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Chapter 8 Components of media plan: Marketing analysis (sales, market share, prime suspects for solicitation) Advertising analysis Media strategy Media schedule Justification and summary People involved in media selection: Media planner, media buyer, account excecutive, client Target market divided into 2: Media audience characteristics Market audience characteristics Media planner plan about: Spot ads (one time placement) Reach ( number of people, households) Frequency ( number of times) Opportunity to see (OTS) Gross rating points Cost per thousand (CPM) Cost per rating point (CPRP) Ratings Continuity (continuous, pulsating, discontinuous) Gross impressions 3 Exposure hypothesis & Recency Theory: 3 ads for effectiveness Intrusion value Attention is selective and focused Impact dissipates over time Maximize exposure Run ads over longer period of time Place ads in multiple outlets Business-to-business Advantages of Tv: 1. High reach 2. High frequency potential 3. Low cost per contact 4. Quality creative opportunities 5. High intrusion value 6. Segmentation possibilities through cable outlets Disadvantages of Tv: 1. Greater clutter 2. Channel surfing during commercials 3. Short amount of copy 4. High cost per ad 5. Low recall due to clutter Advantages of Radio: 1. Lower cost per spot than television 2. Low production cost 3. Music can match station’s programming 4. High segmentation potential Disadvantages of radio: 1. Short exposure time 2. Low attention 3. Few chances to reach national audience 4. Target duplication when several stations use same format Advantages of outdoor advertisement: 1. Large, spectacular ads possible 2. Able to select geographic areas 3. Accessible for local ads 4. Low cost per impression 5. Broad reach Disadvantages of outdoor advertisement: 1. Legal limitations 2. Short exposure time 3. Brief messages 4. Little segmentation possible 5. Cluttered travel routes Advantages of magazine: 1. High market segmentation 2. Targeted audience interest by magazine 3. High color quality 4. Long life 5. Direct response techniques 6. Read during leisure time 7. Longer attention to ads Disadvantages of magazine: 1. Long lead time for ads 2. Little flexibility 3. High cost 4. High level of clutter 5. Declining readership Advantages of newspaper: 1. Priority for local ads 2. Coupons and special-response features 3. High credibility 4. Strong audience interest 5. Longer copy/message possible 6. High flexibility 7. Cumulative volume discounts Disadvantages of newspaper: 1. Major clutter 2. Short life span 3. Poor quality reproduction 4. Limited audience 5. Poor buying procedures Reasons for shift: Business decision makers also consumers. Business decision makers difficult to reach at work. Clutter among business mediums. Chapter 9 Digital Marketing • Combination of e-commerce, Internet marketing and mobile marketing. • Transformed traditional retailing • A company could compete globally despite the size of the company. • An open environment for trading, discussions, comparisons between goods and services. • A communication highway for consumers to interact and engaged. Web 1.0 Static content provided by creator Dominated by institutions and businesses Commercially and technically based Web 2.0 Content is socially based and audience generated Web 3.0 Content driven by online metrics Integration of content and communications Instant real-time communications Web 4.0 Customer engagement Cloud operation systems Web participation a necessity e-Commerce • Selling of goods and services on the Internet • Click-only and/or bricks-and clicks • Applicable to B2B and B2C • E-commerce sites also used for information gathering before customers make a purchase E-Commerce Components: Customer centric design Drilldown search Channel integration Brand engagement Customer interaction Customization and personalization Shopping cart abandonment strategies E-Commerce Incentives Cyberbait: Financial incentives, Convenience incentives, Value-based incentives Financial Incentives • Attract first-time purchaser • Effective incentives: Reduced price , Free shipping, E-coupon • Incentives must be: Meaningful, Changed periodically • Reduces costs through: Lower shipping costs, Lower labor costs, Lower personnel costs Convenience Incentives • E-commerce available 24/7 • Used to obtain product information • Update and change Web site • Easy to locate merchandise • Convenience services: Wedding/Baby registries, Popular items, Measurement charts Value-added incentives • Change purchasing habits – long term • Matched past purchasing behaviors • Customized shopping • Web-only specials • Free information Successful e-commerce incentive use combination Combination of Financial, Convenience, and Valueadded PRIVACY AND SECURITY ISSUES: Identity Theft Information privacy issues Business-to-Business E-Commerce: E-commerce is critical Websites hits directly related to advertising and sales promotions Requires incentives Online exchanges and auctions Mobile marketing: • Links individuals to social networks • Download deals and/or information, check prices, read reviews • Shopping enabled • Text messages offering promotions CONSUMER ENGAGEMENT AND INTERACTIVE MARKETING: • Assist marketers in targeting individuals, specifically potential and current customers • Engages the customers with the company and the product. • Effective interactive marketing strategy: 1. Cultivate an attitude of giving 2. Gain trust 3. Identify your one-word brand 4. Define ultimate vision 5. Choose communication channels 6. Evaluate and adjust Types of online advertising: • Display or banner ad • Classified ads • Search advertising • Media/video ads Company-Sponsored Blogs Blog visitors spend more, Online 23 hours/week versus 13 Benefits Reassure shoppers Glimpse of how firm deals with customers Release company information Customers can voice opinion Company controls site Consumer-Generated Reviews: Amazon-com – leader Circuit City – online reviews of brands Early adopters Implications: Negative reviews, Low-star ratings, Consistent quality products, Information for (Marketing plans, Product modifications, Service strategies) Building a Successful E-mail Campaign • It essential to: • Integrate with other marketing channels • Be based on web analytics • Combine with future web analytics • It is beneficial to: • Integrate with Web site’s content management • Integrate with a customer relationship program E-mail newsletters Build brand awareness Drive web traffic Customers sign up for newsletters Provide value Free subscription Tie-in with Web site Advertising on other newsletters Build brand awareness Drive web traffic Pick newsletters that are relevant Search Engine Optimization / SEO: process of increasing probability of a hit Methods of SEO: • • • Paid search insertion Increase identification through organic emergence of site First page search hit – 9x increase in Web traffic Second/third pages – 6x increase in Web traffic Top 10 listing – 42% increase first month, 100% second month Can take months, years to get into top 10 listings Paid search ads Accounts for 40% of online advertising dollars Click-through rate - 5% (0.2% online advertising) Future dangers of SEO: Clutter, Increased costs Viral Marketing: Message passed from one consumer to another through E-mail, Blogs. A form of advocacy or word-of-mouth endorsement Viral marketing messages Advertisements Hyperlinked promotions Online newsletters Streaming videos Games Chapter 10 Alternative marketing program: Buzz marketing Guerilla marketing Product placement & branded entertainment Lifestyle marketing Experiential marketing Buzz marketing: Word-of-mouth marketing, Higher credibility Methods of generating buzz: Consumers who like a brand Sponsored consumers Brand ambassadors House parties Company or agency generated buzz Sponsored Consumers: Agent or advocate for a new brand Brand ambassadors or customer evangelists Company Employees: • Employees posing as customers • High risk approach • Word of Mouth Marketing Association (WOMMA) : Honesty of relationship, Honesty of opinion, Honesty of identity Buzz marketing stages: 1. Inoculation (introduction) 2. Incubation (used by few people) 3. Infection (widespread use) Buzz Marketing Preconditions • Brand must be unique, new, or perform better • Brand must stand out • Memorable advertising helps o Intriguing, different, and unique • Customers must get involved • Buzz marketing works because o People trust someone’s else’s opinion o People like to give their opinion Stealth Marketing: Undercover marketing, The purpose is to create awareness or buzz among new customers. Thrives online due to the ease of creating videos and offering brand endorsements Guerilla Marketing: Relies on creativity, quality relationships, and the willingness to try unusual approaches. A combination of media, advertising, PR, and surprises. Focus on region or area, Create excitement, Involve interacting with consumers. Goal is to generate buzz Reasons for Using Guerilla Marketing • To find new ways to communicate with customers • To interact with customers • To make advertising accessible to consumers • To impact a spot market • To create buzz • To build relationships with consumers Lifestyle Marketing: Involves identifying marketing methods associated with the hobbies and entertainment venues of the target audience. Visited venues at large concentrations of potential customers places such as festivals, concerts, farmer’s markets, stock car races, etc. Experiential Marketing Combines direct marketing, field marketing, and sales promotion into a single customer experience. Involves direct marketing such as special events and free samples. Seek to engage customers with the brand. Product Placement Product is seen as a part of a movie or a tv program, Low cost per viewer Advertisers believe: Increased brand awareness, Positive attitude towards the brand Branded Entertainment Brand woven into the storyline Use increased sharply with reality shows Also found in novels, plays, songs, and movies Key Factors in Product Placement & Branded Entertainment • Media • Supporting promotional activities • Consumer attitudes toward placements • Placement characteristics • Regulations Product Placement & Branded Entertainment • Work because no call to action • Goal is to increase brand awareness and liking • Placements work best when logical fit • Negative/positive scene impacts reaction • Bypasses legislation • Increase in placement budgets • Brand’s appeal stronger in non-advertising context • Perception of what others think is important to consumers • Provides post-purchase reassurance • Program can provide evidence of a brand’s advantage Video Game Advertising • In-game advertisements • Rotating in-game advertising • Interactive ads • Game-related Web sites • Advergames • Sponsored downloads Benefits: Online games allow Web analytics, Ads can be targeted to match audience Disadvantage: Ads soon become static New technologies: • Ad rotations within game • New ads can be added to online games • Time-sensitive ads can be used • Ads can be made interactive In-Store Marketing 70% of purchase decisions made in store In-store atmospherics: Sight, sound, and scent Video screens and television monitors: Customize messages Wal-Mart: 127 million shoppers per week Point-of-Purchase Displays • Location is key • Last chance to reach buyer • Facts • 70% of decisions are in store • 50% of money spent at mass-merchandisers and supermarkets is unplanned • Average increase in sales is 9% • Half of POP displays not effective • Half that are effective – 20% increase in sales Effective Point of Purchase Displays • Integrate the brand’s image into the display. • Integrate the display with current advertising and promotions. • Make the display dramatic to get attention. • Keep the color of the display down so the product and signage stand out. Measuring POP Effectiveness • Both retailers and manufacturers want displays that are effective • Point-of-sales (POS) data • For retailers • Indicates time to withdraw or change display • Identify POP displays with largest impact • Test market different displays • For manufacturers • Data can improve quality of displays • Strengthen relationships with retailers Combination Approaches • Digital, LED displays • Interactive displays • Integration of advertising and marketing with POP • Interface of digital technology with in-store networks • Interface with retail computers Brand Communities • Ultimate demonstration of • Brand loyalty • Brand devotion • • • • • Symbolic meaning Interactions between brand and consumer Shared values and experiences Cannot be created by brands itself Marketing can enhance community experience Reasons Brand Communities Form • Affirmation of the buying decision. • Social identity and bond. • Swap stories. • Swap advice and provide help to others. • Feedback and new ideas. Ways to Enhance a Brand Community • Create benefits to encourage new customers to join. • Provide materials not available anywhere else. • Involve firm representatives in the groups. • Sponsor special events and regular meetings. • Promote communications among members. • Build a strong brand reputation. Chapter 11 Tasks in Database Marketing 1. Building a data warehouse 2. Database coding and analysis 3. Data mining 4. Database-driven marketing communications 5. Database-driven marketing programs 1. Data Warehouse: • Customer names and addresses • E-mail addresses • Record of visits to the firm’s Web site • History of every purchase transaction • History of customer interactions • Inquiries • Complaints • Returns • Customer survey results • Preferences and profiles supplied by the customer • • Response history from marketing campaigns Appended data • Demographic and psychographic data (Knowledge Base Marketing or Claritas) • Database coding through customer analyses • Lifetime value • Customer segment cluster 2. Database Coding and Analysis • The goal is to be able to Personalized marketing messages to customers • Common forms of coding • Lifetime value analysis: Represents the profit revenue of a customer throughout the lifetime of the relationship • Customer Clusters: Used to group customers based on a wide variety of criteria. Bank (type of account, relationship with the bank ) 3. Data Mining It used to develop a profile of the company’s best customers by: 1. Building profiles of customer groups 2. Preparing models that predict future purchase behavior 4. Database-Driven Communications • Identification codes • Customer IDs/passwords • Personalized greetings • After-sale communications • Customer profile information • Birthday greetings ( discounts, $10 off) • In-bound telemarketing • Lifetime value code • Trawling • Searching for a specific information (i.e. Customers who moved) 5. Database-Driven Marketing Programs • Permission marketing • Frequency/loyalty programs • Customer relationship management Steps in Building a Permission Marketing Program • Obtain permission • Offer a curriculum over time • • • Reinforce incentives to continue the relationship Increase level of permission Leverage the permission to benefit both parties Successful Permission Marketing • Ensure recipients have granted permission • Make e-mails relevant • Customize program by tracking member activity Goals of Frequency Program • Maintain sales, margins, or profits • Increase loyalty of existing customers • Induce cross-selling to existing customers • Differentiate a parity brand • Preempt the entry of a new brand • Preempt or match a competitor’s program Principles Frequency Programs • Design the program to enhance the value of the product. • Calculate the full cost of the program. • Design a program that maximizes the customer’s motivation to make the next purchase. Customer Relationship Management • Designed to build long-term loyalty and bonds with customers, through the use of a personal touch, facilitated by technology. • Two primary metrics of CRM: • Lifetime value of customer • Share of customer – percentage of expenditures a customer makes with one particular firm compared to total expenditures in that category Steps to Develop CRM 1. Identify the company’s customers 2. Differentiate customers in terms of needs and value • Lifetime value • Share of customer 3. Customers driven • Improve cost efficiency • Enhance effectiveness of interaction 4. “Wooed” instead of “stalked” Direct Response Marketing Designed to develop closer relationships with customers through direct contact by: Direct Mail, Catalogs, Telemarketing, Direct Response Mass Media, Internet, Direct sales, Telemarketing Direct Mail Most common form of direct marketing Types of lists • Response list • Compiled list Advantages • Target mailings (consumer, b-2-b) • Measurable • Driver of online sales Disadvantages • Clutter • Costs Catalogs • Long-term impact • Low-pressure sales tactics • First stage in buying cycle • Database • Specialty catalogs • Business-to-business Chapter 12 Types of Consumer Promotions Coupons Premiums Contests and sweepstakes Refunds and rebates Sampling Bonus packs Price-offs Coupons: Offer a price reduction Print media as the primary medium FSI benefits: Consumer makes a conscious effort to clip/save coupons Coupons create brand awareness The rise of digital coupons Why Use Consumer Promotions? Promotions accomplish goals that advertising by itself cannot. Consumers often need to be induced to buy now rather than later, to buy your brand rather than a competitor's, to buy more and to buy frequently. Objective (1) Generating trial purchases (2) Encouraging repeat purchases (3) Reinforcing brand images Methods of Distributing Coupons Print media FSI Direct mail On- or in-package In-store Scanner-delivered Digital Sales staff Types of coupons Instant redemption Bounce-back Scanner-delivered Cross-ruffing Premiums: Prizes, gifts, special offers Customer pays full price Types of Premiums Free-in-the-mail In- or on-package Store or manufacturer Self-liquidating Keys to Successful Premiums Match the premium to the target market Carefully select the premiums Avoid fads, try for exclusivity Pick premium that reinforces firm’s product and image Integrate the premium with other IMC tools especially advertising and POP displays Don’t expect premiums to increase short-term profits Contests and Sweepstakes Contests – require activity, skill Can require purchase to enter Sweepstakes – random chance Must publish odds of winning Do not require purchase Perceived Value Extrinsic Intrinsic Internet Social Media Refunds and Rebates Refunds – soft goods Rebates – hard goods Hassle to redeem, Now expected by consumers, Redemption rates Benefits of Sampling Introduce new products Generate interest Generate leads Collect information Boost sales Bonus Packs objectives Increase usage of a product Match or preempt competition Stockpile the product Develop customer loyalty Attract new users Encourage brand switching Price-Offs Temporary price reduction Stimulating sales Brand switching Stockpiling Four types of consumer promotions plan: Promotion-prone Brand-loyal Brand preferred Price-sensitive Trade Promotions • Incentives designed by members of the trade to entice another member to purchase goods for eventual resale. • Aim at retailers, distributors, wholesalers, agents, brokers Trade Allowance Off-invoice allowance Per-case rebate paid to retailers for an order Slotting fees Money paid to retailers to stock a new product Exit fees Money paid to retailers to remove an item from their SKU inventory Trade Allowance Complications Failure to pass allowances on to retail customers Only occurs 52% of the time Retailers like only one brand on-deal at a time Retailers can schedule and promote on-deal brands Forward buying Purchase extra amount of goods during on-deal Sell the goods after the deal period ends Diversion Purchase goods during on deal in one location and sells it on other off deal location Trade Contests Used to achieve sales targets, Funds known as “spiff money”, Rewards can be prizes or cash, Can be designed for various channel members. Some organizations do not allow trade contests because of possible conflict of interests Types of Trade Incentives • Cooperative merchandising agreement • Premium or bonus pack • Co-op advertising programs Trade Shows Few deals finalized at trade show International attendees want to make deals Increase in international trade shows National shows being replaced by regional and niche shows Niche shows Provide better prospects Lower costs