Promotion Integrated Marketing Communication

1. Promotion Integrated Marketing Communication Elements of promotion ● Advertising Strategies ● Other Methods of Promotion

2. Learning Objectives • Understanding the obstacles that advertising messages face • Understanding the choices facing marketing managers regarding • Promotional objectives • Promotional message • Media choice • Advertising and promotion spending

3. Elements of the Promotion Mix • Advertising • Sales Promotion • Sales • Coupons • Rebates • Premiums • Personal selling • Public relations • Direct marketing

4. Promotion by Decision Stage • Pre-purchase • Influence decision, preference • Samples to induce trial • Purchase • Sales promotion • Point-of-purchase (POP) displays • Post-purchase • Increase repurchase propensity

5. Developing the Advertising Program IDENTIFYING THE TARGET AUDIENCE SPECIFYING ADVERTISING OBJECTIVES SETTING THE ADVERTISING BUDGET DESIGNING THE ADVERTISEMENT(S)

6. Some Media Alternatives • Television • Conventional advertisements • Infomercials • Sponsorship programming • “Placements” • In programming • “Superimposed” • Radio • Magazines • Newspapers • Outdoor • Internet • Point-of-purchase • Other • Movie theaters • On other products

7. Reaching the Customer: Encoding, “Noise,” and “Decoding” NOISE Other ads News articles Other store displays SENDER ENCODING THE MESSAGE MESSAGE CHANNEL DECODING THE MESSAGE RECEIVER Media, Salesperson Retail store News program Mktg mgr Advertising mgr Advertising agency Advertisement Coupon Sales presentation Press release Store display Receiver interpretation of the message Customers Media audience News media Clients CHANNEL FEEDBACK Text, p. 211.

8. Some Promotional Objectives • Brand awareness • Knowledge of product category • Existence • Benefits • Functions • Technology • Knowledge of brand differences • Brand attitude • Favorable beliefs about the brand • Overall • Relative to competitors • Product category or brand trial • Brand preference • Willingness to pay a premium for the brand • Resistance to competitor promotions (e.g., sales, coupons) • Willingness to buy under less convenient circumstances • Increase in product category or brand usage • Quantity used • Frequency used • Scope of uses • Increase in short term sales

9. Promotional Objectives Across the Product Life Cycle (PLC) • Introduction • Advertising and public relations  awareness • Sales promotion  trial • Personal selling  distribution • Growth • Advertising and PR  brand loyalty • Less emphasis on sales promotion • Maturity • Advertising persuasion, reminder • Sales promotion  market share • Decline • Reduction in advertising and PR • More emphasis on sales promotions  temporary sales Text, p. 217

10. Increase in Product Category or Brand Usage—Product Category Potential Examples • Scope of uses • Orange juice: “It isn’t just for breakfast anymore” • Baking soda • ZipLock™ bags • WD-40™ (lubrication and sticker removal) • Quantity used • Calcium supplements • Milk • Frequency used • Cosmetics • Deodorant • Wine • Greeting cards • Phone calls • Cell phone minutes • Call to family/friends • Hotels, airlines • Conference calls • Car engine oil • Canned soup

11. Communications Objectives • Informing • Awareness • Interest • Benefits • Other information • Persuading • Preference based on competitive advantages • Brand switching or prevention of brand switching • Reminding • Trigger memories • Maintain preference and buying habits

12. Some Advertising Strategies • Comparative ads • Illegal in most countries • Generally very disliked by U.S. consumers but still relatively effective • Humor appeal • A way to get attention to the advertisement—but the consumer may remember the humor and not what the product featured was • Adding beliefs • Classical conditioning (association) • Fear appeal • To be effective: • Feared stimulus must be of medium intensity—enough to motivate action but not so intense that the individual “tunes out” the ad • A clear solution must be offered—e.g., use Listerine™ to avoid tooth loss due to gingivitis • Repetition • Celebrity endorsements

13. The Elaboration Likelihood Model and Likely Effectiveness of Celebrity Endorsements Is endorser congruent with product endorsed? Product important or expensive? Yes High elaboration No Yes Low elaboration No More likely to be effective Unlikely to be effective Celebrity endorsements more likely to be effective

14. Executing The Advertising Program • Pre-testing • Several “story boards” or actual ads are created • Ads are tested on consumers • Instant response technologies (consumers either rate approval or have physiological measures taken throughout an ad duration • The best performing ad or ads are chosen subject to constraints imposed (e.g., need to specify a certain message or use certain types of models) • Possible redesign • Carrying out advertisement • Full service agencies • Limited service agencies • In-house

15. Advertising Intensity and Return --A Typical Relationship The “S”-Shaped Curve 1 0.8 Relatively high effectiveness Saturation Point 0.6 Response (e.g., sales, recall) 0.4 Too little to do much good 0.2 0 0 5 10 15 20 25 Amount of Advertising Spending

16. Sample Exam Question

17. Measuring Advertising Effect • Several possible criteria: • Scanner data • Individual TV exposure can be matched against actual purchases • Available only for grocery products • Increase in sales(but it may be impossible to separate effects of different simultaneous ads) • Lab studies: • Recall • Attitude toward product • Preference

18. Japanese Advertising—Use of animation and cartoon characters

19. Breaking Through the Clutter