Marketing Chp 14 Quiz

The New Marketing Communications Model

- consumers are better informed - more communication channels - less mass marketing - changing communications technology In past decades, marketers perfected the art of mass marketing: selling highly standardized products to masses of customers. In the process, they developed effective mass-media communications techniques to support these strategies. Large companies now routinely invest millions or even billions of dollars in television, magazine, or other mass-media advertising, reaching tens of millions of customers with a single ad. Today, however, marketing managers face some new marketing communications realities. Perhaps no other area of marketing is changing so profoundly as marketing communications, creating both exciting and anxious times for marketing communicators Several major factors are changing the face of today's marketing communications. First, consumers are changing. In this digital, wireless age, they are better informed and more communications empowered. Rather than relying on marketer-supplied information, they can use the Internet and other technologies to find information on their own. They can connect more easily with other consumers to exchange brand-related information or even create their own marketing messages. Second, marketing strategies are changing. As mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarkets. Finally, sweeping advances in communications technology are causing remarkable changes in the ways in which companies and customers communicate with each other. The digital age has spawned a host of new information and communication tools—from smartphones and iPads to satellite and cable television systems to the many faces of the Internet (e-mail, brand websites, online social networks, blogs, and so much more). These explosive developments have had a dramatic impact on marketing communications. Just as mass marketing once gave rise to a new generation of mass-media communications, the new digital media have given birth to a new marketing communications model. Although network television, magazines, newspapers, and other traditional mass media remain very important, their dominance is declining. In their place, advertisers are now adding a broad selection of more-specialized and highly targeted media to reach smaller customer segments with more-personalized, interactive messages. The new media range from specialty cable television channels and made-for-the-Web videos to Internet catalogs, e-mail, blogs, mobile phone content, and online social networks. In all, companies are doing less broadcasting and more narrowcasting. Some advertising industry experts even predict that the old mass-media communications model will eventually become obsolete. Mass media costs are rising, audiences are shrinking, ad clutter is increasing, and viewers are gaining control of message exposure through technologies such as video streaming or DVRs that let them skip disruptive television commercials. As a result, they suggest, marketers are shifting ever-larger portions of their marketing budgets away from old-media mainstays and moving them to digital and other new-age media. In recent years, although TV still dominates as an advertising medium, ad spending on the major TV networks has stagnated as ad spending on the Internet and other digital media has surged. Ad spending in magazines, newspapers, and radio, in contrast, has lost considerable ground. In some cases, marketers are skipping traditional media altogether. For example, when Heinz introduced its limited-time Heinz Tomato Ketchup with Balsamic Vinegar flavor, customers were able to learn about and buy the product only through the brand's Facebook page, until it appeared on store shelves six weeks later. Heinz used no TV or print advertising for the introduction, instead relying on its 825,000 Facebook followers to spread the word. Customers responded strongly, and six months later Heinz added the product to its standard lineup, the first new flavor from Heinz Ketchup in nearly a decade. Similarly, eco-friendly household products maker Method recently employed a digital-only promotional campaign themed "Clean happy": Method is known for offbeat campaigns using slogans like "People against dirty" and "For the love of clean." But the most notable thing about the "Clean happy" campaign is that, unlike previous Method campaigns, it uses zero ads in traditional media like TV or magazines. Instead, the centerpiece of the campaign is a two-minute brand video clip that can be watched only on YouTube and on the Method Facebook page. That video is followed at monthly intervals by four other clips that focus on individual Method products. The campaign also employs online media ads, as well as a major presence in social media that include YouTube and Facebook. In the new marketing communications world, rather than using old approaches that interrupt customers and force-feed them mass messages, new media formats let marketers reach smaller groups of consumers in more interactive, engaging ways. For example, think about television viewing these days. Consumers can now watch their favorite programs on just about anything with a screen—on televisions but also laptops, mobile phones, or tablets. And they can choose to watch programs whenever and wherever they wish, often without commercials. Increasingly, some programs, ads, and videos are being produced only for Internet viewing. Despite the shift toward new digital media, however, traditional mass media still capture a lion's share of the promotion budgets of most major marketing firms, a fact that probably won't change quickly. For example, P&G, a leading proponent of digital media, still spends the majority of its huge advertising budget on mass media. Although P&G's digital outlay more than doubled last year to $169 million, digital still accounts for less than 5 percent of the company's annual global advertising budget. At a broader level, although some may question the future role of TV advertising, it's still very much in use today. Last year, television captured more than 40 percent of global advertising spending compared to the 21 percent captured by all online advertising media. Still, online advertising remains the fastest growing medium. It is now the second largest medium behind television, well ahead of newspapers and magazines. Thus, rather than the old media model rapidly collapsing, most industry insiders see a more gradual blending of new and traditional media. The new marketing communications model will consist of a shifting mix of both traditional mass media and a wide array of exciting, new, more-targeted, and more-personalized but sometimes less-controllable media. Many advertisers and ad agencies are now grappling with this transition. In the end, however, regardless of the communications channel, the key is to integrate all of these media in a way that best communicates the brand message and enhances the customer's brand experience. As the marketing communications environment shifts, so will the role of marketing communicators. Rather than just creating and placing "TV ads" or "print ads" or "Facebook display ads," many marketers now view themselves more broadly as brand content managers who manage brand conversations with and among customers across a fluid mix of channels, both traditional and new, controlled and not controlled.

The Promotion Mix (Marketing Communications Mix)

Advertising, PR, personal selling, sales promotion, and direct-marketing to persuasively communicate customer value and build customer relationships

Integrated Marketing Communications

Integration of a company's communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

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 - press releases - sponsorships - special events - web pages

Determining Communication Objectives

Moving target consumers through the Six Buyer-Readiness Stages Awareness > Knowledge > Liking > Preference > Conviction > Purchase Uses: Once the target audience has been defined, marketers must determine the desired response. In many cases they will seek a purchase response. But purchase may result only after a lengthy consumer decision-making process. The marketing communicator needs to know where the target audience now stands and to what stage it needs to be moved.

Advertising

Paid non-personal presentation and promotion of ideas, goods, or services by an identified sponsor - broadcast - print - internet - outdoor

Integrated Marketing Communications Strategy

The company carefully integrates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands. Multiple customer "touch points" managing the customer relationship over time. IMC calls for recognizing all touch points where the customer may encounter the company and its brands. Each contact with the brand will deliver a message, good bad or indifferent. The company's goal should be to deliver a consistent and positive message at each contact. Integrated marketing communications ties together all of the company's messages and images. Its television and print ads have the same message, look, and feel as its e-mail and personal selling communications. And its PR materials project the same image as its website, online social networks, or mobile marketing efforts. Often, different media play unique roles in attracting, informing, and persuading consumers; these roles must be carefully coordinated under the overall marketing communications plan. In the past, no one person or department was responsible for thinking through the communication roles of the various promotion tools and coordinating the promotion mix. To help implement integrated marketing communications, some companies have appointed a marketing communications director who has overall responsibility for the company's communications efforts. This helps to produce better communications consistency and greater sales impact. It places the responsibility in someone's hands—where none existed before—to unify the company's image as it is shaped by thousands of company activities. A View of the Communication Process Integrated marketing communications involves identifying the target audience and shaping a well-coordinated promotional program to obtain the desired audience response. Too often, marketing communications focus on immediate awareness, image, or preference goals in the target market. But this approach to communication is too shortsighted. Today, marketers are moving toward viewing communications as managing the customer relationship over time. Because customers differ, communications programs need to be developed for specific segments, niches, and even individuals. And, given the new interactive communications technologies, companies must ask not only "How can we reach our customers?" but also "How can we let our customers reach us?" Thus, the communications process should start with an audit of all the potential touchpoints that target customers may have with the company and its brands. For example, someone purchasing a new phone plan may talk to others, see television or magazine ads, visit various websites for prices and reviews, and check out plans at Best Buy, Walmart, or a wireless provider's kiosk or store. The marketer needs to assess what influence each communication experience will have at different stages of the buying process. This understanding helps marketers allocate their communication dollars more efficiently and effectively. To communicate effectively, marketers need to understand how communication works. Communication involves the nine elements shown in figure 14.2. Two of these elements are the major parties in a communication—the sender and the receiver. Another two are the major communication tools—the message and the media. Four more are major communication functions—encoding, decoding, response, and feedback. The last element is noise in the system. Definitions of these elements follow and are applied to a McDonald's "I'm lovin' it" television commercial. Sender: The party sending the message to another party—here, McDonald's. Encoding: The process of putting thought into symbolic form—for example, McDonald's ad agency assembles words, sounds, and illustrations into a TV advertisement that will convey the intended message. Message: The set of symbols that the sender transmits—the actual McDonald's ad. Media: The communication channels through which the message moves from the sender to the receiver—in this case, television and the specific television programs that McDonald's selects. Decoding: The process by which the receiver assigns meaning to the symbols encoded by the sender—a consumer watches the McDonald's commercial and interprets the words and images it contains. Receiver: The party receiving the message sent by another party—the customer who watches the McDonald's ad. Response: The reactions of the receiver after being exposed to the message—any of hundreds of possible responses, such as the consumer likes McDonald's better, is more likely to eat at McDonald's next time, hums the "I'm lovin' it" jingle, or does nothing. Feedback: The part of the receiver's response communicated back to the sender—McDonald's research shows that consumers are either struck by and remember the ad or they write or call McDonald's, praising or criticizing the ad or its products. Noise: The unplanned static or distortion during the communication process, which results in the receiver getting a different message than the one the sender sent—the consumer is distracted while watching the commercial and misses its key points. For a message to be effective, the sender's encoding process must mesh with the receiver's decoding process. The best messages consist of words and other symbols that are familiar to the receiver. The more the sender's field of experience overlaps with that of the receiver, the more effective the message is likely to be. Marketing communicators may not always share their customer's field of experience. For example, an advertising copywriter from one socioeconomic level might create ads for customers from another level—say, wealthy business owners. However, to communicate effectively, the marketing communicator must understand the customer's field of experience. This model points out several key factors in good communication. Senders need to know what audiences they wish to reach and what responses they want. They must be good at encoding messages that take into account how the target audience decodes them. They must send messages through media that reach target audiences, and they must develop feedback channels so that they can assess an audience's response to the message. Also, in today's interactive media environment, companies must be prepared to "flip" the communications process—to become good receivers of and responders to messages sent by consumers.

Personal Selling

The personal presentation by the firm's sales force for the purpose of making sales and building customer relationships - sales presentations - incentive programs - trade shows

Sales Promotion

The short term incentive to encourage the purchase or sale of a product or service - discounts - coupons - displays - demonstration

Mixed Communications

challenge to bring company departments together to prevent blurred brand perception. Amount of choice and complexity and fragmentation make it difficult. The challenge is to make it come together in an organized way

Sales Promotion

includes coupons, contests, cents-off deals, and premiums that offer strong incentive to purchase, and can be used to dramatize product offers and to boost sagging sales. Not as effective at building relationships and brand preference Sales promotion includes a wide assortment of tools—coupons, contests, discounts, premiums, and others—all of which have many unique qualities. They attract consumer attention, offer strong incentives to purchase, and can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. Whereas advertising says, "Buy our product," sales promotion says, "Buy it now." Sales promotion effects are often short lived, however, and often are not as effective as advertising or personal selling in building long-run brand preference and customer relationships.

Non-personal communication

is media that carry messages without personal contact or feedback, including major media, atmospheres (ie a bank branch) and events that affect the buyer directly

Designing a Message - AIDA Model

- get Attention (hey what is that?) - hold Interest (wow, that looks interesting!) - arouse Desire (I would like to have this) - obtain Action (I'll go ahead to get it) When putting a message together, the marketing communicator must decide what to say (message content) and how to say it (message structure and format)

Steps in Developing Effective Marketing Communication

1. Identify the target audience 2. Determine the communication objectives 3. Design the message 4. Choose the media through which to send the message 5. Select the message source and collect feedback

The nature of each promotional tool

Advertising reaches masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times (reach x frequency) Is impersonal and a one-way communication Shaping the Overall Promotion Mix The concept of integrated marketing communications suggests that the company must blend the promotion tools carefully into a coordinated promotion mix. But how does it determine what mix of promotion tools to use? Companies within the same industry differ greatly in the design of their promotion mixes. For example, cosmetics maker Mary Kay spends most of its promotion funds on personal selling and direct marketing, whereas competitor CoverGirl spends heavily on consumer advertising. We now look at factors that influence the marketer's choice of promotion tools. The Nature of Each Promotion Tool Each promotion tool has unique characteristics and costs. Marketers must understand these characteristics in shaping the promotion mix. Advertising. Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. For example, television advertising can reach huge audiences. Nearly 111 million Americans watched the most recent Super Bowl, more than 39 million people watched at least part of the last Academy Awards broadcast, and more than 26 million fans tuned in for the kick-off of the eleventh season of American Idol. And consumers viewing the ads again on YouTube and company websites extended their reach by millions more. For companies that want to reach a mass audience, TV is the place to be. Beyond its reach, large-scale advertising says something positive about the seller's size, popularity, and success. Because of advertising's public nature, consumers tend to view advertised products as more legitimate. Advertising is also very expressive; it allows the company to dramatize its products through the artful use of visuals, print, sound, and color. On the one hand, advertising can be used to build up a long-term image for a product (such as Coca-Cola ads). On the other hand, advertising can trigger quick sales (as when Kohl's advertises weekend specials). Advertising also has some shortcomings. Although it reaches many people quickly, advertising is impersonal and lacks the direct persuasiveness of company salespeople. For the most part, advertising can carry on only a one-way communication with an audience, and the audience does not feel that it has to pay attention or respond. In addition, advertising can be very costly. Although some advertising forms, such as newspaper and radio advertising, can be done on smaller budgets, other forms, such as network TV advertising, require very large budgets.

Setting the total promotion budget and mix: affordable budget method

Affordable budget method: sets the budget at what can be afforded. But it ignores the effects of promotion on sales One of the hardest marketing decisions facing a company is how much to spend on promotion. John Wanamaker, the department store magnate, once said, "I know that half of my advertising is wasted, but I don't know which half. I spent $2 million for advertising, and I don't know if that is half enough or twice too much." Thus, it is not surprising that industries and companies vary widely in how much they spend on promotion. Promotion spending may be 10-12 percent of sales for consumer packaged goods, 20 percent for cosmetics, and only 1.9 percent for household appliances. Within a given industry, both low and high spenders can be found. How does a company determine its promotion budget? Here, we look at four common methods used to set the total budget for advertising: the affordable method, the percentage-of-sales method, the competitive-parity method, and the objective-and-task method. Affordable Method Some companies use the affordable method: They set the promotion budget at the level they think the company can afford. Small businesses often use this method, reasoning that the company cannot spend more on advertising than it has. They start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising. Unfortunately, this method of setting budgets completely ignores the effects of promotion on sales. It tends to place promotion last among spending priorities, even in situations in which advertising is critical to the firm's success. It leads to an uncertain annual promotion budget, which makes long-range market planning difficult. Although the affordable method can result in overspending on advertising, it more often results in underspending.

Message Format

In a print ad, the communicator has to decide on the headline, copy, illustration, and colors. To attract attention, advertisers can use novelty and contrast; eye-catching pictures and headlines; distinctive formats; message size and position; and color, shape, and movement. If the message is to be communicated by television or video, the communicator must incorporate motion, pace, and sound. Presenters plan every detail carefully, from start to finish. If the message is carried on the product or its package, the communicator must watch texture, scent, color, size, and shape. For example, color alone can enhance message recognition for a brand. One study suggests that color increases brand recognition by up to 80 percent. Think about target (red), McDonalds (yellow and red). Thus, in designing effective marketing communications, marketers must consider color and other seemingly unimportant details carefully.

Direct Marketing

Involves making connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships - direct mail - DRTV - email - catalog - telemarketing - kiosks

Personal Communication

Involves two or more people communicating directly with each other - face to face - phone - mail - email - internet chat word-of-mouth influence channel is effective because it allows personal addressing and feedback Control of PC: - can be controlled by company...sales force - independent experts...advocates/guides/bloggers - word of mouth...family/friends/neighbors/co-workers

Choosing personal communication: Opinion leaders and buzz marketing

Opinion leaders: are people within a reference group who, because of their special skills, knowledge, personality, or other characteristics, exerts or social influence on others Buzz marketing: involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities (P&G 500,000 moms) (huge soccer ball smashing car) consumers buy big ticket items with reading what existing users reviewed about it Personal influence carries great weight, especially for products that are expensive, risky, or highly visible. One recent survey found that recommendations from friends and family are far and away the most powerful influence on consumers worldwide: More than 50 percent of consumers said friends and family are the number one influence on their awareness and purchase. Another study found that 90 percent of customers trust recommendations from people they know and 70 percent trust consumer opinions posted online, whereas trust in ads runs from a high of about 62 percent to less than 24 percent, depending on the medium. Is it any wonder, then, that few consumers buy a big-ticket item before checking out what existing users have to say about the product at a such as Amazon.com? Who hasn't made an Amazon purchase based on another customer's review or the "Customers who bought this also bought . . ." section? Companies can take steps to put personal communication channels to work for them. For example, as we discussed in chapter 5, they can create opinion leaders for their brands—people whose opinions are sought by others—by supplying influencers with the product on attractive terms or by educating them so that they can inform others. Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or a service to others in their communities. P&G has created a huge word-of-mouth marketing arm—Vocalpoint—consisting of 500,000 moms. Vocalpoint recruits "connectors"—natural-born buzzers with vast networks of friends and a gift for gab. They create buzz not only for P&G brands but also for those of other client companies as well—half its business comes from non-P&G brands. P&G routinely uses the Vocalpoint network in the launch of new products such as the Bounce Dryer Bar and Tide Pods. P&G doesn't pay the moms or coach them on what to say. It simply educates Vocalpointers about a new product, arms them with free samples and coupons for friends, and then asks them to share their "honest opinions with us and with other real women." In turn, the Vocalpoint moms create hundreds of thousands of personal recommendations for the new products..

Setting the total promotion budget and mix: percentage of sales method

Percentage of sales method: sets the budget at a certain percentage of current or forecasted sales Easy...helps management think about the relationship between promotion, selling price, and profit per unit Wrongly views sales as the cause rather than the result of promotion Other companies use the percentage-of-sales method, setting their promotion budget at a certain percentage of current or forecasted sales. Or they budget a percentage of the unit sales price. The percentage-of-sales method is simple to use and helps management think about the relationships between promotion spending, selling price, and profit per unit. Despite these claimed advantages, however, the percentage-of-sales method has little to justify it. It wrongly views sales as the cause of promotion rather than as the result. Although studies have found a positive correlation between promotional spending and brand strength, this relationship often turns out to be effect and cause, not cause and effect. Stronger brands with higher sales can afford the biggest ad budgets. Thus, the percentage-of-sales budget is based on the availability of funds rather than on opportunities. It may prevent the increased spending sometimes needed to turn around falling sales. Because the budget varies with year-to-year sales, long-range planning is difficult. Finally, the method does not provide any basis for choosing a specific percentage, except what has been done in the past or what competitors are doing.

Personal Selling

Personal selling is the most effective method at certain stages of the buying process, particularly in building buyers' preferences, convictions, actions, and developing customer relationships However, it is the most costly tool Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and actions. It involves personal interaction between two or more people, so each person can observe the other's needs and characteristics and make quick adjustments. Personal selling also allows all kinds of customer relationships to spring up, ranging from matter-of-fact selling relationships to personal friendships. An effective salesperson keeps the customer's interests at heart to build a long-term relationship by solving a customer's problems. Finally, with personal selling, the buyer usually feels a greater need to listen and respond, even if the response is a polite "No thank-you." These unique qualities come at a cost, however. A sales force requires a longer-term commitment than does advertising—although advertising can be turned up or down, the size of a sales force is harder to change. Personal selling is also the company's most expensive promotion tool, costing companies on average $350 or more per sales call, depending on the industry. U.S. firms spend up to three times as much on personal selling as they do on advertising.

Push Vs. Pull Strategies

Promotion Mix Strategies Marketers can choose from two basic promotion mix strategies: push promotion or pull promotion. Figure 14.4 contrasts the two strategies. The relative emphasis given to the specific promotion tools differs for push and pull strategies. A push strategy involves "pushing" the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final consumers. For example, John Deere does very little promoting of its lawn mowers, garden tractors, and other residential consumer products to final consumers. Instead, John Deere's sales force works with Lowe's, Home Depot, independent dealers, and other channel members, who in turn push John Deere products to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising and consumer promotion) toward final consumers to induce them to buy the product. For example, Unilever promotes its Axe grooming products directly to its young male target market using TV and print ads, a brand website, its YouTube channel and Facebook page, and other channels. If the pull strategy is effective, consumers will then demand the brand from retailers, such as CVS, Walgreens, or Walmart, who will in turn demand it from Unilever. Thus, under a pull strategy, consumer demand "pulls" the product through the channels. Some industrial-goods companies use only push strategies; likewise, some direct-marketing companies use only pull strategies. However, most large companies use some combination of both. For example, Unilever spends more than $8 billion worldwide each year on consumer marketing and sales promotions to create brand preference and pull customers into stores that carry its products. At the same time, it uses its own and distributors' sales forces and trade promotions to push its brands through the channels, so that they will be available on store shelves when consumers come calling. Companies consider many factors when designing their promotion mix strategies, including the type of product and market. For example, the importance of different promotion tools varies between consumer and business markets. Business-to-consumer companies usually pull more, putting more of their funds into advertising, followed by sales promotion, personal selling, and then public relations. In contrast, business-to-business marketers tend to push more, putting more of their funds into personal selling, followed by sales promotion, advertising, and public relations. Now that we've examined the concept of integrated marketing communications and the factors that firms consider when shaping their promotion mixes, let's look more closely at the specific marketing communications tools.

PR & Direct Marketing

Public relations is a very believable form of promotion that includes news stories, features, sponsorships, and events Direct marketing is a non-public, immediate, customized, and interactive promotional tool that includes direct mail, catalogs, telemarketing, and online marketing Public relations is very believable—news stories, features, sponsorships, and events seem more real and believable to readers than ads do. PR can also reach many prospects who avoid salespeople and advertisements—the message gets to buyers as "news" rather than as a sales-directed communication. And, as with advertising, public relations can dramatize a company or product. Marketers tend to underuse public relations or use it as an afterthought. Yet a well-thought-out public relations campaign used with other promotion mix elements can be very effective and economical. Direct Marketing. Although there are many forms of direct marketing—direct mail and catalogs, online marketing, mobile marketing, and others—they all share four distinctive characteristics. Direct marketing is less public: The message is normally directed to a specific person. Direct marketing is immediate and customized: Messages can be prepared very quickly and can be tailored to appeal to specific consumers. Finally, direct marketing is interactive: It allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer's response. Thus, direct marketing is well suited to highly targeted marketing efforts and building one-to-one customer relationships.

Message Content: 3 Types of Appeal

Rational appeal: relates to the audience's self-interest (Aleve) Emotional appeal: is an attempt to stir up positive or negative emotions to motivate a purchase (google's dear Sophie) Moral appeal: is directed at the audience's sense of right and proper (Live United. Make a difference)

The Start: Identifying the Target Audience

Target Audience affects: What will be said, How it will be said, When it will be said, Where it will be said, Who will say it. (Marlboro) Target audience will heavily affect the communicators decisions in these

Selecting the message source

The message's impact on the target audience is affected by how the audience views the communicator (michael jordan, dr. oz, tiger woods) Celebrities -Athletes -Entertainers Professionals -Health care providers In either personal or non-personal communication, the message's impact also depends on how the target audience views the communicator. Messages delivered by highly credible sources are more persuasive. Thus, many food companies promote to doctors, dentists, and other health-care providers to motivate these professionals to recommend specific food products to their patients. And marketers hire celebrity endorsers—well-known athletes, actors, musicians, and even cartoon characters—to deliver their messages. But companies must be careful when selecting celebrities to represent their brands. Picking the wrong spokesperson can result in embarrassment and a tarnished image. For example, more than a dozen big brands—including Nike, Gatorade, Gillette, EA Sports, and Accenture—faced embarrassment when golfer Tiger Woods' personal problems were publically exposed, tarnishing his previously pristine image. "Arranged marriages between brands and celebrities are inherently risky," notes one expert. "Ninety-nine percent of celebrities do a strong job for their brand partners," says another, "and 1 percent goes off the rails."

Collecting feedback

Understanding the effect on the target audience by measuring behavior After sending the message, the communicator must research its effect on the target audience. This involves asking target audience members whether they remember the message, how many times they saw it, what points they recall, how they felt about the message, and their past and present attitudes toward the product and company. The communicator would also like to measure behavior resulting from the message—how many people bought the product, talked to others about it, or visited the store. Feedback on marketing communications may suggest changes in the promotion program or in the product offer itself. For example, Macy's uses television and newspaper advertising to inform area consumers about its stores, services, and merchandising events. Suppose feedback research shows that 80 percent of all shoppers in an area recall seeing the store's ads and are aware of its merchandise and sales. Sixty percent of these aware shoppers have visited a Macy's store in the past month, but only 20 percent of those who visited were satisfied with the shopping experience. These results suggest that although promotion is creating awareness, Macy's stores aren't giving consumers the satisfaction they expect. Therefore, Macy's needs to improve the shopping experience while staying with the successful communications program. In contrast, suppose research shows that only 40 percent of area consumers are aware of the store's merchandise and events, only 30 percent of those aware have shopped recently, but 80 percent of those who have shopped return soon to shop again. In this case, Macy's needs to strengthen its promotion program to take advantage of its power to create customer satisfaction in the store.

Setting the Total Promotion Budget and Mix: Objective-and-task method

sets the budget based on what the firm wants to accomplish with promotion and includes: Defining promotion objectives Determining tasks to achieve the objectives Estimating costs The most logical budget-setting method is the objective-and-task method, whereby the company sets its promotion budget based on what it wants to accomplish with promotion. This budgeting method entails (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget. The advantage of the objective-and-task method is that it forces management to spell out its assumptions about the relationship between dollars spent and promotion results. But it is also the most difficult method to use. Often, it is hard to figure out which specific tasks will achieve the stated objectives. For example, suppose Samsung wants a 95-percent awareness for its latest camcorder model during the six-month introductory period. What specific advertising messages and media schedules should Samsung use to attain this objective? How much would these messages and media schedules cost? Samsung management must consider such questions, even though they are hard to answer.

Setting the total promotion budget and mix: competitive parity method

sets the budget to match competitors Represents industry standards Avoids promotion wars Still other companies use the competitive-parity method, setting their promotion budgets to match competitors' outlays. They monitor competitors' advertising or get industry promotion spending estimates from publications or trade associations and then set their budgets based on the industry average. Two arguments support this method. First, competitors' budgets represent the collective wisdom of the industry. Second, spending what competitors spend helps prevent promotion wars. Unfortunately, neither argument is valid. There are no grounds for believing that the competition has a better idea of what a company should be spending on promotion than does the company itself. Companies differ greatly, and each has its own special promotion needs. Finally, there is no evidence that budgets based on competitive parity prevent promotion wars.