Formulating Strategic Marketing Programs

1. Formulating Strategic Marketing Programs Marketing Communications Management

2. Integrated Marketing Communications (IMC) • Effective marketing requires an integrated communications plan--relying not just on one form of communication, but bringing together a number of different modes in a consistent and complementary way.

3. Communication Vehicles • Contrast communication options along two dimensions: • Broadcast vs. interactive (1-way message vs. 2-way message) • Mass vs. addressable/customized

4. Characteristics of Communication Options Salesperson Addressable/ customized Super Bowl Ad Mass Broadcast 1-way message 2-way instantaneous 2-way with Time lag

5. Position of Major Communication Vehicles Salesperson Addressable/ Customized Web Telemarketing Direct E-mail Direct Mail Media Radio Newspapers Catalogs Infomercials Magazines Television Mass 1-way 2-way

6. Characteristics of Leading Media Advertising • Television • 70% expenditures for national coverage. • Average 30 second prime time ad costs about $185,000. • In a typical hour of prime time programming, more than 15 ads will be featured. • Cable stations enable more customization. • Summarize cost with CPM (cost per thousand) $185,000 10,000,000 x 1000 = $18.50 CPM

7. Television, continued • Limitations • Ads are viewed as intrusive--zapping • Clutter • Sensory adaptation

8. Leading Media... • Newspapers • 90% of expenditures for local coverage • Most consumers view newspaper ads as informational. • Limitations: • Relatively weak production quality • Limited life

9. Leading Media • Radio • Largely local medium • Audiences are well-segmented--able to deliver message to well-defined audience • Relatively low cost • Limitations • Clutter, easy to tune out

10. Leading Media... • Magazines • Growing numbers of special interest magazines, enabling increased customization • Deliver strong visual message to well-defined target audience • Longest life of any medium and benefit from pass-along readership

11. Characteristics of Direct Marketing Communications • Infomercials • High-quality, detailed marketing messages • Deliver to well-defined audiences

12. Direct Marketing... • Catalogs • High-quality • Highly customizable due to database management

13. Direct Marketing... • Direct Mail • Letter, sales brochure • Includes directions for ordering or requesting information • Highly customizable • Limitations • “junk mail”

14. Direct Marketing... • E-mail • Offers more opportunity for customization • Quicker exchange of information

15. Direct Marketing • Telemarketing • Less cost than in-person selling • $5 per call vs. $250 per call • Immediate 2-way nature--caller can customize the message in accord with the message receiver’s initial response • Limitations: • “junk calls”

16. Characteristics of the Web • Opportunity to exchange customized messages and responses instantaneously • “Hyper impulsivity” • Great potential for bringing the marketing system all together

17. Role of Promotions in Integrated Marketing Communications • Promotions are a specific inducement to generate purchase behavior. • Consumer promotions • Trade promotions

18. Consumer Promotions • Free samples • Price-oriented programs Cents-off coupons Price pacs Mail-in refunds Bonus pacs Rebates • Premiums • Tie-ins • Continuity programs • Contest/sweepstakes

19. Trade Promotions • Slotting allowances • Co-op advertising • Floor planning • Temporary price cuts • Volume discounts • Contests

20. Rounding out IMC: • Event Marketing Sponsorships • Publicity and Public Relations

21. Formulating the IMC Program • 6 M’s Model for Communication Planning 1. Market 2. Mission 3. Message 4. Media 5. Money 6. Measurement

22. 1. Market • Analyze the consumer situation in terms of stages in the purchase and consumption process • Response hierarchy models • Cognitive stages • Affective stages • Behavioral stages

23. Hierarchy Model: AIDA

24. Hierarchy-of-Effects Model

25. Innovation-Adoption Model

26. Communication Model

27. Customer Response Index • The combination of effects in the customer response hierarchy. • Tool for adjusting communications or other marketing tactics.

28. Customer Response Index CRI=% aware x % that comprehend x % that are interested = .63 x .54 x .77 = .26 or 26% Action (90%) Intentions (68%) Interested (77%) No Action (10%) Comprehend (54%) No intentions (32%) Aware (63%) Not interested (23%) Don’t comprehend (46%) Unaware (37%)

29. 2. Mission • Communication objectives, related to customer response Build Awareness Message Reinforcement Stimulate Action

30. 3. Message • Decisions related to message content, structure, format, and source • What kind of an appeal? • One-sided or two-sided message? • Peripherals • Spokesperson

31. 4. Media • Decisions related to media communication channel • Decisions related to media exposure • Target market reach • Frequency • Advertising effectiveness • GRPs • CPMs

32. Media Exposure (continued) • Decisions related to message reinforcement • Pulsing • Heavy-up message frequency • Decisions related to use of consumer promotions

33. 5. Money • The optimal marketing communications budget is typically a function of: • The size and heterogeneity of the target audience • Nature of the message • Receptivity of the audience • Amount of clutter

34. Money (continued) • Some firms use: • % of expected or previous year’s sales • Competitively based benchmark • Spending levels vary greatly across industries and even across firms within the same category

35. 6. Measurement • Plan a mechanism for evaluating the effects of communications efforts. • Critical input to future spending levels, allocation of the budget across media, and specific communication messages.