Principles of Marketing Lecture 13a: Promotional Mix Decisions: Advertising and Sales Promotion. The Traditional Communication Model. Noise.

Transcription

1 Principles of Marketing Lecture 13a: al Mix Decisions: Advertising and Sales Target Market Product Place Price Personal Selling Mass Selling Sales Advertising Publicity The Traditional Communication Model Source Encoding Message channel Decoding Receiver Noise Feedback Customer-Initiated Interactive Communication Receiver (Customer) Source s Message Noise Search Select a Message topic channel and the AIDA Model

2 Objectives Adoption Process AIDA Model Informing Persuading Reminding Awareness Interest { Evaluation Trial } Decision Confirmation } Attention Interest Desire Action Producer s Blend Personal Selling, Sales, Advertising, Publicity Wholesalers Push to Business Customers to Channel Members Wholesalers Push Retailers Push to Final Customers Business Customers Pull Final Consumers Pull The Adoption Curve 90 Innovators (3-5%) Early Adopters (10-15%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters (5-16%) Personal Scientific Sources Mass Media Sales People WOM Mass Media Sales People From EA 50 Percent Adoption 20 Less Receptive to Marketing sources of information 5 0 Time

3 Blends Vary Over the Life Cycle This new idea is good Our brand is best Our brand is better really Let s tell those who still want our product Over Product Life Cycle Introduction => Sell Idea, build primary demand Growth => Sell Brand, build selective demand Maturity => Persuasion, more mass selling and sales promotion Decline => target promotion, slow the decline Setting the Budget Percentage of Sales Match Competitors Per Unit Uncommitted Resources Advertising: Some Facts An average adult is exposed to 247 ads a day. Dollar value Canada: $8,000,000,000; U.S.: $250,000,000,000; Worldwide: $600,000,000,000. Largest advertising industries in Canada (1998) Retailing

4 Automotive Business equipment and service Food Financial More information can be obtained from Major Advertising Decisions Advertising Objectives Budget Decisions Message Decisions Media Decisions Campaign Evaluation Advertising Objectives The communication task to be accomplished with a target audience during a specific period of time. Primary purposes of advertising To inform; To persuade; To remind. Other Possible Advertising Objectives Introduce New Products Position Brands Obtain Outlets Ongoing Contact Strategy Decisions in Setting Advertising Objectives Support Sales Force Get Immediate Action Maintain Relationships Choosing Media

5 Television Yellow Pages Newspaper Direct Mail Major Kinds of Media Magazine Transit Outdoor Radio Internet Comparing Advertising Media Advertising on the Internet Many Forms Still Feeling Its Way Pay for Performance Direct Response Key Issues Some Sites Offer More Exposure Some Sites Offer Better Targeting Context Ads Viewers Can Get Benefits Pointcasting

6 Types of Advertising Pioneering (informative) advertising To build primary demand by informing consumers about a new product or feature. Brand may be promoted, but not as the focus. Competitive advertising To build selective demand for a specific brand. Direct-> Buy now, Indirect-> future purchase Comparative advertising is even more aggressive. Reminder advertising Keep the brand name before the public. Used when brand preference has been established. Special Formats Institutional advertising To promote an organization s image, reputation, or ideas. Cooperative advertising Some organizations share cost and benefit of an advertising campaign. Examples IBM, Mercedes, Got Milk Setting the Advertising Budget Factors to consider Stage in the product life cycle Market share Competition Product differentiation Methods Same as setting the promotion budget Creating Advertising Message Decide upon the message: identify customer benefits as advertising appeals Appeals must be meaningful, believable, and distinctive. Be consistent with the broader positioning strategy. Get Attention, Hold interest, Arouse Desire, Obtain action Execution of the message Style/Themes: e.g., slice of life, mood or image, personality symbol, scientific evidence. Tones: serious humorous Cultures: Acceptable Words: to make it attention-getting and memorable. Format: the layout.

7 Creative Phrasing Message Theme 7-Up is different from cola. A BMW is a well-engineered automobile If you want a light beer with taste, Blue Light is a good beer to drink. We don t rent as many cars, so we have to do more for our customers and make every single renter satisfied. Selecting Advertising Media Deciding on reach, frequency, and impact. Choosing among major media types. Selecting specific media vehicles. Deciding on media timing. Reach, Frequency, and Impact Reach: the percentage of people in the target market who are exposed to an ad campaign during a given period of time. Frequency: how many times the average person in the target market is exposed to the message. Impact: the qualitative value of a message exposure through a given medium. Interest, Desire and Action Creative Copy Uncola The Ultimate Driving Machine Beer not water (Labatt) We re number two, so we try harder (Avis) Get Attention Hold Interest Arouse Desire Obtain Action Advertising Evaluation Evaluate communication effects and sales effects. Copy testing (Copy Thrust) Measuring whether an ad is communicating well. Can be done before or after an ad is printed or broadcasted.

8 Sales effects Comparison of before and after. Experiments. Difficulties: other factors (e.g., price and product features) have to be controlled. Legal Issues: Deceptive/Unfair Representation: Doctors, Lawyers etc. Sales The promotion activities that use short-term incentives to encourage purchase or sales of a product. Sales promotion tools Consumer promotion Samples, coupons, rebates, price packs, premiums, patronage rewards, contests, Trade promotion Free goods, merchandise allowance, dealer sales contests, Sales-force promotion Bonuses, contests, sales rallies, Types of Sales Effects of Sales Encourage new trial Break down loyalty to other brands Price discrimination Can be implemented quickly, and gets results faster than advertising Influence trade and channel members Consumers Stockpile Usually short-term effects (advertising tends to have long-term effects) Increased consumer price sensitivity Negative brand image Trade comes to insist on price deals

9 Publicity Handled by firms public relation departments. Limited and scattered use by firms. Major public relations tools News and press reports Speeches (e.g., at tradeshows, to professional associations) Special events (e.g., news conferences, grand opening) Publicity materials (e.g., annual reports, brochures, logos, business cards, uniforms, company cars) Public-service activities (e.g., donation, sponsorship)