ADV 436 Promotions & Sponsorships
Sponsorship VS Advertising
Unlike advertising, sponsorship requires leveraging, promotional spending in addition to the sponsorships fee, to obtain its maximum benefits Advertising is often sponsorships most valuable leverage
Outsourcing for Discounts
Use a 3rd party firm to handle loyalty programs Moves the management and logistical( data collection, documentation, fulfillment, etc) to a 3rd party specialist Cost some money but may be a smart investment May allow consumers to combine purchases from several different marketers(new Plenti card..good at Kroger, Walgreens, etc..)
Coupon(ing) Issues
Value Message Misredemption Multiple Purchase Requirements Expiration Dates Costs
Leveraging
Leveraging is used in a metaphorical sense. For example, as a frequently used business or marketing term, leveraging is any strategic or tactical advantage and as a verb, means to exploit such an advantage, just as the use of a physical lever gives one advantage in the physical sense Key to making the most of the non-traditional promotional efforts (sweepstakes, coupons, endorsements, special banners, creative collateral materials, video, contests, sponsorships, cause-related marketing etc.) Work hand in hand with traditional advertising approaches and media uses
Rebecca Bahar: What's in it for the corporation?
Link their brand with a trusted org Increase philanthropic visibility within the community Positive PR/improved customer relations Marketing Opportunities Increased Sales Employee Moral
Other names for Continuity Programs
Loyalty Programs Frequency Marketing
How to repair a damaged reputation?
Manage Crisis with Finesse Johnson & Johnson, Tylenol Fix it Right the First Time Never Underestimate the Public's Cynicism Remember-Being Defensive is Offensive If All Else Fails, Change Your Name! Philip Morris/Altria Blackwater/Xe/Academic
Affect transfer
meaning targets have a 'feeling' about the brand
YELLOW
-The most used but fatigued(Overused) -The first color the human eye notices
Electronic Coupons
!!point of purchase distribution tied to scanner data !!frequent shopper cards !!Online services Adv: good targeting, high response rates, short lead times, and retailer relationships Dis: High cost, not available at all stores, consumer dislike, no ad message, and fraud
Cross Ruff Coupons
!Obtained at the time of purchase of a carrier brand & may be redeemed at a later date !Usually a 'cents off' coupon affixed to the product or in the newspaper/magazine inserts for use on the next purchase !Have the ability to link consumer purchases across different brands as well as shopping trips.
Free Standing Inserts: Advantages
#Broad Distribution at relatively low prices #Good targeting #Color #Consumers like them #Retailers respond to them
Free Standing Inserts: Disadvantages
#low redemption rates #wasted reach: may not reach the intended target(those who receives the coupons are not going to use them because they shop @ other places) #limits on availability & long lead time
Coupon Problems
*Expensive and inefficient *Excessive use may erode brand loyalty(consumers come to expect/ depend on coupons) *Lost profits.... *Creates uneven demand *Fraud *Potential solutions: switch to everyday low pricing or tailor programs to meet specific needs
Direct Mail(shows up in your mail box)
*Postal service or alternative delivery system *Adv: Selectivity(geographic and demographic targeting) -one coupon per household -good redemption rates -reach non-subscribers -secrecy *Dis: -high delivery cost($15-$50 per thousand) -poor reaction from retailers
Why Marketers Like Them: Coupons
--Deliver a temporary price cut to consumers --May encourage trial --Differentiate between price sensitive & prices insensitive consumers --Enable targeting to geographic or other demographic segments --May influence retailers to carry product
Why do it? CRM
-79% of consumers were ready to switch to brands supporting CRM given a price-quality parity -80% of the people considered company's support for a cause as an important brand selection factor -39% bought a product associated with a cause in the last 12 months (significant increase over the past)
RED
-A BOLD color that commands attention -Gives the impression of seriousness and dignity, heat, fire, and rage, passion, love, excitement, and action...danger -Using too much red should be done with caution -It is known to escalate the body's metabolism
Message
-Appearance & Shape -Clear, obvious offers, & restrictions -Selling message
Value
-Average face value:$1.44 in 2008 vs. $4.62 in 2013 -High value gets better response, which is better @ reaching competitive users(switchers) -Consumer perception & expectations(wait & watch for coupons)
Expiration Dates
-Average is under 3 months..(about 10 weeks in FSI's)
Multiple Purchase Requirements
-Buy one, get one free 'BOGO'; multiple units of the same brand; different related products -Impact on target redemption rates
Misredemption
-Carelessness @checkout..(less risk with scanners) -Fraud: theft & collusion with retailers, fake coupons printed through home printers, sell in bulk via online auction sites
BLUE
-Coolness, mist, & shadows, sky, water, ice, masculinity, sadness, gloom, and fear,intelligence & strength, the most politically correct color range without negative connotation -The second most powerful color
Problems With Sales Promotions Efforts
-Limited effectiveness at building brand equity(long-term value) -Negative impact on attitudes toward the brand(may erode perceptions of quality) - Sales increase may not be very profitable( costs of promotions erode margins) - Implementation costs, risks & demands - Short-term orientation
Consumer Segments: Brand loyal users
-People who buy a particular brand most of the time(more generally are the higher users in the category) - Desired results(of making and promotional effort...both traditional and non-traditional): -Reinforce behavior -Increases consumption -Change purchase timing -Incentivize trial of other products of the brand(cross-sell)
ORANGE
-Symbolic of endurance, ambition, and strength -Represents the fire and flame of the sun
Low Involvement
-Transference occurs when the situation is low involvement... audience is more passive, not really thinking about the relationship between an endorser and product/brand...more subliminal( you don't think about it but you know it's there) -Music(see Red Bull logo DEMF...) -Sports (see Nike swoosh logo on golf players shirt... Serena Williams tennis outfit)
High Involvement
-When the target audience is really paying attention to the sponsorship effort...who the sponsor is and how it relates to the brand and product -Increased cognitive evaluation (overt thinking)Why is the sponsor doing that? -May lead to skepticism
CRM Types of Arrangements
1) Advertising - where a business aligns itself with a particular cause and uses ads to communicate the causes messages 2) Public relations - where a business calls press and public attention to a strategic partnership between itself and a non-profit group. 3) Sponsorship - where a business helps fund a particular program or event. 4) Licensing - where a business pays to use a charity logo on its products or services 5) Direct marketing - where BOTH a business and a non-profit raise funds and promote brand awareness. 6) Facilitated giving - where a business facilitates customer donations to the charity .... Or to themselves.... May be shady... 7) Purchased or action triggered donations (most widely used)... where a company pledges to contribute a percentage or set amount of a product's price to a charitable cause or organization. A consumer buys a product and a donation is made to a cause. On World AIDS Day, Starbucks donates 5 cents for every beverage purchased. 8) "Giving Malls" - internet based.... Where a company offers customers the opportunity to shop from a large group of merchants and to direct some % to local or national non-profits. Examples: Amazon, LL Bean, eBay, iGive -
Rebecca Bahar: What are potential pitfalls?
1. Charity or sponsor could fall from grace 2. Expenses exceed gross revenue 3. Percentage of sales tied to offer does not incentivize consumer
Planning Questions
1. Who are customers(targets) we want to reach? a. Segmentation by usage behavior(none to heavy...switchers to brand loyal) b. Segmentation by demographics, psychographics, etc 2. What are the reasons for that behavior? 3. What are the goals and objectives of the program?
10 Marketing Goals for Sponsoring Events
1.Heightening visibility 2.Shape or change brand image 3.Narrowcasting(target niche, hard to reach target market groups... ex. Fishermen, gymnasts, dentists, urban teens, truck drivers) 4.Provide incentives for Retailers, Dealers, and Distributors 5.Entertain Clients 6.Recruit, retain employees 7.Create merchandising Opportunities 8.Showcase product Attributes 9.Differentiate their products from Competitors 10.Drive Sales
Rebecca Bahar: Why does charities solicit corporate sponsors?
1.Help underwrite the cost of fundraising activities 2.Increase their visibility in the community 3.Help build a broad base of support of the organization 4.Provide a 3rd party validation of the work 5.Because the have the funds
Case Studies: 7 Loyalty Tactics that Actually Add Value
1.Use a simple point system 2.Use a tier system to reward initial loyalty and encourage more purchases 3.Charge an upfront fee for VIP benefits.(Amazon Prime, AMEX platinum, purple, black.... 4.Structure non-monetary programs around your customers' values 5.Partner with another company to provide all inclusive offers 6.Make a game out of it 7.Scratch the program completely!!
Consumer Usage
75-80% of all households use coupons -HIGHEST USE: Age 45-64 ~$25-75,000 incomes (middle income) -LOWEST USE: Age 18-24 ~$75,000+ incomes
Merchandise-Distributed Coupons
@ Merchandise that comes in, on, or near that product @In pack, on pack, or instant coupons @Same product or cross-ruff Advantages: low distribution costs high redemption rates, and good targeting Disadvantages: long expiration dates needed, special packaging
Category Exclusivity
A guarantee that the sponsor's competitor will not be allowed to become involved with the sponsor EX: Coca-Cola is a sponsor of the World Cup of Cricket. Category exclusivity provides assurance that Pepsico will not be allowed in any official capacity.
Effective use of Sponsorship Components
A. Use -multiple senses(sound, rhythm, and melody) -Visual images -Touch, feel, texture, & temperature(smell or taste) B. Make the -connection (leverage brand name slogan, help them become aware of the meaning) 1.Help them become aware of the brand 2.Experience that ties the connection together
Signage
Actual Signs identifying and promoting the sponsor at the venue Helps to reinforce the relationship in the consumer's mind. There is a concern about signage clutter(sometimes there are so many logos/taglines that any single sponsor's efforts are lost).
Newspaper Ads
Adv: any day of the week, short lead time Dis: limited targeting, low redemption, and expensive
Positive CRM Outcomes
Brand Image Corporate Image Corporate Reputation Corporate Credibility
Negative CRM Outcomes
CRM campaigns can be controversial or backfire Some social causes may enter into partnerships that erode positive value of the value of the cause
KJERSTEN THORSEN: What are challenges with viral marketing?
Can't predict viral videos. S Curve: Pattern of viral marketing
Sponsorships
Cash and/or an in-kind fee paid to a property (typically in sports, arts, entertainment or causes) in return for access to the exploitable commercial potential associated with that property." --International Events Group. An activity that puts buyers and sellers together, with both receiving certain benefits "Any commercial agreement by which a sponsor, FOR THE MUTUAL BENEFIT of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor's image, brands or products and a sponsorship property in return for rights to promote this association and / or for the granting of certain agreed DIRECT or INDIRECT BENEFITS" A person or an organization that pays for or plans and carries out a project or activity especially one that pays the cost of an event, radio or TV program usually in return for advertising time/exposure during its cause
Sponsorship Components( What To Sell)
Category exclusivity (no competitor can advertise) Signage Right to use event trademarks & Logos Distribution Rights Complimentary advertising Free Tickets Right to purchase additional (perhaps discounted) tickets Link on event website Inclusion in event promotions Access to property mailing list/ database Right of first refusal
Cause Related Marketing
Cause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue providing exchanges and satisfy organization and individual objectives "Doing Well, By Doing Good"
Sponsorship Targets
Consumers Employees Investors Multiple Stakeholder
Consumer Usage 2
Coupons use declines when economy is strong Reasons for coupon use: -76% of consumers 'like to save money' -67% need to 'stretch their budget'
Co-op Insert
Different companies pull together coupons from different areas and you get tons of coupons
Costs
Distribution -redemption(face handler, retailer handling)
BLACK
Elegance and Class, Fear, Death, & Mourning Can be used as a contrasting color
What are the dimensions of Corporate Reputation?
Emotional Appeal Products and Services Financial Performance Vision and Leadership Workplace Environment Social Responsibility Have a good feeling about the company Admire and respect the company Trust the company -Products & Services Stands behinds its products & services Develops innovative products & services Offers high-quality products & services Offers products & services that are a good value for the consumer -Financial Performance Has a strong record of profitability Looks like a low-risk investment Looks like a company with strong prospects for future growth Tends to outperform its competitors -Vision & Leadership Has excellent leadership Has a clear vision for its future Recognizes and takes advantage of market opportunities -Workplace Environment Is well-managed Looks like a good company to work for Looks like a company that would have good employees (important to shareholders, investors, partners, employee attraction) -Social Responsibility Supports good causes Is an environmentally responsible company Maintains high standards in the way it treats people
How To Establish a Good Reputation?
Maximize your most powerful asset: It takes years to build a good reputation, but an instant to ruin it. Know Thyself-Measure your Reputation Learn to Play to Many Audiences Live Your Values and Ethics Be a Model Citizen Convey a Compelling Corporate Vision Create Emotional Appeal
Planning Considerations
Objectives of programs? Type of proof required Number and cost of premiums/rewards Structure of the program Duration of offer Handlings Fulfillment(logistics) Partnerships Frequency of product or service purchase Almost unlimited consumption Market dominance(#1 or #2) Perception of real or added value with no added cost High continuity visibility of offer Reasonableness Administrative ease? 3rd party needed?
Magazine Ads
On-page or pop up Adv: High reproduction quality, good targeting Dis: narrow reach, timing problems, lack oof favor amongst consumers
Continuity Programs
Programs designed to create and reward brand loyalty
Shapes
Radom eye catching shapes are better than usual shapes
How To Keep a Good Reputation?
Recognize Your Shortcomings Stay Vigilant to Ever-Present Perils Make your Employees Your Reputation Champions Control the Internet Before it Controls You Speak with a Single Voice Beware the Dangers of Reputation Rub-Off
Ambush Marketing
Rival company attempts to associate its products with an event that already has official sponsors.
KJERSTEN THORSEN: What is her research focus?
Social Media Marketing
Marketing Mix
Sometimes referred to as product, price, place(how do you distribute it), and promotion(how to get the word out)
Congruence effect in Sponsorship
Sponsorship Influences -Consumer recall -Awareness and identification of sponsors -Sponsor image -Attitude toward the sponsor -Purchase intentions
Link on the Event Web Site
The ability for visitors to the event website to click on an icon that will take them to the sponsor's website (can be monitored using 'stickiness' and other metrics)
GREEN
The most restful color for the human eye Fertility, rebirth & freedom Bright Green-Uplifting Dark Green-Evokes a mental picture of a pine forest ( deep, calm, clean..) Street signs- metallic green, + white letters(the easiest to read and recognize for the human brain
Right Holders
The organization that has the authority to sell the rights of association to a sponsor Ex: NFL, Oscars, Wimbledon, MSU Athletics, Rafael Nadal (Individual Star Athletes)
Common Product/Service Categories
Travel Industry(airlines) Credit Card Companies Grocery Stores Pharmacies Gas Stations Restaurants/Coffeehouses 80+% have one or more
Discounting Principle
When a situational explanation is present, consumers discount dispositional explanations -They 'get' that they sponsored it because they gain financially and publicity... minimizes the altruistic belief...minimize positive transference effects...
Rebecca Bahar: What is the relationship between fundraising and public relations?
You can't have one without the other. ~In order to plan a successful fundraising activity, an org must put time and energy into publicity, outreach, and networking. ~An organization can't afford to spend time and energy in publicity, outreach, and networking if they don't have enough funds
What are the benefits of it? CRM
`Economic benefits (incremental sales, enhanced trial, and repeat purchases, broadening customer base) `Awareness benefits (gaining national visibility, increased brand awareness and recognition) `Attitude or image benefits (enhancing corporate image, thwarting negative image, pacifying customer groups, enhancing and reinforcing brand image)
Sponsorship effectiveness
a function of the link between the sponsor and an event that the target consumer values, resulting in the transfer of positive perceptions... what are some more effective than others?
What is Corporate Reputation
a perceptual representation of a company's past actions and future prospects that describe the firm's overall appeal to all of its key constituents when compared with other leading rivals (Fornbrun 1996). Reputation is considered to be a global assessment of a company based on salient performance characteristics. The salient dimensions of a company's reputation may differ across stakeholders, employees, investors, or consumers who are likely to be concerned with different corporate performance characteristics. (Rifon, et al. 2005)
Vampire Advertising
grabs the attention of the target audience away from the product or the brand (or other product/brand related messages) and, thus, prevents customers from remembering the product or the brand
Activation
putting the sponsorship into action (meaning getting targets to DO something!).
Promotions
the primary communication function of marketing
Congruence/ match & attributions:
unexpected information -Creates skepticism & credibility questions (might be a bad fit between sponsor and brand or promotional effort and brand.... Example: Disney sponsoring Miley Cyrus... who twerks.... Wheaties sponsoring Michael Phelps who gets busted for smoking pot...) -Generates judgments...which may be difficult to overcome...
Advantages: Short-term continuity
~Add value to buyer focused in short term ~Creates point of difference ~Generates new media message ~Can provide sell and shelf via flag(reminder) ~Transcends price ~Generates repeat purchase and new user trial
Promotion Mix
~Advertising ~PR ~Sales promotions ~Personal selling ~Other nontraditional communication activities -Major focus areas of this course
Product Programs
~Collect Points ~Redeem for merchandise ~Use for Charitable Cause
Disadvantages: Short-term continuity
~Costs ~Response variables(unknown factors) ~Administration-inventory control(especially if very short term.. not worth the effort and cost) ~Poor selection of items ~Complicated offer(not enough time for consumers to build benefits)
Right of First Renewal
~Current sponsor having the opportunity to renew sponsorship for the next period prior to the solicitation of new sponsorships by the sponsee (ex.: Holloways Real Estate Institute...) ~Evaluate new terms: assess effectiveness of existing sponsorship, potential actions by competing if sponsorship is terminated...(do your best at estimating ROI....)
Complimentary Advertising
~Free advertising for the sponsor. ~Often paid as part of 'rights fees' ~Not paying directly for the ad. -Ex: TV Ads -Radio Ads -Print ad in the event program -Mentions by the announcers (PA or Media)..or prime visual representation at an event
Why the growth?
~It produces results ~Results occur quickly ~Results are measurable ~It is easy and inexpensive to implement ~Retailer demands
Advantages: Long-Term Continuity Programs
~Long-term added value ~Transcends price ~Builds a consumer profile/ data collection ~Adds freshness to brands via award changes ~Goodwill ~Ability to identify and communicate with best customers...alerts to new products, services, and opportunities ~Retain and build brand loyalty with high usage, brand loyalty, mot profitable customers
Disadvantages/Challenges of Long-Term Continuity Programs
~Long-term financial commitment ~Cost drains on marketing funds(media and promotion) ~Difficult to predict results(initially, without testing) ~Needs constant nurturing ~May not offset competitive efforts
Basic Rules for Stadium Billboard Advertising
~Six words or less is ideal: Not Too Much Content ~Location is key ~Increasing effectiveness of dimensionality: Not shaped like a square ~Be smart, have fun, but don't make it too complex -Ex: When an ad is creative but misleads people & they don't understand it vampire marketing advertising: they didn't know what to do or where to buy ~The more billboards, the better ~Don't Say It, Show It ~Color, shape & size makes your ad stand out -Use multiple senses( sound rhythm & melody) -Visual images -Touch, feel, texture, & temperature( smell or taste) -Make the connection (leverage brand name slogan, help them become aware of the meaning) -Help them become aware of the brand -Experience that ties the connection together
What Makes Them Work?
~Traditionally they benefit the company more than the consumer ~Factors impacting success: 1. A product or service that consumers really want on a regular basis(e.g... Amazon...Biggby) 2. Consumers need to be in charge- where a consumer selects what they want, how much they want, and when they want it 3. Consumers must be given the freedom to update their preferences
