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Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT PRINCIPLES OF MARKETING University of Management and Technology 1901 Fort Myer Drive Arlington, VA 22209 Voice: (703) 516-0035 Fax: (703) 516-0985 Website: www.umtweb.edu Page 1 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Module 12: Communicating Customer Value: Advertising and Public Relations Page 2 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Copyright Warning This presentation is the intellectual property of Pearson Education Inc. 2011. Students are hereby advised that they may not copy or distribute this work to any third party info info Page 3 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Rest Stop: Previewing the Concepts Define the five promotion mix tools for communicating customer value. Discuss the changing communications landscape and the need for integrated marketing communications. Describe and discuss the major decisions involved in developing an advertising program. info Explain how companies use public relations to communicate with their publics. info Page 4 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT First Stop Unilever Integrates Digital & Traditional Media Background Implementation About Unilever: World’s # 2 advertiser spends $5.3 billion on global advertising and promotion. Less is being spent on traditional media; more is being invested in online and digital. info Recognition: Unilever was named digital marketer of the year by Advertising Age. However, Unilever does not run digital campaigns in isolationinfoof other media; rather, digital is integrated with traditional media. How They Do It: Innovative websites, viral videos, and “webisodes” represent key digital content. Real, funny TV ads pull viewers to websites to build consumer involvement with brand. Public relations gets clips aired on talk shows. Results: The key benefit of all integrated efforts is termed “superdistribution”, which means digital clips are picked up and shown by other media for free. “Evolution” created $200 million in free media coverage. Page 5 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Promotion Mix Specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. info info Also referred to as “marketing communications mix”. Page 6 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Figure 12.1: Integrated Marketing Communications info info Page 7 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Integrated Marketing Communications Several factors are changing the face of marketing communications: Consumers. Marketing strategies. Communication technology. These factors have shifted the marketing communications model so that firms are doing less broadcasting and more narrowcasting. info info Page 8 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Integrated Marketing Communications (IMC) info info Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling message about the organization and its products. Page 9 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Integrated Marketing Communications A strong need for integrated marketing communications exists. Conflicting messages from different sources can create confusion or blur brand perceptions. Marketers must understand each promotion tool when shaping the marketing communications mix. Each brand contact delivers a message. info info Page 10 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action info Burger King’s integrated, multipronged Whopper Freakout campaign employed a carefully coordinated mix of TV, radio, rich media banner ads, and a Freakout web site. Successful? You bet! Sales grew by info 29%! Page 11 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Shaping the Overall Promotion Mix Nature of advertising: Can reach masses of geographically dispersed buyers at a low cost per exposure. Can repeat a message many times. Consumers view advertised products as more legitimate. Is impersonal, one-way communication. Can be very costly for some media types. info info Page 12 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Shaping the Overall Promotion Mix Nature of personal selling: Involves personal interaction between two or more people. Most effective tool at building preferences, convictions, and actions. Allows relationship building and two-way communication. Requires long-term commitment to sales force. Most expensive promotion tool. info info Page 13 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action With personal selling, customers feel a greater need to listen and respond. Two-way communication is a key strength of selling compared to other forms of marketing communications. info info Page 14 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Shaping the Overall Promotion Mix Nature of sales promotion: Includes a wide assortment of tools. Attracts consumer attention. Can be used to dramatize product offers. Offers strong incentives to buy. Invites and rewards quick consumer response. info Effects are short-lived. info Page 15 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Shaping the Overall Promotion Mix Nature of public relations: Very believable. Reaches people who avoid salespeople and ads. Can dramatize a company or product. Tends to be used as an afterthought. Planned use can be effective and economical. info info Page 16 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Shaping the Overall Promotion Mix Nature of direct marketing: Many forms of direct marketing exist. Direct marketing forms share four primary characteristics: Less public. Immediate. Customized. Interactive. info Well info suited to highly targeted marketing. Page 17 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Figure 12.2: Push vs. Pull Promotion Strategy info info Page 18 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Advertising Advertising has been used for centuries. U.S. advertisers spend more than $290 billion each year; worldwide spending exceeds $604 billion. info info Page 19 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Advertising Advertising is used by: Business firms. Not-for-profit organizations. Professionals. Social agencies. Government. info info Page 20 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Figure 12.3: Major Advertising Decisions info info Page 21 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Advertising objective: A specific communication task to be accomplished with a specific target audience during a specific period of time. Overall advertising goal is to help build customer relationships by communicating customer value. info info Page 22 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Advertising objectives can be classified by purpose: Informative advertising. Persuasive advertising. Comparative advertising (a special type of persuasive advertising). Reminder advertising. info info Page 23 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Fuel For Thought What is the objective of this ad for De Beers diamonds? info info Page 24 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Setting the advertising budget: Affordable method. Percentage-of-sales method. Competitive-parity method. Objective-and-task method. info info Page 25 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action Audi gained a competitive advantage by spending heavily on advertising and promotion at a time when rivals were retrenching. info info Page 26 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Developing advertising strategy: Creating advertising messages. Message strategy and message execution must break through the clutter. Advertising is being merged with entertainment. info info Page 27 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT “Madison & Vine” A term that has come to represent the merging of advertising entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages. info info Visit the Adverblog’s archive on Advertainment for current examples. Page 28 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action info info Ad agency JWT attempted to promote its “Madison & Vine” philosophy to potential business partners with this ad. Page 29 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Planning the message strategy: Identify customer benefits that can be used as advertising appeals. Develop compelling creative concept—the “big idea”. Choose an ad advertising appeal that is: Meaningful. Believable. Distinctive. info info Page 30 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Message Execution Styles: Slice of Life Technical expertise Lifestyle Scientific evidence Fantasy Testimonial evidence or endorsement Mood or image Musical info Personality symbolinfo Page 31 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Message execution process: Choose the execution style. Choose a tone. Use memorable, attention-getting words. Choose format elements: Illustration. Headline. info Copy. info Page 32 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Fuel For Thought What is the message execution style? What is the tone of the ad? Are the words used attentiongetting and memorable? How does the illustration work with the rest of the ad? info info Page 33 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Consumer-generated messages: Tapping consumers for message ideas or actual ads can involve: Searching existing Web video sites. Holding contests or inviting consumers to submit ad message ideas and videos. Benefits of consumer-generated messages: Collects new ideas and fresh brand perspectives at relatively little expense. info Boosts consumer involvement and gets consumers talking and thinking info about the brand. Page 34 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action The Doritos “Crash the Super Bowl” ads are among the top-rated ads on USA Today’s Super Bowl Ad Meter. Visit the “Crash” web site to learn how you can submit your ad and to view the ads created by the most recent winners. info info Page 35 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Developing advertising strategy: Selecting advertising media. Set reach, frequency, and impact goals. Choose among major media types. Select specific media vehicles. Decide on media timing. info info Page 36 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Deciding on reach, frequency, impact: Reach: Percentage of people exposed to ad campaign in a given time period. Frequency: Number of times a person is exposed to advertisement. Media Impact: The qualitative value of a message exposure through a given medium. info info Page 37 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Each media type has specific advantages and disadvantages. Choosing among media types requires consideration of the: Medium’s impact Message effectiveness Cost info The media mix should be regularly info reexamined. Page 38 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Media vehicles: Specific media within each general media type, such as Newsweek. Factors to consider when choosing vehicles: Cost. Audience quality. Audience engagement. info Editorial quality. info Page 39 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Advertising Decisions Marketers must also decide on media timing, or how to schedule the advertising over the course of a year. Follow seasonal pattern. Oppose seasonal pattern. Same coverage all year. Choose the pattern of the ads: Continuity. info info Pulsing. Page 40 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action Many products, services, and retailers advertise more heavily before special holidays, new seasons, or even particular times of the year, such as “Back to School”. info info Page 41 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Evaluating Advertising and Return on Advertising Investment Return on advertising investment: The net return on advertising investment divided by the costs of the advertising investment. Evaluating advertising involves: Measuring the communication effects of an ad or campaign. Measuring the sales and profit effects of the ad campaign. info info Page 42 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action The 2010 Super Bowl drew the single largest TV audience ever in the US (105 million), with ad prices ranging from $ 2.8 to $3 million for a 30 second spot. Was it worth it?? Learn how Nielsen measures ROI for Super Bowl ads. info info Page 43 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Other Advertising Considerations Organization of ad function: Small companies—one person in firm. Large companies—ad department that may also work with an ad agency. Advertising agencies employ specialists who perform ad tasks better then the company’s own staff can. Bring outside viewpoints to problem-solving. info Wide range of experience. info Page 44 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Other Advertising Considerations International advertising issues: To what degree should global advertising be adapted to various countries? Greater need for standardization of global brand advertising strategies. Specific advertising programs must usually be adapted to local cultures and other factors. info info Page 45 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Public Relations info info Building good relations with the firm’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Page 46 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Public Relations Public relations departments perform the following functions: Press relations or press agency. Product publicity. Public affairs. Lobbying. Investor relations. info Development. info Page 47 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Public Relations Role and Impact Public relations: May strongly impact public awareness at a lower cost than advertising. Can yield spectacular results. Is beginning to play an increasingly important brand-building role. info info Page 48 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Marketing in Action info Starting with preview events like the one shown above, Nintendo’s awardinfo winning PR campaign for its new Wii game produced nonstep stock-outs for more than two years. Page 49 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Major Public Relations Tools News Corporate identity materials Speeches Public service activities Special events Buzz marketing & social networking Written materials Audiovisual materials Company Web site info info Page 50 of 51 Module 12, MKT100 Version 181118 Visit UMT online at www.umtweb.edu © 2011 Pearson Education Inc. © 2012 UMT Rest Stop: Reviewing the Concepts Define the five promotion mix tools for communicating customer value. Discuss the changing communications landscape and the need for integrated marketing communications. Describe and discuss the major decisions involved in developing an advertising program. info Explain how companies use public relations to communicate with their publics. info Page 51 of 51 Module 12, MKT100