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Customer CommunicationChapter 16
Copyright © 2015 Pearson Education, Inc.Learning Objectives Describe the three major tasks in crafting a communication strategy and identify four important legal aspects of marketing communication Identify the major types of advertising, the most common advertising appeals, and the most important advertising media Explain how direct marketing differs from advertising and identify the major forms of direct media Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Learning Objectives Describe consultative selling and explain the personal selling process Define sales promotion and identify the major categories of consumer and trade promotions Explain the uses of social media in customer communication and the role of public relations Copyright © 2015 Pearson Education, Inc.
Customer Communication: Challenges, Strategies, and IssuesSocial Communication Model An approach to communication based on interactive social media and conversational communication styles Various technologies have enabled and inspired a new approach to customer communication. In contrast to the “we talk, you listen” mindset of the past, this new social communication model is interactive and conversational. Today’s audiences are no longer passive recipients of messages; instead, they demand to be active participants in a meaningful conversation. On the surface, this approach might look like it has just added a few new electronic media tools to the traditional arsenal of television, radio, newspapers, and magazines. Copyright © 2015 Pearson Education, Inc.
Customer Communication: Challenges, Strategies, and Issues (cont.)Establish clear communication goals Define compelling messages to help Achieve those goals, and outline a cost-effective media mix to engage target audiences. In this new world of interactive communication, it’s more vital than ever to have a strategy that (1) establishes clear communication goals, (2) defines compelling messages to help achieve those goals, and (3) outlines a cost-effective media mix to engage target audiences. Copyright © 2015 Pearson Education, Inc.
Establishing Clear Communication GoalsGenerating awareness Providing information and creating positive emotional connections Building preference Stimulating action Reminding past customers Communication activities can help companies meet a wide range of marketing objectives, but only if these activities are crafted with clear and specific goals based on where the target audience is in the purchasing cycle. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.The Social Model of Customer Communication Exhibit 16.1 The new social model of customer communication differs from the conventional promotion model in a number of significant ways. Copyright © 2015 Pearson Education, Inc.
Defining Customer MessagesCore Message The single most important idea an advertiser hopes to convey to the target audience about its products or the company After establishing communication goals, the marketer’s next step is to define the core message. This is the single most important idea the company hopes to convey to the target audience about a product. Ideally, the message can be expressed in a single sentence, such as “Introducing the HP Z1, the world’s first all-in-one workstation with a 27″ (diagonal) display that snaps open to let you swap out parts and make upgrades. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Communication Communication Mix A blend of communication vehicles— advertising, direct marketing, personal selling, sales promotion, social media, and public relations—that a company uses to reach current and potential customers With clear goals and a compelling message, the next step is to share that message using a communication mix, also known as a media mix or promotional mix, through some combination of advertising, direct marketing, personal selling, sales promotion, social media, and public relations. Crafting the optimal mix is one of the toughest decisions marketing managers face and requires constant monitoring as markets and media choices evolve. Copyright © 2015 Pearson Education, Inc.
Assembling the Communication MixPush Strategy A promotional strategy that focuses on intermediaries, motivating them to promote, or push, products toward end users Pull Strategy A promotional strategy that stimulates consumer demand via advertising and other communication efforts, thereby creating a pull effect through the channel A key decision is whether to focus communication efforts on the intermediaries or on final customers. With a push strategy, a producer focuses on intermediaries, trying to persuade wholesalers or retailers to carry its products and promote those products to their customers. Conversely, with a pull strategy, the producer appeals directly to end customers. Customers learn of the product through these communication efforts and request it from retailers (in the case of consumers) or wholesalers (in the case of business customers). Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.The AIDA Model of Persuasive Communication Exhibit 16.2 With the AIDA model, marketers craft one or more messages to move recipients through four stages of attention, interest, desire, and action. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Message Integration in Customer Communication Exhibit 16.3 To maximize efficiency and consistency, companies need to integrate their customer communication efforts. However, customers also integrate messages on the receiving end—including messages that might contradict messages from the company. Copyright © 2015 Pearson Education, Inc.
Assembling the Communication MixIntegrated Marketing Communications (IMC) A strategy of coordinating and integrating communication and promotion efforts with customers to ensure greater efficiency and effectiveness With the number of communication vehicles continuing to expand, the need for companies to “speak with one voice” becomes even greater. Integrated marketing communications (IMC) is a strategy of coordinating and integrating all communication and promotional efforts to ensure clarity, consistency, and maximum communications impact. However, companies obviously can’t control all the messages their target audiences receive, particularly now that customers are empowered through social media. Copyright © 2015 Pearson Education, Inc.
Communication Laws and EthicsMarketing and sales messages must be truthful and non-deceptive You must back up your claims with evidence “Bait and switch” advertising is illegal Marketing messages and websites aimed at children are subject to special rules Marketing and sales messages are considered binding contracts in many states. In most cases, you can’t use a person’s name, photograph, or other identity without permission Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Advertising Advertising The delivery of announcements and promotional messages via time or space purchased in various media Advertising can be defined as the “placement of announcements and persuasive messages in time or space purchased in any of the mass media.” In other words, advertisers buy time on radio or television and space in print and online media. Two key points here are that advertising is paid for and that it is carried by someone else’s medium. (Companies sometimes own the media in which they advertise, but this is not the usual case.) Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Advertising Institutional Advertising Advertising that seeks to create goodwill and to build a desired image for a company, rather than to promote specific products Advocacy Advertising Advertising that presents a company’s opinions on public issues such as education or health care Institutional advertising is designed to create goodwill and build a desired image for a company rather than to promote specific products. For example, a firm might promote its commitment to sustainable business practices or workforce diversity. Institutional ads that address public issues are called advocacy advertising. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Advertising Appeals Advertising Appeal A creative tactic designed to capture the audience’s attention and promote preference for the product or company being advertised Logic, emotion, humor, celebrity, sex, music, scarcity A key decision in planning a promotional campaign is choosing the advertising appeal, a creative tactic designed to capture the audience’s attention and promote preference for the product or company being advertised. Marketers can choose from seven basic appeals (note that these appeals are not limited to advertising; they are used in other types of persuasive communication as well). Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Advertising Media Advertising Media Communication channels, such as newspapers, radio, television, and the World Wide Web Media Mix A combination of print, broadcast, online, and other media used for an advertising campaign Choosing advertising media, or channels of communication, can be as important as selecting the type of advertising and the advertising appeal. Major advertising media include newspapers, television, radio, magazines, billboards, fixed web (from computers), and mobile web (from mobile phones and other handheld devices). A media plan outlines the advertising budget, the schedule of when ads will appear, and a discussion of the media mix—the combination of print, broadcast, online, and other media to be used in the campaign. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Direct Marketing Direct Marketing Direct communication other than personal sales contacts designed to stimulate a measurable response Mail, , search engine marketing, direct response online, telephone, and direct response television Although it is similar to advertising in many respects, direct marketing, defined as direct communication with potential customers other than personal sales contacts, can differ from advertising in three important ways; First, direct marketing often uses personally addressable media such as letters and messages to deliver targeted messages to individual consumers or organizational purchasers. Second, except for infomercials, direct marketing doesn’t involve the purchase of time or space in other media. The advertiser usually has control over the delivery mechanism and can decide when, where, and how the message is delivered. Third, direct marketing has a direct response aspect that often isn’t present in advertising. Although effective direct marketing works to build lasting relationships with customers, its primary emphasis is generating sales now. Copyright © 2015 Pearson Education, Inc.
Direct Marketing MediaSearch Engine Marketing Automated presentation of ads that are related to either the results of an online search or the content being displayed on other web pages With millions of web users relying on search engines such as Google and Bing every day, search engine marketing, or search advertising, has become an important marketing medium. Although it doesn’t quite fit the traditional categories of either advertising or direct marketing, search engine marketing comes closer to being a direct medium because it is individualized to each web user. Copyright © 2015 Pearson Education, Inc.
Direct Marketing Media (cont.)Direct Response Television The use of television commercials and longer format infomercials that are designed to stimulate an immediate purchase response from viewers More commonly known as infomercials, direct response television programs have the major advantage of time, allowing companies to demonstrate products and engage viewers in a way that isn’t possible with 30- or 60-second commercials. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Personal Selling Personal Selling One-on-one interaction between a salesperson and a prospective buyer Consultative Selling An approach in which a salesperson acts as a consultant and advisor to help customers find the best solutions to their personal or business needs Even with the rapid advance of e-commerce and other marketing technologies, personal selling, the one-on-one interaction between a salesperson and a prospective buyer, remains a fundamentally important part of the promotional mix in many consumer and organizational markets. Although a salesforce can’t reach millions of customers at once like a website or a direct marketing program can, today’s highly trained sales professionals are able to build relationships and solve problems in ways that impersonal media can’t match. One of the most important shifts in the sales profession is the advent of consultative selling, in which the salesperson acts as a consultant and advisor who helps current and potential customers find the best solutions to their personal or business needs. And even if a shopper isn’t ready to buy something immediately, a good consultative salesperson will view the interaction as a chance to build a long-term relationship that could lead to sales in the future. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.The Personal-Selling Process Exhibit 16.6 The personal-selling process can involve up to seven steps, starting with prospecting for sales leads and ending with following up after the sale has been closed. This diagram gives you a general idea of how salespeople approach major sales opportunities. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Sales Promotion Sales Promotion A wide range of events and activities designed to promote a brand or stimulate interest in a product Sales promotion consists of short-term incentives to build the reputation of a brand, encourage the purchase of a product, or simply enhance relationships with current and potential customers. Sales promotion consists of two basic categories: consumer promotion and trade promotion. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Consumer Promotions Coupons Printed or electronic certificates that offer discounts on particular items and are redeemed at the time of purchase Rebates Partial reimbursement of price, offered as a purchase incentive The biggest category of consumer promotion is coupons, printed or electronic certificates that spur sales by giving buyers a discount when they purchase specified products. Couponing is an inefficient and often risky strategy, however. With paper coupons, consumers redeem only a tiny fraction of the billions of printed coupons distributed every year in the United States. With rebates, companies offer partial reimbursement of the price as a purchase incentive. Rebates can be an effective tool for boosting sales, but they obviously cut into per-unit profits—and the effect can be more or less permanent when frequent rebates in an industry encourage buyers to delay purchases until a rebate program is available. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Consumer Promotions Point-of-Purchase (POP) Display Advertising or other display materials set up at retail locations to promote products to potential customers as they are making their purchase decisions Premiums Free or bargain-priced items offered to encourage consumers to buy a product A point-of-purchase (POP) display is an in-store presentation designed to stimulate immediate sales. POP displays are a vital element in the marketing effort for many products sold at retail stores. Not only do they represent the manufacturer’s last chance to communicate with the consumer, but they help capture impulse purchases—unplanned purchases that can make up as much as 50 percent of sales in mass merchandise stores and supermarkets. Other popular consumer sales promotion techniques include in-store demonstrations, loyalty and frequency programs such as frequent-flyer programs, and premiums, which are free or bargain-priced items offered to encourage the consumer to buy a product. Copyright © 2015 Pearson Education, Inc.
Consumer Promotions (cont.)Specialty Advertising Advertising that appears on various items such as coffee mugs, pens, and calendars, designed to help keep a company’s name in front of customers Specialty advertising (on pens, calendars, T-shirts, mouse pads, and other items) helps keep a company’s name in front of customers for a long period of time. Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Trade Promotions Trade Promotions Sales-promotion efforts aimed at inducing distributors or retailers to push a producer’s products Trade Allowances Discounts or other financial considerations offered by producers to wholesalers and retailers Although shoppers are more aware of consumer promotions, trade promotions aimed at inducing wholesalers or retailers to sell a company’s products actually account for the larger share of promotional spending and can be the single largest item in a manufacturer’s marketing budget. The most popular trade promotions are trade allowances, which involve discounts on product prices, free merchandise, or other payments, such as the retail slotting allowances mentioned in Chapter 15. Copyright © 2015 Pearson Education, Inc.
Social Media and Public RelationsAny electronic media that transforms passive audiences into active participants in the communication process by allowing them to share content, revise content, respond to content, or contribute new content Social media are any electronic media that transform passive audiences into active participants in the communication process by allowing them to share, revise, or respond to existing content, or to contribute new content. These media include social networks, blogs, microblogging services such as Twitter, wikis, user-generated content (UGC) sites such as Flickr and YouTube, community Q&A sites such as Get Satisfaction’s customer support sites, community participation websites such as Yelp, and content curation sites such as Pinterest. To varying degrees, all of these media play a role in contemporary marketing. Copyright © 2015 Pearson Education, Inc.
Social Media and Public RelationsWord of Mouth Communication among customers and other parties, transmitting information about companies and products through online or offline personal conversations Social media are any electronic media that transform passive audiences into active participants in the communication process by allowing them to share, revise, or respond to existing content, or to contribute new content. These media include social networks, blogs, microblogging services such as Twitter, wikis, user-generated content (UGC) sites such as Flickr and YouTube, community Q&A sites such as Get Satisfaction’s customer support sites, community participation websites such as Yelp, and content curation sites such as Pinterest. To varying degrees, all of these media play a role in contemporary marketing. However, viral marketing is not really an accurate metaphor. Real viruses spread from host to host on their own, whereas word-of-mouth marketing spreads voluntarily from person to person. The distinction is critical because marketers need to give people a good reason—good content, in other words—to pass along their messages. Copyright © 2015 Pearson Education, Inc.
Social Media and Public Relations (cont.)Conversation Marketing An approach to customer communication in which companies initiate and facilitate conversations in a networked community of potential buyers and other interested parties Audiences in the social media environment are not willing to be passive recipients in a structured, one-way information delivery process—or to rely solely on promotional messages from marketers. This notion of interactive participation is the driving force behind conversation marketing, in which companies initiate and facilitate conversations in a networked community of customers, journalists, bloggers, Twitter users, and other interested parties. Social media can be a powerful communication channel, but companies should follow these guidelines in order to meet audience expectations. Copyright © 2015 Pearson Education, Inc.
Social Media and Public Relations (cont.)Brand Communities Formal or informal groups of people united by their interest in and ownership of particular products Another major impact of social media has been the rapid spread of brand communities, people united by their interest in and ownership of particular products. These communities can be formal membership organizations, such as the longstanding Harley Owners Group (HOG), or informal networks of people with similar interests. They can be fairly independent from the company behind the brand or can have the active support and involvement of company management, as is the case of Harley-Davidson’s support of the motorcycle enthusiasts who are members of HOG (hog is an affectionate nickname for a Harley). Copyright © 2015 Pearson Education, Inc.
Copyright © 2015 Pearson Education, Inc.Public Relations Public Relations Non-sales communication that businesses have with their various audiences (including both communication with the general public and press relations) Public relations encompasses a wide variety of non-sales communications that businesses have with their many stakeholders, including communities, investors, industry analysts, government agencies, and activists. Companies rely on public relations to build a favorable corporate image and foster positive relations with all these groups. Copyright © 2015 Pearson Education, Inc.
Public Relations (cont.)Press Release A brief statement or video program released to the press announcing new products, management changes, sales performance, and other potential news items also called a news release Two standard tools for communicating with the media are the press release and the press conference. A traditional press release is a short message sent to the media covering topics that are of potential news interest; a video news release is a brief video clip sent to television stations. Companies use news releases in the hopes of getting favorable news coverage about themselves and their products. Copyright © 2015 Pearson Education, Inc.
Public Relations (cont.)Press Conference An in-person or online gathering of media representatives at which companies announce new information also called a news conference When a business has significant news to announce, it will often arrange a press conference, at which reporters can listen to company representatives and ask questions. Copyright © 2015 Pearson Education, Inc.
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