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MARKETING COMMUNICATIONS

Marketing

Communication is a continuous Interaction between the buyer and sellers in a market place.

Slide 17-1

Primary Tasks of Communication


REMINDING INFORMING
During the introduction stage of the PLC Explain the purpose & benefits of the product
During the growth stage of the PLC Convenience the customer to buy companys brand over the competition

Target Audience

PERSUADING

During the maturity stage of the PLC Used to trigger memory (brand specific)
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Slide 17-2 Table 17.1

Some Strategic Goals of Marketing Communications


Description

Strategic Goal

Create awareness Build positive images Identify prospects Build channel relationships Retain customers

Inform markets about products, brands, stores or organizations. Develop positive evaluations in peoples minds about products, brands, stores or organizations. Find out the names, addresses and possible needs of potential buyers.

Increase cooperation among channel members.


Create value for customers, satisfy their wants and needs, and earn their loyalty.

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MARKETING COMMUNICATIONS OBJECTIVES

Increase Market Penetration Develop Repeat Purchase Behavior Establish Customer Relationships Increase Rate of Consumption Encourage Product Trial Stimulate Impulse Buying Stimulate Demand Differentiate the Product Establish a Product Image Influence Sales Volume Establish, Modify, or Reinforce Attitudes Develop Sales Leads Stimulate Interest Establish Understanding Build Support & Acceptance

Slide 17-3 Figure 17.1

The Communication Process

Source Encodes Message

Source Transmits Message via Medium

Receiver Decodes Message

Receiver Provides Feedback to Source

Noise
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Slide 17-4 Figure 17.2

The AIDA Model

Marketing Communications

Attention

Interest

Desire

Action

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Slide 17-5

The Communications Mix

Advertising

Personal Service

Sales Promotion

Publicity

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Slide 17-6

Comparing the Elements of the Communications Mix


Advertising Personal Selling Two-Way Medium-High Yes No Yes No High Sales Promotion One-Way High No No No Yes Varies Publicity One-Way Low No Yes No One-Way High Yes No No

Communications Mode Marketer Control Over Message

Long Term, Ongoing Activity


Considered an Unbiased Source Message can be Customized for each Customer Short Term Focus Cost per Contact Overall Cost
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No
Low High

No
No Direct Cost No Direct Cost
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Low

Varies

Slide 17-7

When Elements of Communication Mix (Promotion) Are Most Useful


Advertising

Effectiveness

Personal Selling Sales Promotion Public Relations


Attention Interest Desire Action

Very effective Somewhat effective Not effective


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Slide 17-8

Managing Communications Strategy

Set Communications Objectives

Select the Communications Mix


Set Communications Budgeting Implementation and Control
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Slide 17-9

Factors that Affect the Communication Mix

Nature of the Product Industrial products are expensive, complex, customized Consumers products depend upon costs and risks Stage in the Product Life Cycle Early - advertising & publicity Later - sales promotions Target Market Characteristics Widely scattered markets Highly informed buyers Type of Buying Decision Routine - advertising Complex - personal selling Available Funds Lack of money - publicity, commission based personal selling Plenty of money - advertising PushandPull Strategies Push - suppliers promote to intermediaries Pull February 10, 2013 - suppliers promote to ultimate consumer Sunday,

$$$
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Slide 17-10 Figure 17.3

Two Marketing Communications Approaches


Marketing Communications

Push Strategy

Producer

Resellers

Marketing Communications

End Users

Pull Strategy

Marketing Communications

Producer

Request Products

Resellers

Request Products

End Users

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Comparison of Push and Pull Promotional Policies


PUSH POLICY Promotes to Promotes to Promotes to PULL POLICY
Demands Demands Demands products from products from products from 13

Producer

Producer

Retailer

Promotes to

Wholesaler

Wholesaler

Retailer

Consumer
= Flow of communication

Consumer

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= Flow of product

Slide 17-11a Table 17.3

Methods for Setting Communications Budgets


Advantage
Simple to use

Method

Disadvantage
Budgeting based on expected

Percentage of sales Fixed sum per unit

sales implies communications cant improve sales performance


Marketer likely to benefit Decreasing the communications

from increasing the budget during times of rising sales

Competition- Takes into account based competitors activities


Amounts budgeted will be

budget during periods of falling sales could be disastrous in some cases Can be difficult to get competitors budget information
Can lead to ever-increasing

reasonable if competitors are budgeting effectively

communications budgets
Assumes competitors have the

same objectives

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Slide 17-11b Table 17.3

Methods for Setting Communications Budgets


Advantage
Takes into account limited

Method

Disadvantage
Doesnt consider marketing

All you can afford

resources
May stimulate creativity in

objectives
Borrowing may be worthwhile to

making funds work hard

fund some communications strategies


No basis for setting priorities

Objective and task

Based on achieving

communications objectives
Focusing on objectives uses

among objectives
Treats all objectives as equally

funds most efficiently

worthy of funding
Hard to estimate what will it cost

to achieve a particular objective

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Slide 17-12

Evaluating the Effectiveness of Marketing Communications

Sales Sales Changes Changes

What
Happened

? ?
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Marketing Research

Why
it Happened

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Promotion
Any form of communication a business or organization uses to inform, persuade, or remind people about its products.
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Basic Promotion Methods and Strategy Planning


Target Market

Product

Place

Promotion

Price

Personal Selling

Mass Selling

Sales Promotion

Advertising
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Publicity
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Basic Promotional Objectives


Informing

BASIC PROMOTION OBJECTIVES


Persuading
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Reminding
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The Promotional Mix

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The Promotional Mix


Advertising

Public Relations

Personal Selling

Sales Promotion
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Advertising
A paid form of nonpersonal communication through the mass media
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Advertising
very broad audience cost efficient externalities (public image)

cons
high absolute cost effectiveness hard to measure not directly persuasive Sunday, February 10, 2013

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Personal Selling
Face-to-face contact with consumers designed to inform and persuade consumers to buy
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Personal Selling

very persuasive direct feedback individually message design suitable for very complex information

cons
extremely high absolute cost message heterogeneity

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Sales Promotion
An activity or material that offers a direct inducement to purchase
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Example of Sales Promotion Activities


Coupons Sports sponsorship Trading stamps Samples Contests Point-of-purchase materials Trade shows

Aimed at final consumers or users

SALES PROMOTION ACTIVITIES


Aimed at middlemen Aimed at sales force

Price deals Allowances Sales contests Trade shows Catalogs Merchandising aids
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Contests Bonuses Meetings Sales aids Travel incentives Training materials


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Sales Promotions
effective for changing behavior in the short run very flexible

cons

can lead to promotion wars

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Publicity
Non-paid form of nonpersonal communication through the mass media
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Publicity
very effective for maintaining company image credible source or information

but

lack of control
media often not willing to cooperate
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Objectives of Promotion
Create

Awareness Stimulate Demand Encourage Product Trial Identify Prospects Retain Loyal Customers

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Objectives of Promotion
Facilitate

Reseller Support Combat Competitive Promotional Efforts


Reduce

Sales Fluctuations

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Factors Affecting Promotional Methods

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Factors Affecting Promotional Methods

Promotional Resources, Objectives, and


Policies Characteristics of the Target Market Characteristics of the Product Costs and Availability of Methods Push and Pull Channel Policies
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Comparison of Push and Pull Promotional Policies


PUSH POLICY Promotes to Promotes to Promotes to PULL POLICY
Demands Demands Demands products from products from products from 38

Producer

Producer

Retailer

Promotes to

Wholesaler

Wholesaler

Retailer

Consumer
= Flow of communication

Consumer

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= Flow of product

Use of Elements of the Promotional Mix

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Use of Elements of the Promotional Mix

During the product life cycle: introduction stage growth stage maturity stage decline stage

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Use of Elements of the Promotional Mix


During the product life cycle: For product with different characteristics: complexity risk extended product characteristics

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Use of Elements of the Promotional Mix


During the product life cycle: For product with different characteristics: Stage of the consumer buying process: Pre purchase purchase post purchase

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Use of Elements of the Promotional Mix

During the product life cycle:


For product with different

characteristics:

Stage of the consumer buying

process:

Push or pull strategy


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Integrated Marketing Communications


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The Marketing Communications Mix


Advertising
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.

Personal Selling

Personal Presentations by a Firms Sales Force.

Sales Promotion

Short-term Incentives to Encourage Sales.


Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Communications With Individuals to Obtain an Immediate Response.
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Public Relations
Direct Marketing

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The Communication Process


Noise Noise Noise Noise Noise Noise Sender Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Encoding Feedback Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Message Noise Noise Noise Noise Noise Noise Media Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Response Decoding Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Receiver Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Noise Sunday, February 10, 2013

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Steps in Developing Effective Communication


Step 1. Identifying the Target Audience

Step 2. Determining the Communication Objectives


Buyer Readiness Stages

Awareness
Knowledge Liking Preference Conviction
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Purchase

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Steps in Developing Effective Communication


Step 3. Designing a Message
Message Content
Rational Appeals Emotional Appeals Moral Appeals

Message Structure
Draw Conclusions Argument Type Argument Order

Message Format
Headline, Copy, Color, Words, & Sounds, Body Language Action

Attention

Interest

Desire

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Steps in Developing Effective Communication


Step 4. Choosing Media
Personal Communication Channels Nonpersonal Communication Channels Step 5. Selecting the Message Source

Step 6. Collecting Feedback


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Setting the Total Promotion Budget

Affordable Method

Percentageof-Sales Method

CompetitiveParity Method
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Objectiveand-Task Method
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Setting the Promotion Mix


Nature of Each Promotion Tool
Advertising
Reaches Many Buyers, Expressive Impersonal

Personal Selling
Personal Interaction, Builds Relationships Costly

Sales Promotion
Provides Strong Incentives to Buy Short-Lived

Public Relations
Believable, Effective, Economical Underused by Many Companies

Direct Marketing
Nonpublic, Immediate, Customized, Interactive
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Factors in Developing Promotion Mix Strategies


Distribution Channels to Final Consumers.

Push Strategy - Pushing the Product Through

Pull Strategy - Producer Directs Its Marketing Activities Toward Final Consumers to Induce Them to Buy the Product.

Type of Product/ Market


Buyer/ Readiness Stage

Product Life-Cycle Stage

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Changing Face of Marketing Communications


New Marketing Communications Realities

Marketers Have Shifted Away From Mass Marketing Less Broadcasting

Improvements in Information Technology Has Led to Segmented Marketing More Narrowcasting

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Integrated Marketing Communications


Company Carefully Integrates and Coordinates Its Many Communication Channels to Deliver a Clear, Consistent, Compelling Message.
Packaging Advertising

Event Marketing

Message

Personal Selling

Direct Marketing
Public Relations
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Sales Promotion

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