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INTERGATED MARKETING COMMUNICATION This is also known as a communication mix-also called a promotion mix and consists of the specific blend of the advertising, sales promotion, public relations, personal selling and direct marketing tools that a company uses to pursue its advertising and marketing objectives. Importance of Promotion Mix One of the importance of the Promotion mix is to build closer relationships with customers in more narrowly defined micro markets as the mass markets fragment. At the same time today’s information technology helps marketers to keep closer track of customer needs and these newer technologies also provide new communication avenues for reaching smaller customer segments with tailored messages. All too often companies failed to integrate their various communications channels resulting in consumer confusion, for instance, mass media advertisements say one thing, a price promotion sends a different signal, a [product label creates still another message, a company sales literature says something altogether and the company’s website seems out of sync with everything else! Hence IMC (Integrated Marketing Communication),a concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent and compelling messages about the organization and its products. Integrated promotion mix(communication) produces better communications consistency and greater sales impact. a. Advertising It is any paid form of impersonal presentation and promotion of ideas, goods or services by an identified sponsor. Advantages i. It can reach masses of geographically dispersed buyers at a low cost per exposure and it enables the seller to repeat a message many times. ii. Large-scale advertising also says something positive about the seller’s size, popularity and success. They look more legitimate. iii. Advertising is very expensive and it allows the company to dramatize its products through the artful use of visuals, print, sound and color. iv. It can trigger quick sales. v. It can build long-term image of the company. Disadvantages i. It is impersonal and cannot be as directly persuasive as salesmanship. ii. It can carry only one-way communication with consumers/audience. iii. Audience has no obligation to pay attention or respond. iv. Though radio advertising may be cheaper, but TV advertisement can be expensive. Marketing management must make four important decisions when developing an advertising program: i. Setting the advertising objectives This means a specific task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by the primary purpose: 1. To inform, this also means informative advertising. It is used heavily when introducing a new product category. 2. Persuade, this also means Persuasive advertising, here the company’s objective is to build selective demand, and becomes more important as competition increases. This goes along with comparative advertising (comparing two brands). 3. Reminder advertising (to remind).It is important for mature products and keeps the consumers thinking about the product. Expensive Coca Cola television ads primarily remind people about the brand rather than informing or persuading them. ii. Setting the advertising budget There are four common methods of setting advertisement budgets: 1. Affordable Method, which implies setting the promotion budget at the level management, thinks the company can afford. It tends to place advertising last among spending priorities, even in situations in which advertising is critical to firm’s success. Some of the demerits of this method include: It ignores the effect of promotion on sales, it tends to place advertising last among spending priorities, and it leads to uncertain annual promotion budget which makes long-range market planning difficult. 2. Percentage-of-sales Method; It involves setting their promotion budget at a certain %age of current or forecasted sales or as a %age of unit sales. Some advantages include that it is simple to use and helps management think about the relationship between promotion spending, setting price and profit/unit. However disadvantages include: it wrongly view sales as the cause of promotion rather than result as the method is based on the availability of funds rather than on opportunities: Budget varies from year to year and hence longterm planning is hard: It does not promise any specific percentage except what has been done in the past or what competitors 3. Competitor-parity method This involves setting the promotion budget to match competitors’ outlays. You monitor competitor’s advertising or get industry spend estimates from trade publications. Some advantages include that it represents collective wisdom of the industry, spending what the competitors spend helps prevent promotion wars. Disadvantages include, there is no evidence for believing that the competitor has better idea, Companies differ greatly and each has its own special promotion needs, and there is no evidence that budgets on that the method prevents promotion wars. 4. Objective and Task Method This means developing the promotion budget by: a) defining specific objectives) determining the tasks that must be performed to achieve these objectives, c) estimating the costs of performing these tasks. The disadvantages are that it is a difficult method, as it is hard to figure out which specific tasks will achieve specific objectives. In conclusion, no matter what method is used deciding how much to spend on advertising is one of the hardest marketing decisions a company faces measuring the results of advertising results of advertising spending and’ advertising return on investment’ remains an inexact science. iii. Developing advertising strategy(message decisions and media decisions) iv. Evaluating advertising campaigns. b. Personal Selling It is the most effective tool especially in the building up buyer’s preferences, convictions and actions. It involves interaction between two or more specific people, so each person can observe the other’s needs and characteristics and make quick adjustments. The effective Personal selling means the personal presentation by the firm’s sales force for the purpose of making sales and building customer relationship. There effective salesperson keeps the customers’ interests at heart in order to build a long-term relationship. The buyer usually to feel a great need to listen and respond even if a polite “no, thanks you” A salesperson is an individual acting for a company by performing one/more of the following activities----prospecting, communicating, servicing and information gathering. Sale Force management means the analysis planning, implementation and control of sales force activities. It includes setting and designing sales force strategy and structure, and recruiting, selecting, training, supervising, compensating and evaluating the firm’s salespeople. Designing Sales Force Strategy and Structure There are several ways to structure a sales force: i. Territory Sales Force-TSF A sales organization that assigns each salesperson to an exclusive geographic territory which the salesperson sells the company’s the company’s full line of products/services. Travel expenses are relatively low as salespersons travel were limited area. The Salesperson’s work is clearly defined by the organization and fixes accountability.TSF increases the salesperson’s desire to build local business relationship. ii. Product Sales Force Structure A Sales force organization under which salespeople specialize in selling only a portion of the company’s products/lines. It leads into problems when a major client (hospital) has several salespeople from same company calling on them on the same day. The benefits are that the salesperson gains better product knowledge and attention to individual products. iii. Customer Sales Force Structure A sales force organization under which salespeople specialize in selling only to certain customers or industries. The Merits of this structure are that Organization becomes more customer-focused and build closer relationship with key customers. iv. Complex Sales Force Where a company sells a wide variety of products or services to many types of customers over a broad geographic area it combines several types of sales force structures. Salespeople can be specialized by customer and territory, by product and customer, or by product and territory, product or customer. Other Personal Selling activities and issues include recruiting, training, compensating, supervising and evaluating salespeople Sales Force Size; Once the company has set up its structure, it is ready to consider sales force size. Sales forces may range in size from only a few salespeople to many tens of thousands. The sales force constitutes one of the company’s most productive – and most expensive-assets. Therefore increasing their number will increase both sales and costs. One of the method used s the Workload Approach which entails several steps: 1. Using the method a company groups accounts into different classes according to size, amount status, or other factors related in the amount of effort required to maintain them. 2. Determine the number of salespeople needed to call on each class of accounts, the desired number of times. 3. For example, the company might think as follows: Suppose w had 200 Type A accounts and 400 Type B accounts. Type A requires 36 calls a year Type B requires 12 calls a year In this case, the sales force’s workload-the number of calls it must make per year-is 9600(36*200)+(400*12)=7200+2400=9600 Suppose our average salesperson can make 1000 calls a year. Thus the company needs 10 salespeople =9600/1000=9.6 Sales promotion They are short-term incentives to encourage the purchase or sale of a product or service. It is targeted toward final buyers (consumer promotion),retailers and wholesalers(trade promotions),business customers(business promotions) and members of the sales force(sales force promotions). Sales Promotion objectives vary with target groups: i. With Consumers, which is supposed to increase short-term sales or help build market share. ii. Trade, the aim is to get retailers to carry new items and more inventory, getting them to advertise the product and give it more shelf space and getting them to buy ahead. iii. Sales Force, it is used in order to get more sales support for current or new products/getting salespeople to sign up new accounts. Consumer Promotion Tools This include samples, cash refunds, price Packs, premuims,advertising speciallities,patronage rewards, point-of-purchase displays and demonstrations and contests, sweepstakes and games. Samples are offers of a trial amount of a product. Some samples are free, whereas for others a company charges a small amount to offset its costs. Coupons are certificates that give buyers a saving when they purchase specified products. Most consumers love coupons. Coupons can stimulate sales of a mature brand or promote trial of a new brand. Marketers are also cultivating new markets for distributing coupons such as supermarkets shelf dispensers, electronic point-of-sale coupon printers or ‘paperless coupon systems’ Cash refund offers (rebates), are like coupons except the price reduction occurs after the purchase rather than at the retail outlets. The consumer sends a ‘proof of purchase’ to the manufacturer, who then refunds part of the purchase price by mail. Price packs (cents-off deals), which the offer the consumers savings off the regular price of the product. They are very effective in stimulating short-term sales. The reduced prices marked by the producer directly on the label or package. Premiums are gods offered either free or at low cost as incentive to buy a product. A premium may come inside the pack (in-pack), outside the pack (on-pack) or through the mail. Advertising specialties/promotion products. These are useful articles, imprinted with an advertiser’s name, logo, message that are given as gifts, to consumers. They include T-shirts, apparel, pens, coffee, mugs, calendars, key rings mouse pads, matches, goofballs and caps. Patronage rewards are cash or other awards offered for the regular use of a certain company’ products/services. For example airlines offer frequent flier plans awarding points for miles traveled that can be turned into free airline trips or the Nakumatt loyalty card. Point of Purchase promotions (POP) promotions include displays and demonstrations that take place at the point of sale. They include aisle displays, signs, posters and so on received from the manufacturer’s every year. Contests, sweepstakes and games give consumers the chance to win something such as cash, trips or gods by luck or through extra effort. Trade Promotion Tools These are sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising and push it to customers. Shelf space is s scarce these days that manufacturers often have to offer price-offs,allowances,buy-back guarantees of free goods to retailers and wholesalers to get products on the shelf and once there to keep them on it. Many of the tools used for consumer promotions such as contest, premiums and displays can be used as trade promotions: 1) Manufacture r’s may also offer straight discount off the list price, on each case purchased during a stated period of time (also called a price-off). 2) Manufacture rs can offer allowance-usually so much money off a case in return to the retailer’s agreement to feature the manufacturer’s product in a certain way. 3) Free goods. Manufacturers’ may offer free goods which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size. 4) Push money. These are cash/gifts top dealers or their sales to “push” the manufacturer’s goods. 5) Specialty advertising items: These are given to the retailers by the manufacturers and carry the company’s calendars, pens, pencils, paperweights, memo pads and so on. Business Tools Sales Promotion tools used to generate business leads, stimulate purchases, reward customers and motivate salespeople. Business tools includes many of the same tools used for consumer/trade p[promotions. However in addition, there are 2 more: Conventions and trade shows. This provides that many vendors receive many benefits such as opportunities to find new sales leads, contact customers, introduce new products, meet new customers, sell more to present customers and educate customers with publications and audiovisual materials. Sales Contests: It is a contest for salespeople/dealers to motivate them to increase their performance over a given period. Sales contests have several benefits: motivate and recognize good company performers-who receive trips, cash prizes, and also award points for performance which the receiver can turn in for any of a variety and work best when tied to measurable and achievable sales objectives.(such finding new accounts ,receiving old accounts or increasing account profitability). This is a SAMPLE (Few pages have been extracted from the complete notes:-It’s meant to show you the topics covered in the full notes and as per the course outline Download more at our websites: www.naarocom.com To get the complete notes either in softcopy form or in Hardcopy (printed & Binded) form, contact us on: Call/text/whatsApp +254 719754141/734000520 Email: [email protected] [email protected] [email protected] Get news and updates by liking our page on facebook and follow us on Twitter Sample/preview is NOT FOR SALE