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of MARKETING Chapter 18 Marketing Communications Strategy Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Objectives 1. 2. 18-1 Explain the concept of the marketing communications mix. Describe the marketing communications mix as part of the marketing mix. 3. Elaborate on the importance of the integrated marketing communications concept. 4. Outline a theoretical mode of the communications process. 5. Show how various marketing communications must conform to this model in order to be effective. 6. Explain and contrast pulling and pushing marketing communications strategies. 7. Discuss the appropriateness of different types of marketing communications objectives. 8. Explain the concept of a marketing communications budget. 9. Discuss the appropriateness of different types of marketing communications budgets. 10. Discuss marketing communications in the light of some public criticisms. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Marketing Communications • All activities and messages inform, persuade, and influence the consumer in making a purchase decision. 18-2 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Figure 18.1 Integrating the Marketing Communications Plan into the Total Marketing Mix Personal Selling Combined with Marketing Manager Sets goals & objectives Integrated marketing communications strategy Other aspects of the marketing program: Product Distribution Pricing strategy strategy strategy Produces Utility for Consumer Nonpersonal Selling Feedback 18-3 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Integrated Marketing Communications (IMC) • A comprehensive marketing communications plan that takes into consideration all the communication disciplines being used and combines them to provide clarity, consistency, and maximum communications impact. 18-4 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Figure 18.3 Chapter 18 The Process of Marketing Communications Sender Marketing Manager Transfer Mechanism Salesperson, print or electronic Advertising media, direct mail, internet, public relations channel Encoding Sales presentations, ads, displays, publicity, releases Noise Feedback Advertising research, field reports, inventory movements Response Attitude change or decision Decoding Customer/receiver Interests message 18-5 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Table 18.1 Examples of Marketing Communications TYPE OF PROMOTION TRANSFER MECHANISM DECODING BY RECEIVER RESPONSE SENDER ENCODING Personal selling Canon Office Equipment Sales presentation on new model office copier Canon sales representative Office manager Order placed and employees Canon copier in local firm discuss Canon sales presentation and those of competing suppliers Two-for-one coupon(sales promotion) Wendy's Hamburgers Wendy's marketing department and advertising agency Coupon inserted Newspaper in weekend reader sees newspaper coupon for hamburger and saves it Hamburgers purchased by consumers using the coupon Information that customers are reacting positively to the message Television advertising Movie producer Advertisement for a new movie is developed by the producer's advertising agency Network television during programs with high percentage of viewers in target market Small number of movie tickets purchased Communication failed to interest and motivate the target market Audience sees ad but few decide to go to the movie FEEDBACK Information that for customers are reacting positively to the message 18-6 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Marketing Communications Mix • The blend of personal selling and nonpersonal communications (including advertising, sales promotion, public relations, sponsorship marketing, and point-of-purchase communications) by marketers in an attempt to accomplish information and persuasion objectives. 18-7 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Figure 18.4 Chapter 18 The Marketing and Marketing Communications Mix Marketing Mix Product Price Distribution Marketing communications Marketing Communications Mix Personal selling Nonpersonal selling • Advertising • Sales promotion • Point-of-purchase communications • Public relations • Sponsorship marketing • Publicity 18-8 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Personal Selling • A seller’s promotional presentation conducted on a person-to-person basis with the buyer. 18-9 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Nonpersonal Communication (1 of 3) • Advertising Paid nonpersonal communication through various media by business firms, nonprofit organizations, and individuals who are in some way identified with the advertising message and who hope to inform or persuade members of a particular audience. 18-10a Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Nonpersonal Communication (2 of 3) • Sales Promotion Those marketing activities, other than personal selling, mass media advertising, and publicity hat stimulate consumer purchasing and dealer effectiveness. • Public Relations A firm’s effort to create favourable attention and word-of-mouth. 18-10b Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Nonpersonal Communication (3 of 3) • Sponsorship Marketing The practice of promoting the interests of a company by associating the company or a brand with a specific event. • Point-of-Purchase Communications Materials designed to influence buying decisions at the point of purchase. 18-10c Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Table 18.2 Factors That Influence the Marketing Communications Mix FACTOR EMPHASIS ON Personal Selling Advertising Objectives of the Marketing Plan Affects all decisions in the mix Actions of Competitors Decide whether to match competitors and/or to develop a different mix Nature of the Market Number of buyers Geographic concentration Type of customer Limited number Concentrated Business purchaser Large number Dispersed Ultimate consumer Nature of the Product Complexity Service requirements Type of good Use of trade-ins Custom-made, complex Considerable Business Trade-ins common Standardized Minimal Consumer Trade-ins uncommon Stage in the Product Life Cycle Introductory and early growth stages Latter part of growth stage and maturity and early decline stages Price High unit value Low unit value Funds Available Affects all decisions in the mix 18-11 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Pulling Strategy • A promotional effort by the seller to stimulate final-user demand, which then exerts pressure on the distribution channel. 18-12 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Pushing Strategy • The promotion of the product first to the members of the marketing channel, who then participate in its promotion to the final user. 18-13 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Figure 18.5 Chapter 18 Relative Importance of Advertising and Selling Relative Importance Selling Advertising Pre-transactional 18-14 Transactional Post-Transactional Source: Harold C. Cash and W.J.E. Crissey, “The Salesman’s Role in Marketing,” The Psychology of Selling, Vol. 12 (New York: Personnel Development Associates). Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Figure 18.6 Chapter 18 Promotion Can Help Marketers Achieve Demand Objectives Price Demand objective for the product 2 Existing demand for a product 1 Quantity 18-15 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Figure 18.7 Product Differentiation Price Differentiated demand Homogeneous demand Quantity 18-16 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Figure 18.8 Chapter 18 Promotion Can Accentuate the Value of the Product Price Less responsive to price differences More responsive to price differences D1 D2 Quantity 18-17 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Figure 18.9 Elements of Advertising Planning Research Inputs • Consumer research • Product research • Market analysis • Consumer situation Strategic Decisions • Setting objectives • Defining target markets • Determining advertising budget deciding media strategy •Coordinating with other marketing factors Tactical Execution • Establishing controls • Writing and producing ads and commercials • Selecting and scheduling media vehicles 18-18 Feedback Taking into account constraints and uncontrollable influences Making evaluations and adjustments Measuring the effectiveness of advertising Market Impact Source: Excerpt from advertising: Its Role in Modern Marketing, 5th ed., by S. Watson Dunn and Arnold M. Barban, p. 202. Copyright © 1982. Reprinted with permission of South-Western, a division of Thomson Learning: www.thomsonrights.com. Fax 800-730-2215. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 How Much Should be Spent on Marketing Communications? • • • • Percentage of Sales Fixed Sum per Unit Meet Competition Task-Objective Method 18-19 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Task-Objective Method • A sequential approach to allocating marketing communications budgets that involves two steps: 1)defining the realistic communication goals the firm wants the marketing communications mix to accomplish, and 2)determining the amount and type of marketing communications activity required to accomplish each of these objectives. 18-20 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 Direct-Sales Results Test • A test that attempts to ascertain for each dollar of promotional outlay the corresponding increase in revenue. 18-21 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Communications Strategy Chapter 18 The Value of Marketing Communications • Business and Nonprofit Enterprise Importance • Economic Importance • Social Importance 18-22 Copyright © 2003 by Nelson, a division of Thomson Canada Limited.