Topic 10 Communicating customer value

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Topic 10 Communicating customer value
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Objectives

• Introducing various promotion mix tools
• Examining the rapidly changing communication
  environment and the need for integrated marketing
  communication
• Discussing the steps in developing marketing
  communications

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The Marketing Communications Mix
Advertising
Personal Selling
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New marketing communications landscape(1)

• Consumers are changing
• Better informed and more communications
  empowered
• Seek out information on their own exchange
  brand-related information or even create their
  own marketing messages

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New marketing communications landscape(2)

• Marketing strategies are changing
• As mass markets have fragmented, marketers are
  shifting away from mass marketing.
• Developing focused marketing programs designed to
  build closer relationships with customers in more
  narrowly defined micro-markets.

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Integrated marketing communication (IMC)

• Carefully integrating and coordinating the
  companys many communications channels to deliver
  a clear, consistent, and compelling message about
  the organization and its products.
• Touch point (where the customer may encounter the
  company and its brands)

Think about all the ways you interact with
companies such as Nike
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Elements in the Communication Process
SENDER
Noise
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Communication process

• Sender the party sending the message to another
  party
• Encoding the process of putting though into
  symbolic form
• Message the set of symbols that the sender
  transmits
• Media the communication channels through which
  the message moves from sender to receiver
• Decoding the process by which the receiver
  assigns meaning to the symbols encoded by the
  sender
• Receiver the party receiving the message sent
  by another party
• Response the reactions of the receiver after
  being exposed to the message
• Feedback the part of the receivers response
  communicated back to the sender
• Noise the unplanned static or distortion during
  the communication process, which results in the
  receivers getting a different message than the
  one the sender sent.

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Elements in the Communication Process
SENDER
Noise
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Case study McDonalds Im lovin it campaign

• Sender McDonalds
• Encoding McDonalds advertising agency assembles
  words, sounds, and illustrations into an ad. That
  will convey the intended message.
• Message the actual McDonalds ad
• Media television and the specific television
  programs that McDonalds selects

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Case study McDonalds Im lovin it campaign
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Case study McDonalds Im lovin it campaign

• Receiver the customer who watches the
  McDonalds ad.
• Decoding a consumer watches the McDonalds ad
  And interprets the words and images it contains.
• Response any of hundreds of possible responses,
  such as the consumer likes McDonalds better, is
  more likely to eat at McDonalds next time, hums
  the Im lovin it jingle, or does nothing
• Feedback McDonalds research shows that
  consumers are struck by and remember the ad, or
  consumers write
• Noise the consumer it distracted while watching
  the commercial misses its key points

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Steps in developing effective marketing
communications
Step 1. Identifying the Target Audience
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
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Step 3. Designing the Message
What to say?
How to say?
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Rational appeals relate to the audiences
self-interest. They show that the product will
produce the desired benefits.
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Emotional appeals stir up either negative or
positive emotions that can motivate purchase.
e.g. love , joy, humor, fear and guilty
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(No Transcript)
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Moral appeals direct the audiences sense of
what is right and proper.
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Step 4. Select Communications Channel
Personal Communication Channels Face to face,
on the phone, through mail or e-mail, internet
chat Controlled by company Vs. WOM influence
Non-personal Communication Channels Major
media, atmospheres, events
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Step 5. selecting the message source
Step 6. collecting feedback
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Setting the total promotion budget
Affordable Setting the promotion budget at the
level management thinks the company can afford.
Of Sales Setting the promotion budget at a
percentage of current or forecasted sales
Competitive Parity Setting the promotion budget
to match competitors outlays

• Objective Task
• Developing the budget by
• defining specific objectives (2) determining the
  tasks that must be performed to achieve these
  objectives and (3) estimating the costs of
  performing these tasks. The sum of these costs is
  the proposed promotion budget.

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Decide on Communications Mix
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Factors in developing promotion mix strategies
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Push Versus Pull Strategy
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Major decisions in advertising
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Advertising Objectives

• Specific Communication Task
• Accomplished with a Specific Target Audience
• During a Specific Period of Time

Informative Advertising Build Primary Demand
Persuasive Advertising Build Selective Demand
Reminder Advertising Keeps Consumers
Thinking About a Product.
Comparison Advertising Compares One Brand to
Another
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The Five Ms of Advertising
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Advertising Budget Factors
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Profiles of Major Media Types
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Profiles of Major Media Types
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Classification ofAdvertising Timing Patterns
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Simplified Rating Sheet for Ads
(Attention) How well does the ad catch the
readers attention? __20
(Read-through) How well does the ad lead the
reader to read further? __20
(Cognitive) How clear is the central message or
benefit? __20
(Affective) How effective is the particular
appeal? __20
(Behavior) How well does the ad suggest
follow-through action? __20
__Total
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Slice of Life
Testimonial Evidence
Advertising strategy message execution
Turning the Big Idea Into an Actual Ad to
Capture the Target Markets Attention and
Interest.
Lifestyle
Scientific Evidence
Typical Message Execution Styles
Fantasy
Technical Expertise
Mood or Image
Personality Symbol
Musical
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Advertising Evaluation
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Why the increase in Sales Promotion?

• Growing retailer power
• Declining brand loyalty
• Increased promotional sensitivity
• Brand proliferation
• Fragmentation of consumer market
• Short-term focus
• Increased managerial accountability
• Competition
• Clutter

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Channels of Sales Promotions
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Consumer promotion
Consumer-Promotion Objectives
Consumer-Promotion Tools
Entice Consumers to Try a New Product
Lure Customers Away From Competitors Products
Get Consumers to Load Up on a Mature Product
Hold Reward Loyal Customers
Consumer Relationship Building
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Deal Proneness,Liechtenstein, Burton,
Netemeyer, Journal of Retailing, Summer 1997
Deal Proneness,Liechtenstein, Burton,
Netemeyer

• Examination of deal proneness among consumers
  in a supermarket setting
• Surveys Grocery Receipts used
• Eight types of deals
• Cent-off, One-free, Gift, Display, Rebate,
  Contest, Sale, Coupon

• Cluster analysis yielded two interpretable
  results
• 49 are deal prone, 51 not
• 24 High Deal prone, 50 intermediate, 26 deal
  insensitive
• Deal-proneness a generalized construct -
  (crosses type of promotion)
• Younger Less educated more likely to be deal
  prone

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Trade Promotions
Trade-Promotion Tools
Trade-Promotion Objectives
Persuade Retailers or Wholesalers to Carry a
Brand
Give a Brand Shelf Space
Promote a Brand in Advertising
Push a Brand to Consumers
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Business-to-Business Promotion
Business-Promotion Objectives
Business-Promotion Tools
Generate Business Leads
Stimulate Purchases
Reward Customers
Motivate Salespeople
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Major public relation tools