9/05/2014

MARK1012
LECTUREs10&11
COMMUNICATINGCUSTOMERVALUE
INTEGRATEDMARKETINGCOMMUNICATION

MohammedARazzaque
SchoolofMarketing

LectureObjectives
Definethefivemajorpromotionmixtoolsforcommunicatingcustomer
valueandtheconceptofintegratedmarketingcommunication(IMC)
ExplainthechangingcommunicationslandscapeandtheneedforIMC.
Describeanddiscussthemaindecisionsinvolvedindevelopingan
advertisingprogram.
Explainhowcompaniesusepublicrelationstocommunicatewiththeir
publics.
Discusstheroleofacompanyssalespeopleincreatingvaluefor
customersandbuildingcustomerrelationships.
IdentifyandexplainthesixmajorSalesforce managementsteps.
Discussthepersonalsellingprocess,distinguishingbetweentransaction
orientedmarketingandrelationshipmarketing.
Explainhowsalespromotioncampaignsaredeveloped&implemented.
IntroducetheconceptofDirectandonlinemarketing.

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WhyMarketersNeedtoCommunicatewithCustomers?

To Inform
To Persuade
To Remind
To
Add Value

Byalteringconsumerperceptions
Bydeliveringsalespromotions

To
Assist Other Efforts
MOHAMMED
MOHAMMEDRAZZAQUE
RAZZAQUE

Tomakecustomersawareoftheirnewofferings
Toinformthemaboutspecificbrands
Toeducatethemaboutproductfeaturesandbenefits
Topersuadecustomerstotrynewproducts/services
Tocreatedemandforentireproductcategory
Tobuildsecondarydemand
Tokeepcompanysbrandfreshinconsumersmemory
Tocreatetopofmindawareness

Toassistsalesrepresentatives
Topresellproducts
Toprovidesalespeoplewithvaluableintroduction

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TheMarketingCommunicationSystem

Company

PROMOTIONMIX
Advertising
SalesPromotion
PersonalSelling
PublicRelations
DirectMarketing

Intermediary

Consumers

Wordof
Mouth

Publics

Intermediaries

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Thenatureofmarketingcommunicationsnetworkmanagement

Thenewmarketing
communications
landscape

Theshifting
marketing
communications
model

Theneedfor
integrated
marketing
communications
MOHAMMEDRAZZAQUE

Consumers arechanging.
Marketingstrategies arechanging.
Therearechangesincommunications
technology .
Dominance of mass media is declining.
Companies are doing less broadcasting and
more targeted narrowcasting.
Media costs are rising, audiences are
shrinking, ad clutter is increasing, and
viewers are gaining control of message
exposure through technologies .
Companies are required to carefully
integrate its many communications
channels to deliver a clear, consistent,
and compelling message about the
organisation and its brands.

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NeedforIntegratingPromotionMix:ComingofIMC

Advertising
SalesPromotion
PersonalSelling
PublicRelations

DirectMarketing

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WhydoweneedIntegration?

Fromthemediaside
Fragmentedmedia
Overlappingmedia

Fromtheconsumer side
Morecomplex,coexistent
lifestyles
Morechoicesofinformation
sources
Lessenduringbrandloyalty

Fromthebusiness side
Retailerbecomesmorepowerful

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IntegratedMarketingCommunications(IMC)

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TheNatureofEachPromotionTool:Advertising
Advantages
Canreachmassesofgeographicallydispersedbuyersatalowcost
perexposure,anditenablesthesellertorepeatamessagemany
times.
Largescaleadvertisingsayssomethingpositiveaboutthesellers
size,popularity,andsuccess.
Consumerstendtoviewadvertisedproductsasmorelegitimate.

Disadvantages
Impersonalandcannotbeasdirectlypersuasiveascancompany
salespeople.
Cancarryononlyaonewaycommunicationwiththeaudience.
Advertisingcanbeverycostly.

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TheNatureofEachPromotionTool:SalesPromotion
Salespromotionincludesawideassortmentoftools
coupons,contests,centsoffdeals,premiums,andothers.
Advantages:
Attractconsumerattention.
Offerstrongincentivestopurchase.
Canbeusedtodramatizeproductoffersandtoboostsaggingsales.
Inviteandrewardquickresponse.

Disadvantages:
Salespromotioneffectsareoftenshortlived.
Theyareoftenarenotaseffectiveasadvertisingorpersonalselling
inbuildinglongrunbrandpreferenceandcustomerrelationships.

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TheNatureofEachPromotionTool:PersonalSelling
MoreappropriateforB2Bmarketing
Advantages:
Themosteffectivetoolatcertainstagesofthebuying
process,particularlyinbuildingupbuyerspreferences,
convictions,andactions.
Involvespersonalinteractionbetweentwoormorepeople.
Withpersonalselling,thebuyerusuallyfeelsagreaterneed
tolistenandrespond.

Shortcomings:
ASalesforce requiresalongertermcommitmentthandoes
advertising.
Companysmostexpensivepromotiontool.

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TheNatureofEachPromotionTool:

PublicRelationsandDirectMarketing
PublicRelations(PR)
Publicrelationsisverybelievablenewsstories,features,sponsorships,
andeventsseemmorerealandbelievabletoreadersthanadsdo.
Publicrelationscanreachmanyprospectswhoavoidsalespeopleand
advertisements.
Publicrelationscandramatizeacompanyorproduct.

DirectMarketing
Althoughtherearemanyformsofdirectmarketing,theyallsharefour
distinctivecharacteristics:
Directmarketingislesspublic.
Directmarketingisimmediate.
Directmarketingiscustomised.
Directmarketingisinteractive.

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Promotionmixstrategies
PUSHSTRATEGY:THECOMPANYPUSHESTHEPRODUCTTHROUGHINTERMEDIARIES

PRODUCERS

PROMOTES

RETAILERS&
WHOLESALERS

PROMOTES

CUSTOMERS

PULLSTRATEGY:THECOMPANYPROMOTESDIRECTLYTOFINALCONSUMERSCREATING
ADEMANDWHICHITFULFILLSTHROUGHINTERMEDIARIES

PRODUCERS

DEMAND

RETAILERS&
WHOLESALERS

DEMAND

CUSTOMERS

Producersmarketingactivities[Advertising,SalesPromotion,DirectMarketing&Others]

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AdvertisingandMajorAdvertisingDecisions
AdvertisingisonlyoneelementofIMC;itsjobistohelpcommunicatethe
brandsvaluepropositiontotargetCustomers.Itmustblendwithother
IMCelements.

MajorAdvertisingDecisions
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PossibleAdvertisingObjectives

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Settingtheadvertisingbudget
Affordablemethod

Setatthelevelthecompanycanafford

Percentageofsales
method

Setatacertainpercentageofcurrent
orforecastsales

Competitiveparity
method

Settomatchcompetitorsoutlays

Objectiveandtask
method

Setbydefiningspecificobjectivesand
determiningthepromotionaltasks
requiredtoachievetheseobjectives

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Developingadvertisingstrategy
Advertisingstrategyconsistsoftwomainelements:

Creatingadvertisingmessages;
Selectingadvertisingmedia

Alargeadvertisingbudgetdoesnotguaranteea
successfuladvertisingcampaign.

Twoadvertiserscanspendthesameamounton
advertisingyethaveverydifferentresults

Thefirststepincreatingeffectiveadvertisingmessages
istodecidewhatgeneralmessagewillbe
communicatedtoconsumers

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Creatingtheadvertisingmessage
Breakingthrough
theclutter

Mergingadvertising
andentertainment

Themessagetobecommunicatedto
consumers;identifycustomerbenefits (ad
appeals);developacreativeconcept (big
idea)tobringthemessagestrategytolifein
adistinctiveway.

Turningthebigideaintoanactualad
executiontocapturethetargetmarkets
attentionandinterest.
Tappingconsumersformessageideasorads
takingadvantageofinteractive
technologies.

Messagestrategy

Messageexecution
Consumer
generatedmessages
MOHAMMEDRAZZAQUE

Justtogainandholdattention,admessages
mustbebetterplanned,moreimaginative,
entertaining,andrewardingtoconsumers.
UsingMadison&Vine:mergeadwith
entertainment:Advertainment&brand
integrations.

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presenttheSydneyPremiereofTheStartupKids adocumentaryabout
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YouareinvitedtojoinusnextWednesdayOctober23rdat6pminthe
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viathelinkbelow.
http://www.asb.unsw.edu.au/startup

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Selectingamessage

Ideallythemessageshouldidentifycustomer
benefitsthatcanbeusedasadvertisingapple.
Messagesmayhave(i)RationalAppeals;(ii)
EmotionalAppeals and(iii)MoralAppeals

Themessageshouldbesuchthatitcan(i)get
Attention (ii)holdInterest (iii)arouseDesires
and(iv)obtainAction.(Aframeworkknownas
theAIDA model).

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Advertisingappeals:Reasonforapersontobuyaproduct.
Somecommonadvertisingappealsthatareconsidereddesirable,exclusive
andbelievableareselectedbymarketersasthethemeforacampaign.

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Lifestyle:Showinghowaproductfitsinwithalifestyle.
Fantasy:Createsafantasyaroundtheproductoritsuse.
Sliceoflife:Peopleusingtheproductinanormalsetting.
Personalitysymbol:Createsacharacterthatrepresentstheproduct.
Technicalexpertise:Showsthecompanysexpertiseinmakingtheproduct.
Musical:Peopleorcartooncharacterssingingasongabouttheproduct.
Testimonialevidence:Highlybelievableorlikeablesourceendorsingtheproduct.
Moodorimage:Buildsamoodorimagearoundtheproduct,e.g.,beauty,loveetc.
Scientificevidence:Providingscientificevidencethatthebrandisbetterormore
likedthanothercompetingbrands.
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SelectingadvertisingmediaI
Decidingon
reach,frequency
andimpact
Choosingamong
themainmedia
types

Selectingspecific
mediavehicles

Decidingon
mediatiming
MOHAMMEDRAZZAQUE

Reach: ameasureofthepercentage ofpeoplein

thetargetmarketwhoareexposedtothead
campaignduringagivenperiodoftime.

Frequency: ameasureofhowmanytimes the

averagepersoninthetargetmarketisexposedto
themessage.

Mediaimpact:thequalitativevalue ofa
messageexposurethroughagivenmediumthat
theadvertisermustdecideonitsdesiredlevel.

Theadvertiserwantstochoosemediathat
willengage consumersratherthansimply
reachthem.Butsuchmeasuresarehard
tocomebyformostmedia.

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SelectingadvertisingmediaII
Decidingon
reach,frequency
andimpact
Choosingamong
themainmedia
types

Themediaplannerhastoknowthereach,
frequency,andimpactofeachofthemajor
mediatypes,namely:
Television
Internet
Newspapers

Selectingspecific
mediavehicles

Directmail
Magazines
Radio

Decidingon
mediatiming

Outdoor

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Profilesofmajormediatypes

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SelectingadvertisingmediaIII
Decidingon
reach,frequency
andimpact

Themediaplannermustchoosethebest
media vehiclesi.e.,thespecificmediawithin
eachgeneralmediatype.(e.g.,TV:NCIS,Ch9
News)

Choosingamong
themainmedia
types

Theymustcomputethecostperthousand
persons(CPM)reachedbyavehicle.Theymust
alsoconsiderthecostsofproducingadsfor
differentmedia.

Selecting
specificmedia
vehicles

Themediaplannermustbalancemedia
costsagainstseveralmediaeffectiveness
factorssuchas:
Audiencequality.

Decidingon
mediatiming

Audienceengagement.
Editorialquality.
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SelectingadvertisingmediaIV
Decidingon
reach,frequency
andimpact

Theadvertisermustdecidehowtoschedule
theadvertisingoverthecourseofayear.

Choosingamong
themainmedia
types

Somemarketerspreferseasonaladvertising:
Hallmarkadvertisesitsgreetingcardsonly
beforemajorholidays.

Selectingspecific
mediavehicles

Theadvertiserhastochoosebetween
continuity andpulsing patternoftheads.
Continuity meansschedulingadsevenly
withinagiventimeperiod.

Decidingon
mediatiming
MOHAMMEDRAZZAQUE

Pulsing meansschedulingadsUnevEnly
overagiventimeperiod.
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EvaluationofAdvertisingEffectiveness
Advertisingeffectivenesshasfallen40%overthepast
decadeand37.3%ofadvertisingbudgetsarewasted.
Advertisersshouldregularlyevaluate(i)Communication
effectand(ii)Salesandprofiteffects:
(i)Communicationeffect(copytesting);
Pretestingandposttesting
Threemajormethodsofadvertisingpretesting:
(i)Directrating;(ii)Portfoliotests;(iii)Laboratorytests

Twomethodsofposttestingadvertisements:
(i)Recalltests;(ii)Recognitiontests

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Salesandprofiteffects:
Returnonadvertisinginvestment
(ii)Salesandprofiteffects:
Comparepastsalesandprofitswithpastadexpenditure;
Throughexperimentation(CocaColausesthismethod).
Salesandprofitseffectsofadvertisingareoftenharderto
measure.Salesandprofitsareaffectedbymanyfactors
besidesadvertisingsuchasproductfeatures,price,and
availability.

Returnonadvertisinginvestment:
Itisthenetreturnonadvertisinginvestmentdividedby
thecostsoftheadvertisinginvestment.

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Organisingforadvertising
Differentcompaniesorganiseindifferentwaysto
handleadvertising.
Smallcompanies,advertisingmightbehandledbysomeone
inthesalesdepartment.
Largecompaniessetupadvertisingdepartmentswhosejobit
istosettheadvertisingbudget,workwiththeadagency,and
handleadvertisingnotdonebytheagency.
Advertisingagencies employspecialistswhocanoften
performadvertisingtasksbetterthanthecompanysown
staff.
Mostlargeadvertisingagencieshavethestaffandresources
tohandleallphasesofanadvertisingcampaignforitsclients,
fromcreatingamarketingplantodevelopingadcampaigns
andpreparing,placing,andevaluatingads.
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Internationaladvertisingdecisions
Morecomplexthandomesticaddecision.
Majorissue:Standardisationvs.localisation
Standardisationreducesadvertisingcosts,providesgreater
globaladvertisingcoordination,andamoreconsistentglobal
image.Butitignoresthefactthatcountrymarketsdiffergreatly
intheircultures,demographics,andeconomicconditions.
Advertisingmediacostsandavailabilitydiffervastlyfrom
countrytocountry.Countriesalsodifferintheextenttowhich
theyregulateadvertisingpractices.

Althoughadvertisersmaydevelopglobalstrategiestoguide
theiroveralladvertisingefforts,specificadvertisingprograms
mustusuallybeadaptedtomeetlocalculturesandcustomers,
mediacharacteristics,andadvertisingregulations.

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PRCCOKEAD
SAPEPSIAD
WESTERN

SociallyResponsibleAdvertising

Advertising
Avoidfalseordeceptiveadvertising.
Mustnotcreateadsthathavethecapacityto
deceive.
Avoidbaitandswitchadvertising thatattracts
buyersunderfalsepretences

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Publicrelations
Impact

Functions

Canhaveastrongerimpacton
publicawarenessatalower
costthanadvertisingcan.
Ifthecompanydevelopsan
interestingstoryorevent,media
maypubliciseit.

Thecompanydoesnotpaythe
mediaforPR.Soithasmore
credibilitythanadvertising.
PRisoftendescribedasa
marketingstepchildbecause
ofitsoftenlimitedand
scattereduse.

Press
relations

Develop
ments

Investor
relations

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Product
publicity

Public
affairs

Lobbying

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PublicRelationsDecisions

Publicrelations
amajormass
communicationtool.
aimsatbuilding
goodrelationswith
thecompanysvarious
publicsusingdifferent
tools:

Pressrelations
Productpublicity
Corporatecommunication
Lobbying
Counselling

MOHAMMEDRAZZAQUE AUSTRALIANSCHOOLOFBUSINESS

Majorpublicrelations
toolsinclude:
News
Speeches
Specialevents
Writtenmaterials
Audiovisualmaterials
Corporateidentity
materials
Communityservice
activities

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SalesPromotion
Theactofinfluencingcustomer/consumerperceptionand
behaviourtobuildmarketshareandsalestoreinforces
brandimage.
Consistsofshorttermincentivestoencouragethepurchaseor
saleofaproductorservice.
Usedtogetherwithotherpromotionalmixelementse.g.,
advertising,personalselling,directmarketingetc.
1. Closelylinkedwithdirectandonlinemarketing.
2. HasitsoriginsinFMCG;butusedbymostorganisations,i.e.,
manufacturers,distributors,retailersandnotforprofitsector.
3. Hasmanymeanings.
4. Coversarangeofincentives;usedwithproductspromotedvia
eithermassmediaadsorbydirectandonlinemethods.
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PurposeofSalesPromotion
To attractnewtriers (i.e.,nonusers,loyalusersofother
brands,andbrandswitchers);totryanewproductor
brand.
Tolureconsumersawayfromcompetitorsproductsorbrands
Togetconsumerstoloaduponamatureproduct

Torewardbrandloyalcustomersandtherebyretain
them,
Toreducethetimebetweenpurchases,andeven
Toturnlightusersintomediumorheavyusers.
Theaimmightalsobetoregainpastpurchaserswhohave
ceasedbuying.
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Salespromotionobjectives

Consumer
promotions

Shorttermcustomerbuying
Toenhancecustomerbrandinvolvement

Trade
promotions

Gettingretailerstocarrynewitemsand
moreinventory
Topromotethecompanysproducts
GettingmoreSalesforce support
Gettingsalespeopletosignupnew
accounts

Salesforce

Copyright2012PearsonAustralia(adivisionofPearsonAustraliaGroupPtyLtd) 9781442531109/Kotler/POM/5e
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MajorSalesPromotionTools:ConsumerPromotions

Contests and games

of skill and chance
Point-ofPurchase

Sales Promotion
tools

Patronage
Rewards

Samples

Redeemable
coupons
Cash-back
offers

Advertising
Specialties

Cents-off deals
or Price Packs
Premiums

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Developingsalespromotionprograms
Anumberofdecisionsmustbemadeinorderto
definethefullsalespromotionprogram:

Sizeoftheincentive
Conditionsforparticipation
Lengthofthepromotion
Evaluation
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Personalselling
istheinterpersonalarmofthe Personalsellingcan
promotionmix.
fosterrelationship
marketing(RM).
involvestwoway,personal

RM
theprocessof
communicationbetween
creating,maintaining
salespeopleandindividual
andenhancingstrong,
customerswhether

facetoface,
bytelephone,
throughvideoconferences,
orbyothermeans.

Hence,personalsellingcanbe
moreeffectivethanadvertising
incomplexsellingsituations
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valueladenrelation
shipswithcustomers
andotherstakeholders
bycreatingsuperior
customervalueand
satisfaction

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TheRoleofPersonalSelling
Manytypesofpersonalsellingjobs:

Theroleofpersonalsellingcanvarygreatlyfrom
oneindustry/companytoanother.
Thepeoplewhodothesellinggobymany
names:
o Salespeople
o Salesrepresentatives
o Accountexecutives/representatives
o Agents
o Districtmangers
o Marketingrepresentatives
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TheRoleoftheSalesforce
Thesalesforce
servesasacritical
linkbetweena
companyandits
customers

Salesforce
Coordinating
marketingand
sales

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ManagingtheSalesforce

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DesigningSalesforce strategyandstructure
Salesforce
structure

Salesforcesize
OtherSalesforce
strategyand
structureissues

TerritorialSalesforce structure
ProductSalesforce structure
Customer Salesforce structure
Complex Salesforce structures

Workloadapproach

OutsideandinsideSalesforce
Teamselling

Copyright2012PearsonAustralia(adivisionofPearsonAustraliaGroupPtyLtd) 9781442531109/Kotler/POM/5e
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Recruitingwill
attractmany
applicantsfrom
whomthe
companymust
selectthebest

Toattractgoodsalespeople,a
companymusthaveanappealing
compensationplan

Mostcompanies
providecontinuing
salestrainingvia
seminars,sales
meetingsandWeb
elearningthroughout
thesalespersonscareer
MOHAMMEDRAZZAQUE

Continuingsupervisionand
encouragementshouldbegiven
tonewsalespeopleinorderto
helpthemdoabetterjobeven
thoughtheyhavealready
receivedformaltraining.

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Gettingregular
information
fromsales
peopleisakey
factorin
ensuring
effective
evaluationof
their
performance.

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EvaluatingsalespeopleandSalesforce performance
Sales
reports

Feedback

Call
reports

Expense
reports

MOHAMMEDRAZZAQUE

+
Returnon
sales
investment

Copyright2012PearsonAustralia(adivisionofPearsonAustraliaGroupPty
Ltd) 9781442531109/Kotler/POM/5e

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Majorstepsineffectiveselling

Transaction
oriented

Relationship
oriented
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TheDirectMarketingModel:
MethodsofInteractingWithCustomers
Directmarketingisaninteractivesystemofmarketingwhichusesone
ormoreadvertisingmediatoeffectameasurableresponseand/or
transactionatanylocation
Itconsistsofconnecting

directlywithcarefully
targetedindividual
consumersbothtoobtain
animmediateresponseandto
cultivatelasting
customerrelationships.

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Benefitsfor
buyers:
Convenient,easy
andprivate

Givesbuyersreadyaccesstoawealthof
productsandcomparativeinformationabout
companies,products,andcompetitors.
Isinteractiveandimmediate.
Givesconsumersagreatermeasureofcontrol.

Frommarketing
communication

to

Transactingand
relationship
management

Benefitsfor
sellers:
Cantargetsmallgroupsorindividualconsumers.
Lowcost,efficient,speedyalternativeforreaching
theirmarkets.
Canoffergreaterflexibility.
Givessellersaccesstobuyersthattheycouldnot
reachthroughotherchannels.

Flexibility,cost

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Digitalmarketing:Internetandmobilemarketing
Digitalmarketing
entailsinteractingwithknowncustomersandothersinthe
marketingchannel,onaonetoonebasis,usingelectronic
networktoolsandtechnologiesrangingfromtheinternetto
mobilephonenetworks.
enablesorganisationstointeractwiththeircustomersin
realtime,boththroughtheorganisationswebsite,orthrough
socialmediavehiclessuchasFacebookandTwitter.
facilitatescustomerrelationshipmanagement(CRM).
Amarketingorganisationthatfindsitscustomershavehighly
differentiatedneedsandoffergreatvarietyintheirreturnsto
theorganisationmightwellconsideradigitalonetoone
marketingstrategy.
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Formsofdirectandonlinemarketing
Sales Promotion

Electronic
dispensing & kiosks

Direct print
& reproduction

Direct selling

Direct-response
TV & Radio

Electronic
shopping

Telemarketing

Telesales

Integrated database marketing

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