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2011-11-17 15:23:10
Marketing Chapter 12

Catch the Buzz Chapter 12
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  1. Promotion
    the coordination of a marketer’s communication efforts to influence attitudes or behavior
  2. marketing communications try to create or
    reinforce a corporate image:
    • Informs consumers about new goods and services and where they can purchase them
    • Reminds consumers to continue using certain brands
    • Persuades consumers to choose one brand over others
    • Builds relationships with customers
  3. Marketing communication
    • the process that markets use to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time to target audiences
    • Successful marketer in communicating the value preposition means adopting an IMC perspective
  4. The Communication Model
    • The process in which a source transmits a message through some medium to a receiver who is listening and understand the message
    • Source
    • Message
    • Medium
    • Receiver
    • Noise
    • Feedback
  5. Source
    • Encoding: the process by which a source translates an idea into a form of communication that conveys the desired meaning
    • Source: the organization or individual that sends the message
    • In some cases actual consumers are the source (real owners of a product and experience)
  6. Message
    • The actual communication that goes from the source to a receiver
    • Includes information necessary to persuade, inform, remind, or build a relationship
    • Message connects with end consumers or business customers in its target market
    • Salesperson can deliver a message she tailors for each individual/ respond to questions and objections
  7. Medium
    • Communication vehicle through which a message is transmitted to a target audience
    • Two major challenges selecting medium:
    • 1. They must make sure the target market will be exposed to the medium
    • 2. The attributes of the advertised product should match those of the medium
  8. Receiver
    • The organization or individual that intercepts and interprets the message
    • Decoding: is the process whereby a receiver assigns meaning to a message (translates the message back into an idea that makes sense to her)
    • Marketers hope the target consumer will decode the message the way they intended
  9. Noise
    • Anything that interferes with effective communication – can block messages
    • Marketers try to minimize noise by placing their messages where there is less likely to be distractions or competition for consumers’ attention
  10. Feedback
    • A reaction to the message that helps marketers gauge the effectiveness of the message so they can perfect it
    • Must actively seek their customers’ feedback
    • Importance of conducting marketing research to verify that a firm’s strategies are working
  11. Promotion Mix
    the major elements of marketer-controlled communication, including advertising, sales promotion, public relations, personal selling, and direct marketing
  12. Mass Appeals
    • Non-personal communication from an indentified sponsor using the mass media
    • PROS: The marketer has control over what the message will say, when it will appear, and who is likely to see it
    • CONS: Often Expensive to produce and distribute
    • May have low credibility and/or ignored by audience
  13. Sales Promotion
    • Contest, coupons, or other incentives that marketers design to build interest in or encourage purchase of a product during a specified period
    • PROS: Provides incentives to retailers to support one’s products
    • Builds excitement for retailers and consumers
    • Encourages immediate purchase and trial of new products
    • Price oriented promotions cater to price sensitive consumers
    • CONS: Short-term emphasis on immediate sales rather than a focus on building brand loyalty
    • The number of competing promotions may make it hard to break through the promotional clutter
  14. Public Relations
    • Seek to create and maintain a positive image of an organization and its products among various publics, including customers,government officials, and shareholders
    • Efforts to present negative company news in the most positive way so that this information will have less damaging consequences
    • Try to influence feelings, opinions, or beliefs for the long term
    • PROS: Relatively low cost
    • High credibility
    • CONS: Lack of control over the message that is eventually transmitted and no guarantee that the message will ever reach the target
    • Hard to track the results of publicity efforts
  15. Personal Appeals
    • Personal selling: direct interaction between a company representative and a customer that can occur in person, by phone, or even over an interactive computer link
    • PROS: Direct contact with the customer gives the salesperson the opportunity to be flexible and modify the sales message to coincide with the customer’s needs
    • The salesperson can get immediate feedback from the customer
    • CONS: High cost per contact with customer
    • Difficult to ensure consistency of message when it is delivered by many different company representatives
    • The credibility of salespeople often depends on the quality of their company’s image, which has been created by other promotional strategies
  16. Direct Marketing
    • Activities to create personal appeals
    • Provides direct communication with a consumer or business customer
    • PROS: Can target specific groups of potential customers with different offers
    • Marketers can easily measure the results
    • Can provide extensive product information and multiple offers within a single appeal
    • Provides a means for collecting information for company marketing databases
    • CONS: Consumers may have a negative opinion of some types of direct marketing
    • Costs more per contact than mass appeals
  17. Word of mouth (WOM)
    the act of a consumer creating and/or distributing marketing relevant information to another consumer
  18. Word of mouth marketing
    an effort by an organization to affect how consumers create and or distribute marketing relevant information to another customer
  19. Buzz Marketing
    using high profile entertainment or news to get people to talk about your brand
  20. Viral Marketing
    creating entertaining or informative messages designed to be passed along in an exponential fashion, often electronically or by email
  21. Buzz
    • as everyday people helping their marketing efforts by talking about a product or a company to their friends and neighbors
    • Exponential: increase in influence of the individual consumer who use blogs and other computer generated media to increase their reach
    • Smaller: businesses where customers feel they have more of a personal relationship
  22. Guerilla Marketing
    • Marketing activity in which a firm “ambushes”
    • consumers with promotional content in places they are not expecting to encounter this kind of activity
  23. Experiential Marketing
    • Attempts to connect consumers with brands in personally relevant was by giving customers an opportunity to actually interact with brands
    • Experience benefits of the brand for themselves; most powerful tool possible for creating brand loyalty
  24. Characteristics of IMC
    • IMC Begins with the Customer
    • IMC creates a Single Unified Voice
    • IMC Develops relationships with Customers
    • IMC Involves Two-Way Communication
    • IMC Focuses on Stakeholders, Not Just Customers
    • IMC Creates a Continuous Stream of Communication
    • IMC Focuses on Changing Behavior
  25. IMC Often Relies on a Customer Database
    • Database Marketing: creating an ongoing relationship with a set of customers with an identifiable interest in a good or service and tracking their responses to promotional messages over time
    • Works well the firms can use its records of customers’ responses to gain insights about which messages work
    • Carefully map customer touch-points, know the best times and places
    • Determine what type of customer accounts for their greatest sales and their greatest profits / Helps develop better understanding of their target market
  26. IMC Plan
    • Step 1: Indentify the Target Audiences
    • Step 2: Establish the Communication Objectives
    • Step 3: Determine and Allocate the Marketing Communication Budget
    • Step 4: Design the Promotion Mix
    • Step 5: Evaluate the Effectiveness of the Communication Program
  27. Step 1: Indentify the Target Audiences
    • Communicate with a variety of stakeholders who
    • influence the target market
    • Well designed database, able to know who their
    • target market is as well as the buying behavior of different segments within the total target market
  28. Step 2: Establish the Communication Objectives
    • Let them know that the organization has a product to meet their needs in a timely matter and affordable way
    • Hierarchy of effects: a series of steps prospective customers move through, from initial awareness of a product to brand loyalty
    • Potential buyers may drop along the way
  29. Create Awareness
    make members of the target market aware that there’s a new brand
  30. Inform the Market
    provide prospective users with knowledge about the benefits the new products has to offer/ emphasize the position of the product
  31. Create Desire
    create favorable feelings toward the product and to convince at least some portion of this group
  32. Encourage Purchase and Trial
    a promotion plan might encourage trial by mailing samples to members of the target market, placing elaborate displays in stores that dispense coupons or even sponsoring contests
  33. Build Loyalty
    • convincing customers to stay.
    • Promotion efforts must maintain ongoing communication with current users to reinforce the bond they feel with the product
  34. Step 3: Determine and Allocate the Marketing Communication Budget
    • Budgeting relies on marginal analysis in which the organization spends money on promotion as long as the revenues it realizes through these efforts continue to exceed the costs of the promotions themselves
    • Two budgeting techniques
    • 1. Top-down Budgeting Techniques
    • Percentage of sales method
    • Competitive parity method
    • 2. Bottom Up Budgeting Techniques
    • Objective task method
  35. 1. Top-down Budgeting Techniques
    Percentage of sales method
    Competitive parity method
    • allocating of the promotion budget based on management’s determination of the total amount to be devoted to marketing communication
    • Percentage of sales method: a method for promotion budgeting that is based on a certain percentage of either last year’s sales or on estimates for the present year’s sales
    • Advantage is that it ties spending on promotion to sales and profits
    • Competitive parity method: a promotion budgeting method in which an organization matches whatever competitors are spending
    • Disadvantage is that budget decisions are based more on established practices than on promotion objectives
  36. 1. Bottom upbudgeting techniques
    Objective task method
    • allocation of the promotion budget based on identifying promotion goals and allocating enough money to accomplish them
    • Objective task method: a promotion budgeting method in which an organization first defines the specific communication goals it hopes to achieve and then tries to calculate what kind of promotional efforts will take to meet these goals
    • Hard to implement because it obliges managers to specify their objectives and attach dollar amounts to them
  37. Push Strategy
    • the company tries to move its products through the channel by convincing channel members to offer them and entice their customer to select these items
    • Focusing on personal selling, trade advertising, and sales promotion activities such as exhibits at trade shows
  38. Pull strategy
    the company tries to move its products through the channel by building desire for the products among customers, thus convincing retailer to respond to this demand by stocking these items
  39. Allocate the Budget to a Specific Promotion Mix
    • Must divide its budget among the elements in the promotion mix
    • Characteristics of the organization itself may influence budget allocation; managers may have a preference for advertising versus other elements of the promotion mix
    • Consumers vary widely in the likelihood that they will respond to various communication elements
    • The size and makeup of a geographic market also influence promotion decisions
  40. Step 4: Design the Promotion Mix
    • Determining the specific communication tools to use, what message to communicate, and the communication channel(s) on which to send the message
    • The message ideally should accomplish four objectives (AIDA model)
    • Attention
    • Interest
    • Desire
    • Action
  41. Type of Appeal
    Many ways to say the same thing, marketers must take care in choosing what type of appeal, or message strategy, they use when they encode the message
  42. Structure of the Appeal
    • Presents arguments and tries to convince the receivers to shift their opinions
    • The supportive arguments/ one sided messages:
    • tout one or more positive attributes of the product or reasons to buy it
    • Two-sided message: both positive and negative
    • information
    • Argument should draw conclusion:
    • Message personally relevant, consumer can draw its own conclusion
    • Arguments are hard to follow best to make these conclusions explicit
  43. Communication Channel
    • Mass media: newspaper, television, radio, magazines, and direct mail
    • Outdoor display signs and boards and electronic media
    • Internet provides a unique environment because it can include, text, audio, video, hyper linking, and personalization and opportunities for interaction
    • Sponsorships
  44. Step 5: Evaluate the Effectiveness of the Communication Program
    • -Monitor and evaluate the company’s communication efforts
    • -Easier to determine the effectiveness of some forms of communication than others
    • -Measure brand awareness, recall of product benefits communicated through advertising and even the image of the brand before and after and advertising campaign
    • -PR is more difficult to assess because objectives relate more often to image building than sales volume