Gilbert A. Churchill, Jr. J. Paul Peter

1. Marketing Chapter 17 Managing Marketing Communications Gilbert A. Churchill, Jr. J. Paul Peter

2. Slide 17-1 Primary Tasks of Communication • INFORMING • During the introduction • stage of the PLC • Explain the purpose & • benefits of the product • REMINDING • During the growth • stage of the PLC • Convenience the customer • to buy company’s brand • over the competition Target Audience • PERSUADING • During the maturity • stage of the PLC • Used to trigger • memory (brand specific)

3. Some Strategic Goals of Marketing Communications Slide 17-2 Table 17.1 Strategic Goal Description Create awareness Inform markets about products, brands, stores or organizations. Build positive images Develop positive evaluations in people’s minds about products, brands, stores or organizations. Identify prospects Find out the names, addresses and possible needs of potential buyers. Build channel relationships Increase cooperation among channel members. Retain customers Create value for customers, satisfy their wants and needs, and earn their loyalty.

4. The Communication Process Slide 17-3 Figure 17.1 SourceEncodesMessage ReceiverDecodesMessage Source Transmits Message via Medium Receiver Provides Feedback to Source Noise

5. The AIDA Model Slide 17-4 Figure 17.2 MarketingCommunications Action Interest Desire Attention

6. The Communications Mix Slide 17-5 Advertising PersonalService SalesPromotion Publicity

7. Comparing the Elements of the Communications Mix Slide 17-6 Advertising Publicity Personal Selling SalesPromotion Communications Mode One-Way One-Way Two-Way One-Way High Low Marketer Control Over Message Medium-High High Long Term, Ongoing Activity Yes No Yes No Considered an Unbiased Source No Yes No No No No Yes No Message can be Customized for each Customer No No No Yes Short Term Focus Low No Direct Cost High Varies Cost per Contact Overall Cost High No Direct Cost Low Varies

8. Slide 17-7 When Elements of Communication Mix (Promotion) Are Most Useful Advertising Personal Selling Effectiveness Sales Promotion Public Relations Attention Interest Desire Action Very effective Somewhat effective Not effective

9. Managing Communications Strategy Slide 17-8 SetCommunicationsObjectives Select theCommunicationsMix SetCommunicationsBudgeting ImplementationandControl

10. Slide 17-9 Factors that Affect the Communication Mix • Nature of the Product • Industrial products are expensive, complex, customized • Consumers products depend upon costs and risks • Stage in the Product Life Cycle • Early - advertising & publicity • Later - sales promotions • Target Market Characteristics • Widely scattered markets • Highly informed buyers • Type of Buying Decision • Routine - advertising • Complex - personal selling • Available Funds • Lack of money - publicity, commission based personal selling • Plenty of money - advertising $ $ $ • Push–and–Pull Strategies • Push - suppliers promote to intermediaries • Pull - suppliers promote to ultimate consumer

11. Two Marketing Communications Approaches Slide 17-10 Figure 17.3 Push Strategy MarketingCommunications MarketingCommunications Producer Resellers End Users Pull Strategy Marketing Communications Request Products Request Products Producer Resellers End Users

12. Methods for Setting Communications Budgets Slide 17-11a Table 17.3 Method Advantage Disadvantage • Simple to use • Budgeting based on expected sales implies communications can’t improve sales performance Percentage of sales Fixed sum per unit • Marketer likely to benefit from increasing the budget during times of rising sales • Decreasing the communications budget during periods of falling sales could be disastrous in some cases Competition-based • Takes into account competitors’ activities • Amounts budgeted will be reasonable if competitors are budgeting effectively • Can be difficult to get competitors’ budget information • Can lead to ever-increasing communications budgets • Assumes competitors have the same objectives

13. Methods for Setting Communications Budgets Slide 17-11b Table 17.3 Method Advantage Disadvantage • Takes into account limited resources • May stimulate creativity in making funds work hard • Doesn’t consider marketing objectives • Borrowing may be worthwhile to fund some communications strategies All you can afford Objective and task • Based on achieving communications objectives • Focusing on objectives uses funds most efficiently • No basis for setting priorities among objectives • Treats all objectives as equally worthy of funding • Hard to estimate what will it cost to achieve a particular objective

14. Evaluating the Effectiveness of Marketing Communications Slide 17-12 SalesChanges WhatHappened ? SalesChanges MarketingResearch Whyit Happened ?

15. Slide 17-13 Regulation of Communication Self-Regulation - complaints • National Advertising Division (NAD) of BBB • National Advertising Review Board (NARB) Federal Regulation - deceptive & misrepresentation • Federal Trade Commission (FTC)