Delivering customer value through marketing

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Delivering customer value through marketing

• Class 4
• Marketing communications

2
Case analysis Experian

• You are to assume the role of marketing manager
  for Experian. Prepare a report for the board of
  directors on future new product development for
  the company, addressing in particular (though not
  exclusively) the following issues
• 1. Creating an innovative culture.
• 2. Identifying possible new markets which the
  company could approach.
• 3. Linking product development to pricing.
• 4. Possibilities for using intermediaries (e.g.
  financial advisers, accountants) to sell Experian
  products.
• 5. Managing stakeholders needs.

• What is the role of marketing manager?
• What is the format required?
• Innovative culture
• Why innovate
• New product types
• New product development process
• New markets
• Markets where this service is not provided
• Markets where the need for this service is
  largest
• Markets about which data base exists or can be
  acquired
• Pricing for new products
• Penetration or skimming
• Cost-based, value-based, demand-based
• Price setting process
• Using intermediaries
• When intermediaries create or add value
• Types of intermediaries
• What Experian can get from intermediaries
• Stakolders needs

3
Home assignment

• Using the analysis youve made so far evaluate
  the key factors which will influence Innocents
  future channel management strategy

• Channel management strategy
• Channel functions
• Innocent channel analysis ( SW)
• What can cause changes (OT)
• Internal and external
• channel length
• integration
• logistics
• distribution density
• location
• Customers
• cost considerations
• Positioning
• competitors

4
Plan for today

• The role of marketing communications
• Marketing communications strategy
• Marketing communications in different markets
• Communication tools

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Elements of the marketing mix that compose a
cohesive marketing program
Marketing manager
Place Outlets Channels Coverage Transportation Sto
ck level
Promotion Advertising Personal selling Sales
promotion PR
Price List price Discounts Allowances Credit
items Payment period
Product Features Brand name Packaging Service Warr
anty
Cohesive marketing mix
Product
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Marketing mix customers perspective

• Product Customer needs
• Price Costs
• Place Convenience
• Promotion Communications
• People Consideration
• Processes Coordination and concern
• Physical evidence Confirmation

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Communications growing importance

• Product
• PLC shortening
• Innovations copied fast
• Price wars are dangerous
• Disintegration developing
• Support role of marketing communications

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Definition

• Management process through which an organisation
  engages with its various audiences (Fill)
• By understanding the audiences environments the
  organisation develops and presents messages for
  the identified stakeholders groups, evaluates and
  acts on the responses

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Definitions

• Communication can be defined as the process of
  meaningful interaction among human beings. It is
  the act of passing information and the process by
  which meanings are exchanged so as to produce
  understanding. Exchange requires feedback.
• Business communication is communication used to
  promote a product, service, or organization
  relay information within the business or deal
  with legal and similar issues.
• Marketing communication a management process
  through which an organisation engages with its
  various audiences. An organisation develops and
  presents messages for their identified
  stakeholder group before evaluating and acting
  upon responses received. Audiences are encouraged
  to offer attitudinal and behavioural responses

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Communications role

• Social role of communications
• Information
• Entertainment
• Vehicle of cultural values transfer
• DRIP model
• Differentiate
• Remind
• Inform
• Persuade

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Changes in communications

• Dialogue rather than monologue
• Interaction with target audiences
• Can be initiated and controlled by consumers

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Ethics in marketing communications

• Communications can distort, select, exaggerate,
  conceal and falsify information
• Basic consumer rights
• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
• Consumer protection bodies
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• ??? ?????? ???????????? ??????? ??????????
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• ??????????? ????, ??????????? ? ???????? ??????
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  1998
• ???? ???????????? ??

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Communication process (linear, one-step)
noise
Terms of reference
Terms of reference

Decoding
Encoding
Message
Source
Receiver
Media
noise
noise
Feed-back
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Communication influences

• Opinion leaders
• Reinforce the message
• Two-step communication

• Opinion formers
• Designated as knowledgeable, experts (part of
  job)
• Objective
• Easy to target
• Celebrities as opinion formers

Sender
Step 1
Message
Opinion leader
Step 2
Receiver
Receiver
Receiver
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Communication model (multi-step)
1
2
Opinion leader
Mass media
3
6
noise
4
Opinion leader
7
noise
5
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Hierarchy of objectives

• Corporate mission
• Corporate objectives
• Marketing objectives
• Marketing strategy
• Marketing communications objectives

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Mission statement
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Communication objectives

• Clarification of customers needs
• Increasing brand awareness
• Increasing product knowledge
• Improving brand image
• Improving company image
• Increasing brand preference
• Stimulating search behaviour
• Increasing trial purchases
• Increasing repeat purchases
• Increasing WOM recommendations
• Improving corporate image
• Increasing cooperation from trade
• Enhancing reputation with key stakeholders

• SMART
• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

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Planning marketing communications

• Context analysis
• Communications objectives
• Communications strategy
• Integrated communications plan

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Communications plan and framework
Context analysis
Corporate goals
Marketing research
Marketing goals
Promotional objectives and positioning
Communications goals
Promotional Strategy (3Ps)
Pull
Push
Agencies
Integrated communications plan
Profile
Scheduling
Resources
Implementation, control and evaluation
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Planning and frameworks

• Business context
• Customer context
• Internal context
• External context
• Stakeholder context

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Context analysis

• Research provides information about
• Needs of the audience
• Their perception
• Their attitudes
• Their decision making process

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Context analysis

• Perception models
• AIDA Attention, Interest, Desire, Action
• ATR model Attention, Trial, Reinforcement.
• AIETA Attention, Interest, Evaluation, Trial,
  Adoption
• DAGMAR defining advertising goals and measuring
  advertising results
• Attitudes
• Cognition what you know
• Affection what you feel
• Conation what you do

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Context analysis

• Decision making process
• Consumers
• Problem recognition/definition
• Information search
• Alternatives evaluation
• Action
• Post-purchase evaluation

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Context analysis

• Decision making process of organisations
• Problem recognition/definition
• Product specification
• Information search
• Alternatives evaluation
• Shortlisting candidates
• Negotiating price and terms
• Contract signing
• Purchase
• Post-purchase relations

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Promotion strategies 3Ps
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Legal issues of marketing communications

• Consumer protection
• Image of the industry
• Credibility of messages
• Decency
• Protection of vulnerable groups
• National and international regulation
• National law on advertising 2006
• International European Advertising Standards
  Alliance promotion and support of
  self-regulation

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Internal marketing communications

• Objectives
• Promotion of marketing orientation throughout the
  organisation
• Quality management
• Change programs support
• Satisfied employee and high performance
  correlation
• Internal customer concept

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Internal marketing mix

• Product changes or job roles
• Price costs and benefits of obtaining a change
• Place how changes are exercised, who is selling
  it
• Promotion internal communications

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Internal communications

• Goals
• Goal setting
• Team building
• Involvement
• Change management

• Methods (fig.10.2, p. 165)
• Intranet
• E-mails
• Seminars
• Briefings
• Newsletters
• Mobiles

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External communications audiences

• Consumers
• Channel members
• Stakeholders
• Media
• Trade unions
• Pressure groups
• Society/community

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Communications in B2B markets

• How B2B is different
• Number of buyers and sellers
• Decision making process
• Type of purchase
• Relationships importance
• Communications mix (fig.9.1. p. 148)
• Personal selling
• Direct marketing
• PR (exhibitions)
• Trade promotion
• Advertising in special press
• Corporate reputation corporate branding

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Communications across the borders

• International as in domestic market
• Multinational individual for each country
• Global one strategy
• What influences communications
• Culture
• Symbols
• Religion
• values
• Media
• Availability
• Attitude
• Standardisation vs. adaptation (fig.9.2, p. 150)

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Above-the-line, below-the-line tools and
through-the-line

• ATL
• Placed in paid-for media earning its revenue on
  commission basis
• Press, radio, TV, cinema, outdoor
• BTL
• Product-based and negotiated sales incentives on
  fee-paying basis
• Packaging, merchandising, sales promotion, etc.
• TTL
• direct marketing and other permission based
  communications

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Primary and secondary tools

• In a campaign some tools are used to support
  others
• Choice of primary tools is influenced by
• Stage of the product life cycle
• Accessibility of the target audience
• Competition
• Budget limitations

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Communications and product life cycle

• What is different at the stages of the PLC?
• Strategic goals
• Customers to be addressed
• In small groups fill in the table below

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Tools coordination

• Why coordinate
• Maximise influence on customers
• Effectiveness
• Efficiency

1. Effectiveness of the tools
2. Economy of the tools
Integration into the program
4. Review of the tools
3. Efficiency of the tools
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What is integrated

• Message
• Promotion mix elements
• Campaign management
• Internal and external communications

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Communication Credibility Costs Control
4Cs framework
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Communication mix

• Mix elements
• Advertising
• Sales promotion
• Public relations
• Personal selling
• Direct marketing
• Coordinated communications
• Integration and cohesion of all elements of the
  promotion mix
• Using marketing mix as a communicator
• Drivers of coordination
• Organizational Globalisation, growth and
  efficiency, competitive advantage
• Market Sophisticated consumers, cost of media,
  message clutter, networks and relationships
• Communications Technologies, branding

• Communication media
• Broadcast TV, radio
• Print
• Outdoor and transport
• New media (Internet, mobile phones, text
  messages)
• In-store P-O-S, packaging
• Other cinema, product placement, ambient media

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Advertising

• Paid form of non-personal communication
  transmitted through mass media to promote a
  product, organisation, idea, place or personality
• Objectives
• Promotion products, services, organisations
• Stimulating demand
• Competing (offensive/defensive)
• Increasing sales
• Educating the market
• Increasing the use of products/services (market
  development)
• Reminding and reinforcing (market penetration)
• Reducing d\seasonal fluctuations
• Advertising perception
• High involvement product characteristics
• Low involvement - communications

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Advertising in the marketing mix

• Supporting function
• Advertising and the channel
• Pull/push advertising
• Positioning through advertising
• How and where the brand will compete
• Advertising and price
• Advertising informs about the price
• Advertising justifies the price

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Sales promotion

• Tactical technique within a strategic marketing
  framework to add value to a product/service to
  achieve immediate sales/trial
• Objectives
• Brand awareness
• Trial and adoption
• Switch from competitors
• Level out seasonal fluctuations
• Increase brand usage
• Increase customer loyalty
• Encourage trading up (e.g. cars)

• Techniques
• Money-off coupons
• Buy one, get one free
• Loyalty schemes
• Twin packs
• Bulk buying
• Discounts
• Try before you buy
• Cash rebate
• Trial sized products (sampling)
• Prize draws
• Competition codes
• POS displays

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Trade promotion

• Push/pull communications
• Product penetration
• Techniques
• Allowances and discounts
• Volume allowances
• Discount overriders (retrospective)
• Free merchandise
• Selling and marketing assistance
• Sales contests
• Bonus payments

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Retailer to consumer and manufacturer to consumer

• Increase in-store traffic
• Increase purchase frequency
• In-store loyalty
• Own brands
• Consistent demand

• Encourage trial
• Disseminate information
• Trade up

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Public relations

• Publicity vs. PR
• Publics
• Objectives
• Corporate and brand image
• Enhance organisation standing
• Communicate organisation ethos
• Disseminate information
• Damage limitation activity
• Rise company profile

• Marketing vs. public relations
• Overlapping, but not identical
• Objectives other than marketing
• PR to change attitude
• Attitude construct (cognition affection
  conation)
• Attitudinal change

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PR techniques

• Press release
• Press conference
• Publications
• Advocate advertising
• Media relations
• Events
• Annual reports
• Lobbying
• Corporate (internal PR)

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Direct and interactive marketing

• Drivers
• Life dynamics
• Competition
• Customer power
• Media fragmentation
• Increasing cost of media
• Accumulation of market information
• IT technologies development

• From tactical approach to a powerful marketing
  tool
• Definition
• Interactive system using one or more advertising
  media to effect a measurable response at any
  location (Institute of Direct marketing)

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Direct marketing

• Objectives
• Increasing direct orders
• Disseminating information
• Generating sales leads
• Generating trial leads
• Database marketing application of digital info
  collected about customers and their buying
  behavior to improve marketing performance by
  building personalised relationships with customers

• Techniques
• Direct mail
• Direct response advertising
• telemarketing

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Sponsorship

• Definition providing financial or material
  support for some independent activity (not
  usually directly associated with the company
  business) which the sponsor hopes to benefit
• Objectives
• Increase brand awareness
• Enhance corporate image
• Awareness to products restricted in advertising
• Types of sponsorship
• Program sponsorship
• Arts/sports sponsorship
• Sponsorship of events
• Sponsorship of individuals and teams
• Relevance and problems of sponsorship
• Relevance for the target audience
• Impact period
• Terms of agreement
• Spin off promotions

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Personal selling

• Face to ace communications to inform, persuade or
  remind individuals to take appropriate action
• What personal selling can do
• Provide market information to support selling
  process
• Provide potential leads
• Develop client history
• Promotional materials
• Sales aids

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Practical exercise

• You work for an international B2B organisation of
  your choice, and the company has just developed a
  new product. You have been asked to plan the
  communications mix and co-ordinate this with the
  marketing mix. Illustrate the different elements
  of the marketing communications mix you would
  suggest for the launch of this new B2B product,
  and explain how the communications mix would be
  integrated with the rest of the marketing mix.

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Evaluating communications effectiveness

• Development and testing of messages
• Pre-testing
• Readability tests
• Theatre tests
• Physiological tests
• Focus groups
• Consumer juries
• Impact and effect of communications
• Post-testing
• Inquiry tests
• Recognition tests
• Recall tests

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Exam practice (80 min)

• You work as a Marketing Consultant and have a
  specialist interest in the fruit juice and soft
  drinks sector. You have been asked by the Board
  of Innocent Drinks to address the following
  tasks.
• Develop a communications strategy and plan that
  will enable Innocent to maintain its dominant
  market position in the UK. Your strategy and plan
  should demonstrate how Innocent will build and
  maintain its competitive advantage in its chosen
  markets.

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Home assignment

• Read chapters 9-12
• Read the exam case and do external environment
  analysis