The marketing mix The marketing communications mix Step 5: Design the marketing strategy

1. The marketing mix The marketing communications mixStep 5: Design the marketing strategy

2. When we finish this lecture you should • Understand why a marketing manager should specify objectives to guide the advertising effort • Know when the various types of advertising are appropriate and how to select the best advertising medium • Know how to plan the best message or copy strategy • Understand some of the issues relevant to international advertising • Recognise the role and importance of direct marketing • Understand the nature and variety of sales promotions • Understand the reason for the growth of sponsorship in Australasia • Know the principles of public relations and publicity

3. The marketing communications mix • Various categories of promotional tools available to marketers—all contributing to the role of the whole marketing communications mix—a combination of • Advertising • Direct-response promotion • Sales promotion • Publicity • Public relations • Personal selling

4. Advertising • Marketing managers must decide • Who is their target audience • What kind of advertising to use • How to reach customers (via which types of media) • What to say to them (the copy strategy) • Who will do the work (the company’s own advertising department or an outside agency)

5. Figure 15.1 Strategy planning for advertising

6. The importance of advertising • Involves a huge amount of money • Work is done by relatively few people • Major expense is for media time/space • Companies spend only a small percentage of sales on advertising

7. Setting advertising objectives • Help introduce new products to specific target markets • Help position the firm's brand or marketing mix by informing and persuading target customers or intermediaries about its benefits • Help obtain desirable outlets (distribution) • Provide ongoing contact with target customers • Prepare the way for the personal selling effort • Get immediate buying action • Help buyers confirm purchasing decisions

8. Figure 15.2 Examples of different types of advertising over adoption process stages

9. Types of advertising • Product advertising—Tries to sell a specific product to final users or channel members • Pioneering advertising builds primary demand • Competitive advertising builds selective demand • Corporate/institutional advertising—Tries to promote an organisation's image, reputation or ideas—rather than a specific product

10. Coordinating advertising efforts • Vertical cooperation • Involves the cooperation of members from different levels of a distribution channel • Is common in relation to advertising decisions • Advertising allowances • Price reductions given to organisations in the channel to encourage them to advertise or otherwise promote the supplier’s products locally • Horizontal cooperation • Involves cooperation between several members at the same level of a distribution channel • Often occurs in relation to advertising

11. Major advertising media • Magazine • Television • Newspaper • Yellow Pages • Radio • Outdoors • Cinema • Internet

12. Choosing the ‘best’ advertising medium • Promotional objectives • Target market you need to reach • Funds available • Nature of the media • Who it reaches • With what frequency • At what impact • At what cost • Overall fit with the rest of the marketing mix

13. Figure 15.3 Advantages and disadvantages of several types of media

14. Figure 15.3 Advantages and disadvantages of several types of media (continued)

15. Figure 15.3 Advantages and disadvantages of several types of media (continued)

16. Measuring advertising effectiveness • Sales • Direct-response advertising • Pre-testing advertising • Attitude research • Laboratory-type devices • Split runs of advertisements • Customer recall

17. International aspects of advertising • Legal aspects of advertising • In most countries, the government takes an active role in deciding what kinds of advertising are permitted, what is considered fair and what is inappropriate • Global agencies for global advertising • Many agencies are small, with 10 or fewer employees • Some large agencies have merged, creating mega-agencies

18. Figure 15.4 Top eight advertising agency supergroups and examples of products they advertise

19. Direct-response promotion • Special considerations with ‘direct marketing’ • Direct communication between a seller and the individual customer using a promotion method other than face-to-face personal selling • Started with mail advertising, but has evolved to include other media • Distinctive feature—It attempts to evoke a direct response from the customer • Closely tied to the use of a database to target customers

20. Direct-response online • Many promotional mixes now include an advertiser’s Web site and a viewer can respond by clicking to obtain more detailed information • Information might include pictures, videos, sound, text, order entry and so on • A small subset of the total number of Web sites account for a large percentage of the potential audience • Portals are Web sites that act as a gateway to the Internet

21. Sales promotion • Promotion activities (other than advertising, publicity and personal selling) that stimulate interest, trial or purchase • May be focused at channel members, final customers or users, or employees • Skill may be difficult to develop inside the company, since a promotion activity is often designed and used only once • Sales promotion spending is increasing and exceeds advertising spending

22. Figure 15.5 Examples of sales promotion activities

23. Figure 15.6 Some possible effects of a sales promotion on sales

24. Sponsorship • An investment in cash or kind, in an event, sport, art, person or idea, in exchange for access to the commercial potential of that event, sport, art, person or idea • Not a new concept (traced back to Ancient Rome and Gladiatorial Games) • Sport sponsorship is by far the most intensive form of sponsorship • A wide range of possible objectives • A general lack of rigorous evaluation by sponsors

25. Public relations and publicity • Public relations (PR) involves communicating with several interest groups—Employees, shareholders, governments and political parties as well as customers and the general public • It is aimed at fostering positive publicity and may be used to counter negative publicity • Publicity comprises all word-of-mouth (negative or positive) and media coverage • There is such a thing as negative publicity (including rumours and myths)

26. Creating synergies • There is a wide array of tools in the promotional mix • There is an unlimited number of possible combinations • The aim of marketers is to create synergy and to ensure that every promotional activity reinforces the desired image—For example, a sponsorship program that is not advertised is unlikely to have the same impact as one which is advertised and used for PR and sales promotions purposes

27. What we will be doing in the next chapter • In the following chapter we will be discussing sales marketing, including • The importance and nature of personal selling • The elements of the personal selling process • The when and where of using the three types of sales presentation • The importance of providing good customer service • The importance of long-term customer relationships