Mktg Chapter 14_1

promotional mix
the combination of one or more communication tools used to
(1) Inform prospective buyers (2) persuade them to try it (3) remind them later about benefits they enjoyed
IMC
The concept of designing marketing communications programs that coordinate all promotional activities–advertising, personal selling, sales promotion, public relations, and direct marketing– to provide a consistent….
Integrated Marketing Communications
Communication
is the process of conveying a message to others and that requires six elements: A message, a channel of communication, a receiver, and the processes of encoding and decoding
Source
May be a company or person who has information to convey
Message
the information sent by a source, such as a description of a new cellular telephone
Channel of communication
Ex: Salesperson, advertising media, or PR
Encoding
the process of having the sender transform an idea into a set symbols
Decoding
the process of having the receiver take a set of symbols, the message, and transform the symbols back to an idea.
field of experience
A similar understanding and knowledge they apply to message
feedback
the sender’s interpretation of the response and indicates whether the message was decoded and understood as intended
feedback loop
a response and feedback
Noise
Extraneous factors that can work against effective communication by distorting a message or the feedback received
Mass selling
Advertising, sales, promotion, public relations– they are used with groups of prospective buyers
Customized interaction
in contrast with mass selling, includes face-to-face, telephone, and interactive electronic communication.
Advertising
is any paid form of non personal communication about an organization, good, service, or idea by an identified sponsor.
Advantages to advertising
Once the message is created, the same message is sent to all receivers in a market segment
Disadvantages to advertising
The costs to produce and place a message are significant
Personal selling
Consists of the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
Advantages of personal selling
A salesperson can control to whom the presentation is made, reducing the amount of wasted coverage
Disadvantages of personal selling
THE most expensive of the 5 promotional elements
Public relations
is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers prospective customers, stockholders, suppliers, employees, and other publics about a company and its products.
Publicity
Is a non-personal, indirectly paid presentation of an organization, good, or service
Sales promotion
is a short-term inducement of value offered to arouse interest in buying a good or service
Advantages of sales promotions
The short term nature often stimulates sales for their duration
Disadvantages of sales promotions
Cannot be the sole basis for a campaign because gains are often temporary
Direct marketing
a promotion alternative that uses direct communication with consumers to generate a response in the form of an order, a request for info, or visit to a retail outlet
Advantages of direct marketing
Can be customized to match the needs of specific target markets (includes face to face selling, direct mail, catalogs)
Disadvantages of direct marketing
Consumers have a growing concern about privacy, it can be expensive and time-consuming
Developing a promotional mix
Determine the balance of elements, coordinate the promotional effort, assess target audience– consumer or business
Introduction stage
Informs customers to increase their level of awareness
Growth stage
To persuade the customers to buy the product
Maturity
Maintain existing buyers, remind them of the products existence
Decline
Usually a period of phase-out for the product, little money spent on advertising
Push strategy
involves directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product
Pull strategy
involves directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product
Developing the promotion program
Identify the target audience
Specify the objectives
See the budget
Design and schedule promotion
Executing the promotion program
Pre-test the promotion
& carry out
Assessing the promotion program
Post-test the promotion
& make needed changes
behavioral targeting
collecting information about your web-browsing behavior to determine the banner and display ads that you will see as you surf the Web
Hierarchy of effects
the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages: awareness, interest, evaluation, trial, and adoption
Awareness
The consumers ability to recognize and remember the product or brand name
Interest
An increase in the consumers desire to learn about some of the features of the product or brand
Evaluation
Consumers appraisal of the product or brand of important attributes
Trial
the consumers actual first purchase and use of the product or brand
Adoption
The consumers repeated purchase and use of the product or brand
Percentage of sales budgeting
the amount of money spent on promotion is a percentage of past or anticipated sales
Competitive parity budgeting
matches the competitor’s absolute level of spending or the proportion per point of market share
All you can afford budgeting
allows money to be spent on promotion only after all other budget items—such as manufacturing costs—are covered
Objective and task budgeting
(1) determines its promotion objectives, (2) outlines the tasks to accomplish those objectives, and (3) determines the promotion cost of performing those tasks.
Promotion-to-sales ratio
(Total promotion expenditure/total sales) X 100
five basic IMC tools
advertising, personal selling, sales promotion, public relations, and direct marketing
Designing the Promotion
The design will play a primary role in determining the message that is communicated to the audience. Successful designs are often the result of insight regarding consumers’ interests and purchasing behavior
Scheduling the Promotion
Determines the most effective timing of their use. Describes the order in which each promotional tool is introduced and the frequency of its use during the campaign. Overall, the scheduling of the various promotions was designed to generate interest, bring consumers into theaters, and then encourage additional purchases
Executing and assessing the promotion program
Consists of pretesting, posttesting, and IMC audit
Pretesting
the ideal execution of a promotion program involves _______ each design before it is actually used to allow for changes and modifications that improve its effectiveness
Postesting
________ is recommended to evaluate the impact of each promotion and the contribution of the promotion toward achieving the program objectives
IMC audit
A tool used to evaluate a company’s current process. It analyzes the *internal communication network* of the company; identifies *key audiences*; evaluates *customer databases*; assesses *messages in recent advertising*, public relations releases, packaging, websites, e-mail communication, signage, sales promotions, and direct mail
Direct orders
is the result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction
The *growth* of direct marketing
The increasing interest in customer relationship management has reflected dramatic growth, E-mail is the most popular form of DM but most campaigns use several methods
The *value* of direct marketing
One of the most visible indicators is its level of use. Also provides excellent customer service. (Ex: Toll-free telephone numbers, customer service representatives with access to information regarding purchasing preferences, overnight delivery services)
Lead generation
the result of a direct marketing offer designed to generate interest in a product or service and a request for additional information
Traffic generation
is the outcome of direct marketing offer designed to motivate people to visit a business
What are the six elements required for communication to occur?
a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding
A difficulty for U.S. companies advertising in international markets is that the audience does not share the same _________.
field of experience
A misprint in a newspaper ad is an example of ________.
Noise
Explain the difference between advertising and publicity when both appear on television.
Since advertising space on TV is paid for, a firm can control what it wants to say and to whom and how often the message is sent over a broadcast, cable, satellite, or local TV network. Since publicity is an indirectly paid presentation of a message about a firm or its products or services, the firm has little control over what is said to whom or when. Instead, it can only suggest to the TV medium that it run a favorable story on the firm or its offerings.
Cost per contact is high with the element of the promotional mix.
personal selling
Which promotional element should be offered only on a short-term basis?
sales promotion
Promotional programs can be directed to ________ , _________ , or both.
the ultimate consumer; an intermediary (retailer, wholesaler, or industrial distributor)
Describe the promotional objective for each stage of the product life cycle.
Introduction—to inform; Growth—to persuade; Maturity—to remind; and Decline—to phase out.
What are the stages of the hierarchy of effects?
The five stages of the hierarchy of effects are awareness, interest, evaluation, trial, and adoption.
What are the four approaches to setting the promotion budget?
They are percentage of sales, competitive parity, all you can afford, and objective and task.
How have advertising agencies changed to facilitate the use of IMC programs?
Some agencies have adopted: (1) a total communications solutions approach that includes all forms of promotion; (2) an IMC audit to analyze the internal communication network of their clients; and (3) the use of both pretesting and posttesting to improve the effectiveness of IMC programs.
The ability to design and use direct marketing programs has increased with the availability of _________ and ________.
customer information databases; new printing technologies
What are the three types of responses generated by direct marketing activities?
They are direct orders, lead generation, and traffic generation.
Communication refers to
the process of conveying a message to others that requires six elements—a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.
Encoding refers to
the process of having the sender transform an idea into a set of symbols during the communication process.
Which of the following is an inherent weakness of advertising?
it is difficult to receive good feedback
Special events, lobbying efforts, and press conferences are examples of __________ tools.
public relations
At which stage in the product life cycle would the promotional objective be to persuade consumers to buy the product from the firm rather than competitors?
growth stage
What is the promotional objective of the decline stage of the product life cycle?
phase out
During the planning stage of an IMC program, a firm will identify the target audience, specify the advertising objectives, __________, select the right promotional tools, and design the promotion.
set the budget
The first decision in executing the promotion program is to __________.
pretest the promotion
After reading the daily newspaper, the restaurant owner of Zefferelli’s Tower of Pizza said, “I see that the owner of Fellini’s House of Noodles ran a quarter-page ad in today’s paper. We’ll have to match his spending by running our own ad the day after tomorrow.” Based on this statement, what promotional budgeting technique is the Zefferelli’s restaurant owner most likely using?
competitive parity budgeting
Which of the following statements regarding direct marketing is most accurate?
Many customers believe direct marketing saves time, is entertaining, and offers privacy.
Percentage of sales budgeting refers to
allocating funds to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.
Pharmaceutical companies now spend more than $5 billion annually on __________ prescription drug advertising, to complement traditional personal selling and free samples directed only at doctors.
direct to consumer
Public relations refers to:
a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services
New Balance recently spent $13 million for time on television and space in selected magazines to promote its athletic shoes. What form of marketing communication did it use?
advertising
Advertising, personal selling, public relations, sales promotion, and direct marketing are marketing communications alternatives that make up a firm’s _________.
promotional elements
In the feedback loop, feedback refers to
the sender’s interpretation of the response which indicates whether the message was decoded and understood as intended.
A message is conveyed by means of an_____such as a salesperson, advertising media, or public relations tools.
Channel of Communication
The offer of one free pizza with the purchase of two pizzas at the regular price might appeal to you. This type of incentive offer is an example of __________.
consumer-oriented sales promotion
Which of the following in an inherent weakness of personal selling?
messages may differ between salespeople
The first decision in developing the promotion program is to _________. The first decision in developing the promotion program is to _________.
identify the target audience
In the hierarchy of effects, evaluation refers to
the consumer’s appraisal of the product or brand
on important attributes
The result of organizations’ efforts to create profiles of customers so that direct marketing tools, such as e-mail and catalogs, can be directed at specific customers are referred to as
databases
Consumers are often concerned that some marketing efforts are invading their privacy. While this is a legitimate concern to consumers, the explanation by many marketers is
the collection of data from businesses where customers have shopped allows the marketer to satisfy their customer’s needs more effectively by customizing programs specifically for that consumer.
Direct marketing faces several challenges and opportunities in global markets. Several countries such as Italy and Denmark, for example, have requirements for mandatory “opt-in”-that is
potential customers must give permission to include their name on a list for direct marketing solicitations.
Pauline received a postcard from a local antique mall. The card invited her to attend an invitation-only open house at the mall and receive a 10 percent discount on her first purchase that day. The antique mall was using the postcard for _________.
Traffic generation
A paid advertisement for the Texas Department of Economic Development, Tourism Division invited readers of a magazine to mail in a postage-paid reply card that was included with the ad, visit the state’s website, or use a toll-free number to request more information about vacation destinations in Texas. The primary purpose of this ad was as a(n) _________.
lead generator
The result of an offer designed to generate interest in a product or service, and a request for additional information is referred to as _________.
lead generation
The two general approaches to managing unsolicited e-mail are _________.
opt-in and opt-out
Chrysler Corporation provides support and incentives for 2,390 Chrysler and Jeep dealers. Through a multi-level program, Chrysler provides incentives to reward dealers for meeting sales goals. Dealers receive an incentive when they are near a goal, another when they reach a goal, and a larger incentive if they exceed sales projections. All of these actions are intended to encourage Chrysler dealers to __________ the Chrysler products through the channel to consumers.
push
Directing the promotional mix at ultimate consumers to encourage them to ask retailers for the product, is referred to as a(n) _________.
pull strategy
Many prescription drugs such as Lipitor and Zocor now have their own websites to encourage patients to learn more about the drugs and ask for them by name from the doctor. The manufacturers of these drugs are using a(n) __________ promotional strategy.
pull
During the planning stage of an IMC program a firm will identify the target audience, _________, set the budget, select the right promotional tools, and design the promotion.
specify the advertising objectives
During the planning stage of an IMC program a firm will identify the target audience, specify the advertising objectives, set the budget, _________, and design the promotion.
select the right promotional tools
During the planning stage of an IMC program a firm will identify the target audience, specify the advertising objectives, set the budget, select the right promotional tools, and _________.
design the promotion
Hierarchy of effects refers to
the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption.
In the hierarchy of effects, awareness is defined as
the consumer’s ability to recognize and remember the product or brand name.
Promotion objectives should possess three important qualities. They should be designed for a well- defined target audience, be measurable, and _________
cover a specified time period.