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Market Communication

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Figure 14.1: The Communications Model

Source

Noise

Feedback

Message Medium

Receiver

encoding decoding

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Promotion Mix

• Advertising

• Sales Promotions

• Public Relations

• Personal Selling

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Figure 14.2: Control Continuum

AdvertisingAdvertisingSales

PromotionSales

Promotion

PublicRelationsPublic

Relations

PersonalSelling

PersonalSelling

Word ofMouth

Word ofMouth

High Low

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Appeals

• Personal appeals allow for direct interaction between a company representative and a customer– personal selling

• Mass appeals seek to reach many prospective customers at the same time– advertising– sales promotion– public relations

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Advertising

• Non-personal communication from an identified sponsor using the mass media

– can convey rich and dynamic images

– can establish and reinforce brand identity

– can communicate factual information

– can remind customer to buy

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Sales Promotion

• Programs that build interest or encourage purchase of a product through the use of an incentive in a specified time period

– coupons

– contests

– rebates

– premiums

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Publicity and Public Relations

• Portray an organization and its products positively by influencing the perceptions of various publics– writing press releases– holding special events– conducting and publishing consumer

surveys– putting a positive spin on negative news

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Developing the Promotion Plan

• Framework for developing, implementing, and controlling the firm’s promotional activities

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Figure 14.3: Stages in Developing the Promotion Mix

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Step 1: Establish Promotion Objectives

• Objectives will change depending on where consumers are on the path to loyalty

• Some objectives might be

– create awareness

– inform the market

– create desire

– encourage trial

– build loyalty

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Figure 14.4: Up the Promotional Road

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Step 2: Identify Influence on the Promotion Mix

• Mix must be tailored for each situation– Will company use push or pull strategy?

• Push means that the company seeks to move its products through the channel by convincing channel members to offer them and entice their customers to select these items

• Pull means that the company relies on consumers to learn about and express desire for its products

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Effects of Time and the PLC

• Introduction phase: push strategy; mix relies heavily on advertising, sales promotions, and public relations

• Growth phase: heavy advertising with emphasis on differentiation

• Maturity phase: emphasis on sales promotions to encourage brand switching

• Decline phase: dramatic reductions in promotional spending

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Step 3: Determine and Allocate the Total Promotion Budget

• Top-down budgeting techniques

– percentage-of-sales method

– competitive parity

• Bottom-up budgeting technique

– objective-task method

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Step 4: Allocate Budget to Specific Promotion Mix

• Organizational factors

• Market potential

• Market size

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Step 5: Designing the Promotion Mix

• Which elements of promotion will be used?

• What message is to be communicated?

– Type of appeal?

– Structure of appeal?

• What communication channels should be employed?

• What role will advertising, sales promotion, public relations, and selling play?

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The AIDA Model

• Attention

• Interest

• Desire

• Action

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Step 5: Evaluate the Effectiveness of the Promotion Mix

• Is the plan working?

– Measure response to sales promotions

– Measure brand awareness, recall, and image before and after ad campaign

– Analyze and compare sales performances by territory and sales force

– Clip articles appearing in media

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Interactive Marketing

• Attention Economy– The amount of information seems infinite; our

ability to get it is limited by the time we can spend looking

– Interactive media are in the business of buying and selling people’s attention

• Customized marketing communications yield a measurable response in the form of a purchase or request for more information

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De-Mass Marketing

• Companies once focused on mass marketing are increasingly segmenting and customizing promotions for small targets

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Levels of Interactive Response

• First-order response: product offer directly yields a transaction

• Second-order response: product offer results in some form of customer feedback but it isn’t a transaction

– request for more information

– request NOT to receive more information

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Database Marketing

• Critical to interactive marketers as they seek to track responses to messages and develop a dialogue with customers

• Allows the organization to learn customer preferences, fine-tune and test offerings, build relationships

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Database Marketing

• Is interactive

• Builds relationships

• Locates new customers

• Stimulates cross-selling

• Is measurable

• Is trackable

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Putting It All Together

• Integrated Marketing Communications (IMC) is “a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.”

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Figure 14.5: The Integrated Communications Perspective

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MSN

Microsoft practicesIMC by coordinatingprint advertisingwith otherelements of its promotional mix.

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Characteristics of IMC Approach

• Focus on customer need for communications• Reliance on customer database to focus messages• Use of consistent messages via diverse

communications vehicles• Careful planning of message delivery to generate a

steady stream of consistent information• Use of several elements of the promotional mix

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Figure 14.6: Integrated Marketing Model

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The IMC Planning Model

• Start with a Customer Database

• Develop Promotional Strategies

• Implement Specific Promotional Tactics

• Evaluate IMC Communications

– First-order responses

– Second-order responses

– Attitudes toward brand and firm

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Barriers to Acceptance of IMC

• Requires changes in planning and implementation of promotional strategies

• Puts more weight on promotional aspects other than advertising

• Requires upper-level management to view other aspects of the marketing mix as part of the communications strategy

• Requires company-wide commitment• Traditional ad agencies may not be equipped to handle a

true IMC campaign