Communicating Customer Value: Advertising, Sales Promotion and Public Relations

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Communicating Customer ValueAdvertising, Sales
Promotion and Public Relations
Marketing Principles Session 12
Jeffrey E. Newcomb Red Widget Strategies for
Hosei University
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Looking Forward Where are we going?
Session 12, Communicating Customer Value, will
help you to

• Know the tools of the marketing communications
  mix
• Understand the process and advantages of
  integrated marketing communications
• Learn the steps in developing marketing
  communications
• Understand methods for setting promotional
  budgets and the factors that affect the design
  of the promotion mix
• Explore the roles of advertising, sales
  promotion, and public relations in the promotion
  mix
• Know the major decisions involved in developing
  an advertising program
• Learn how sales promotion is developed and
  implemented
• Learn how companies use public relations to
  communicate

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Crispin Porter Bogusky
Case Story

• The CPB Agency Winner of awards for creative
  advertising
• Known for non-traditional tactics, unconventional
  media and innovative marketing
• CPB often suggests changes in the clients
  procedures, products and processes to enhance
  brand image
• Clients include Virgin Airline, BMWs MINI cars,
  Ikea furniture, Molson beer, and Burger King
  restaurants
• Interactive Subservient Chicken website creates
  buzz for Burger King
• Truth campaign resulted in a decline of smoking
  in Florida schools, by 38

• Lets Motor campaign produced for BMWs MINI
  begins by mounting the MINI on sports utility
  vehicles in 22 cities
• For the MINI, CPB presented a unified brand
  message at every consumer touchpoint
• Lets motor campaign has been successful, with
  a long waiting list for customer delivery

Evidence of a successful advertising campaign
Awareness of the BMW
MINI has grown from 2 to 53 of US
consumers
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Integrated Marketing Communications

• The marketing communications environment is
  changing
• Mass markets have fragmented, causing marketers
  to shift away from mass marketing to target
  marketing
• Improvements in information technology are
  facilitating segmentation
• Media fragmentation has occurred with
  organizations doing less broadcasting and more
  narrowcasting

Examples of narrowcasting WGBH Boston, public
television in the US trends in radio ownership,
programming and advertising
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• or clutter
• Any distraction which reduces impact of a
  marketing message

As consumers, we are exposed to an estimated
average of 5,000 - 7,000 marketing messages
each day
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Integrated Marketing Communications

• Need for integrated
• marketing communications
• Conflicting messages from different sources or
  promotional approaches can confuse organization
  or brand images
• Integrated Marketing Communications (IMC)
• With IMC, an organization coordinates many
  possible communications channels to deliver a
  clear, consistent and compelling message about
  the organization and its products
• IMC today combines traditional branding efforts
  -- with the interactivity and service
  capabilities of the internet and online
  communications

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Advertising
Promotion Mix or Marketing Communications Mix
Any paid form of non-personal message by a known
sponsor

Sales Promotion
Personal Selling
Short-term incentives to encourage trial or
purchase
Public Relations

Personal sales presentations

Direct communications with market for immediate
response
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Elements in the Communication Process

• Communications efforts
• view as of managing customer relationships over
  time
• begin with an audit of all potential contacts a
  customer might have with the brand
• require knowledge of how communication works

Message Media
Sender Encoding
Receiver Decoding
Feedback
Response
Message Media
Continuous flow of information
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Developing Effective Communication

• Step 1 Identifying the target
• audience
• Affects decisions related to what, how, when and
  where message will be delivered -- and who will
  deliver it
• Step 2 Determining communication objectives
• Buyer readiness stages

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Buyer Readiness Stages Response Hierarchy Models
Source Armstrong Kotler
2006 Jeffrey E. Newcomb / Red Widget Strategies
for Hosei University
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Developing Effective Communication

• Step 3 Designing a message
• Buyer Readiness framework -- for example, AIDA
  --
• guides message design
• Message content contains appeals or themes
  designed
• to produce desired results
• Examples of appeals
• Rational appeals Borrow the cash you need, at
  low rates!
• Moral appeals Animal Rescue Foundation needs
  your help!
• Emotional appeals Got milk?

• Message format decisions design layout, copy,
  color,
• movement, words, sounds, voice, body
  language, dress

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got milk?
From the got milk? print advertising campaign
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Relative Effectiveness of IMC Components
Source Armstrong Kotler
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Developing Effective Communication

• Step 4 Choosing media
• Personal communication channels
• Includes face-to-face, phone, mail, and Internet
  chat
• Word-of-mouth influence is critical
• Buzz marketing cultivates opinion leaders
• Non-personal communication channels
• Includes media and events

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Word-of-Mouth and Buzz Marketing
From Session 5, Consumer and Business Buying
Behavior

• Word-of-mouth Personal communication about a
  product or service, between target buyers and
  neighbors, friends and relatives
• Buzz marketing Finding opinion leaders to
  generate favorable information about a product or
  service in the community

Opinion leaders create excitement or buzz
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Developing Effective Communication

• Step 5 Selecting the message source
• Highly credible sources are more persuasive
• Examples Tiger Woods for Nike, Buick Akebono
• A poor spokesperson can tarnish a brand
• Step 6 Collecting feedback
• Assess targets recognition, recall, behaviors
• Suggest changes in product/promotion

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Promotion Budget

• Setting the total
• promotional budget
• Affordability Method
• Budget is set at a level that organization can
  afford
• Percentage-of-Sales Method
• Past or forecasted sales may be used
• Competitive-Parity Method
• Budget matches competitors spending
• Objective-and-Task Method
• Define specific objectives
• Determine tasks required to achieve objectives
• Estimate and sum costs of performing tasks

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Setting the Promotional Mix
Promotion tools Advertising

• Reaches large, geographically dispersed audiences
• with high frequency
• Low cost per exposure -- but overall costs are
  high
• Emphasizes goods for consumers as legitimate
• Dramatizes organization and brand
• Builds brand image -- may stimulate short-term
  sales
• Is anonymous, offering only one-way communication
• Cannot offer immediate feedback

Major advertising opportunities 100 million
television viewers watch World Cup soccer 86
million watch footballs Super Bowl
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Setting the Promotional Mix
Promotion tools Personal selling

• Most effective tool for building buyers
  preferences, convictions, and actions
• Example Software and hardware solutions
• Personal interaction with clients allows for
  feedback and adjustments
• Personal selling is relationship-oriented
• Buyers are more attentive
• Most expensive of the promotional tools

The average sales call in the US today costs 329
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Setting the Promotional Mix
Promotion tools Sales promotion

• Makes use of a variety of formats premiums,
  coupons, contests, etc.
• Attracts attention, offers purchase incentives,
  dramatizes offers, boosts sagging sales
• Stimulates quick response
• Short-lived impact on target buyers
• Ineffective building long-term brand preferences

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Setting the Promotional Mix
Promotion tools Public relations

• Highly credible
• Many forms news stories, news features, events
  and sponsorships
• Reaches prospects missed using other promotion
  forms
• Dramatizes company or benefits
• Often the most underused element in the
  promotional mix

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Setting the Promotional Mix
Promotion tools Direct marketing

• Many forms Catalog marketing, telemarketing,
  direct mail, online marketing
• Four distinctive characteristics
• Nonpublic
• Immediate
• Customized
• Interactive
• Suited to highly targeted marketing efforts

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Push, Pull and Combination Strategies
Producer persuades Intermediaries to push
products to End users
Producer
Interme- diaries
Marketing activities
End users
Marketing activities
Push Strategy
Demand
Producer persuades End users to pull demand
through Intermediaries
Marketing activities
Producer
Interme- diaries
End users
Pull Strategy
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Advertising
Setting objectives

• Signs of ancient times evidence of early
  advertising
• Today spending on advertising tops 245 billion
  in US annually, 498 billion worldwide
• Advertising objectives can be classified by
  primary purpose.
• To inform
• Introducing new products
• To persuade
• Becomes more important as competition increases
• Comparative advertising
• To remind
• Most important for mature products

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• Kleenex is a well- known brand
• the purpose of this advertisement is to remind
  the consumer of the brands value

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Advertising
Creative execution styles

• Slice of life
• Lifestyle
• Fantasy
• Mood or image

• Musical
• Personality symbol
• Technical expertise
• Scientific evidence
• Humor

• Testimonial
• or endorsement

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Creative Execution Styles
Slice of Life
Fantasy
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Advertising
Developing the advertising strategy

• To select advertising media, determine.
• Reach measures of people in target market
  exposed to message in given time
• Frequency measures how many times average person
  is exposed to message and
• Impact measures qualitative value of a messages
  expose through a given medium
• Choose among major media types by considering
• Consumer media habits, nature of the product,
  types of messages, costs

• Select specific media vehicles
• Decide on media timing by considering
• Seasonal appeal of products or
  services, holidays

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Profiles of Traditional Media
Newspapers Advantages Flexibility, timeliness
good local market coverage broad acceptance,
high believability Limitations Short life poor
reproduction quality small pass-along audience
Television Advantages Combines sight, sound,
motion high attention
high reach appealing to senses Limitations Hi
gh absolute costs high clutter fleeting
exposure less audience selectivity
Radio Advantages Mass use high geographic and
demographic selectivity low cost Limitations
Audio only fleeting exposure lower attention
variable rates fragmented
audiences
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Media Selection

• What media types make sense for Segway Scooters?
  Why?

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Media Selection

• Some media ideas for advertising the Segway
  Scooter
• Internet websites promoting transportation
  alternatives
• Targeted consumer magazines
• Targeted professional journals
• Commute-time radio in urban centers
• .

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Measuring Advertising Effectiveness

• Concerns are growing about televisions
  effectiveness for advertising, especially with
  the rise of TiVo
• While the overall ad industry grows at about 8
  per year, Internet advertising is growing by 40
• The effectiveness of ads on television is
  difficult to measure
• On the Internet feedback is immediate customer
  preferences can be tracked

Source Advertising Age
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Objectives of Advertising

• . advertisings only purpose is to sell.
• -David Ogilvy

Ogilvy Mather advertising agency
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Sales Promotion Tools
Sales promotions are short-term incentives to
encourage purchase or sale of a product or
service

• Objective Consumer Promotions
• Increase short-term sales or long-term market
  share
• Generate interest for product trial
• Objective Trade Promotions
• Obtaining distribution and shelf space
• Encouraging retailers to advertise the brand
• Objective Sales Force Promotions
• Signing up new accounts

• Examples
• Premiums
• Patronage rewards
• Point-of-Purchase communications
• Contests, games and sweepstakes

• Samples
• Coupons
• Cash refunds (rebates)
• Price packs (cents-off deals)
• Advertising specialties

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Sales Promotion Tools

• This print ad is combined with a consumer sales
  promotion

What other sales promotion tools do you know?
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• Public relations
• communications with the organizations various
  publics to improve corporate image and leverage
  news stories and events to the organizations
  advantage includes press relations, product
  publicity, lobbying and investor relations
• Public relations provides
• impact on public awareness at lower cost than
  advertising
• greater credibility than advertising
• publicity is often underused
• good public relations can be a powerful
  brand-building tool

Public Relations
Public relations tools

• News
• Speeches
• Buzz marketing
• Corporate identity materials
• Mobile marketing

• Special events
• Written materials
• Audiovisual materials
• Public service activities
• Internet

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Public Relations

• From pizza to doctors, many magazines and
  websites publish Best of lists

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1. The Happy Fish Corporation has initiated an
aggressive coupon program to boost sales of its
special fish hooks. Which of the following
promotional tools is Happy Fish employing?
3QQ 3 Question Quiz

• Advertising
• Sales promotion 
• Public relations 
• Direct marketing

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1. The Happy Fish Corporation has initiated an
aggressive coupon program to boost sales of its
special fish hooks. Which of the following
promotional tools is Happy Fish employing?
3QQ 3 Question Quiz

• Advertising
• Sales promotion 
• Public relations 
• Direct marketing

Sales promotions offer strong incentives to
purchase now. Contests, rebates, premiums, and
many other forms exist
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2. A _____ strategy calls for promoting
extensively to final consumers. When effective,
consumers will ask their retailers for the
product, the retailers will then ask the
wholesalers for it, will ultimately ask the
producers for it.
3QQ 3 Question Quiz

• public relations
• push
• pull
• partner

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2. A _____ strategy calls for promoting
extensively to final consumers. When effective,
consumers will ask their retailers for the
product, the retailers will then ask the
wholesalers for it, will ultimately ask the
producers for it.
3QQ 3 Question Quiz

• public relations
• push
• pull
• partner

Advertising and sales promotions directed toward
final consumers create desire for the product,
and consumer demand pulls the product through
the channels
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3. The measure of how many times the average
person in the target market is exposed to the
message is called
3QQ 3 Question Quiz

• Reach 
• Frequency 
• Impact 
• Exposures

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3QQ 3 Question Quiz
3. The measure of how many times the average
person in the target market is exposed to the
message is called

• Reach 
• Frequency 
• Impact 
• Exposures

Typically, a minimum average frequency of 3 is
desired during a 4-week period for established
brands new products require greater frequency
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Your TOP TEN Terms

• Advertising
• Buzz marketing, word-of-mouth
• Integrated marketing communications (IMC)
• Noise / clutter
• Objective-and-task method
• Personal selling
• Promotion mix / marketing communications mix
• Public relations
• Pull strategy / push strategy
• Sales promotion

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Looking Back Where have we been?

• Know the tools of the marketing communications
  mix
• Understand the process and advantages of
  integrated marketing communications
• Learn the steps in developing effective marketing
  communications
• Understand methods for setting promotional
  budgets
• and the factors that affect the design of the
  promotion mix
• Explore the roles of advertising, sales
  promotion, and public relations in the promotion
  mix
• Know the major decisions involved in developing
  an advertising program
• Learn how sales promotion campaigns are developed
  
• and implemented
• Learn how organizations use public relations to
  communicate with their publics