Marketing Communications & Direct Marketing Chapter 16

The Communication Process Sender Message Channel of communication Receivers Encoding process Decoding process Discuss all aspects, including: sender, receiver, channel of communication, encoding and decoding, field of experience (similar understanding and knowledge), response (impact of message on receiver’s knowledge, attitudes, or behaviors), feedback (sender’s interpretation of the response).

Promotional Elements Advertising Personal Selling Public Relations Example: Commercials Advantages Disadvantages Personal Selling Public Relations Annual reports Publicity Adv.: Can reach a large # of people, can control message easier Disadv: Expensive costs, hard to get feedback PS- 2-way flow of information designed to influence a purchase Adv.: Easier to modify the message Disadv.: Expensive, what if get wrong salespeople? PR- Seeks to influence beliefs or opinions held by stakeholders Publicity- Nonpersonal, indirectly paid presentation of a company, good, or service Adv.: Credibility Disadv.: Lack of control (message, audience, times ran)

Promotional Elements Sales Promotion Direct Marketing Example: Coupons Advantages Disadvantages Direct Marketing Direct mail, catalogs Sales Promotion: A S-T inducement of value offered to arouse interest in buying a good or a service Advantage:S-T can stimulate sales Disadv.: Temporary if S-T; if long-tern, lose effectiveness DM- Direct communication with consumers to get them to place an order, ask or more info, or visit a retail outlet Adv.: Interactive, custom presentations Disadv.: Need up-to-date database (time and cost), privacy issues

Promotional Mix The Target Market The Product Life Cycle Product Characteristics Complexity Degree of risk Ancillary services TM- B2C- Mass marketing; B2B- Trade journals; Intermediaries- Personal selling Intro- Make them aware of product Growth- Buy instead of substitutes. Personal selling to get channels; advertising- brand loyalty Maturity- Remind customers of product; Promotions (price cuts, coupons); Direct Marketing (Mailings)

Promotional Mix Stages of Buying Decision Channel Strategies Prepurchase stage Purchase stage Postpurchasing Channel Strategies Push Pull Prepurch- Advertising (info); sales promotion (coupons) Purchase- Sales promotion (displays, rebates) Postpurch- Personal contact and advertising (assurance). Push- Direct promotions at channel members Pull- aim at customers, they buy from retailers, who need more stock from warehouses, etc.

Marketing Program Developing the Program Executing the Program Evaluating the Program

Developing the Program Identify the Target Audience What Should the Program Accomplish? Hierarchy of effects Setting the Promotion Budget Percentage of sales Competitive parity All you can afford Objective and task HoE- Awareness, Interest, Evaluation, Trial, Adoption % sales- Easy; but if sales dip then you will lose money. Comp. parity- Look at competition All you can afford- Leftovers Objective and task- Looks at goals and what needs to be done to reach them

Developing the Program Select Promotional Tools What combination? Designing the Promotion Example: Advertising and humor Scheduling the Promotion

Executing and Evaluation Posttests Databases

Direct Marketing 2001 Expenditures: $205 billion 2001 Revenues: $1.9 trillion 2005 Revenues: $2.7 trillion

Direct Marketing Value Issues Consumers Sellers Technological Global Ethical Consumers- Stay at home; cheaper; 24-hour; more private than store; Sellers: Direct orders (Contain all info buyers need to purchase); lead generation (Result of an offer designed to generate interest and request more info); traffic generation (outcome of an offer designed to motivate people to visit business Tech- Dbs Global- Not everyone has developed telephone and internet access Ethical- Privacy