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MARKETING COMMUNICATIONS 12th Lecture, 17th of May 2016 LECTURE CONTENTS Marketing communications – What is the role of marketing communications? Effective communications – How to be understood by customers? Mass communications – How to advertise, promote sales and manage PR? Personal communications – How to use direct and interactive marketing? COMMUNICATIONS: INTRODUCTION Modern marketing calls for more than developing a good product, pricing it and making it accesible Companies must also communicate with present and potential stakeholders and the general public The question is not whether to communicate but rather what to say, how and when to say it, to whom, and how often Consumers themselves are taking a more active role in the communication process and deciding what they want to receive and how they want to communicate MARKETING COMMUNICATIONS Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers (directly or indirectly) about the products and brands they sell Marketing communications represent the "voice" of the company and its brands and are means by which it can establish a dialogue and build relationships with consumers Those who practice advertising, branding, direct marketing, graphic design, promotion, publicity, sponsorship, public relations and online marketing are termed marketing communicators MARKETING COMMUNICATIONS Marketing communications mix: 1) Advertising – any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor 2) Sales promotion - variety of short-term incentives to encourage trial or purchase of a product or service 3) Events and experiences - sponsored activities and programs designed to create daily or special brand-related interactions MARKETING COMMUNICATIONS Marketing communications mix: 4) Public relations and publicity - variety of programs designed to promote or protect a company's image or its individual products 5) Direct marketing – use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects 6) Interactive marketing - online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image, or elicit sales of products and services 7) Personal selling - face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS To get their messages through, marketers must encode their messages in a way that takes into account how the target audience usually decodes messages They must also transmit the message through efficient media that reach the target audience and develop feedback channels to monitor response to the message EFFECTIVE COMMUNICATIONS EFFECTIVE COMMUNICATIONS Developing effective communications: 1) Identify target audience 2) Determine objectives 3) Design communications 4) Select channels 5) Establish budget 6) Decide on media mix 7) Measure results EFFECTIVE COMMUNICATIONS 1) Identify target audience The process must start with a clear target audience in mind: Potential buyers of the company's products Current users Deciders and influencers Individuals, groups Particular publics, or the general public In identifying the target audience, the marketer needs to close any gap that exists between current public perception and the image sought EFFECTIVE COMMUNICATIONS 2) Determine objectives Category need – establishing a product or service category as necessary to remove or satisfy a perceived discrepancy between a current motivational state and a desired emotional state Brand awareness –ability to identify (recognize or recall) the brand within the category, in sufficient detail to make a purchase Brand attitude - evaluating the brand with respect to its perceived ability to meet a currently relevant need Brand purchase intention – self-instructions to purchase the brand or to take purchase related action EFFECTIVE COMMUNICATIONS 3) Design communications Formulating the communication requires solving three problems: What to say? (message strategy) How to say it? (creative strategy) Who should say it? (message source) EFFECTIVE COMMUNICATIONS 4) Select channels Personal channels: Advocate – salespeople contacting buyers in the target market Expert – independent experts making statements to target buyers Social – neighbors, friends, family members, and associates Nonpersonal channels: Media – print, broadcast, electronic, display Sales promotions – consumer, trade and business promotions Events – sports, arts, entertainment PR - directed internally to employees of the company or externally to consumers, other firms, the government, and media EFFECTIVE COMMUNICATIONS 5) Establish budget – methods: Affordable – what you think the company can afford Percentage of sales – set expenditures at a specified % of sales Expenditures might be as high as 40% to 45% of sales in the cosmetics industry and as low as 5% to 10% in the industrial-equipment industry Competitive-parity – set promotion budget to achieve share-of-voice parity with competitors Objective-and-task – estimating the costs of performing stated communication tasks E.g. the advertiser hopes to reach 80% (40 million prospects) with the advertising message; the company estimates 50 million potential users and sets a target of attracting 8% of the market-that is, 4 million users EFFECTIVE COMMUNICATIONS 6) Decide on media mix Companies must allocate the marketing communications budget over the major modes of communication Each communication tool has its own unique characteristics and costs Companies are always searching for ways to gain efficiency by replacing one communications tool with others EFFECTIVE COMMUNICATIONS 7) Measure results Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and their previous and current attitudes toward the product and the company The communicator should also collect behavioral measures of audience response, such as how many people bought the product, liked it, and talked to others about it MASS COMMUNICATIONS MASS COMMUNICATIONS Advertising – any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor Advertising is a form of marketing communication used to encourage, persuade, or manipulate an audience to take or continue to take some action Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering In Latin, ad vertere means "to turn toward" MASS COMMUNICATIONS Advertising objectives: Informative advertising aims to create brand awareness and knowledge of new products or new features Persuasive advertising aims to create liking, preference, conviction, and purchase of a product or service Reminder advertising aims to stimulate repeat purchase of products and services Reinforcement advertising aims to convince current purchasers that they made the right choice MASS COMMUNICATIONS Mass media for mass marketing communications: Print (newspapers, magazines, etc.) from the late 15th century Recordings (tapes, cassettes, cartridges, CDs) from the late 19th century Cinema from about 1900 Radio from about 1910 Television from about 1950 Internet from about 1990 Mobile phones from about 2000 MASS COMMUNICATIONS Out-of-home advertising (OOH) – focused on marketing to consumers when they are "on the go" in public places, in transit, waiting (such as in a medical office), and/or in specific commercial locations (such as in a retail venue) Billboards Street furniture Transit Alternative MASS COMMUNICATIONS Sales promotions are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability, used to: Gather information about what type of customers one draws in and where they are Jumpstart sales The ultimate goal of sales promotions is to stimulate potential customers to action MASS COMMUNICATIONS Sales promotions include: Contests and games Product giveaways Demonstrations Loyalty programs Premiums Discounts MASS COMMUNICATIONS Event and experience marketing – the activity of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert), to: Promote a product, cause, or organization Identify with a particular target market or lifestyle Increase awareness of company or product name Create experiences and evoke feelings Express commitment to the community or on social issues Entertain key clients or reward key employees MASS COMMUNICATIONS Successful sponsorships of events requires: Choosing the appropriate events – the event must meet the marketing objectives and communication strategy defined for the brand, the audience must match the target market Designing the optimal sponsorship program – the marketing program accompanying an event sponsorship ultimately determines its success Measuring the effects of sponsorship – assessing the extent of media coverage and reported exposure from consumers MASS COMMUNICATIONS Public relations (PR) includes a variety of programs to promote or protect a company's image or individual products Not only must the company relate constructively to customers, suppliers, and dealers, it must also relate to a large number of interested publics A public is any group that has an actual or potential interest in or impact on a company's ability to achieve its objectives MASS COMMUNICATIONS PR functions: 1) Press relations – presenting news and information about the organization in the most positive light 2) Product publicity – sponsoring efforts to publicize specific products 3) Corporate communications – promoting understanding of the organization through internal and external communications 4) Lobbying – dealing with legislators and government officials to promote or defeat legislation and regulation 5) Counseling – advising management about public issues, and company positions and image during good and bad times PERSONAL COMMUNICATIONS PERSONAL COMMUNICATIONS Direct marketing is a form of advertising that allows businesses and nonprofit organizations to communicate straight to the customer Market demassification has resulted in an ever-increasing number of market niches It emphasizes a focus on the customer, data, and accountability Problems: irritation, unfairness, deception, invasion of privacy PERSONAL COMMUNICATIONS Interactive Marketing refers to the evolving trend in marketing whereby marketing has moved from a transaction-based effort to a conversation Not synonymous with online marketing, although interactive marketing processes are facilitated by internet technology The ability to remember what the customer has said is made easier when we can collect customer information online and we can communicate with our customer more easily using the speed of the internet PERSONAL COMMUNICATIONS Online advertising, also called online marketing or Internet advertising or web advertising, is a form of marketing and advertising which uses the Internet to deliver promotional marketing messages to consumers Email marketing Search engine marketing (SEM) Social media marketing Display advertising Mobile advertising PERSONAL COMMUNICATIONS Personal selling is a face-to-face interaction in which a seller attempts to persuade a buyer to make a purchase Today most industrial companies rely heavily on a professional sales force to locate prospects, develop them into customers, and grow the business In modern economies ~10% of the total workforce work fulltime in sales occupations, both nonprofit and for profit Many consumer-based companies use only direct salesforce to sell their products Interactive (two way communication), but costly and with lack of control PERSONAL COMMUNICATIONS Sales-force objectives: Prospecting – searching for prospects, communicating information about the company's products and services Selling – approaching, presenting, answering questions, overcoming objections, and closing sales Servicing – providing various services to the customers-consulting on problems, rendering technical assistance, arranging financing and delivery Information gathering – conducting market research and doing intelligence work Allocating – deciding which customers will get scarce products during product shortages INBOUND VS OUTBOUND „Inbound marketing focuses on creating quality content that pulls people toward your company and product, where they naturally want to be By aligning the content you publish with your customer’s interests, you attract inbound traffic that you can then convert, close, and delight” INBOUND VS OUTBOUND Outbound marketing Also called interruption-based marketing Finding a medium with a large following and periodically interrupt that following with disassociated ads With some careful planning and a study of the demographics, a small percentage of the audience will listen to the interruption in the storyline and convert in to a customer Examples: TV & Radio ads, Direct Mail, Newspaper ads, Billboards INBOUND VS OUTBOUND Inbound marketing Also called permission-based marketing Communication via mediums in which the audience has given you permission to communicate Examples: subscription based email marketing, social media, blog subscribers Answering the questions people are asking and proliferate those answers around the web in anticipation of the question Examples: SEO, keyword targeting, landing page strategy, content/blog strategy CONLUSIONS Marketing communications is based on informing, persuading, and reminding about products and services using different channels Developing effective communications is a process starting with identification of audience and objective within the budget constraints Mass communications is typically based on advertising, using mass media, OOH, sales promotion, event marketing and public relations Personal communications relies on interactive and online marketing and personal selling and can be the only choice for some products Altough new marketing paradigm follows the need for inbound marketing, the use of „interruption-based” outbound marketing is still vast