Chapter Twelve Communicating Customer Value: Advertising, Sales Promotion, and Public Relations
The Marketing Communications (Promotion) Mix • Advertising • Sales Promotion • Public Relations • Personal Selling • Direct Marketing Copyright 2007, Prentice Hall, Inc.
New Communications Realities • Mass markets have fragmented, leading to a shift away from mass marketing. • Improvements in information technology are speeding movement toward segmented marketing. • These factors have shifted the marketing communications model. • Less broadcasting • More narrow casting Copyright 2007, Prentice Hall, Inc.
Integrated Marketing Communications • Using IMC, the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands. • Several factors influence the choice of promotional tools. Copyright 2007, Prentice Hall, Inc.
Advertising • Can reach masses of geographically dispersed buyers. • Can repeat a message many times. • Is impersonal, one-way communication. • Can be very costly for some media types. Copyright 2007, Prentice Hall, Inc.
Personal Selling • Involves personal interaction between two or more people. • Most effective tool at building preferences, convictions and actions. • Allows relationship building. • Most expensive promotion tool; requires long-term commitment. Copyright 2007, Prentice Hall, Inc.
Sales Promotion • Wide assortment of tools. • Attracts consumer attention. • Offers strong incentives to buy. • Invites and rewards quick consumer response. • Effects are short-lived. Copyright 2007, Prentice Hall, Inc.
Public Relations • Very believable. • Reaches people who avoid salespeople and ads. • Can dramatize a company or product. • Tends to be used as an afterthought. • Planned use can be effective and economical. Copyright 2007, Prentice Hall, Inc.
Direct Marketing • Many forms that share four primary characteristics: • Nonpublic • Immediate • Customized • Interactive • Well suited to highly targeted marketing. Copyright 2007, Prentice Hall, Inc.
Promotion Mix Strategies • Push Strategy • Producer directs its marketing activities toward channel members to induce them to carry the product and promote it to the final consumers. • Pull Strategy • Producer directs its marketing activities toward final consumers to induce them to buy the product. Copyright 2007, Prentice Hall, Inc.
Advertising • Advertising has been used for centuries. • U.S. advertisers spend more than $264 billion each year; worldwide spending approaches $550 billion. • Advertising is used by: • Business firms • Nonprofit organizations • Professionals • Social agencies • Government Copyright 2007, Prentice Hall, Inc.
Major Advertising Decisions • Setting advertising objectives • Setting the advertising budget • Developing advertising strategy • Evaluating advertising campaigns Copyright 2007, Prentice Hall, Inc.
1. Setting Advertising Objectives • Advertising Objective: • specific communication task to be accomplished with a specific target audience during a specific period of time. • Classified by Purpose: • Inform • Persuade • Compare • Remind Copyright 2007, Prentice Hall, Inc.
2. Setting the Advertising Budget • Affordable method • Percentage-of-sales method • Competitive-parity method • Objective-and-task method Copyright 2007, Prentice Hall, Inc.
Sales Promotion • Sales promotion consists of short-term incentives to encourage the purchase or sales of a product or service. • The idea behind sales promotion is to generate immediate sales. Copyright 2007, Prentice Hall, Inc.
Rapid Growth of Sales Promotion • Sales promotion can take the form of consumer, business, trade, or sales force promotions. • Rapid growth in the industry has been achieved because: • Product managers are facing more pressure to increase their current sales • Companies face more competition • Advertising efficiency has declined • Consumers have become more deal oriented Copyright 2007, Prentice Hall, Inc.
Consumer Promotion • Objectives: • Increase short-term sales • Help build long-term market share • Many tools exist which can help to achieve these objectives. Copyright 2007, Prentice Hall, Inc.
Patronage rewards Point-of-purchase displays Demonstrations Contests Sweepstakes Games Samples Coupons Cash refunds Price packs Premiums Advertising Specialties Consumer Sales Promotion Tools Copyright 2007, Prentice Hall, Inc.
Public Relations • Public Relations • building good relations with the firm’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Copyright 2007, Prentice Hall, Inc.
Public Relations Functions • Press relations or press agency • Product publicity • Public affairs • Lobbying • Investor relations • Development Copyright 2007, Prentice Hall, Inc.
Public Relations Role & Impact • May strongly impact public awareness at a lower cost than advertising. • Results can be spectacular. • Beginning to play an increasingly important brand-building role. Copyright 2007, Prentice Hall, Inc.
Audiovisual materials Corporate identity materials Public service activities Company Web site News Speeches Special events Buzz marketing Mobile marketing Written materials Public Relations Tools Copyright 2007, Prentice Hall, Inc.