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Chapter Seven Marketing Services Making Your Mark in MarCom. Making Your Mark in MarCom.

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Presentation on theme: "Chapter Seven Marketing Services Making Your Mark in MarCom. Making Your Mark in MarCom."— Presentation transcript:

1 Chapter Seven Marketing Services Making Your Mark in MarCom. Making Your Mark in MarCom.

2 Marketing Services n Most Marketing Services relate to Marketing Communications n MarCom for short l Umbrella term for all promotional activities other than advertising. n MarCom services are growing l New ways to market brands, and… l New sources of career opportunities n Most Marketing Services relate to Marketing Communications n MarCom for short l Umbrella term for all promotional activities other than advertising. n MarCom services are growing l New ways to market brands, and… l New sources of career opportunities

3 Marketing Services n Sales Promotion n Direct Marketing n Public Relations n Marketing Research n Event Marketing & Sponsorship n Promotional Products n Sales Promotion n Direct Marketing n Public Relations n Marketing Research n Event Marketing & Sponsorship n Promotional Products

4 Who Performs Marketing Services? n Client Marketing Department n Divisions of mega-agencies l Specialized Agencies l Division within IMC agency n Specialized Agencies or suppliers n Client Marketing Department n Divisions of mega-agencies l Specialized Agencies l Division within IMC agency n Specialized Agencies or suppliers

5 Who Supervises Marketing Services? n At the Marketer, many options l Director of Marketing l Brand Management l Specialized Manager (Promotion, etc.) l MarCom Manager n At Specialized Agencies… l Account Managers, Account Executives l Project Managers n At the Marketer, many options l Director of Marketing l Brand Management l Specialized Manager (Promotion, etc.) l MarCom Manager n At Specialized Agencies… l Account Managers, Account Executives l Project Managers

6 The World of Sales Promotion n How Big is the World of Sales Promotion? l Measured Volume (Fees, etc.) over $100 Billion! l It breaks out this way… n How Big is the World of Sales Promotion? l Measured Volume (Fees, etc.) over $100 Billion! l It breaks out this way… Advertising 52.7% Consumer Promotion 23.4% Trade Promotion 18.4% Other 5.5% Other 5.5%

7 The World of Sales Promotion l Its actually larger… l The biggest categories s Trade discounts s Consumer Savings l …are not included! l Overall, the Volume is HUGE!!! l Its actually larger… l The biggest categories s Trade discounts s Consumer Savings l …are not included! l Overall, the Volume is HUGE!!! Advertising 52.7% Consumer Promotion 23.4% Trade Promotion 18.4% Other 5.5% Other 5.5% n How Big is the World of Sales Promotion? l Measured Volume (Fees, etc.) over $100 Billion! l It breaks out this way… n How Big is the World of Sales Promotion? l Measured Volume (Fees, etc.) over $100 Billion! l It breaks out this way…

8 n Some Top Sales Promotion Agencies The World of Sales Promotion l DraftFCB (Interpublic) s EA, Taco Bell, Dow l Epsilon (Alliance Data Systems) s P&G, Ford, Pepsico l Leo Burnett/Arc Worldwide (Publicis) s McDonalds, Comcast, CocaCola l Wunderman (WPP) s Johnson&Johsnon, Unilever, Ford l Digitas (Publicis) s American Express, Kraft, eBay l DraftFCB (Interpublic) s EA, Taco Bell, Dow l Epsilon (Alliance Data Systems) s P&G, Ford, Pepsico l Leo Burnett/Arc Worldwide (Publicis) s McDonalds, Comcast, CocaCola l Wunderman (WPP) s Johnson&Johsnon, Unilever, Ford l Digitas (Publicis) s American Express, Kraft, eBay

9 n Two Types of Sales Promotion l Trade Promotion (Push ) l Consumer Promotion (Pull ) n Both emphasize Short-Term Sales n Two Types of Incentives l Less = Savings l More = Added Value s More Product (Bonus Pack, BOGO*, etc.) s A Prize (Sweepstakes) s Something else (A Premium, or…) n Two Types of Sales Promotion l Trade Promotion (Push ) l Consumer Promotion (Pull ) n Both emphasize Short-Term Sales n Two Types of Incentives l Less = Savings l More = Added Value s More Product (Bonus Pack, BOGO*, etc.) s A Prize (Sweepstakes) s Something else (A Premium, or…) The World of Sales Promotion

10 Trade Promotions n Point-of-sale

11 Trade Promotions n Dealer contests n Point-of-sale n Merchandising the advertising n Deals and allowances n Co-op advertising n and then theres… n Merchandising the advertising n Deals and allowances n Co-op advertising n and then theres…

12 Consumer Promotions n Coupons/ FSIs (Free Standing Inserts) n Contests, sweepstakes & games n Cents-off promotions n Premiums n Sampling/ Tastings n Rebates n Gift with Purchase

13 Consumer Promotions/ Entertainment Brands n 7-Eleven becomes a Kwik-E-Mart l Promoting The Simpsons Movie s 3 weeks prior to release date 7-11 transformed 12 of its convenience stores into Kwik-E-Marts, featured in the Simpsons fictious town. l Sales doubled in the 12 Kwick-E-Mart stores. n 7-Eleven becomes a Kwik-E-Mart l Promoting The Simpsons Movie s 3 weeks prior to release date 7-11 transformed 12 of its convenience stores into Kwik-E-Marts, featured in the Simpsons fictious town. l Sales doubled in the 12 Kwick-E-Mart stores.

14 n Simply put, direct marketing occurs when you buy direct from a marketer l By returning a coupon l By calling an 800# l By responding to a mail solicitation l By shopping on the Internet l By responding to a telemarketer who called you during dinner n Simply put, direct marketing occurs when you buy direct from a marketer l By returning a coupon l By calling an 800# l By responding to a mail solicitation l By shopping on the Internet l By responding to a telemarketer who called you during dinner The World of Direct Marketing

15 n Sales from Direct Marketing Efforts n 8.7% of total US GDP n 1.3 million direct marketing employees n Sales from Direct Marketing Efforts n 8.7% of total US GDP n 1.3 million direct marketing employees The World of Direct Marketing $1.96 trillion! l add up to… Source: DMA Economic Impact Statement 2003

16 n Sales from Direct Marketing Efforts The World of Direct Marketing Its BIG! n 163 billion in expenditures. Estimated (by the DMA) to be 52.1% of all advertising expenditures. n Whatever the exact amount… n 163 billion in expenditures. Estimated (by the DMA) to be 52.1% of all advertising expenditures. n Whatever the exact amount… Source: DMA Economic Impact Statement 2008

17 n Types of Direct Marketing Companies The World of Direct Marketing l Direct Marketers s Examples: American Express, Lands End l Direct Marketing Agencies s Example: DraftFCB (Interpublic) l Support Services s Examples: Call Centers, Catalog Printers, List Management Services, the Post Office l Direct Marketers s Examples: American Express, Lands End l Direct Marketing Agencies s Example: DraftFCB (Interpublic) l Support Services s Examples: Call Centers, Catalog Printers, List Management Services, the Post Office

18 n CRM = Customer Relationship Marketing n LTV = Lifetime Value l Direct Marketers work to maximize the value of the relationship with their customers, to get the most LTV (Lifetime Value) n Doing all those things is CRM n Increased valuation of current customers is a driving force in marketing today n CRM = Customer Relationship Marketing n LTV = Lifetime Value l Direct Marketers work to maximize the value of the relationship with their customers, to get the most LTV (Lifetime Value) n Doing all those things is CRM n Increased valuation of current customers is a driving force in marketing today The World of Direct Marketing

19 Some Key Reasons for Direct Marketings Growth n Changing consumer lifestyles l Shopping opportunity for time-poor consumers n More consumer credit l Now its easy to buy from a direct marketer n Better Direct Marketing technology l More and better lists of potential customers l Better technology for massaging the database n Big Changes in Media l More cost-efficient media opportunities l The Internet makes direct response easy n Changing consumer lifestyles l Shopping opportunity for time-poor consumers n More consumer credit l Now its easy to buy from a direct marketer n Better Direct Marketing technology l More and better lists of potential customers l Better technology for massaging the database n Big Changes in Media l More cost-efficient media opportunities l The Internet makes direct response easy

20 Consumer Complaints About Direct Marketing Some Current Issues: n Annoyance l List removal option of DMA n Privacy issues l Who owns your information? l Data technology raises new concerns n Unscrupulous practices l Example: Negative option n Major Result – The Do Not Call List. Some Current Issues: n Annoyance l List removal option of DMA n Privacy issues l Who owns your information? l Data technology raises new concerns n Unscrupulous practices l Example: Negative option n Major Result – The Do Not Call List.

21 The Key to Success in Direct Marketing n List Quality is Key n Internal lists l Compiled by organization itself n Internal lists l Compiled by organization itself n External lists l Purchased from s List brokers s List compilers n External lists l Purchased from s List brokers s List compilers

22 Improving Performance n Improve the List n Improve the Offer/Incentive n Improve the Messaging n List Enhancement l Add more information about households on current list l Cleaning the list: the merge-purge function when combining different lists n Continual testing against previous success l Improve results and knowledge n Improve the List n Improve the Offer/Incentive n Improve the Messaging n List Enhancement l Add more information about households on current list l Cleaning the list: the merge-purge function when combining different lists n Continual testing against previous success l Improve results and knowledge

23 n Marketing PR (MPR) l Supports marketing efforts n Marketing PR (MPR) l Supports marketing efforts The World of Public Relations n Corporate PR (CPR) l Deals with broader range of issues, from investor relations to employee communications n Corporate PR (CPR) l Deals with broader range of issues, from investor relations to employee communications

24 Marketing PR: Product Publicity n The Basics: l The Objective - obtaining free time or space in the media that represents favorable mention

25 Marketing PR: Product Publicity n The Basics: l The Objective - obtaining free time or space in the media that represents favorable mention l The Strategy - product publicity, like all PR, must be newsworthy l The Objective - obtaining free time or space in the media that represents favorable mention l The Strategy - product publicity, like all PR, must be newsworthy l The Benefit - the value of implied or third-party endorsement by the media

26 Product Publicity Activities n Press Releases (immediate news) n Technical and Case History stories n Feature stories n Press Tours l Press to Company l Company to Press n Press Releases (immediate news) n Technical and Case History stories n Feature stories n Press Tours l Press to Company l Company to Press

27 Corporate PR Activities (Non-Marketing Related PR ) n Investor Relations n Employee Communications n Government Relations (lobbying) n Crisis Management (oil spills, etc.) n Community Relations n Advocacy Advertising (corporate point of view on public issues) n Investor Relations n Employee Communications n Government Relations (lobbying) n Crisis Management (oil spills, etc.) n Community Relations n Advocacy Advertising (corporate point of view on public issues)

28 n PR Agencies now part of mega-agency groups n Ad Organizations by PR Revenue (2012) PR Agency Ownership l WPP $1.49 billion l Omnicom$1.29 billion l Interpublic$1.21 billion l Publicis $0.53 billion l Havas $0.22 billion n Mergers Continue lY&R now included in WPP totals lOmnicom and Publicis combine for top spot at $1.82 billion. l Omnicom$1.29 billion l Interpublic$1.21 billion l Publicis $0.53 billion l Havas $0.22 billion n Mergers Continue lY&R now included in WPP totals lOmnicom and Publicis combine for top spot at $1.82 billion.

29 n Top Ten PR Agencies in 2012 2012 Net Fees PR Agency Ownership n PR Agencies now part of mega-agency groups l Edelman $655,900,289 l APCO Worldwide$121,800,000 l Waggener Edstrom Worldwide$118,426,000 l W2O Group $62,005,000 l Ruder Finn $56,148,000 l Text 100 Global PR $50,930,028 l MWW Group $42,875,000 l ICR $36,554,283 l DKC $32,896,560 l Finn Partners $32,293,000 ODwyers Magazine, May 2013 l APCO Worldwide$121,800,000 l Waggener Edstrom Worldwide$118,426,000 l W2O Group $62,005,000 l Ruder Finn $56,148,000 l Text 100 Global PR $50,930,028 l MWW Group $42,875,000 l ICR $36,554,283 l DKC $32,896,560 l Finn Partners $32,293,000 ODwyers Magazine, May 2013

30 Look What Happens When It All Works Together! Look What Happens When It All Works Together! Integration & Amplification!

31 Integration & Amplification!

32 n The Business of Evaluation l FEEDBACK is critical nourishment for marketers n The Product is FACT, not opinion l Accurate information gathering is also critical. l Research reputations depend on the dependability of their data n The Business of Evaluation l FEEDBACK is critical nourishment for marketers n The Product is FACT, not opinion l Accurate information gathering is also critical. l Research reputations depend on the dependability of their data The World of Marketing Research

33 n Two types of entities provide this critical marketing information: l Internal Marketing Research Departments s At the marketer s At a full-service agency l Outside Marketing Research Firms s Ongoing services (Nielsen) s Projects (Surveys, focus groups, etc.) n Two types of entities provide this critical marketing information: l Internal Marketing Research Departments s At the marketer s At a full-service agency l Outside Marketing Research Firms s Ongoing services (Nielsen) s Projects (Surveys, focus groups, etc.) The World of Marketing Research

34 Role of Internal Marketing Research Department n Analyze company sales data n Provide short-term and long-term sales and industry projections n Determine what primary research studies need to be carried out n Select and hire outside research firms to conduct surveys and provide other information n Analyze company sales data n Provide short-term and long-term sales and industry projections n Determine what primary research studies need to be carried out n Select and hire outside research firms to conduct surveys and provide other information

35 Types of Outside Marketing Research Firms n Limited-service Research Suppliers l These supply a specific type of data, often to all major marketers. l Syndicated Research (Nielsen TV ratings) l Standardized Research (Gallup & Robinson ad recall pre-testing studies) n Full-service Research Suppliers l Focus Groups and Surveys l Starting from scratch research projects n Limited-service Research Suppliers l These supply a specific type of data, often to all major marketers. l Syndicated Research (Nielsen TV ratings) l Standardized Research (Gallup & Robinson ad recall pre-testing studies) n Full-service Research Suppliers l Focus Groups and Surveys l Starting from scratch research projects

36 n How big is the World of Event Marketing? The World of Event Marketing l Sports sponsorship $13.01 billion

37 n How big is the World of Event Marketing? The World of Event Marketing l Entertainment, tours, attractions $1.93 billion l Sports sponsorship $13.01 billion

38 n How big is the World of Event Marketing? The World of Event Marketing l Causes $1.70 billion l Festivals, fairs and annual events $825 million l Entertainment, tours, attractions $1.93 billion l Sports sponsorship $13.01 billion

39 n How big is the World of Event Marketing? The World of Event Marketing $18.9 billion! l Causes $1.70 billion l Entertainment, tours, attractions $1.93 billion n That all adds up to... l Sports sponsorship $13.01 billion l The Arts $891 million l Festivals, fairs and annual events $825 million l Associations and Memberships $550 million 2012 Sponsorship Spending, Sponsorship.com

40 The World of Event Marketing

41 n Provides opportunities for: l Sampling of product l Widespread publicity in media l Unique connection w. target market n Cause marketing: l A special type of event marketing l Example: Childrens Miracle Network n Provides opportunities for: l Sampling of product l Widespread publicity in media l Unique connection w. target market n Cause marketing: l A special type of event marketing l Example: Childrens Miracle Network The World of Event Marketing

42 n A $16 billion business n Company Brand or Logo l Pens, hats, key rings, etc n Business Gifts l Higher priced items n Many uses: l Sales lead generation, trade shows, awareness building, employee morale, etc. n A $16 billion business n Company Brand or Logo l Pens, hats, key rings, etc n Business Gifts l Higher priced items n Many uses: l Sales lead generation, trade shows, awareness building, employee morale, etc. The World of Promotional Products

43 Who is The Person Who Helps Pull All of This Together? Who is The Person Who Helps Pull All of This Together?

44 The MarCom Manager n Relatively new position - result of IMC. l Title/function more common on West Coast l Evolving as marketers needs evolve n Need to understand all forms of IMC l Jack-of-all-trades promotional skills n Emphasis will vary by industry l High-tech = PR emphasis l Packaged goods = Sales promotion emphasis l Beverages = event and sports marketing emphasis n Relatively new position - result of IMC. l Title/function more common on West Coast l Evolving as marketers needs evolve n Need to understand all forms of IMC l Jack-of-all-trades promotional skills n Emphasis will vary by industry l High-tech = PR emphasis l Packaged goods = Sales promotion emphasis l Beverages = event and sports marketing emphasis

45 n Increased pressure for short-term revenue n Dynamic growth in most areas l Sales Promotion - up 20% l Direct Marketing - up 15% n Increased focus on existing customer LTV l More loyalty programs l More targeted programs l More Customer Relationship Management n Increased pressure for short-term revenue n Dynamic growth in most areas l Sales Promotion - up 20% l Direct Marketing - up 15% n Increased focus on existing customer LTV l More loyalty programs l More targeted programs l More Customer Relationship Management The Future of Marketing Services

46 n New Technologies l Interactive and Information Technology l The Internet affects everybody! l Virtually everyone will practice some form of direct or highly targeted marketing with Internet response. n New Companies l Start-ups - need IMC from ground up l Start-ups will be internal as well as external s Example: Tadcast, a new startup company s Create product placement for online videos s Sponsors contest for best video about (Coca-Colas) new Honest Tea - get the most hits on YouTube. MediaPost News, Jan. 15, 2009 n New Technologies l Interactive and Information Technology l The Internet affects everybody! l Virtually everyone will practice some form of direct or highly targeted marketing with Internet response. n New Companies l Start-ups - need IMC from ground up l Start-ups will be internal as well as external s Example: Tadcast, a new startup company s Create product placement for online videos s Sponsors contest for best video about (Coca-Colas) new Honest Tea - get the most hits on YouTube. MediaPost News, Jan. 15, 2009 The Future of Marketing Services

47 n Economics of Scale l Large Mega-agencies will have more resources l Large marketers will want more programs n Competition l All marketing services activity will increase l Competition between services will also increase n More Diversity l Not just in population, but marketing approach l Managing all of this will be a huge challenge! n Economics of Scale l Large Mega-agencies will have more resources l Large marketers will want more programs n Competition l All marketing services activity will increase l Competition between services will also increase n More Diversity l Not just in population, but marketing approach l Managing all of this will be a huge challenge! The Future of Marketing Services

48 In Conclusion… In Conclusion… Can Make Your Mark in MarCom. Can Make Your Mark in MarCom. You You

49 Questions & Discussion n Sales Promotion n Direct Marketing n Public Relations n Marketing Research n Event Marketing n Promotional Products n Sales Promotion n Direct Marketing n Public Relations n Marketing Research n Event Marketing n Promotional Products

50 n Independent companies that buy media time and space for advertisers n Originally, an alternative to the media department of a full-service ad agency n Evolved as media choices proliferated and media buying became more complicated n Now mega-agencies have unbundled their media departments to create competing media buying services n Independent companies that buy media time and space for advertisers n Originally, an alternative to the media department of a full-service ad agency n Evolved as media choices proliferated and media buying became more complicated n Now mega-agencies have unbundled their media departments to create competing media buying services The World of Media Buying Services

51 n The Pioneer: Dennis Holt builds Western into #1 The World of Media Buying Services l Bought by Interpublic l Merged with Initiative l Becomes model for all agencies l Bought by Interpublic l Merged with Initiative l Becomes model for all agencies The World of Media Agencies nWPP combines Ogilvy and JWT Media Departments to form MindShare n Leo Burnett turns their Media Department into StarCom n Unbundling continues… nWPP combines Ogilvy and JWT Media Departments to form MindShare n Leo Burnett turns their Media Department into StarCom n Unbundling continues…


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