Chapter 17 Consumer Behavior and Promotion Strategy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

17-2  Marketers develop promotions to communicate information about their products and to persuade consumers to buy them.  The four major types of promotion being advertising, sales promotions, personal selling, and publicity.  Successful products and brands require promotions to create and maintain a differential advantage over their competitors. Types of Promotion

17-3 Advertising  Any paid, nonpersonal presentation of information about a product, brand, company, or store; may be conveyed via a variety of media.  Usually has an identified sponsor.  Characterized as image management, which involves creating and maintaining images and meanings in consumers’ minds.  Goal is to influence consumer’s purchase behavior.

17-4  Direct inducements to the consumer to make a purchase.  Difficult to define sales promotions due to many types.  Key aspect of sales promotions is to “move the product today, not tomorrow.”  Most sales promotions are oriented at changing consumers’ immediate purchase behaviors.  Coupons remain the most popular form of sales promotions. Sales Promotion

17-5 Personal Selling  Direct interactions between a potential buyer and a salesperson.  May increase consumers’ involvement with the product and/or decision process.  Interactive communication allows salespeople to adapt their sales presentation to individual customer needs.

17-6 Personal Selling (cont.)  Certain consumer products are traditionally promoted through personal selling.  Personal selling by telephone, or telemarketing, has become popular.  Direct mail has also increased in popularity to counteract increasing restrictions on telemarketing.

17-7  Any unpaid form of communication about the marketer’s company, products, or brands.  Can either be positive or negative.  Can sometimes be more effective than advertising because consumers may not screen out the messages so readily.  Can be considered more credible than advertising as it is not presented by the marketing organization.  Is difficult to manage. Publicity

17-8  A coherent overall promotion strategy must be developed to integrate the four types of promotions into an effective promotion mix.  A controversy continues about the relative importance of advertising vs. sales promotions.  Evidence indicates that advertising has a declining influence on consumers’ behaviors due to various factors such as hectic lifestyle and time pressures.  The promotion mix of the future is likely to be more eclectic with options such as event sponsoring, sports marketing, direct marketing, and public relations. The Promotion Mix

17-9 Exhibit A General Model of the Communication Process for Promotions

17-10 Goals of Promotion Communications  Consumers must have a recognized need for the product category or product form.  Consumers must be aware of the brand.  Consumers must have a favorable brand attitude.  Consumers must have an intention to purchase the brand.  Consumers must perform various behaviors to purchase the brand.

17-11 The Promotion Environment  Includes all stimuli associated with the physical and social environment in which consumers experience promotion strategies.  Two environmental factors can influence advertising and sales promotion strategies.  Promotion clutter  Level of competition

17-12 Promotion Clutter  Is the growing number of competitive strategies in the environment.  Clutter created by multiple ads during commercial breaks and between TV programs will reduce the communication effectiveness of each ad.  Also affects other types of promotion strategies, especially sales promotions.

17-13 Level of Competition  Comparative advertising, featuring direct comparisons with competitive brands, has become more common.  In fiercely competitive environments, promotion often becomes the key element in the marketers’ competitive arsenal.

17-14 Promotion Affect and Cognition  Interpretation of promotion communications and integration processes are extremely important.  Consumers’ comprehension processes vary in depth and elaboration, depending on their levels of knowledge and involvement.  It is important to know the consumers’ attitudes toward ads and the persuasion processes to understand the effects of advertising.

17-15 Attitude Toward the Ad  The affective evaluations of the ad itself can influence attitudes toward the advertised product or brand.  A positive attitude toward an ad may not always lead to increased purchase of the brand.

17-16 The Persuasion Process  Persuasion refers to the changes in beliefs, attitudes, and behavioral intentions caused by a promotion communication.  The Elaboration Likelihood Model (ELM)  Identifies two cognitive processes by which promotion and communication can persuade consumers.  Also distinguishes between two types of information in the promotion communication.

17-17 Exhibit Two Routes to Persuasion in the ELM

17-18 Promotion Behaviors  Different types of promotions can be used to influence the various behaviors in the purchase– consumption sequence.  Information contact  Word-of-mouth communication with other consumers

17-19 Information Contact  Information contact with promotions may be intentional or incidental.  Placing information in consumers’ environments may be easy when target consumers can be identified accurately.  Contact for personal selling promotions can be achieved through cold calls, referrals, and leads.  Telemarketing is a popular and increasingly controversial method of information contact.

17-20 Word-of-Mouth Communication  Helps spread awareness beyond those consumers who come into direct contact with the promotion.  Placing promotion information in consumers’ environments, increases the probability that the information will be communicated to other consumers.

17-21 Managing Promotion Strategies  Four key activities  Analyze consumer–product relationships  Determine the promotion objectives and budget  Design and implement a promotion strategy  Evaluate effects of the promotion strategy

17-22 Analyze Consumer - Product Relationships  Requires identifying the appropriate target markets for the product.  Marketers must strive to understand the relationship between their target consumers and the product or brand of interest.

17-23 Exhibit The Foote, Cone & Belding Grid for Analyzing Consumer–Product Relationships

17-24 Determine Promotion Objectives and Budget  Promotion strategies may be designed to meet one or more of the following objectives  Influence behaviors.  Create new knowledge, meanings, or beliefs about the product or brand in consumers’ memories.  Transform affective responses.  Increase the activation potential of the brand name or some other product meaning in consumers’ memories.

17-25  Before designing a promotion strategy, marketers should determine their specific promotion objectives and the budget available to support them.  Some promotions have multiple objectives.  Some promotions are designed to first influence consumers’ cognitions in anticipation of a later influence on their overt behaviors. Determine Promotion Objectives and Budget

17-26 Exhibit An Analysis of Consumer Vulnerability

17-27 Design and Implement a Promotion Strategy  Designing promotion strategies  Appropriate promotions depend on the type of relationship consumers have with the product or brand, especially their intrinsic self-relevance.  Promotion methods vary in their effectiveness for achieving certain objectives.  Promotion objectives will change over a product’s life cycle.

17-28  Developing advertising strategy  Marketers should specify the advertising strategy in terms of the type of relationship the consumer will have with the product or brand.  The MECCAS model can helps marketers understand the key aspects of an ad strategy and make better strategic decisions.  Marketers can use the MECCAS model to translate several means–end chains into possible ad strategies, which can then be evaluated for their competitive advantages. Design and Implement a Promotion Strategy

17-29 Exhibit The MECCAS Model

17-30 Exhibit A Model of the Personal Selling Process

17-31 Evaluate Effects of the Promotion Strategy  Involves comparing its results with the objectives.  Determining promotion effects can be difficult.  Promotion objectives stated in behavior terms can be hard to evaluate.  In some cases, evaluation of promotion effects can be relatively straight-forward.

17-32 Measuring Advertising Effects  A wide variety of approaches such as pretesting and copy testing have been taken to measure advertising effects.  Three broad criteria used as indicators of advertising effectiveness are:  Sales  Recall  Persuasion

17-33 Summary  Knowledge about consumers’ affect and cognitions, behaviors, and environments can be used by marketers in developing more effective promotion strategies.  The four types of promotions are advertising, sales promotions, personal selling, and publicity.  The basic communication model can be used to create promotions as forms of marketing communications.

17-34 Summary (cont.)  Promotion clutter and level of competition can influence advertising and sales promotion strategies.  Information contact and word-of-mouth communication with other consumers are critical to the success of promotion strategies.  Developing and implementing effective promotion strategies entails four key activities.

17-35 Summary (cont.)  Described the various goals and objectives marketers may have for promotion strategies.  Looked at two special models for developing advertising strategies and personal selling strategies.  Discussed how to evaluate the effectiveness of promotion strategies.