Communicating Customer Value Advertising and Public Relations Chapter 12

Rest Stop: Previewing the Concepts Define the five promotion mix tools for communicating customer value. Discuss the changing communications landscape and the need for integrated marketing communications. Describe and discuss the major decisions involved in developing an advertising program. Explain how companies use public relations to communicate with their publics. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

First Stop Unilever Integrates Digital & Traditional Media Implementation How They Do It: Innovative Web sites, viral videos, and “webisodes” represent key digital content. Real, funny TV ads pull viewers to Web sites to build consumer involvement with brand. Public relations gets clips aired on talk shows. Results: The key benefit of all integrated efforts is termed “superdistribution,” which means digital clips are picked up and shown by other media for free. “Evolution” created $200 million in free media coverage. Background About Unilever: World’s # 2 advertiser spends $5.3 billion on global advertising and promotion. Less is being spent on traditional media; more is being invested in online and digital. Recognition: Unilever was named digital marketer of the year by Advertising Age. However, Unilever does not run digital campaigns in isolation of other media; rather, digital is integrated with traditional media. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall The Promotion Mix Promotion mix (also called marketing communications mix): Specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall The Promotion Mix The company’s total promotion mix consists of a specific blend of: Advertising. Sales promotion. Public relations. Personal selling. Direct marketing. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Integrated Marketing Communications Several factors are changing the face of marketing communications: Consumers. Marketing strategies. Communication technology. These factors have shifted the marketing communications model so that firms are doing less broadcasting and more narrowcasting. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Integrated Marketing Communications Integrated marketing communications (IMC) defined: Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling message about the organization and its products. A strong need for integrated marketing communications exists. Marketers must understand each promotion tool when shaping the marketing communications mix. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Shaping the Overall Promotion Mix Nature of advertising: Can reach masses of geographically dispersed buyers at a low cost per exposure. Can repeat a message many times. Consumers view advertised products as more legitimate. Is impersonal, one-way communication. Can be very costly for some media types. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Shaping the Overall Promotion Mix Nature of personal selling: Involves personal interaction between two or more people. Most effective tool at building preferences, convictions, and actions. Allows relationship building and two-way communication. Requires long-term commitment to sales force. Most expensive promotion tool. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Shaping the Overall Promotion Mix Nature of sales promotion: Includes a wide assortment of tools. Attracts consumer attention. Can be used to dramatize product offers. Offers strong incentives to buy. Invites and rewards quick consumer response. Effects are short-lived. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Shaping the Overall Promotion Mix Nature of public relations: Very believable. Reaches people who avoid salespeople and ads. Can dramatize a company or product. Tends to be used as an afterthought. Planned use can be effective and economical. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Shaping the Overall Promotion Mix Nature of direct marketing: Many forms of direct marketing exist. Direct marketing forms share four primary characteristics: Less public. Immediate. Customized. Interactive. Well suited to highly targeted marketing. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Promotion Mix Strategies Push strategy: Promotion strategy that calls for using the sales force and trade promotion to push the product through channels. Pull strategy: Promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Advertising Advertising has been used for centuries. U.S. advertisers spend more than $290 billion each year; worldwide spending exceeds $604 billion. Advertising is used by: Business firms. Not-for-profit organizations. Professionals. Social agencies. Government. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Setting advertising objectives. Setting the advertising budget. Developing advertising strategy. Evaluating advertising campaigns. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Advertising objective: A specific communication task to be accomplished with a specific target audience during a specific period of time. Overall advertising goal is to help build customer relationships by communicating customer value. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Advertising objectives can be classified by purpose: Informative advertising. Persuasive advertising. Comparative advertising (a special type of persuasive advertising). Reminder advertising. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Setting the advertising budget: Affordable method. Percentage-of-sales method. Competitive-parity method. Objective-and-task method. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Developing advertising strategy: Creating advertising messages. Message strategy and message execution must break through the clutter. Advertising is being merged with entertainment. Selecting advertising media. Set reach, frequency, and impact goals. Choose among major media types. Select specific media vehicles. Decide on media timing. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Planning the message strategy: Identify customer benefits that can be used as advertising appeals. Develop compelling creative concept—the “big idea.” Choose an advertising appeal that is: Meaningful. Believable. Distinctive. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Message Execution Styles: Slice of Life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence Testimonial evidence or endorsement Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Message execution process: Choose the execution style. Choose a tone. Use memorable, attention-getting words. Choose format elements: Illustration. Headline. Copy. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Consumer-generated messages: Tapping consumers for message ideas or actual ads can involve: Searching existing Web video sites. Holding contests or inviting consumers to submit ad message ideas and videos. Benefits of consumer-generated messages: Collects new ideas and fresh brand perspectives at relatively little expense. Boosts consumer involvement and gets consumers talking and thinking about the brand. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Steps in advertising media selection: Deciding on reach, frequency, impact. Choosing among media types. Selecting specific media vehicles. Deciding on media timing. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Deciding on reach, frequency, impact: Reach: Percentage of people exposed to ad campaign in a given time period. Frequency: Number of times a person is exposed to advertisement. Media Impact: The qualitative value of a message exposure through a given medium. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Each media type has specific advantages and disadvantages. Choosing among media types requires consideration of the: Medium’s impact Message effectiveness Cost The media mix should be regularly reexamined. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Media vehicles: Specific media within each general media type, such as Newsweek. Factors to consider when choosing vehicles: Cost. Audience quality. Audience engagement. Editorial quality. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Advertising Decisions Marketers must also decide on media timing, or how to schedule the advertising over the course of a year. Follow seasonal pattern. Oppose seasonal pattern. Same coverage all year. Choose the pattern of the ads: Continuity. Pulsing. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Evaluating Advertising and Return on Advertising Investment The net return on advertising investment divided by the costs of the advertising investment. Evaluating advertising involves: Measuring the communication effects of an ad or campaign. Measuring the sales and profit effects of the ad campaign. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Other Advertising Considerations Organization of ad function: Small companies—one person in firm. Large companies—ad department that may also work with an ad agency. Advertising agencies employ specialists who perform ad tasks better then the company’s own staff can. Bring outside viewpoints to problem-solving. Wide range of experience. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Other Advertising Considerations International advertising issues: To what degree should global advertising be adapted to various countries? Greater need for standardization of global brand advertising strategies. Specific advertising programs must usually be adapted to local cultures and other factors. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Public Relations Public relations: Building good relations with the firm’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Public Relations Public relations departments perform the following functions: Press relations or press agency. Product publicity. Public affairs. Lobbying. Investor relations. Development. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Public Relations Role and Impact May strongly impact public awareness at a lower cost than advertising. Can yield spectacular results. Is beginning to play an increasingly important brand-building role. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Public Relations Tools News Speeches Special events Written materials Audiovisual materials Corporate identity materials Public service activities Buzz marketing & social networking Company Web site Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Rest Stop: Reviewing the Concepts Define the five promotion mix tools for communicating customer value. Discuss the changing communications landscape and the need for integrated marketing communications. Describe and discuss the major decisions involved in developing an advertising program. Explain how companies use public relations to communicate with their publics. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall