*, will produce an audience awareness of A*. The effect of exposures on audience awareness depends on the exposures’ reach, frequency, and impact: Reach (R) Frequency (F) Impact (I) Figure 18.2(b) shows the relationship between audience awareness and reach. Audience awareness will be greater the higher the exposures’ reach, frequency, and impact. There are important trade-offs among reach, frequency, and impact. The relationship between reach, frequency, and impact is captured in the following concepts: The relationship between reach, frequency, and impact is captured in the following concepts: Total number of exposures (E)—This is the reach times the average frequency; that is, E = R × F. This measure is referred to as the gross rating points (GRP). If a given media schedule reaches 80 percent of the homes with an average exposure frequency of three, the media schedule is said to have a GRP of 240 (80 × 3). If another media schedule has a GRP of 300, it is said to have more weight, but we cannot tell how this weight breaks down into reach and frequency. Weighted number of exposures (WE)—This is the reach times average frequency times average impact, that is WE = R × F × I. CHOOSING AMONG MAJOR MEDIA TYPES The media planner has to know the capacity of the major advertising media types to deliver reach, frequency, and impact. The major advertising media along with their costs, advantages, and limitations are profiled in Table 18.1. Media planners make their choices by considering factors such as target audience media habits, product characteristics, message requirements, and cost. ALTERNATIVE ADVERTISING OPTIONS In recent years, reduced effectiveness of traditional mass media has led advertisers to increase their emphasis on alternate advertising media. Place Advertising Place advertising, or out-of-home advertising, is a broadly defined category that captures many different alternative advertising forms. Marketers are using creative and unexpected ad placement to grab consumer’s attention. The rationale is that marketers are better off reaching people in other environments, such as where they: Work Play Shop Popular options available include: Billboards Public places Product placement Point-of-purchase There are many ways to communicate with consumers at the point of purchase (P-O-P). In-store advertising includes ads on shopping carts, cart straps, aisles, and shelves, as well as promotion options such as in-store demonstrations, live sampling, and instant coupon machines. Some supermarkets are selling floor space for company logos and experimenting with talking shelves. P-O-P radio provides FM-style programming and commercial messages to thousands of food stores and drugstores nationwide. Programming includes a store-selected music format, consumer tips, and commercials. Evaluating Alternative Media Ads can now appear virtually anywhere consumers have a few minutes or even seconds to notice them. The main advantage of non-traditional media is a very precise and captive audience in a cost-effective manner. Unique ad placements designed to break through clutter may also be perceived as invasive and obtrusive, however. Consumers must be favorably affected in some way to justify the marketing expenditures for non-traditional media. Marketing Insight: Playing Games with Brands Given the explosive popularity of video games with younger consumers, many advertisers have adopted an “if you can’t beat them, join them” attitude. Online games have wide appeal. Women seem to prefer puzzles and collaborative games, whereas men seem more attracted to competitive or simulation games. An “advergame” can be played on the sponsor’s corporate homepage, on gaming portals, or even at restaurants. SELECTING SPECIFIC VEHICLES The media planner must search for the most cost-effective vehicles within each chosen media type. A) In making choices, the planner has to rely on measurement services that provide estimates of audience size, composition, and media cost. Media planners then calculate the cost per thousand persons reached by a vehicle. Several adjustments have to be applied to the cost-per-thousand measure: 1) The measure should be adjusted for audience quality. The exposure value should be adjusted for the audience-attention probability. The exposure value should be adjusted for the magazine’s editorial quality (prestige and believability). The exposure value should be adjusted for the magazine’s ad placement policies and extra services. Media planners are using more sophisticated measures of effectiveness and employing them in mathematical models to arrive at the best media mix. DECIDING ON MEDIA TIMING AND ALLOCATION In choosing media, the advertiser faces both a macro scheduling and a micro-scheduling problem. The macro-scheduling problem involves scheduling the advertising in relation to seasons and the business cycle. The micro-scheduling problem calls for allocating advertising expenditures within a short period to obtain maximum impact. Figure 18.3 shows several possible patterns. The chosen pattern should meet the communication objectives set in relationship to the nature of the product, target customers, distribution channels, and other marketing factors. The timing pattern should consider three factors. Buyer turnover Purchase frequency Forgetting rate In launching a new product, the advertiser has to choose among continuity, concentration, flighting, and pulsing. Continuity Concentration Flighting Pulsing A company has to decide how to allocate its advertising budget over space as well as over time. The company makes “national buys” when it places ads on national TV networks or in nationally circulated magazines. It makes “spot buys” when it buys TV time in just a few markets or in regional editions of magazines. These markets are called areas of dominant influence (ADIs) or designated marketing areas (DMAs). EVALUATING ADVERTISING EFFECTIVENESS Most advertisers try to measure the communication effect of an ad—that is, the potential effect on awareness, knowledge, or preference. They would also like to measure the ad’s sales effect. Communication-Effect Research Communication-effect research, called copy testing, seeks to determine whether an ad is communicating effectively. Marketers should perform this test both before it is put into media and after it is printed or broadcast. Table 18.2 describes some specific advertising research techniques. Sales-Effect Research The fewer or more controllable other factors such as features and price are, the easier it is to measure advertising’s effect on sales. The sales impact is easiest to measure in direct marketing situations and hardest in brand or corporate image-building advertising. Companies are generally interested in finding out whether they are overspending or underspending on advertising. One approach to answering this question is to work with the formulation shown in Figure 18.4. A company’s share of advertising expenditures produces a share of voice (i.e., proportion of company advertising of that product to all advertising of that product) that earns a share of consumers’ minds and hearts and ultimately, a share of market. The historical approach involves correlating past sales to past advertising expenditures using advanced statistical techniques. Other researchers use an experimental design to measure advertising’s sales impact. A growing number of researchers are striving to measure the sales effect of advertising expenditures instead of settling for communication-effect measures. SALES PROMOTION Sales promotion, a key ingredient in marketing campaigns, consists of a collection of incentive tools, mostly short-term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. Where advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotions include tools for: Consumer promotion Trade promotion Business and sales-force promotion OBJECTIVES Sales promotions tools vary in their specific objectives: A) Sellers use incentive-type promotions to: 1) Attract new users. Reward loyal customers. Increase the repurchase rates of occasional users. Sales promotions are often used to attract brand switchers. Sales promotions used in markets of high brand similarity can produce a high sales response in the short run. In markets of high brand dissimilarity, sales promotions may be able to alter market shares permanently. In addition to brand switching, consumers may engage in stockpiling during sales promotions. ADVERTISING VERSUS PROMOTION Sales promotion expenditures increased as a percentage of budget expenditure for a number of years, although its growth has recently slowed. A) Several factors contributed to this growth, particularly in consumer markets. B) Promotion became more accepted by top management as an effective sales tool; The number of brands increased; competitors used promotions frequently; Many brands were seen as similar; Consumers became more price-oriented; The trade demanded more deals from manufacturers; Advertising efficiency declined. The rapid growth of sales promotion created clutter. Loyal brand buyers tend not to change their buying patterns as a result of competitive promotions. Price promotions may not build permanent total-category volume. The upshot is that many consumer-packaged-goods companies feel forced to use more sales promotion than they wish. They blame heavy use of sales promotion for decreased brand loyalty, increased price sensitivity, brand-quality image dilution, and a focus on short-run marketing planning. MAJOR DECISIONS In using sales promotions, a company must establish its objectives, select the tools, develop the program, pretest the program, implement and control it, and evaluate the results. Establishing Objectives Sales promotion objectives are derived from broader promotion objectives that are derived from more basic marketing objectives developed for the product. For consumers, objectives may include: Encouraging purchase of larger-sized units 2) Building trial among non-users 3) Attracting switchers away from competitors’ brands Ideally, promotions with consumers would have short-run sales impact as well as long-run brand equity effects. For retailers, objectives include persuading retailers to: Carry new items Higher levels of inventory Encourage off-season buying Encourage stocking of related items Offset competitive promotions Build brand loyalty Gain entry into new retail outlets D) For the sales force, objectives include: Encourage support of a new product or model Encourage more prospecting Stimulate off-season sales Selecting Consumer-Promotion Tools The promotion planner should take into account the type of market, sales-promotion objectives, competitive conditions, and each tool’s cost effectiveness. The main consumer-promotion tools are summarized in Table 18.3. We can also distinguish between sales-promotion tools that are consumer-franchise building and reinforce the consumer’s brand preference and those that do not. Consumer franchise-building promotions offer the best of both worlds—they build brand equity while moving product. Digital coupons eliminate printing costs, reduce paper waste, are easily updatable, and have higher redemption rates. Selecting Trade-Promotion Tools Manufacturers use a number of trade-promotion tools; a higher proportion of the promotion pie is devoted to trade-promotion tools than to consumer promotion. Manufacturers use several trade promotion tools (Table 18.4). Manufacturers award money to the trade (1) to persuade the retailer or wholesaler to carry the brand; (2) to persuade the retailer or wholesaler to carry more units than the normal amount; (3) to induce retailers to promote the brand by featuring, display, and price reductions; and (4) to stimulate retailers and their sales clerks to push the product. The growing power of large retailers has increased their ability to demand trade promotions at the expense of consumer promotion and advertising. Manufacturers face several challenges in managing trade promotions. They often find it difficult to police retailers. Manufacturers are increasingly insisting on proof of performance before paying allowances. More retailers are doing forward buying—buying a greater quantity during the deal period than they can sell during the deal period. G) Retailers are doing more diverting. H) Manufacturers are trying to handle forward buying and diverting by limiting the amount that they will sell at a discount. Selecting Business-and Sales-Force-Promotion Tools Companies spend heavily on business and sales force promotion tools (Table 18.5) to gather business leads, impress and reward customers, and motivate the sales force to greater effort. Developing the Program In planning sales-promotion programs, marketers are increasingly blending several media into a total campaign concept. In deciding to use a particular incentive, marketers have several factors to consider: The size of the incentive The conditions for participation The duration of the promotion The distribution vehicle The timing of the promotion The total sales-promotion budget Implementing and Evaluating the Program Marketing managers must prepare implementation and control plans for each individual promotion that cover lead-time and sell-in time. Lead-time is the time necessary to prepare the program prior to launching it. Sell-in time begins with the promotional launch and ends when approximately 95 percent of the deal merchandise is in the hands of consumers. Manufacturers can evaluate the program using three methods: Sales data Consumer survey Experiments Additional costs beyond the cost of specific promotions: Include the risk that promotions might decrease long-run brand loyalty. Promotions can be more expensive than they appear. Some are inevitably distributed to the wrong consumers. Costs of special production runs, extra sales-force effort, and handling requirements. Finally, certain promotions irritate retailers, who may demand extra trade allowances or refuse to cooperate. EVENTS AND EXPERIENCES Companies also sponsor events including sports, entertainment tours and attractions, festivals, fairs, the arts, as well as cause marketing. By becoming part of a special and more personally relevant moment in consumers’ lives, companies’ involvement with events can broaden and deepen the relationship with their target market. Such below-the-line activities are gaining popularity in Asia as companies try to find better use for their money to achieve a higher return on investments. An event, relative to an ad, may cost less and yet allows the advertiser to interact with a captive target market. Daily encounters with brands may also affect consumers’ brand attitudes and beliefs. Atmospheres are “packaged environments” that create or reinforce leaning toward product purchase. Many firms are creating on-site or off-site product and brand experiences. EVENTS OBJECTIVES Marketers report a number of reasons why they sponsor events: To identify with a particular target market or lifestyle To increase awareness of company or product name To create or reinforce consumer perceptions of key brand image associations To enhance corporate image dimensions To create experiences and evoke feelings To express commitment to the community or on social issues To entertain key clients or reward key employees To permit merchandising or promotional opportunities Despite these potential advantages, there are a number of potential disadvantages to sponsorships: The success of the event can be unpredictable and out of the control of the sponsor. Some consumers may still resent the commercialization of events. MAJOR SPONSORSHIP DECISIONS Making sponsorships successful requires choosing the appropriate events, designing the optimal sponsorship program for the event, and measuring the effects of sponsorship. Choosing Events Because of the huge amount of money involved and the number of events, many marketers are becoming more selective about choosing sponsorship events. The event must meet the marketing objectives and communication strategy defined for the brand. The audience must match the target market of the brand. The event must have sufficient awareness, possess the desired image, and be capable of creating the desired effects with that target market. Consumers must make favorable attributions to the sponsor for its event involvement. An ideal event is also unique but not encumbered with many sponsors, lends itself to ancillary marketing activities, and reflects or enhances the sponsor’s brand or corporate image. Designing Sponsorship Programs Many marketers believe that it is the marketing program accompanying an event sponsorship that ultimately determines its success. At least 2 to 3 times the amount of the sponsorship expenditure should be spent on related marketing activities. Event creation is a particularly important skill in publicizing fundraising drives for non-profit organizations. More firms are now using their names to sponsor the arenas, stadiums, and other venues that hold events. Measuring Sponsorship Activities It is a challenge to measure the success of events. The supply-side method focuses on potential exposure to the brand by assessing the extent of media coverage. Demand-side method focuses on reported exposure from consumers. Marketing Memo: Measuring High Performance Sponsorship Programs Offers ten guidelines critical to issues of sponsorship measurement. Supply-side methods attempt to approximate the amount of time or space devoted to media coverage of an event. This measure of potential “impressions” is then translated into an equivalent “value” in advertising dollars according to the fees associated with actual advertising in the particular media vehicle. The demand-side method attempts to identify the effects sponsorship has on consumers’ brand knowledge. Creating Experiences A large part of local, grassroots marketing is experiential marketing, which not only communicates features and benefits, but also connects a product or service with unique and interesting experiences. PUBLIC RELATIONS Not only must the company relate constructively to customers, suppliers, and dealers, it must also relate to a large number of interested publics. A public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objectives. Public relations (PR) involves a variety of programs designed to promote or protect a company’s image to its individual products. The wise company takes concrete steps to manage successful relations with its key publics. Most companies have a public-relations department that monitors the attitudes of the organizations’ publics and distributes information and communications to build goodwill. PR departments perform the following functions: Press relations Product publicity Corporate communication Lobbying Counseling MARKETING PUBLIC RELATIONS Many companies are turning to marketing public relations (MPR) to support corporate or product promotion and image making. MPR, like financial PR and community PR, serves a special constituency, the marketing department. MPR plays an important role in the following tasks: Assisting in the launch of new products Assisting in repositioning a mature product Building interest in a product category Influencing specific target groups Defending products that have encountered public problems Building the corporate image in a way that reflects favorably on its products As the power of mass advertising weakens, marketing managers are turning to MPR to build awareness and brand knowledge for both new and established products. MPR is also effective in blanketing local communities and reaching specific groups. Creative public relations can affect public awareness at a fraction of the cost of advertising. Some experts say that consumers are five times more likely to be influenced by editorial copy than by advertising. MAJOR DECISIONS IN MARKETING PR In considering when and how to use MPR, management must establish the marketing objectives, choose the PR messages and vehicles, implement the plan carefully, and evaluate the results. The main tools of MPR are described in Table 18.6. Establishing Objectives MPR can: Build awareness by placing stories in the media to bring attention to a product, service, person, organization, or idea. It can build credibility by communicating the message in an editorial context. It can help boost sales-force and dealer enthusiasm with stories about a new product before it is launched. It can hold down promotion costs because MPR costs less than direct mail and media advertising. Choosing Messages and Vehicles The MPR manager must identify or develop interesting stories about the product. A) The best MPR practitioners are able to find or create stories. B) Each event is an opportunity to develop a multitude of stories directed at different audiences. Implementing the Plan and Evaluating Results MPR’s contribution to the bottom line is difficult to measure, because it is used along with other promotional tools. The easiest measure of MPR effectiveness is the number of exposures carried by the media. Publicists supply the client with a clippings book showing all the media that carried news about the product and a summary statement. This measure is not very satisfying because it contains no indication of how many people actually read, heard, or recalled the message and what they thought afterward; nor does it contain information on the net audience reached, because publications overlap in readership. Because publicity’s goal is reach, and not frequency, it would be more useful to know the number of unduplicated exposures. A better measure is the change in product awareness, comprehension, or attitude resulting from the MPR campaign (after allowing for the effect of other promotional tools). Instructor Manual for Marketing Management: A South Asian Perspective Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha 9789810687977, 9780132102926