MKTG 350 ch. 16

Disadvantages of advertising

- Absolute dollar outlay can be high - Rarely provides rapid feedback - Often difficult to measure its effect on sales - Less persuasive than personal selling - Has a limited time exposure

The four possible elements of a promotion mix are

- Advertising - Personal selling - Public relations - Sales promotion

For existing products, promotional efforts may aim to increase awareness of

- Brands - Product features - Image-related issues (such as organizational size or socially responsive behavior) - Operational characteristics (such as store hours, locations, and credit availability)

Changes in advertising

- Consumers are striving to maximize their presence and impact through digital media - Ads are being designed that cater to smaller, more personalized audiences - Traditional media like newspapers are in a decline due to a drop in readership

Characteristics of IMC

- Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective - Goal: to send a consistent message to customers - Enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets - Through digital media, companies can provide product information and services that are coordinated with traditional promotional activities

Selective demand can be stimulated by

- Differentiating the product from competing brands in the minds of potential buyers - Increasing the number of product uses and promoting them through advertising campaigns, as well as through price discounts, free samples, coupons, consumer contests and games, and sweepstakes - Encouraging existing customers to use more of the product

Examples of sales promotion

- Free samples - Games - Rebates - Sweepstakes - Contests - Premiums - Coupons

Intensity of market coverage

- Intensive distribution: advertising, sales promotion -Selective distribution: promotion mixes vary - Exclusive distribution: personal selling

Life cycle stage in determining promotional mix

- Introduction: advertising plus personal selling and sales promotion is used to generate awareness for both business and consumer products - Growth and Maturity: consumer products require heavy emphasis on advertising and business products often call for a concentration of personal selling and some sales promotion - Decline: Marketers decrease all promotional activities, especially advertising

Advantages of advertising

- Is extremely cost-efficient when it reaches a vast number of people at a low cost per person - Lets the source repeat the message several times -Visibility gained from advertising can enhance an organization's image

Business vs. consumer goods in determining promotional mix

- Promotion mixes for business products concentrate on personal selling, whereas advertising plays a major role in promoting consumer goods - Personal selling is used extensively for consumer durables, such as home appliances, automobiles, and houses, whereas consumer convenience items are promoted mainly through advertising and sales promotion

Product factors that influence which promotional element to use

- business vs. consumer goods - price - product life cycle stage - intensity of market coverage

Promotion mix

A combination of promotional methods used to promote a specific product

Source

A person, group, or organization with a meaning it tries to share with a receiver or an audience

Price in determining promotional mix

A product's price also influences the composition of the promotion mix - High-priced products call for personal selling - For low-priced convenience items, marketers use advertising

Viral marketing

A strategy to get consumers to share a marketer's message, often through e-mail or online video, in a way that spreads dramatically and quickly

Buzz marketing

An attempt to incite publicity and public excitement surrounding a product through a creative event

Noise

Anything that reduces a communication's clarity and accuracy

Combat Competitive Promotional Efforts

At times, a marketer's objective in using promotion is to offset or lessen the effect of a competitor's promotional or marketing programs - used to prevent sales/market share loss - used most often by firms in extremely competitive consumer markets

Why the concept of integrated marketing communications is increasingly effective

Because mass media advertising is used less frequently today because of its high cost and lower effectiveness in reaching some target markets, marketers can now take advantage of more precisely targeted promotional tools, such as TV, direct mail, the internet, special-interest magazines, smartphones, mobile applications, social media, sales calls, and outdoor boards -Database marketing and marketing analytics are allowing marketers to target individual customers more precisely

Proxemic communication

Communicating by varying the physical distance in face-to-face interactions

Kinesic communication

Communicating through the movement of head, eyes, arms, hands, legs, or torso

Tactile communication

Communication through touching

Coding process (encoding)

Converting meaning into a series of signs or symbols -When coding meaning into a message, the source must consider certain characteristics of the receiver or audience - When coding a meaning, a source needs to use signs or symbols that the receiver or audience uses to refer to the concepts the source intends to convey

Decoding process

Converting signs and symbols into concepts and ideas

Integrated marketing communications

Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers

Primary demand

Demand for a product category rather than a specific brand

Selective demand

Demand for a specific brand - Requires singling out attributes important to potential buyers

Encourage Product Trial

If customers stall during the evaluation stage, marketers can use certain types of promotion—such as free samples, coupons, test drives, or limited free-use offers, contests, and games—to encourage product trial in order to move them through the product adoption process

When a salesperson and a customer meet face-to-face, they use several types of interpersonal communication

Kinesic, Proxemic, Tactile

Pull policy

Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel - done primarily through advertising and sales promotion

Push policy

Promoting a product only to the next institution down the marketing channel - Normally stresses personal selling

New introductory promotion

Promotion that informs consumers about a new product

A component of public relations is publicity

Publicity is nonpersonal communication in news-story form about an organization or its products, or both -Is transmitted through a mass medium at no charge

Receiver

The individual, group, or organization that decodes a coded message

Channel capacity

The limit on the volume of information a communication channel can handle effectively

Communications channel

The medium of transmission that carries coded message from the source to the receiver - Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication

Feedback

The receiver's response to a decoded message - Can be verbal and nonverbal - In interpersonal communication, feedback occurs through talking, teaching, smiling, nodding, eye movements, and other body movements and postures

Audience

Two or more receivers

Public relations

a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders - an ongoing program rather than a set of tools to be used only during crises

Advertising

a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media - used by individuals and organizations to promote goods, services, ideas, issues, and people

Personal selling

a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation

Sales promotion

an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or customers

Create Awareness (objective of promotion)

for an organization that is introducing a new product or a line extension, making customers aware of the product is crucial to initiating the product adoption process

Elements of the Communication Process

sender, encoding, message, media, decoding, receiver, response, feedback, noise