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Marketing: Real People, Real Choices 3rd edition 14-1©2003 Prentice Hall, Inc
Chapter 14
Conversing with the Customer: Promotional
Strategy, Interactive Marketing, and
Database Marketing
Marketing: Real People, Real Choices 3rd edition 14-2©2003 Prentice Hall, Inc
Chapter Objectives_1
Understand the communication model
List and describe the elements of the promotion mix
Explain the stages in developing the promotion plan
Explain the current trend toward interactive promotion strategies
Marketing: Real People, Real Choices 3rd edition 14-3©2003 Prentice Hall, Inc
Chapter Objectives_2
Explain why database marketing is increasingly popular and how databases are developed and managed
Explain how firms implement integrated marketing communications and why some marketers resist it
Marketing: Real People, Real Choices 3rd edition 14-4©2003 Prentice Hall, Inc
Role of Promotion
Promotion is communication by marketers that informs, persuades, reminds, and builds relationships with potential buyers of a product to influence an opinion or elicit a response.
IMC is a plan for optimal use of the elements of promotion: advertising, personal selling, sales promotion, and public relations
Marketing: Real People, Real Choices 3rd edition 14-5©2003 Prentice Hall, Inc
Promotion Mix
Advertising
Sales Promotions
Public Relations
Personal Selling
Marketing: Real People, Real Choices 3rd edition 14-6©2003 Prentice Hall, Inc
Advertising
Non-personal communication from an identified sponsor using the mass media– can convey rich and dynamic images– can establish and reinforce brand identity– can communicate factual information
– can remind customer to buy
Marketing: Real People, Real Choices 3rd edition 14-7©2003 Prentice Hall, Inc
Sales Promotion
Programs that build interest or encourage purchase of a product through the use of an incentive in a specified time period
– coupons– contests– rebates– premiums
Marketing: Real People, Real Choices 3rd edition 14-8©2003 Prentice Hall, Inc
Publicity and Public Relations
Portray an organization and its products positively by influencing the perceptions of various publics
– writing press releases– holding special events– conducting and publishing consumer
surveys– putting a positive spin on negative news
Marketing: Real People, Real Choices 3rd edition 14-9©2003 Prentice Hall, Inc
Developing the Promotion Plan
Framework for developing, implementing, and controlling the firm’s promotional activities
Marketing: Real People, Real Choices 3rd edition 14-10©2003 Prentice Hall, Inc
Step 1: Establish Promotion Objectives
Objectives will change depending on where consumers are on the path to loyalty
Some objectives might be
– create awareness– inform the market– create desire– encourage trial– build loyalty
Marketing: Real People, Real Choices 3rd edition 14-11©2003 Prentice Hall, Inc
Step 2: Identify Influence on the Promotion Mix
Mix must be tailored for each situation
• Push means that the company seeks to move its products through the channel by convincing channel members to offer them and entice their customers to select these items
• Pull means that the company relies on consumers to learn about and express desire for its products
Marketing: Real People, Real Choices 3rd edition 14-12©2003 Prentice Hall, Inc
Step 3: Determine and Allocate the Total Promotion Budget
Top-down budgeting techniques
– percentage-of-sales method
– competitive parity
Bottom-up budgeting technique
– objective-task method
Marketing: Real People, Real Choices 3rd edition 14-13©2003 Prentice Hall, Inc
Step 4: Allocate Budget to Specific Promotion Mix
Organizational factors
Market potential
Market size
Marketing: Real People, Real Choices 3rd edition 14-14©2003 Prentice Hall, Inc
Step 5: Designing the Promotion Mix
Which elements of promotion will be used?
What message is to be communicated?
– Type of appeal?– Structure of appeal?
What communication channels should be employed?
What role will advertising, sales promotion, public relations, and selling play?
Marketing: Real People, Real Choices 3rd edition 14-15©2003 Prentice Hall, Inc
The AIDA Model
Attention
Interest
Desire
Action
Marketing: Real People, Real Choices 3rd edition 14-16©2003 Prentice Hall, Inc
Step 5: Evaluate the Effectiveness of the Promotion
Mix
Is the plan working?– Measure response to sales promotions– Measure brand awareness, recall, and image
before and after ad campaign– Analyze and compare sales performances
by territory and sales force– Clip articles appearing in media
Marketing: Real People, Real Choices 3rd edition 14-17©2003 Prentice Hall, Inc
Interactive Marketing
Attention Economy
– The amount of information seems infinite; our ability to get it is limited by the time we can spend looking
– Interactive media are in the business of buying and selling people’s attention
Customized marketing communications yield a measurable response in the form of a purchase or request for more information
Marketing: Real People, Real Choices 3rd edition 14-18©2003 Prentice Hall, Inc
Levels of Interactive Response
First-order response: product offer directly yields a transaction
Second-order response: product offer results in some form of customer feedback but it isn’t a transaction
– request for more information– request NOT to receive more
information
Marketing: Real People, Real Choices 3rd edition 14-19©2003 Prentice Hall, Inc
Database Marketing
Critical to interactive marketers as they seek to track responses to messages and develop a dialogue with customers
Allows the organization to learn customer preferences, fine-tune and test offerings, build relationships
Marketing: Real People, Real Choices 3rd edition 14-20©2003 Prentice Hall, Inc
Database Marketing
Is interactive
Builds relationships
Locates new customers
Stimulates cross-selling
Is measurable
Is trackable
Marketing: Real People, Real Choices 3rd edition 14-21©2003 Prentice Hall, Inc
Putting It All Together
Integrated Marketing Communications (IMC) is “a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.”
Marketing: Real People, Real Choices 3rd edition 14-22©2003 Prentice Hall, Inc
Characteristics of IMC Approach
Focus on customer need for communications
Reliance on customer database to focus messages
Use of consistent messages via diverse communications vehicles
Careful planning of delivery to generate a steady stream of consistent information
Use of several elements of the promotional mix
Marketing: Real People, Real Choices 3rd edition 14-23©2003 Prentice Hall, Inc
The IMC Planning Model
Start with a Customer Database
Develop Promotional Strategies
Implement Specific Promotional Tactics
Evaluate IMC Communications
– First-order responses– Second-order responses– Attitudes toward brand and firm