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Aims of the course Aims International Affairs Engeenering Introduction to main concepts and practices : - Theoretical grounding and Processes - Strategies, technics and tools Communication / promotion Learn how sales promotion campaigns are developed and implemented. Learn how companies use public relations to communicate with their publics. Session 1 : The Fundamentals of Communication G. de Lanauze ½ Unit (ECUE) Period: 2d semester 2 Marketing G. de Lanauze Course presentation Promotion - IAI M1 - 2015 / 2016 Course outlines Déroulement du cours de COMMUNICATION : 6 sessions of 3h duration Session 1 : Fundamentals and communication theory, promotion strategy, communication plan ( a review) Session 2 : Advertising through mass media Session 3 : Sales promotion Session 4 : Below the line promotional technics Session 5 : Online promotion Session 6 : Case study in class Final exam 3 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 4 Marketing G. de Lanauze COMMUNICATION Promotion - IAI M1 - 2015 / 2016 What is promotion? Promotion is the element in an organisation’s marketing mix that serves to inform, persuade and remind the market about the organisation and/or its products. Session 1 Must contribute to the firm profitability and performance Fundamentals Communication theory Promotion strategy Relationship between Advertising and the Product Life Cycle 5 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 6 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 1 Introduction to promotion policy Aims of promotion Aim: to communicate with customers as to provide information that buyers need in order to make purchasing decisions Company Numerous tools available: advertising is the most visible, but also personnal selling, exhibitions, sales promotions, publicity, direct marketing (including the Internet) Differentiation Competitive advantages Brand awareness In a global world, image can grow international and entail strategic benefits Service tangibilization •Provide information •Influence the buyer But communication is mainly based on language and cultural meaning, which usually implies adaptation to the local culture Informing Persuading Reminding 7 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 8 Marketing G. de Lanauze Why do we PROMOTE? • • • • • • • • Promotion - IAI M1 - 2015 / 2016 Promotion objectives Informing Increase sales by increasing consumer demand Remind consumer of exiting products and why they are special Attract new buyers Demonstrate the superior quality of product as compared to its competitors – often occurs after a product has been updated Create or reinforce the brand image Correct misleading reports about the product or the business and reassure consumers after a “scare” or “accident” Develop or adapt the public image rather than the product Encourage stocking by retailers people have to know about it, in order to buy it Technics that seeks to develop demand through presenting factual information on the attributes of a product or service. Persuading when competition offers similar product, you have to “persuade” them to try yours Technics that emphasizes using words and/or images to try to create an image for a product and to influence attitudes about it. Reminding when new competition comes along, you have to “remind” customers of your greater experience, advantages etc. Technics whose goal is to reinforce previous promotional activity by keeping the product’s or service’s name in front of the public. 9 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 10 Marketing G. de Lanauze The communication process Noise sender Message Message: coding - decoding Shannon & Weaver (1949) encoding Media decoding Promotion - IAI M1 - 2015 / 2016 Semiology: Receiver signifier One way communication : advertising, sales promotion Sender Message Feed back explicit or implicit convention Receiver Response signified Two way communication (interactive): Direct Marketing, Internet 11 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 12 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 2 Message: coding - decoding The communication process models Semiology: The AIDA model (1898, Lewis) : signifier explicit or implicit convention A for Attention 1°Draw the attention on the message I for Interest 2°Arouse the interest of the target D for Desire 3°Create and develop the desire for the product A for Action 4°Convince to purchase signified 13 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 14 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 The advertising persuasion model The model of attitude Mc Guire (1976) Exposure to the message Attitude components Effects hierarchy Conative step: intention of buying 6. Purchase 5. Conviction Affective step: feelings 4. Preference 3. Liking Cognitive step: perception, beliefs 2. Knowledge 1. Awareness Attention for the message Comprehension of the message Acceptation of the message and change of attitude Memorization of the message Behavior based on the new attitude Advertising draws not only cognitive responses but also affective responses: emotions, feelings, humors,… 15 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 16 Marketing G. de Lanauze Toward attitudinal and behavioral changes Promotion - IAI M1 - 2015 / 2016 Exercize Aim of any promotional action is to get a consumer response. The worst thing would be to leave people indifferent. And to be noticed is good, but not enough… List the vaious factors and ways to improve each step of process: • Exposure Create a preference Modifying beliefs, acting on perceptions, chnaging attitudes • Attention/impact • Comprehension • Acceptation / Attitude change • Memorization • Behavior Stimulate motivation / reduce inhibitions and obstacles to purchase Generate a reaction Modify consumer behavior Préférences must have actual effects Advertising must involve 17 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 18 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 3 Deciding on message source: the endorsement theory The target audience The sender influences the target audience : the source effect Define the target clearly : critical influence on promotion decisions reach Credibility Appeal, prestige Influence cost Marketing target Target audience Core target Source credibility factors: expertise, trustworthiness, likability • • Consumers Potential buyers • Current users • Deciders • Influencers 19 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 20 Marketing G. de Lanauze Communication according to targets Promotion - IAI M1 - 2015 / 2016 The different levels of communication Varying messages, varying channels according to whom we talk to : large public, groups, individuals Three main levels: • The company Communication about the company toward its main partners (suppliers, personal, distributors, stockholders) and toward the public (expression of its values, institutional communication) Mass targeting One to many Segments • The brand Communication about the value and the personality of the brand, development of the brand awareness One to few • The product Communication about the product, its attributes and quality One to one 21 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 22 Marketing G. de Lanauze The main techniques of communication Promotion - IAI M1 - 2015 / 2016 Communication channels Interpersonal channels Five main kinds of communication: Communication Impersonal channels Advertising Public relations Sales promotion Direct marketing Personal selling 23 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 24 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 4 Five Major Promotion Tools Typical communication tools One way communication Advertising Paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor Sales promotion Short-term incentives to encourage the purchase or sale of a product or service Personal selling Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships Public relations Advertising Newspapers 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 Direct marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships Public relations Two way communication Sales promotion Direct marketing Personal selling Annual reports Rebates and price discounts Direct mail/ database marketing Sales presentations Magazines Corporate image Catalogues and brochures Internet marketing Sales force management Radio House magazines Samples, coupons and gifts Telemarketing Trade fairs and exhibitions Television Press relations Competitions Viral marketing Cinema Public relations Outdoor Events Internet Lobbying Sponsorship 26 25 Marketing G. de Lanauze Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 Promotion Types Above-the-line promotion Above-theline Purchasing communication with the consumer – AKA – advertising Below-the-line promotion Below-theline Short-term incentives to encourage consumers to purchase the product Promotion - IAI M1 - 2015 / 2016 ATL and BTL definitions Promotions that are visual & auditory TV Ads, billboards, radio, print ads Promotions that are tactile Samples, coupons, loyalty programs, games, price deals The term involves the way in which Procter & Gamble, was charged for its media in the 1950 and 1960s. Advertising agencies made commission from booking media (Television, cinema, radio, press, out-of-home and magazines). As below the line had no media involvement there was no commission to be made for the advertising agencies. The accountants thus labeled the different media ATL and BTL depending on where it would sit in the balance sheet and profit and loss accounts (ATL where they made a profit and BTL where they did not) . Colloquially, ATL means mass media. However since then, models have changed and clients are no longer charged for their media in that way 27 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 Above-the-line Promotion Persuasive Marketing G. de Lanauze Provide information to potential customers like, price, features, technical specifications, or where to purchase Trying to create a distinct image or brand identity Promotion - IAI M1 - 2015 / 2016 Promotion - IAI M1 - 2015 / 2016 Below-the-line Promotion Advertising Communicating information about a product or business through the media such as radio, TV, newspapers, magazines, or billboards. Informative 28 Marketing G. de Lanauze Sales promotions are used to generate short-term gains in sales. Sales or price deals – a temporary reduction in price Loyalty programs – airline miles, points earned to redeem for other products and gifts Coupons Point-of-sale displays – aisle interrupters, dump-bins BOGOF – buy one, get one free offers Games and competitions Public relations Sponsorships 29 30 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 5 New classification The new trends in communication Before Paid media Owned media Earned media Offline Offline Offline Advertising Point of sales promotion Direct marketing Editions/ catalogs Packaging Controled point of sales WOM Opinion leaders Journailists Online Online Online Advertising :display & search Afilliation and comparators E-mailing Vompany websites Mobile apps Blogs forums Social networks •Prospects •Customers •influencers •Customers •Prospects •Public opinion Company message Media Consumer message Now Message Consumer Win when lit Company •Fans •Leaders Media 31 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 32 Marketing G. de Lanauze Promotions mechanisms Promotion - IAI M1 - 2015 / 2016 Push versus pull promotion strategy Producer marketing activities Promotions can be targeted to two groups: • Final consumer – encourages consumers to purchase (PULL Strategy) a pull strategy emphasizes mass media advertising Producer Demand Promotion - IAI M1 - 2015 / 2016 Pull strategy Marketing G. de Lanauze Pushing through the promotion channel wholesaler retailer Consumers Producer marketing activities 33 Personal selling Demand Retailer & wholesalers Producer The choice between the strategies depends upon: 1. product type and consumer sophistication 2. channel length 3. media availability Producer Consumers Push strategy Distribution channel or Retailer – encourage stocking and display to encourage more sales (PUSH Strategy) a push strategy emphasizes personnel selling Marketing G. de Lanauze Retailer & wholesalers Reseller marketing activities Pulling through the promotion channel customer Producer Examples of promotional techniques: Run ads in trade magazines to make wholesalers aware of the product • Provide incentives to retailers to carry the item • Run contests for salespeople to win prizes for selling the product Personal selling 2 wholesaler retailer Examples of promotional techniques: • Run TV commercials so customers directly learn about the product - then they go to the store and ask for it, or call around to find out where it is sold • Give free samples to potential customers 35 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 customer A pull strategy is better: • for consumer goods products • when distribution channels are long • when sufficient print and electronic media are available to carry the marketing message In general, a push strategy is better: • for industrial products and/or complex new products • when distribution channels are short • when few print or electronic media are available • 34 Promotion - IAI M1 - 2015 / 2016 36 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 6 Importance of a good promotion Mix Integrated marketing communication Advertising The concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products. mix of promotion tools Personal selling Marketing Communications mix (Promotion mix) Advertising Sales promotion Customer Public relations Personal selling Sales promotion Public relations Consistent,clear,and compelling company and product Messages. Direct marketing 37 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 Direct marketing Marketing G. de Lanauze The communication plan 38 Promotion - IAI M1 - 2015 / 2016 Definition Advertising is an artsistic job: Promotion plan A tool for defining, according to the marketing objectives of the firm, the promotional actions to reach them. It settle the promotion objectives, the targets and the messages, the actions, time schedules and budgets. It helps and ensures the piloting of the program actions Wrong The core factor of a good promotion strategy: Analysis, vision and rigor: It is : A management tool A communication tool A organizing tool orchestrating the actions and their synergies True The promotion plan 39 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 40 Marketing G. de Lanauze Developing the promotion plan Promotion - IAI M1 - 2015 / 2016 Steps in developing the communication strategy 1. Strategic Objectives Coherence 2. Communication Objectives Synergies 3. Targets Market strategy Positioning Targets Teams Actions 4. Communication design Impact of the whole greater than the sum 5. Select Channels 6. Establish Budget 7. Decide on media mix 8. Measure results 41 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 42 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 7 Strategic objective / promotion objective Communication objectives Communication objectives are different from strategic objectives: Three main kinds of objectives: - share of market. - Sales volume. - contribution to profitability Cognitive objectives: • Knowledge, information, awareness Communication managers must: Affective objectives Know them perfectly Contribute to the strategic objectives (knowing the environment, knowing the communication processes) Examples: • • • • • Liking, feelings, emotions, preference, image Conative objectives • Action, persuasion, behaviors, habits, trial Product launching Win market dhares Reinforcement on specific target audiences Reactions to competitors actionss 44 43 Marketing G. de Lanauze Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 Measure of awareness Promotion - IAI M1 - 2015 / 2016 Benefits of awareness Brand awareness rate is the percentage of a given population who knows the existence of the brand in a given category and knows to which product categoy it belongs Ground for other traits of image Familiarity / Preference Aided (or prompted) awareness awareness Spontaneous (or unaided) awareness Old and well known brand = trustworthiness Top of mind Simplify choice and purchase 45 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 46 Marketing G. de Lanauze Image Promotion - IAI M1 - 2015 / 2016 Benefits attached to brand image Information processing •Brand image is the whole set of mental perceptions and •associations attached to a brand by an individual Differentiation and positioning Brand image characteristics: BRAND IMAGE Individual Subjective Selective Incomplete Relatively steady over time, but not invulnerable Positive attitudes Trust and attachment Purchaser/consumer valuation Ease brand extensions 47 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 48 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 8 Measuring brand image Brand image : Apple Qualitative measure: perceived image Brand reputation: social responsibility, emotions, performance, products, services, image Image review, assessment, dimensions, positioning 49 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 50 Marketing G. de Lanauze Does this ad attempt to inform, persuade, or remind? Promotion - IAI M1 - 2015 / 2016 Identify target audience Identify and prioritise the targets: Main targets: consumers, users Other important targets: prescriptors, other partners (suppliers, customers, intermediairies, distributors), opinion leaders, journalists Analyse and define targets : Quantitative factors : Démographics, économic, prfesional, social factors Qualitative description: behaviors (habits, lifestyles,innovation, motivations) brand positioning, searched advantages 51 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 52 Marketing G. de Lanauze Choose and define target audiences Discussion question Example : targets as they are defined in the copy strategy of Dan Up Danone product When does advertising pass the boundaries of good taste? Can you think of some examples? – Quantitative target : » » » » Promotion - IAI M1 - 2015 / 2016 Under-50 housewives Kids in households Catégories de revenus A, B, C Men and women between 15 and 24 – Qualitative target Should marketers be concerned about the opinions of anyone other than the target market? Why or why not? » Consumers looking for tonifying product to be in shapconsumers juging the product as a cool way to drink yogurt anywhere. » Kids and teens seduced by the specific way to drink it directly from the bottle – Core target » Teens and young adults 15-24 Criteria must be explicative of behaviors and operational 53 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 54 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 9 Establish the marketing communications budget How much to spend on marketing communications? Depends on: Stage in the product life cycle Marketshare and consumer base Competition and clutter Advertising frequency Product substituability Four common methods: 1. Affordable method (resources) 2. Percentage-of-sales method 3. Competitive-parity method 4. Objective-and-task method 55 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 56 Marketing G. de Lanauze Promotional budget Promotion - IAI M1 - 2015 / 2016 Budget decisions Promotional budget results from: • Strategical objectives • Ambitions (eg; market share) • Competitors strategies Two main issues: Optimal amount of money to spend? Repartition among brands, targets, technics and support media ? Communication spendings are operating costs • (they are not investments, though they usually have to be considered on the long run) Decision belongs to the advertiser (the company) Communication spendings are fixed costs • (Many of them do not depend on the sales volumes, though they may be planned according to sales previsions or objectives 57 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 58 Marketing G. de Lanauze Promotion budget decision The promotional budget Percentage of sales method • Company may determine past or anticipated sales and apply a percentage of sales as the promotional budget. All available funds • Company uses all available funds on the promotional campaign . Matching the competition (also known as competitive parity). • Promotional expenditure based on market share of competitors, or actual expenditure if known. Task or objective method • Determine what tasks or objectives the promotion must accomplish. • Determine what it will cost to perform the task or meet objective. Affordable Percentageof sales Promotion budget decision Promotion - IAI M1 - 2015 / 2016 Objective and task Competitive parity 59 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 60 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 10 Competitors spending analysis Budget decisions Share of voice (SOV) : brand X share of advertising spendings among the total spendings on the given market Some further principles: Plan side budgets (opportunity or market problems) Comparing the share of voice and share of market: R = SOV/SOM • R>1 : overinvestment • R<1 : unerinvestment Example: Brands Plan budgets for long term programs Market share in $ SOV R Brand A 45% 40% 0,88 Brand B 20% 30% 1,5 Brand C 18% 28% 1,55 Brand D 6% 0% - Brand E 5% 0% - Other brand 6% 2% 0,33 In case of small budgets: creative risk, boldness, narrow target audiences, Do not neglect pre and post-tests Ask for detailed quotations, get help from specialists (cost-controllers) 61 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 62 Marketing G. de Lanauze Criterions for the choice of an ad agency Promotion - IAI M1 - 2015 / 2016 New trends in promotion and communication Quelques termes et concepts: • Agency size (homogeneity between the announcer's and the agency’s size) Reactive and Interactive marketing Story telling and content marketing • Activity (experience in the field, but no direct competitor) • Digital native and new tools • Working methods Sometime a testing campaign is made before the partnership Anti-ad movements and brandalism … • Announcer's international policy (adaptation, standardization or homogenization) 63 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 64 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 For next time Friday, Jan. 8th Select an ad (magazine or television) Define : • Signifier and signified • Main objective • Target audience • Pros and cons according to the McGuire model To be discussed in class 65 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 66 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 11 Application – case study presentation in class What do you have to do? In groups of two Your task is to explain the importance of a coherent promotion strategy and the synergies between the different actions and media Select a company or brand in any product or service category You should consider including information on: Marketing and promotional objectives Target audiences competitive advantage Choice of methods and synergies Timings and budgeting Evaluation and results Describe the promotion strategy Define, detail and justify : the objectives, the targets, the actions Give a proxy of the corresponding budget 68 67 Marketing G. de Lanauze Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 Promotion - IAI M1 - 2015 / 2016 Case presentations 20 page report (word doc.) and presentation support (ppt) to be sent by Monday, March, 21st, for evaluation: [email protected] 3-4 groups selected for a 20’ presentation on Wednesday, March. 23rd 69 Marketing G. de Lanauze Promotion - IAI M1 - 2015 / 2016 12