Download Engaging Customers and Communicating Customer Value

Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 14:
Engaging Customers
and Communicating
Customer Value
Lecturer:
Szilvia Bíró-Szigeti, PhD
Department of Management and Corporate Economics
Copyright © 2016 Pearson Education, Inc.
The Promotion Mix
The promotion mix is the specific blend of promotion tools
that the company uses to persuasively communicate
customer value and build customer relationships.
Marketing Promotion Mix
Advertising
Sales
promotion
Print ads
Broadcast ads
Brochures
Leaflets
Billboards
Point-of-purchase
displays
Symbols and
logos
Contests
Games
Lotteries
Premiums and
gifts
Samples
Demonstrations
Fairs and trade
shows
Coupons
Rebates
Personal selling
Sales
presentations
Sales meetings
Incentive
programs
Samples
Fairs and trade
shows
Direct
marketing
Catalogs
Mailings (DM)
Telemarketing
TV-shopping
E-mail
Electronic
shopping
Public Relations
Press kits
Annual reports
Charitable
donations
Sponsorships
Publications
Company
magazine
Events
The Promotion Mix
Advertising is any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified
sponsor.
• Broadcast
Street advertising
• Print
• Online
• Mobile
• Outdoor
The Promotion Mix
Sales promotion is a short-term incentive to encourage the
purchase or sale of a product or service.
• Discounts
When you can not see the forest from tree…
• Coupons
• Displays
• Demonstrations
The Promotion Mix
Personal selling is the personal interaction by the firm’s sales
force for the purpose of engaging customers, making sales,
and building customer relationships.
The Promotion Mix
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.
The Promotion Mix
Direct and digital marketing involves engaging directly with
carefully targeted individual consumers and customer
communities to both obtain an immediate response and
build lasting customer relationships.
Integrated Marketing Communications
The New Marketing Communications Model
• Consumers
are
changing.
• Marketing strategies
are changing.
• Advances in digital
technology
They are better informed
communications empowered.
and
more
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.
Sweeping changes in digital technology are
causing remarkable changes in the ways in
which companies and customers communicate
with each other.
Integrated Marketing Communications
The Need for Integrated Marketing Communications
Integrated marketing
communications (IMC) involves
carefully integrating and coordinating the company’s many
communications channels to deliver a clear, consistent, and
compelling message about the organization and its
products.
Integrated Marketing Communications
FIGURE | 14.1
Integrated Marketing
Communications
A View of the Communication Process
FIGURE | 14.2
Elements in the
Communication
Process
Elements in the Communication Process
Sender’s field of
experience
Receiver’s field
of experience
A View of the Communication Process
Elements in the Communication Process
Sender:
Encoding:
Message:
Media:
Decoding:
Receiver:
Response:
Feedback:
Noise:
The party sending the message to another party.
The process of putting thought into symbolic form.
The set of symbols that the sender transmits.
The communication channels through which the message moves
from sender to receiver.
The process by which the receiver assigns meaning to the symbols
encoded by the sender.
The party receiving the message sent by another party.
The reactions of the receiver after being exposed to the message.
The part of the receiver’s response communicated back to the
sender
The unplanned static or distortion during the communication
process that results in receivers getting a different message than
the one the sender sent.
Steps in Developing Effective Marketing Communication
Identify the target audience
Determine the communication
objectives
Design the message
Choose the media to send the
message
Select message source and
collect feedback
Steps in Developing Effective Marketing Communication
Identifying the Target Audience
What will be
said
How it will
be said
When it will
be said
Where it will
be said
Who will say
it
Steps in Developing Effective Marketing Communication
Determining the Communication Objectives
FIGURE | 14.3
Buyer-Readiness Stages
Steps in Developing Effective Marketing Communication
Designing a Message
AIDA Model
• Get Attention
• Hold Interest
• Arouse Desire
• Obtain Action
Steps in Developing Effective Marketing Communication
Designing a Message
Message content is
“what to say.”
Message structure
and format is
“how to say it.”
Rational appeal relates to
audience’s self-interest.
the
Emotional appeal is an attempt to
stir up positive or negative
emotions to motivate a
purchase.
Moral appeal is directed to an
audience’s sense of what is
right and proper.
Steps in Developing Effective Marketing Communication
Choosing Communication Channels and Media
Personal communication involves two or more people
communicating directly with each other.
• Face to face
• Phone
• Mail or e-mail
• Texting or Internet chat
Steps in Developing Effective Marketing Communication
Choosing Communication Channels and Media
Opinion leaders are people whose
opinions are sought by others.
Buzz marketing involves cultivating
opinion leaders and getting
them to spread information
about a product or service to
others in their communities.
Steps in Developing Effective Marketing Communication
Choosing Communication Channels and Media
Nonpersonal communication channels are
media that carry messages without
personal contact or feedback, including
major media, atmospheres, and events.
Video case
Which element of the marketing communications mix does
OXO most heavily​ utilize?
- Direct marketing
When Sam Farber started OXO and launched​ never-before-seen
products that were targeted at people with dexterity​ problems,
in which stage of​ buyer-readiness was his target​ market?
- Awareness
In order to achieve depth of awareness of the OXO​ brand,
which of the following media strategies does the
company​ utilize?
- Personal: Social media
Which type of message appeal does OXO​ utilize?
- Rational
Which​ budget-setting method does OXO​ utilize?
- Affordable
Steps in Developing Effective Marketing Communication
Selecting the Message Source
The message’s impact depends on how the target
audience views the communicator.
• Celebrities
• Athletes
• Entertainers
• Professionals
• Health care providers
Steps in Developing Effective Marketing Communication
Collecting Feedback
Collecting feedback involves the communicator understanding
the effect on the target audience by measuring behavior
resulting from the content.
Collecting feedback – why is
it useful for the company
and for the consumer?
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
How does the company decide on the total
promotion budget and its division among the
major promotional tools to create the
promotion mix?
• The affordable method sets the promotion budget at the level
management thinks the company can afford.
Small businesses
• The percentage-of-sales method sets the promotion budget at a certain
percentage of current or forecasted sales or as a percentage of the unit
sales price. It is simple to use.
• It helps management think about the relationship between promotion
spending, selling price, and profit per unit.
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
• The competitive-parity method sets the promotion budget
to match competitors’ outlays.
• Competitor’s budgets represent the collective wisdom of the industry.
• Spending what competitors spend helps prevent promotion wars.
• The objective-and-task method develops the promotion
budget by specific promotion objectives and the costs of
tasks needed to achieve these objectives.
• Defining specific promotion objectives
• Determining the tasks needed to achieve these objectives
• Estimating the costs of performing these tasks
the most
difficult
method
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
The concept of integrated marketing communications suggests
that the company must blend the promotion tools carefully into
a coordinated promotion mix.
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.
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.
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
Sales promotion includes coupons, contests, cents-off deals, and
premiums that attract consumer attention and offer strong
incentives to purchase.
Public relations is a very believable form of promotion that includes
news stories, features, sponsorships, and events.
Direct and digital marketing is an immediate, customized, and
interactive promotional tool that includes direct mail, catalogs,
telephone marketing, online, mobile, and social media.
Marketing Promotion Mix
Advertising
Sales
promotion
Print ads
Broadcast ads
Brochures
Leaflets
Billboards
Point-of-purchase
displays
Symbols and
logos
Contests
Games
Lotteries
Premiums and
gifts
Samples
Demonstrations
Fairs and trade
shows
Coupons
Rebates
Personal selling
Sales
presentations
Sales meetings
Incentive
programs
Samples
Fairs and trade
shows
Direct
marketing
Catalogs
Mailings (DM)
Telemarketing
TV-shopping
E-mail
Electronic
shopping
Public Relations
Press kits
Annual reports
Charitable
donations
Sponsorships
Publications
Company
magazine
Events
Shaping the Overall Promotion Mix
Promotion Mix Strategies
Shaping the Overall Promotion Mix
Promotion Mix Strategies
• A push strategy involves “pushing” the product through
distribution channels to final consumers. The producer
directs its marketing activities (primarily personal selling and
trade promotions) toward channel members to induce them
to carry the product and to promote it to final consumers.
• Using a pull strategy, the producer directs its marketing
activities toward final consumers to induce them to buy the
product. If the pull strategy is effective, consumers will then
demand the product from channel members, who will in
turn demand it from producers. Thus, under a pull strategy,
consumer demand “pulls” the product through the
channels.
• Most large companies use some combination of
both.
Shaping the Overall Promotion Mix
Integrating the Promotion Mix
The company must take steps to see that each promotion
mix element is smoothly integrated.
The various promotion elements should work together to
carry the firm’s unique brand messages and selling
points.
The new marketing communications model
• Consumers are better informed
• More communication - Less mass marketing
• Changing communications technology
The communications model is shifting from
broadcasting to narrowcasting.
The Incredible Story Of How Target Exposed A Teen Girl's
Pregnancy
25 products that when purchased
together indicate a women is likely pregnant. The value of this information was that
Target could send coupons to the pregnant woman.
Plugged into Target's customer tracking technology, Pole's formula was a beast. Once it even
exposed a teen girl's pregnancy:
Target’s statistician (Andrew Pole) identified
[A] man walked into a Target outside Minneapolis and demanded to see the manager. He was
clutching coupons that had been sent to his daughter, and he was angry, according to an
employee who participated in the conversation.
“My daughter got this in the mail!” he said. “She’s still in high school, and you’re sending her
coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?”
The manager didn’t have any idea what the man was talking about. He looked at the mailer. Sure
enough, it was addressed to the man’s daughter and contained advertisements for maternity
clothing, nursery furniture and pictures of smiling infants. The manager apologized and then
called a few days later to apologize again.
On the phone, though, the father was somewhat abashed. “I had a talk with my daughter,” he
said. “It turns out there’s been some activities in my house I haven’t been completely aware of.
She’s due in August. I owe you an apology.”
http://www.businessinsider.com/the-incredible-story-of-how-target-exposed-a-teen-girls-pregnancy-2012-2
A campaign that follows you
A campaign for the „Battersea Dogs Home”, who are trying to get people
to adopt Dog’s and Cats from their shelter.
https://www.youtube.com/watch?v=V6sBUcVSYTg
http://www.digitalbuzzblog.com/battersea-dogs-home-looking-for-you-smart-billboards/
Product life-cycle stages and
communication mix
(Kotler 2012, 273)
Introduction:
advertising has the highest cost effectiveness, followed
by personal selling and sales promotion.
Growth:
all the tools can be toned down, demand has its own
momentum through word of mouth.
Maturity:
sales promotion, advertising and personal selling all grow
more important in this order.
Decline:
sales promotion continues strong, advertising and publicity are
reduced and sales people give the product only minimal effort.
Socially Responsible Marketing Communication
Advertising and Sales Promotion
• Communicate openly and honestly with consumers and
resellers
• Avoid deceptive or false advertising
• Avoid bait-and-switch advertising
• Conform to all federal, state, and local regulations
Socially Responsible Marketing Communication
Personal Selling
• Follow rules of “fair competition”
• Do not offer bribes
• Do not attempt to obtain competitors’ trade secrets
• Do not disparage competitors or their products
https://www.commonsensemedia.org/zero-toeight-2013-infographic
Dove Campaign for Real Beauty
The Dove Campaign for Real Beauty is a
worldwide marketing campaign launched
by Unilever in 2004 that includes
advertisements,
video,
workshops,
sleepover events and the publication of a
book and the production of a play. The aim
of the campaign is to celebrate the natural
physical variation embodied by all women
and inspire them to have the confidence to
be comfortable with themselves.
https://en.wikipedia.org/wiki/Dove_Campaign_for_Real_Beauty
• Only 4% of women around the world
consider themselves beautiful (up from 2% in
2004)
• Only 11% of girls globally are comfortable
using the word beautiful to describe
themselves
• 72% of girls feel tremendous pressure to be
beautiful
• 80% of women agree that every woman has
something about her that is beautiful but do
not see their own beauty
• More than half (54%) of women globally
agree that when it comes to how they look,
they are their own worst beauty critic
SOURCE: Dove Research: The Real Truth About Beauty: Revisited
http://www.dove.us/Social-Mission/Self-EsteemStatistics.aspx
•
•
•
•
different reactions
popular
financial success
increased women’s
confidence
https://www.youtube.com/watch?v=Q5qZedMTkkE
Once uploaded, the advert was
viewed over 40,000 times in its first
day, 1.7 million times within a month
of its upload, and 12 million times
within its first year.
https://www.youtube.com/watch?v=9zKfF40jeCA
Read more: http://www.dove.us/Social-Mission/campaign-for-real-beauty.aspx, http://www.newsgeneration.com/2014/04/11/prcase-study-dove-real-beauty/
Victoria’s Secret: The prefect „body”
http://www.buzzfeed.com
/rossalynwarren/victoriassecret-appears-to-havechanged-its-controversialp#.tw3GQXvx6,
https://www.change.org/
p/victoriassecretapologise-for-yourdamaging-perfect-bodycampaign-iamperfect
Engaging Customers and Communicating
Customer Value
• Define the five promotion mix tools for
communicating customer value.
• Discuss the changing communications
landscape and the need for integrated
marketing communications.
• Outline the communication process and
the steps in developing effective
marketing communications.
• Explain the methods for setting the
promotion budget and factors that
affect the design of the promotion mix.
Case study – Marketing-mix
• Present: you can read…
• Future: please imagine it!
• If you are the marketing manager of the company…
• If you can change (in realistic board) the product line, the
pricing strategy, the promotion tools and place decisions…
• How will look like this company in 10 years later? And its
consumers? (please use the STP analysis)