Download Consumer Behavior and Promotion Strategy

Chapter 17
Consumer Behavior and
Promotion Strategy
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Types of Promotion
• Promotion defined
• Advertising
– Any paid, nonpersonal presentation of
information about a product, brand, company, or
store
– Usually has an identified sponsor
– Has been characterized as image management
– May be conveyed via a variety of media
17-3
Types of Promotion cont.
• Sales promotion
– Direct inducements to the consumer to make a
purchase
– Difficult to define sales promotions due to many
types
• Personal selling
– Direct interactions between a potential buyer
and a salesperson
17-4
Types of Promotion cont.
– What makes it a powerful promotion method?
– Certain consumer products are traditionally
promoted through personal selling
– For other businesses, a form of personal selling
by telephone, called telemarketing, has become
popular
• Publicity
– Any unpaid form of communication about the
marketer’s company, products, or brands
17-5
Types of Promotion cont.
– Can either be positive or negative
– Can sometimes be more effective than
advertising because consumers may not screen
out the messages so readily
• The promotion mix
– Ideally, marketing managers should develop a
coherent overall promotion strategy that
integrates the four types of promotions into an
effective promotion mix
17-6
Types of Promotion cont.
– A controversy continues in marketing about the
relative importance of advertising vs. sales
promotions
– The promotion mix of the future is likely to be
more eclectic with many more options
17-7
A Communication Perspective
• The cognitive processing model of decision
making is relevant to an understanding of
the effects of promotions on consumers
• The communication process
– Key factors
•
•
•
•
•
•
Source
Encode
Transmit
Receiver
Decode
Action
17-8
A Communication Perspective cont.
17-9
A Communication Perspective cont.
– Two stages of the communication are
particularly important to the success of
promotion strategies
• Encoding
• Decoding
• Goals of promotion communications
– Effects can be ordered in hierarchical sequence
of events or actions that are necessary before
consumers can or will purchase a brand
17-10
A Communication Perspective cont.
– Effects can be treated as a sequence of goals
or objectives for promotion communications
– Stimulate category need
• Need to create beliefs about the positive
consequences of buying and using the product
category or form
• Typically use advertising to stimulate category need
17-11
A Communication Perspective cont.
– Brand awareness
• A general communication goal for all promotion
strategies
• Level of brand awareness necessary for purchase
varies depending on how and where consumers
make their purchase decisions
• Ask consumers to state the brand names they can
remember or recognize as familiar
• A company’s brand awareness strategy depends on
how well known the brand is
17-12
A Communication Perspective cont.
– Brand attitude
•
•
•
•
Create a brand attitude
Maintain existing favorable brand attitudes
Increase the existing brand attitude
Cannot analyze consumers’ brand attitudes in an
absolute or very general sense without specifying the
situational context
17-13
A Communication Perspective cont.
– Brand purchase intention
• Most promotion strategies are intended by marketers
to increase the probability that consumers will buy
the brand
• To develop effective promotion strategies directed at
brand purchase intention, marketers must know
when BI are formed by most of the target customers
17-14
A Communication Perspective cont.
• More typically, formation of a brand BI is delayed
until well after exposure to advertising, when the
consumer is in a purchase context
• Personal selling and sales promotion are usually
designed to influence purchase intentions at the time
of exposure to the promotion information
– Facilitate other behaviors
• Some promotion strategies are designed to facilitate
behaviors other than purchase
17-15
The Promotion Environment
• Includes all stimuli associated with the
physical and social environment in which
consumers experience promotion strategies
• Two environmental factors can influence
advertising and sales promotion strategies
17-16
The Promotion Environment cont.
– Promotion clutter
• The growing number of competitive strategies in the
environment
• Possible that clutter created by multiple ads during
commercial breaks and between TV programs will
reduce the communication effectiveness of each ad
• Also affects other types of promotion strategies,
especially sales promotions
17-17
The Promotion Environment cont.
– Level of competition
• A key aspect of the promotion environment
• Comparative advertising, featuring direct
comparisons with competitive brands, has become
more common’
• Promotion often becomes the key element in the
marketers’ competitive arsenal in fiercely competitive
environments
17-18
Promotion Affect and Cognition
• Interpretation of promotion communications
and integration processes are extremely
important
• Consumers’ comprehension processes vary
in depth and elaboration, depending on their
levels of knowledge and involvement
17-19
Promotion Affect and Cognition cont.
• Attitude toward the ad
– The affective evaluations of the ad itself can
influence the attitudes toward the advertised
product or brand
– Ads that consumers like seem to create more
positive brand attitudes and purchase intentions
than ads they don’t like
17-20
Promotion Affect and Cognition cont.
• The persuasion process
– Refers to changes in beliefs, attitudes, and
behavioral intentions caused by a promotion
communication
– The Elaboration Likelihood Model (ELM)
• Identifies two cognitive processes by which
promotion and communication can persuade
consumers
17-21
Promotion Affect and Cognition cont.
– The central route to persuasion is more likely when
consumers’ involvement is higher
– The peripheral route to persuasion is more likely when
involvement is lower
• Also distinguishes between two types of information
in the promotion communication
– Central route to persuasion
– Peripheral route to persuasion
17-22
Promotion Behavior
• Information contact
– Consumers must come into contact with
promotion information for it to be successful
– Information contact with promotions may be
intentional, but probably is most often incidental
– Placing information in consumers’ environments
may be easy when target consumers can be
identified accurately
17-23
Promotion Behavior cont.
– Cold calls vs. referrals and leads
– Use of telemarketing
– Consumers must also attend to the promotion
messages
• Word-of-mouth communication
– Helps to spread awareness beyond those
consumers who come into direct contact with
the promotion
17-24
Managing Promotion Strategies
• Analyze consumer-product relationships
– Requires identifying the appropriate target
markets for the product
– May require considerable marketing research to
learn about the consumer-product relationship
– The FCB grid
17-25
Managing Promotion Strategies cont.
17-26
Managing Promotion Strategies cont.
– Based on consumers’ involvement and their
salient knowledge, meanings, and beliefs about
the product
– Think products
– Feel products
– The appropriate promotion strategy depends on
the product’s position in the grid
17-27
Managing Promotion Strategies cont.
• Determine promotion objectives and budget
– Promotion strategies may be designed to meet
one or more of the following objectives
•
•
•
•
To influence behaviors
To inform
To transform affective responses
To remind
17-28
Managing Promotion Strategies cont.
– Before designing a promotion strategy,
marketers should determine their specific
promotion objectives and the budget available
to support them
– Some promotions have multiple objectives
– Some promotions are designed to first influence
consumers’ cognitions in anticipation of a later
influence on their overt behaviors
17-29
Managing Promotion Strategies cont.
• Design and implement a promotion strategy
17-30
Managing Promotion Strategies cont.
– Must be sensitive to the consumer-product
relationships represented in different market
segments
– Various consumer segments to be considered
– Appropriate promotions depend on the type of
relationship consumers have with the product or
brand, especially their intrinsic self-relevance
17-31
Managing Promotion Strategies cont.
– Promotion methods vary in their effectiveness
for achieving certain objectives
– Promotion objectives will change over a
product’s life cycle as changes occur in
consumers’ relationships with the product and
the competitive environment
17-32
Managing Promotion Strategies cont.
– Developing advertising strategy
• Specify advertising strategy in terms of the type of
relationship the consumer will have with the product
or brand
• MECCAS model can help marketers understand the
key aspects of ad strategy and make better strategic
decisions
17-33
Managing Promotion Strategies cont.
17-34
Managing Promotion Strategies cont.
• MECCAS defines four elements of advertising
strategy
–
–
–
–
•
•
•
•
Driving force
Leverage point
Consumer benefits
Message elements
The executional framework
Consumer-product relationship
The driving force
Leverage point
17-35
Managing Promotion Strategies cont.
• An advertising strategy should specify how a brand
will be connected to the important ends the
consumer wants
• Developing personal selling strategies
– ISTEA model
17-36
Managing Promotion Strategies cont.
17-37
Managing Promotion Strategies cont.
• Model suggests salespeople’s influences depend on
their skills at performing five basic activities
–
–
–
–
–
Developing useful impressions of the customer
Formulating selling strategies based on these impressions
Transmitting appropriate messages
Evaluating customer reactions to the messages
Making appropriate adjustments in presentation should the
initial approach fail
• ISTEA model is consistent with the communication
approach to consumer promotions
• Model emphasizes analysis of the customer as the
starting point
17-38
Managing Promotion Strategies cont.
• Evaluate effects of the promotion strategy
– Involves comparing its results with the
objectives
– Determining promotion effects can be difficult
– Promotion objectives stated in behavior terms
can be hard to evaluate
17-39
Managing Promotion Strategies cont.
– In some cases, evaluation of promotion effects
can be relatively straight-forward
– Measuring advertising effects
• Three broad criteria have been used as indicators
– Sales
– Recall
– Persuasion
17-40
Summary
• Discussed how knowledge about
consumers’ affect and cognitions, behaviors,
and environments can be used by marketers
in developing more effective promotion
strategies
• Described four types of promotions
• Detailed how the basic communication
model can be used
17-41
Summary cont.
• Discussed important aspects of the
promotion environment, affective and
cognitive responses to promotions, and
promotion-related behaviors
• Examined a managerial model for designing
and executing promotion strategies
17-42
Summary cont.
• Described the various goals and objectives
marketers may have for promotion
strategies
• Looked at two special models for developing
advertising strategies and personal selling
strategies
• Discussed how to evaluate the effectiveness
of promotion strategies
17-43