Download Evaluating Integrated Marketing Communications

EVALUATING INTEGRATED
MARKETING
COMMUNICATIONS
Topic 3
Direct Marketing


Few promotional mix elements are
growing as rapidly as direct marketing
Direct Marketing Communication
Channels

Direct Mail


Marketers combine information from
internal and external databases, surveys,
coupons, and rebates that require responses
to provide information about consumer
lifestyles, buying habits, and wants
http://www.failteireland.ie/content.asp?id=
116

Catalogs

Thousands of different
consumer mail-order
catalogs and thousands for
business-to- business sales
are mailed, distributed or
downloaded each year

Telemarketing:
promotional
presentation
involving the use of
the telephone for
outbound contacts
by salespeople or
inbound contacts
initiated by
customers who
want to obtain
information and
place orders


Direct Marketing via Broadcast
Channels
Broadcast direct marketing includes:


Brief (30 to 90 and second) direct
response ads on television or radio
Home shopping channels like:
Quality Value Channel (QVC)
 Home Shopping Network (HSN)


Infomercial: promotional presentation
for a single product running 30 minutes or
longer in a format that resembles a
regular television program

Electronic Direct Marketing
Channels


Web advertising is an important
component of electronic direct marketing
E-mail direct marketing is a natural and
easy extension of traditional direct mail
marketing

Other Direct Marketing Channels


Print media is generally not as effective as Web
marketing or telemarketing for direct marketers
Magazine and newspaper ads with toll-free telephone
numbers, kiosks, and other media are still useful in
many situations

Starbucks
Encore

Starbucks’
DirectResponse
Print Ad
Developing an Optimal Promotional Mix

Factors that influence the
effectiveness of a promotional to
mix:





Nature of the market
Nature of the product
Stage in the product life-cycle
Price
Funds available for promotion

Nature of the market



Personal selling may prove effective with a market
composed of a limited number of buyers
Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
Personal selling often works better for intermediary
target markets

Nature of the product
Highly standardized products with minimal
servicing requirements usually need less personal
selling than custom products with complex features
and/or frequent maintenance needs
 Consumer products are more likely to rely heavily
on advertising than are business products


Stage in the product life-cycle






Promotional mix must be tailored to the products
stage in the product life-cycle
In the introductory stage, there is a heavy emphasis
on personal selling to the to the intermediaries
However, advertising and sales promotion help to
create awareness and stimulate initial purchases
In the growth and maturity stages, advertising gains
relative importance
Personal selling efforts at marketing intermediaries to
expand distribution is continued
In the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures

Price


Advertising dominates the promotional mix for lowunit-value products due to the high personal contact
costs of personal selling
Consumers a high-priced items like luxury cars expect
lots of well-presented information via videocassettes,
CDs, fancy brochures, and personal selling

Funds available for promotion
A critical element in the promotional strategy is the
size of the promotional budget
 While the cost-per-contact of a $3 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms


McDonald’s
Euro menu:
Promotion
Based on
Price
Pulling and Pushing
Promotional Strategies

Pulling strategy: promotional effort
by a seller to stimulate demand
among final users, who will then exert
pressure on the distribution channel to
carry the good or service, pulling it
though the marketing channel

Pushing strategy: promotional effort by a
seller to members of the marketing channel
intended to stimulate personal selling of the good
or service, thereby pushing it through the
marketing channel

Colgate Total

Using a Pulling
Strategy With
Ads Like This
Combined With a
Pushing Strategy
(30 Million
Samples to
Dental
Practitioners)
Created Strong
Demand for This
Improved
Product

Night & Day 30 day contact lenses
using a pull strategy by encouraging
customers to ask their doctors.
Budgeting for Promotional Strategy

Percentage-of-sales method

Fixed-sum-per-unit method

Meeting competition method

Task-objective method
Method
Description
Example
Percentage-ofsales method
Promotional budget is set as a
specified percentage of either past
or forecasted sales.
“Last year we spent $10,500 on
promotion and had sales of E420,000.
Next year we expect sales to grow to
E480,000, and we are allocating E12,000
for promotion.”
Fixed-sum-perunit method
Promotional budget is set as a
predetermined euro amount for
each unit sold or produced.
“Our forecast calls for sales of 14,000
units, and we allocate promotion at the
rate of E65 per unit.”
Meeting
competition
method
Promotional budget is set to match “Promotional outlays average 4 percent
competitor’s promotional outlays
of sales in our industry.”
on either an absolute or relative
basis.
Task-objective
method
Once marketers determine their
specific, promotional objectives,
the amount (and type) of
promotional spending needed to
achieve them is determined.
“By the end of next year, we want 75
percent of the area college students to be
aware of our new, highly automated fastfood prototype outlet. How many
promotional euros will it take, and how
should they be spent?”
Measuring the Effectiveness of Promotion

Measurement tools:


Direct sales results measures the
effectiveness of promotion by revealing the
specific impact on sales revenues for each
euro of promotional spending
Indirect evaluation concentrates on
quantifiable indicators of effectiveness like:
Recall - how much members of the target
market remember about specific products or
advertisements
 Readership – size and composition of a
message’s audience


Redemption Rates (Sales Promotion)

Measuring Online Promotions



Early attempts at measuring online
promotional efforts involved counting hits and
visits
Incorporating direct response and comparing
different promotions for effectiveness
Two major techniques for setting online
advertising rates:
Cost per impression (CPM), technique that
related the cost of an ad to every thousand
people who read it
 Cost per response (click-throughs), which
assumes that those who actually click on an ad
want more information

The Value of Marketing Communications

Social Importance



Criticisms of promotional messages as
tasteless and lacking any contribution to
society sometimes ignore the fact that society
provides no commonly accepted set of
standards
The one generally accepted standard in a
market society is freedom of choice for the
consumer
Promotion has become an important factor in
campaigns aimed at achieving socially
oriented objectives like the elimination of
drug abuse

Promotional
Message
Addressing a
National Social
Concern
http://www.diageo.ie/community/AlchoholAwarness


Philips
The Social
Importance of
Marketing
Communicati
ons

Business Importance




Promotional strategy has become
increasingly important to both small and
large firms
Its effectiveness to encourage attitude
changes, brand loyalty and increase sales is
well-documented
Both business and nonbusiness enterprises
recognize the importance of promotional
efforts
Nonbusiness organizations using promotion
include governments and religions

The effectiveness of advertisements
like this classic to encourage brand
loyalty and increase sales.

Economic Importance



Effective promotion has allowed society to
derive benefits not otherwise available
Promotion increases the number of units
sold; the resulting economies of scale
lower production costs and allows lower
sales prices
Subsidizes the information contents of
newspapers and the broadcast media
TREND WATCH
Tryvertising – form of advertising that places
products in the real world. Allows consumers to
evaluate products based on experience, not
communication messages (which are
increasingly being ignored)
 Traditional methods, digital displays, creative
product interaction. Nokia Tryvertising Prints,
SonyEricsson large walkman phone in a
London bus stop - played videos, for bored
people waiting for their bus.


http://www.youtube.com/watch?v=y_3zKLexpQ4

Tutorial

http://www.oscar.com/