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Formulating Strategic Marketing Programs Marketing Communications Management Integrated Marketing Communications (IMC) Effective marketing requires an integrated communications plan--relying not just on one form of communication, but bringing together a number of different modes in a consistent and complementary way. Communication Vehicles Contrast communication options along two dimensions: – Broadcast vs. interactive (1-way message vs. 2way message) – Mass vs. addressable/customized Characteristics of Communication Options Addressable/ customized Mass Salesperson Super Bowl Ad Broadcast 1-way message 2-way with Time lag 2-way instantaneous Position of Major Communication Vehicles Salesperson Addressable/ Customized Direct Media Radio Newspapers Magazines Mass Web Telemarketing E-mail Direct Mail Catalogs Infomercials Television 1-way 2-way Characteristics of Leading Media Advertising Television – 70% expenditures for national coverage. – Average 30 second prime time ad costs about $185,000. – In a typical hour of prime time programming, more than 15 ads will be featured. – Cable stations enable more customization. – Summarize cost with CPM (cost per thousand) $185,000 x 1000 = $18.50 CPM 10,000,000 Television, continued Limitations – Ads are viewed as intrusive--zapping – Clutter – Sensory adaptation Leading Media... Newspapers – 90% of expenditures for local coverage – Most consumers view newspaper ads as informational. – Limitations: » Relatively weak production quality » Limited life Leading Media Radio – Largely local medium – Audiences are well-segmented--able to deliver message to well-defined audience – Relatively low cost – Limitations » Clutter, easy to tune out Leading Media... Magazines – Growing numbers of special interest magazines, enabling increased customization – Deliver strong visual message to well-defined target audience – Longest life of any medium and benefit from pass-along readership Characteristics of Direct Marketing Communications Infomercials – High-quality, detailed marketing messages – Deliver to well-defined audiences Direct Marketing... Catalogs – High-quality – Highly customizable due to database management Direct Marketing... Direct Mail – Letter, sales brochure – Includes directions for ordering or requesting information – Highly customizable – Limitations » “junk mail” Direct Marketing... E-mail – Offers more opportunity for customization – Quicker exchange of information Direct Marketing Telemarketing – Less cost than in-person selling » $5 per call vs. $250 per call – Immediate 2-way nature--caller can customize the message in accord with the message receiver’s initial response – Limitations: » “junk calls” Characteristics of the Web Opportunity to exchange customized messages and responses instantaneously “Hyper impulsivity” Great potential for bringing the marketing system all together Role of Promotions in Integrated Marketing Communications Promotions are a specific inducement to generate purchase behavior. Consumer promotions Trade promotions Consumer Promotions Free samples Price-oriented programs Cents-off coupons Mail-in refunds Rebates Premiums Tie-ins Continuity programs Contest/sweepstakes Price pacs Bonus pacs Trade Promotions Slotting allowances Co-op advertising Floor planning Temporary price cuts Volume discounts Contests Rounding out IMC: Event Marketing Sponsorships Publicity and Public Relations Formulating the IMC Program 6 M’s Model for Communication Planning 1. Market 2. Mission 3. Message 4. Media 5. Money 6. Measurement 1. Market Analyze the consumer situation in terms of stages in the purchase and consumption process Response hierarchy models – Cognitive stages – Affective stages – Behavioral stages Hierarchy Model: AIDA Stages AIDA Model Cognitive Attention Affective Interest Desire Behavioral Action Hierarchy-of-Effects Model Stages Hierarchy-ofEffects Model Cognitive Awareness Knowledge Affective Liking Preference Conviction Behavioral Purchase Innovation-Adoption Model Stages Cognitive Affective Behavioral Innovation-Adoption Model Awareness Interest Evaluation Trial Adoption Communication Model Stages Communication Model Cognitive Exposure Reception Cognitive Response Affective Attitude Intention Behavioral Behavior Customer Response Index The combination of effects in the customer response hierarchy. Tool for adjusting communications or other marketing tactics. Customer Response Index CRI=% aware x % that comprehend x % that are interested = .63 x .54 x .77 = .26 or 26% Comprehend (54%) Aware (63%) Interested (77%) Intentions (68%) No intentions (32%) Not interested (23%) Don’t comprehend (46%) Unaware (37%) Action (90%) No Action (10%) 2. Mission Communication objectives, related to customer response Build Awareness Message Reinforcement Stimulate Action 3. Message Decisions related to message content, structure, format, and source – – – – What kind of an appeal? One-sided or two-sided message? Peripherals Spokesperson 4. Media Decisions related to media communication channel Decisions related to media exposure – Target market reach – Frequency – Advertising effectiveness » GRPs » CPMs Media Exposure (continued) Decisions related to message reinforcement – Pulsing – Heavy-up message frequency Decisions related to use of consumer promotions 5. Money The optimal marketing communications budget is typically a function of: – The size and heterogeneity of the target audience – Nature of the message – Receptivity of the audience – Amount of clutter Money (continued) Some firms use: – % of expected or previous year’s sales – Competitively based benchmark Spending levels vary greatly across industries and even across firms within the same category 6. Measurement Plan a mechanism for evaluating the effects of communications efforts. Critical input to future spending levels, allocation of the budget across media, and specific communication messages.