Chapter Seven Marketing Services

1
Chapter SevenMarketing Services

• Making
• Your Mark
• in MarCom.

2
Marketing Services

• Most Marketing Services relate to Marketing
  Communications
• MarCom for short
• Umbrella term for all promotional activities
  other than advertising.
• MarCom services are growing
• New ways to market brands, and
• New sources of career opportunities

3
Marketing Services

• Sales Promotion
• Direct Marketing
• Public Relations
• Marketing Research
• Event Marketing Sponsorship
• Promotional Products

4
Who Performs Marketing Services?

• Client Marketing Department
• Divisions of mega-agencies
• Specialized Agencies
• Division within IMC agency
• Specialized Agencies or suppliers

5
Who Supervises Marketing Services?

• At the Marketer, many options
• Director of Marketing
• Brand Management
• Specialized Manager (Promotion, etc.)
• MarCom Manager
• At Specialized Agencies
• Account Managers, Account Executives
• Project Managers

6
The World of Sales Promotion

• How Big is the World of Sales Promotion?
• Measured Volume (Fees, etc.) over 100 Billion!
• It breaks out this way

Other 5.5
Trade Promotion 18.4
Advertising 52.7
Consumer Promotion 23.4
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The World of Sales Promotion

• How Big is the World of Sales Promotion?
• Measured Volume (Fees, etc.) over 100 Billion!
• It breaks out this way

• Its actually larger
• The biggest categories
• Trade discounts
• Consumer Savings
• are not included!
• Overall, the Volume is HUGE!!!

Other 5.5
Trade Promotion 18.4
Advertising 52.7
Consumer Promotion 23.4
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The World of Sales Promotion

• Some Top Sales Promotion Agencies

• DraftFCB (Interpublic)
• Burger King, Kelloggs
• GMR Marketing (Omnicom)
• Microsoft, Miller, Visa
• Arc (formerly Frankel/Publicis)
• Frito-Lay, McDonalds, Nestle
• Momentum (Interpublic)
• American Express, Anheuser-Busch, GM
• Impiric (WPP)
• ATT, Mastercard, Mattell, Xerox

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The World of Sales Promotion

• Two Types of Sales Promotion
• Trade Promotion (Push )
• Consumer Promotion (Pull )
• Both emphasize Short-Term Sales
• Two Types of Incentives
• Less Savings
• More Added Value
• More Product (Bonus Pack, BOGO, etc.)
• A Prize (Sweepstakes)
• Something else (A Premium, or)

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Trade Promotions

• Point-of-sale

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Trade Promotions

• Point-of-sale

• Dealer contests

• Merchandising the advertising
• Deals and allowances
• Co-op advertising
• and then theres

12
Consumer Promotions

• Coupons/ FSIs (Free Standing Inserts)

• Contests, sweepstakes games

• Gift with Purchase

• Premiums

• Sampling/ Tastings

• Rebates

• Cents-off promotions

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Consumer Promotions/ Entertainment Brands

• 7-Eleven becomes a Kwik-E-Mart
• Promoting The Simpsons Movie
• 3 weeks prior to release date 7-11 transformed
  12 of its convenience stores into Kwik-E-Marts,
  featured in the Simpsons fictious town.
• Sales doubled in the 12 Kwick-E-Mart
  stores.

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The World of Direct Marketing

• Simply put, direct marketing occurs when you
  buy direct from a marketer
• By returning a coupon
• By calling an 800
• By responding to a mail solicitation
• By shopping on the Internet
• By responding to a telemarketer who called
  you during dinner

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The World of Direct Marketing

• Sales from Direct Marketing Efforts

• From Lead Generation 904 billion
• From Traffic Generation 212 billion
• Direct Order Sales 635 billion
• From Catalogs - 133 billion
• From Direct Response Ads - 203 billion
• From the Internet - 41 billion
• That adds up to

1.7 trillion!
Source DMA Economic Impact Statement 2003
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The World of Direct Marketing

• Sales from Direct Marketing Efforts

• Estimated (by the DMA) to be 57.1 of all
  advertising expenditures.
• Whatever the exact amount

Its BIG!
Source DMA Economic Impact Statement 2008
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The World of Direct Marketing

• Types of Direct Marketing Companies

• Direct Marketers
• Examples American Express, Lands End
• Direct Marketing Agencies
• Example DraftFCB (Interpublic)
• Support Services
• Examples Call Centers, Catalog Printers, List
  Management Services, the Post Office

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The World of Direct Marketing

• CRM Customer Relationship Marketing
• LTV Lifetime Value
• Direct Marketers work to maximize the value of
  the relationship with their customers, to get the
  most LTV (Lifetime Value)
• Doing all those things is CRM
• Increased valuation of current customers is a
  driving force in marketing today

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Some Key Reasons for Direct Marketings Growth

• Changing consumer lifestyles
• Shopping opportunity for time-poor consumers
• More consumer credit
• Now its easy to buy from a direct marketer
• Better Direct Marketing technology
• More and better lists of potential customers
• Better technology for massaging the database
• Big Changes in Media
• More cost-efficient media opportunities
• The Internet makes direct response easy

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Consumer Complaints About Direct Marketing

• Some Current Issues
• Annoyance
• List removal option of DMA
• Privacy issues
• Who owns your information?
• Data technology raises new concerns
• Unscrupulous practices
• Example Negative option
• Major Result  The Do Not Call List.

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The Key to Success inDirect Marketing

• List Quality is Key

• Internal lists
• Compiled by organization itself

• External lists
• Purchased from
• List brokers
• List compilers

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Improving Performance

• Improve the List
• Improve the Offer/Incentive
• Improve the Messaging
• List Enhancement
• Add more information about households on current
  list
• Cleaning the list the merge-purge function
  when combining different lists
• Continual testing against previous success
• Improve results and knowledge

23
The World of Public Relations

• Marketing PR (MPR)
• Supports marketing efforts

• Corporate PR (CPR)
• Deals with broader range of issues, from
  investor relations to employee communications

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Marketing PR Product Publicity

• The Basics

• The Objective - obtaining free time or space in
  the media that represents favorable mention

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Marketing PR Product Publicity

• The Basics

• The Objective - obtaining free time or space in
  the media that represents favorable mention
• The Strategy - product publicity, like all PR,
  must be newsworthy

• The Benefit - the value of implied or
  third-party endorsement by the media

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Product Publicity Activities

• Press Releases (immediate news)
• Technical and Case History stories
• Feature stories
• Press Tours
• Press to Company
• Company to Press

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Corporate PR Activities(Non-Marketing Related PR)

• Investor Relations
• Employee Communications
• Government Relations (lobbying)
• Crisis Management (oil spills, etc.)
• Community Relations
• Advocacy Advertising (corporate point of view on
  public issues)

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PR Agency Ownership

• PR Agencies now part of mega-agency groups

• Ad Organizations by PR Fees

• Omnicom 490.1 million

• Interpublic 316.5 million
• WPP Group 230.4 million
• YR Inc. 196.4 million
• True North 120.3 million
• Mergers Continue
• YR now included in WPP totals
• True North added to Interpublic totals.

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PR Agency Ownership

• PR Agencies now part of mega-agency groups

• Top Ten PR Agencies in 2009 2008 Revenue

• Edelman 287,469,596

• Waggener Edstrom Worldwide 108,591,000
• Ruder Finn 77,275,000
• APCO Worldwide 62,000,000
• Qorvis Communications 34,919,065
• Schwartz Communications 29,334,668
• ICR 26,713,971
• Text 100 Public Relations 23,900,000
• DKC 22,400,000
• Taylor Global 20,305,000
• PR Week, 2009 Agency Business Report

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Look What Happens When It All Works Together!
Integration
Amplification!
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Integration
Amplification!
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The World of Marketing Research

• The Business of Evaluation
• FEEDBACK is critical nourishment for marketers
• The Product is FACT, not opinion
• Accurate information gathering is also critical.
• Research reputations depend on the dependability
  of their data

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The World of Marketing Research

• Two types of entities provide this critical
  marketing information
• Internal Marketing Research Departments
• At the marketer
• At a full-service agency
• Outside Marketing Research Firms
• Ongoing services (Nielsen)
• Projects (Surveys, focus groups, etc.)

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Role of Internal Marketing Research Department

• Analyze company sales data
• Provide short-term and long-term sales and
  industry projections
• Determine what primary research studies need to
  be carried out
• Select and hire outside research firms to
  conduct surveys and provide other information

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Types of Outside Marketing Research Firms

• Limited-service Research Suppliers
• These supply a specific type of data, often to
  all major marketers.
• Syndicated Research (Nielsen TV ratings)
• Standardized Research (Gallup Robinson ad
  recall pre-testing studies)
• Full-service Research Suppliers
• Focus Groups and Surveys
• Starting from scratch research projects

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The World of Event Marketing

• How big is the World of Event Marketing?

• Sports sponsorship 5.92 billion

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The World of Event Marketing

• How big is the World of Event Marketing?

• Sports sponsorship 5.92 billion

• Entertainment, tours, attractions 817 million

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The World of Event Marketing

• How big is the World of Event Marketing?

• Sports sponsorship 5.92 billion

• Entertainment, tours, attractions 817 million

• Festivals, fairs, annual events 740
  million

• Causes 700 million

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The World of Event Marketing

• How big is the World of Event Marketing?

• Sports sponsorship 11.16 billion

• Entertainment, tours, attractions 1.66
  billion

• Causes 1.57 billion

• The Arts 848 million

• Festivals, fairs and annual events 786
  million

• Associations and Memberships 503 million

16.527 billion!

• That all adds up to...

2009 Sponsorship Spending, Sponsorship.com
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The World of Event Marketing
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The World of Event Marketing

• Provides opportunities for
• Sampling of product
• Widespread publicity in media
• Unique connection w. target market
• Cause marketing
• A special type of event marketing
• Example Childrens Miracle Network

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The World of Promotional Products

• A 16 billion business
• Company Brand or Logo
• Pens, hats, key rings, etc
• Business Gifts
• Higher priced items
• Many uses
• Sales lead generation, trade shows, awareness
  building, employee morale, etc.

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Who isThe Person Who Helps Pull All of This
Together?
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The MarCom Manager

• Relatively new position - result of IMC.
• Title/function more common on West Coast
• Evolving as marketers needs evolve
• Need to understand all forms of IMC
• Jack-of-all-trades promotional skills
• Emphasis will vary by industry
• High-tech PR emphasis
• Packaged goods Sales promotion emphasis
• Beverages event and sports marketing emphasis

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The Future of Marketing Services

• Increased pressure for short-term revenue
• Dynamic growth in most areas
• Sales Promotion - up 20
• Direct Marketing - up 15
• Increased focus on existing customer LTV
• More loyalty programs
• More targeted programs
• More Customer Relationship Management

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The Future of Marketing Services

• New Technologies
• Interactive and Information Technology
• The Internet affects everybody!
• Virtually everyone will practice some form of
  direct or highly targeted marketing with Internet
  response.
• New Companies
• Start-ups - need IMC from ground up
• Start-ups will be internal as well as external
• Example Tadcast, a new startup company
• Create product placement for online videos
• Sponsors contest for best video about
  (Coca-Colas) new Honest Tea - get the most
  hits on YouTube.
• MediaPost News, Jan. 15, 2009

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The Future of Marketing Services

• Economics of Scale
• Large Mega-agencies will have more resources
• Large marketers will want more programs
• Competition
• All marketing services activity will increase
• Competition between services will also increase
• More Diversity
• Not just in population, but marketing approach
• Managing all of this will be a huge challenge!

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In Conclusion
You

• Can Make
• Your Mark
• in MarCom.

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Questions Discussion

• Sales Promotion
• Direct Marketing
• Public Relations
• Marketing Research
• Event Marketing
• Promotional Products

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The World of Media Buying Services

• Independent companies that buy media time and
  space for advertisers
• Originally, an alternative to the media
  department of a full-service ad agency
• Evolved as media choices proliferated and media
  buying became more complicated
• Now mega-agencies have unbundled their media
  departments to create competing media buying
  services

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The World of Media Buying Services
The World of Media Agencies

• The Pioneer Dennis Holt builds Western into 1

• Bought by Interpublic
• Merged with Initiative
• Becomes model for all agencies

• WPP combines Ogilvy and JWT Media Departments to
  form MindShare
• Leo Burnett turns their Media Department into
  StarCom
• Unbundling continues