AC 111-CH2 Role of IMC in the Marketing Process

Geico Marketing Success
Geico Marketing Success
Geico Example
-Strong brand image and strong IMC programs
Marketing & Promotions Process Model
Marketing & Promotions Process Model
A ” ” Process Model which contains:
-Marketing Strategy & Analysis
-Target Marketing Process
-Marketing Planning Program Development
-Promotion to Final Buyer
-Resellers
-Target Market
-Purchase
Marketing Strategy & Analysis
-Strategic Marketing Plan:
>Opportunity Analysis
>Competitive Analysis
>Target Market Selection
>>Strategic Marketing Plan<< >Opportunity analysis… careful analysis of the marketplace can lead to alternative market opportunities for existing product lines, new products for current markets, or new products for new markets.

>Competitive analysis… can range from direct brand competition to more indirect forms of competition, such as product substitutes. The goal is to find a competitive advantage.

>Target market selection… after evaluating the opportunities identified during the opportunity and competitive analysis, a company must select one or more target markets. This target market becomes the focus of the firm’s marketing effort, and has direct implications for advertising and promotional efforts.

The Targeting Market Process:
-Identify markets with unfulfilled needs
-Determine market segmentation
-Select a market to target
-Position through marketing strategies
The Targeting Market Process:
-Identify markets with unfulfilled needs
-Determine market segmentation
-Select a market to target
-Position through marketing strategies
> Identify markets with unfulfilled needs – this isolates consumers with similar lifestyles, needs, and wants

>Determine market segmentation dividing a market into distinct groups that have common needs and will respond similarly to a marketing action.

>Select a market to target – determining how many segments to enter, and which segments offer the most potential.

>Position through marketing strategies – the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it apart from the competition

Target Market Identification
-This form of segmentation allows companies to establish common ground with consumers, which in turn results in more effective marketing and communication programs.

Ex:This would be a good time to show the Kraft Foods Philly Cream Cheese video commercial, which targeted an Hispanic audience.

Isolate Consumer with similar….
-Lifestyles
-Social Class
-Economic Status
-Geographic Location
-Age
-Marital Status
-Needs

Market Segmentation
Market Segmentation
Dividing a market into distinct groups
-W/ common needs
-who respond similarly to a marketing situation
Bases for Market Segmentation;
-Demographic
-Geographic
-Psychographic
-Socioeconomic
Bases for Market Segmentation;
-Demographic
-Geographic
-Psychographic
-Socioeconomic
Demographic:
-Gender
-Age
-Race
-Life stage
-Birth era
-Household size
-Residence tenure
-Marital status

Geographic:
-Region
-City Size
-Metropolitan Area
-Density

Psychographic:
-Personality
-Values/Lifestyle

Socioeconomic:
-Income
-Education
-Occupation

Geographic Segmentation Ads
Geographic Segmentation Ads
Ex: BIG RED advertisement targets a specific geographic region

– Companies have developed program target to customer is a specific region of the country. In this case, Big Red is a successful regional “cult” brand in Texas

Demographic Segmentation Ads
Demographic Segmentation Ads
-Demographic segmentation, in which the market is divided on the basis of:
>age
>sex
>family size
>education
>income
>social class.
Benefit Segmentation Ads
Benefit Segmentation Ads
Benefit Segmentation: is grouping consumers on the basis of attributes sought in a product.

Ex: In this case, AT&T is offering worldwide cell phone coverage.
>Who might be included in this market segment?
– (Business travelers, people going overseas on vacation, etc.)

>What other types of products can students think of that are marketed on the basis of benefits? (Examples: toothpaste, low-energy light bulbs, running shoes, etc.)

PRIZM Social Groups
PRIZM Social Groups
-Demonstrate’s the types of information that research companies offer marketers to help them define their markets and develop targeting strategies.
-The chart shown here was developed by Nielsen Claritas. It provides demographic and psychographic profiles of geographic areas as small as census track, block group, or zip code +4. Users of this system include Ace Hardware, Walmart, and AOL, among others.
Test Your Knowledge:
All of the following are considered market coverage alternatives except:
A) Undifferentiated
B) Differentiated
C) Concentrated
D) Dispersed
D.
Selecting a Target Market
1. Determine how many segments to enter
2.Determine which segments have the greatest potential
Segments:
-Undifferentiated
-Differentiated
-Concentrated
Segments:
-Undifferentiated
-Differentiated
-Concentrated
Market Coverage Options:
-Undifferentiated marketing… ignores segment differences and offers just one product or service to the entire market.

-Differentiated marketing… involves marketing in a number of segments, but developing separate marketing strategies for each.

-Concentrated marketing… involves selecting and trying to capture a large share of a single segment.

Market Positioning
-Fitting the product or service to one or more segments of the broad market in such a way as to set it apart from competition

Ex: Lifewater, as shown in this ad, positions itself as a vitamin-rich water.
-include Fiji Water, which is bottled on the island of Fiji, and Perrier, which positions itself as a luxury item.
-Point out that waters may also be marketed as spring, mineral, purified, flavored, carbonated, or health-related, and good packaging can command a premium price

Positioning Strategies:
-Attributes & Benefits
-Price/Quality
-Use/Application
-Product Class
-Product Users
-Competitors
-Cultural Symbol 
-Repositioning
Positioning Strategies:
-Attributes & Benefits
-Price/Quality
-Use/Application
-Product Class
-Product Users
-Competitors
-Cultural Symbol
-Repositioning
Strategies available to marketers:
>Attributes/Benefits – a common approach is setting the brand apart from competitors on the basis of specific characteristics or benefits. Marketers attempt to identify salient benefits, which are those that are important to customers when making purchase decisions

>Price/Quality – using price as characteristic of the brand. If a product is positioned as high quality, price may be a secondary consideration. Another option is to focus on product quality or value offered at a competitive price.

>Use/Application – associate the brand with a specific use. This approach can be an effective way to expand usage of a product.

>Product Class – positioning your product against a product in another category, rather than against a competitor. For example, positioning frozen orange juice against fresh oranges.

>Product User – associating a brand with a type of person or group that uses a product or service.

>Competitor – positioning a company or brand against a competitor. Often another form of positioning is used as well to differentiate the brand.

>Cultural Symbols – using a cultural symbol to differentiate a product from competitors (e.g. Keebler elves, the Jolly Green Giant, Tony the Tiger).

>Repositioning-involves altering or changing the position of a product or brand, and usually occurs because of stagnant or declining sales.

Positioning by cultural symbol
Positioning by cultural symbol
Ex: Tony the tiger,The Marlboro Man, Aunt Jemima, Mrs. Butterworth’s, Mickey Mouse, Ronald McDonald, the Trix rabbit, the Michelin Man, Betty Crocker, and the Energizer Bunny.
Marketing Planning Program
Marketing Planning Program
>Product decisions- branding and packaging

>Price decisions-what can and should be charged

>Distribution Channels- direct or indirect

>Promotional Strategy- push or pull

Branding Goals
Branding Goals
” ” Goals:
-Build & maintain brand awareness and interest
-Develop & enhance attitudes toward the company, product, or service
-Build & foster relationships between the consumer and the brand
Branding:
-Brand Identity vs. Brand Equity
Branding:
-Brand Identity vs. Brand Equity
Ex: advertisement that reflects how Rolex builds strong brand equity.

>Brand identity
Combination of the name, logo, symbols, design, packaging, and image associations held by the consumer

>Brand equity
Added value or goodwill
Results from the favorable image, impressions of differentiation, and/or the strength of consumer attachment to a company name, brand name, or trademark

Branding and Packaging Decisions
-Branding and Packaging are related. They must work together to help create a position and/or image.

Branding:
-Brand name commun-icates attributes and meaning
-Advertising creates and maintains brand equity

Packaging:
-Has become increasingly important
-Often the customers’ first exposure to product

Packaging Creates Image
Packaging Creates Image
-The image of a product does the following:
communicate, hold the consumer’s attention, and differentiate a brand from competitors.
Pricing Decisions;
-Factors the firm must consider
-What consumers give up to buy a product or service
Pricing Decisions;
-Factors the firm must consider
-What consumers give up to buy a product or service
-Factors the firm must consider:
>Cost
>Demand
>Competition
>Perceived Value

-A firm must consider a number of factors in determining the price it charges for its product or service, including costs, demand factors, competition, and perceived value. It must also consider what the ultimate consumer is willing to give up to purchase the product or service
-From an IMC perspective, the price must be consistent with the perceptions of the product, as well as the communications strategy.

-What consumers give up to buy a product or service:
>Time
>Mental Activity
>Behavioral Effort

Relating Price to Ads and Promotions
Relating Price to Ads and Promotions
>A firm charges for a product or service must be consistent with its advertising and promotional campaigns. Products and services positioned as “high quality” usually carry a higher price. A low price indicates bargain or value positioning.
>It is important to point out that a product positioned as high quality while carrying a lower price than competitors will confuse customers.

-Price must be consistent with perceptions of the product

-Higher prices communicate higher product quality

-Lower prices reflect bargain or “value” perceptions

-Price, advertising, and distribution must be unified in identifying product position

Market Channels
-Sets of interdependent organizations involved in the process of making a product or service available for use
Channels and Image
-Channels can impact communication objectives
>Image
>Store displays
>Point-of-purchase merchandising
>Shelf footage

What to consider?
-Is the product better suited to distribution through Neiman Marcus or Kmart?
-What types of displays are available and needed in the store?
-What type of point-of-purchase merchandising is possible?
-How much shelf space is available, and where?
-Point out that distributing products via a channel is optional… some companies sell directly to consumers, bypassing the middle-man

Types of Channels:
-Direct
-Indirect
Types of Channels:
-Direct
-Indirect
>Direct:
-Driven by direct-response ads, telemarketing, the Internet
-Often used when selling expensive and complex products

>Indirect:
-Network of wholesalers and/or retailers

Ex: Many companies successfully use direct marketing, including Avon, Tupperware, and Mary Kay.
-However, most consumer-product companies distribute through indirect channel
-Usually a network of wholesalers that sell to retailers, or retailers who sell directly to the consumer.

Push vs. Pull Strategies
Push vs. Pull Strategies
>Push strategy… involves motivating the channel members to stock and promote a manufacturer’s products. A push strategy encourages resellers to push merchandise through to their customers.

>Pull strategy… involves spending money on advertising and sales promotion efforts directed toward the ultimate consumer. The goal of a pull strategy is to create consumer demand, which encourages retailers to request the product from the retailer.

Test Your Knowledge:
An ad in a publication aimed at veterinarians explains why they should recommend Eukanuba cat food to the owners of the cats they treat. This is an example of:
A) Consumer advertising
B) A promotional pull strategy
C) A harvesting strategy
D) A consumer promotion
E) A promotional push strategy
E