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Marketing Communications

The Growth of Advertising and Promotion

Expenditure in Billions of Dollars


Advertising Outside U.S. U.S. Sales Promotion 2004 1980

U.S. Advertising

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$50

$100

$150

$200

$250

$300

$350

What is Marketing?
Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization. Value Relationship marketing Mass customization Customer relationship management (CRM)

What are Marketing Communications

Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell.

Elements in the Communications Process

Response Hierarchy Models

Elements of Marketing Communications

Advertising Sales promotion Events Public relations and publicity

Direct marketing Interactive marketing Word-of-mouth marketing Personal selling

Traditional Approach to Marketing Communications


Sales promotion

Point of purchase

Publicity

Special events

Media Advertising

Word of Mouth

Direct response

Public relations Direct marketing

Interactive marketing

Contemporary IMC Approach

Word of Mouth

Sales promotion

Direct response

Point of purchase Publicity

Media Advertising

Public relations

Interactive marketing

Direct marketing

Special events

Defining IMC

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences. The goal of IMC is to generate short-term financial returns and build long-term brand value.

A Contemporary Perspective of IMC

Recognized as a business process

IMC

Importance of relevant audience Multiple relevant audiences Demand for accountability and Demand for accountability Measurement of Outcomes

Reasons for the Growing Importance of IMC


From
Media advertising Mass media Manufacturer dominance General focus Low agency accountability Traditional compensation Limited Internet availability

Toward
Multiple forms of communication Specialized media Retailer dominance Data-based marketing Greater agency accountability
Performance-based compensation

Widespread Internet availability

IMC and Branding


Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumers mind. IMC plays a major role in the process of developing and sustaining brand identity and equity. 2005 Brand Value
(Billions of Dollars)

1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Disney 8. McDonalds 9. Marlboro 10. Mercedes

$67.52 $59.94 $53.38 $46.99 $35.59 $26.45 $26.44 $26.01 $24.84 $21.19

Basic Elements of the Promotional Mix


Advertising Direct Marketing Interactive/ Internet Marketing Sales Promotion Publicity/Public Relations Personal Selling

What is Advertising

Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

The Five Ms of Advertising

Advertising Objectives
Informative advertising Reminder advertising Persuasive advertising Reinforcement advertising

Characteristic of Advertising

Pervasiveness Amplified expressiveness Impersonality

Factors to Consider in Setting an Advertising Budget

Stage in the product life cycle Market share and consumer base Competition and clutter Advertising frequency Product substitutability

Advertising Platforms
Print and broadcast ads Packaging inserts Motion pictures Brochures and booklets Posters Billboards POP displays Logos Videotapes

Major Media Types


Newspapers Television Direct mail Radio Magazines Outdoor Yellow Pages Newsletters Brochures Telephone Internet

Television Ads
Advantages Reaches broad spectrum of consumers Low cost per exposure Ability to demonstrate product use Ability to portray image and brand personality Disadvantages Brief Clutter High cost of production High cost of placement Lack of attention by viewers

Print Ads
Advantages Detailed product information Ability to communicate user imagery Flexibility Ability to segment Disadvantages Passive medium Clutter Unable to demonstrate product use

Classifications of Advertising
National Advertising

Retail/Local Advertising Primary vs. Selective Demand Advertising

Consumers

Business-to-Business Advertising

Professional Advertising

Trade Advertising

Organizations

Direct Marketing

Direct marketing is: A marketing channel without intermediaries An element of the promotion mix Fastest-growing form of marketing

Growth and Benefits of Direct Marketing

Benefits to Buyers

Convenience Ready access to many products Access to comparative information about companies, products, and competitors Interactive and immediate

Growth and Benefits of Direct Marketing

Benefits to Sellers

Tool to build customer relationships Low-cost, efficient, fast alternative to reach markets Flexible Access to buyers not reachable through other channels

Characteristic of Direct Marketing

Customized Up-to-date Interactive

Direct Marketing Platforms


Direct Mail Internet (E-mail, blogs,
Websites)

Direct Response Advertising

Direct Marketing
TV Shopping Shopping Channels Catalogs Telemarketing

Forms of Direct Marketing

Personal selling direct marketing Direct-mail direct marketing Catalog direct marketing Telephone marketing Direct-response television marketing Kiosk marketing Digital direct marketing Online marketing

Bose Uses Direct Response Advertising

Sharp Creatively Integrated Advertising and the Internet

Using the Internet as an IMC Tool

The Internet

Educates or informs customers

A persuasive advertising medium

A sales tool or an actual sales vehicle

Obtains customer database information

Communicates and interacts with buyers

Provides customer service and support

Builds and maintains customer relationships

What is Sales Promotion?

Sales promotions consist of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

Characteristic of Sales Promotion

Communication Incentive Invitation

Sales Promotion Tools


Coupons Samples Premiums
Contests/Sweepstakes

Trade Allowances POP Displays Training Programs Trade Shows Coop Advertising

Refunds/Rebates Bonus Packs Loyalty Programs Events

Consumeroriented
[For end-users]

Tradeoriented
[For resellers]

Various Uses of Sales Promotion


Introduce new products Get existing customers to buy more

Combat competition

Attract new customers

Sales Promotion
Enhance personal selling Maintain sales in off season

Tie in advertising & personal selling

Increase retail inventories

Advertising Versus Publicity


Factor Control Credibility Reach Frequency Cost Flexibility Timing Advertising Great Lower Measurable Schedulable High/Specific High Specifiable Publicity Little Higher Undetermined Uncontrollable
Low/Unspecified

Low Tentative

Publicity Vehicles
Feature Articles

News Releases

Publicity Vehicles

Interviews

Press Conferences

Special Events

What is Public Relations


Public relations involves building good relations with the company s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

Public Relations Tools


Publicity Publications Vehicles Special Events Publications

Community Activities

Corporate Advertising

Identity Media, Cause-related Speeches, Marketing News

Public Affairs Activities

Sponsorships

Tasks Aided by Public Relations

Launching new products Repositioning a mature product Building interest in a product category Influencing specific target groups Defending products that have encountered public problems Building the corporate image in a way that reflects favorable on products

Public Relations Functions

Press relations Product publicity Corporate communications Lobbying Counseling

What is Personal Selling


Personal selling is the personal presentation by the firm s sales force for the purpose of making sales and building customer relationships Sales presentations Trade shows Incentive programs

IMC Audience Contact Tools


Broadcast media (TV/radio)
Print media (newspapers, magazines)

Public Relations/ publicity

Internet/ interactive

Out-of-home media

Direct marketing

Target Audience
Personal selling
Point-ofpurchase (displays, packaging)

Sales Promotion

Word-ofmouth

Events and sponsorship

Product placements (TV and movies)

The Marketing Plan


1. A detailed situation analysis

2. Specific marketing objectives

3. A marketing strategy and program

4. A program for implementing the strategy

5. A process for monitoring and evaluating performance

Integrated Marketing Communications Planning Model


Review of marketing plan Promotional program situation analysis Analysis of the communications process Budget determination Develop integrated marketing communications programs Advertising Advertising objectives Message strategy Sales promotion Sales promotion objectives Sales promotion strategy PR/ publicity PR/ publicity objectives PR/ publicity strategy Personal selling Personal selling objectives Personal selling strategy Direct marketing Direct marketing objectives Direct marketing strategy Internet/ interactive Internet/ interactive objectives Internet/ interactive strategy

Integrate and implement marketing communications strategies Monitor, evaluate and control IMC Program

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