Marketing Communications
summary
Chapter 1 Marketing communications and campaign planning
Channels perspective – it shows the channel location of the major types of
advertising, remembering that these types of advertising often include a sales
promotion.
Personal selling is a major component in the lower three channels:
Manufacturer (producent) to distributors (leveranciers)
Distributors to consumers
Manufacturer to business users
4P’s:
- Product quality level
- Pricing for value
- Place of distribution and purchase
- Promotion to assist in selling the branded product or service
Marcom activities are all designed to sell the brand and they do this by
communicating about the brand. All marcoms strive for commonality between
the marketer’s intended positioning of the brand and the customer’s perceived
positioning of the brand.
Marcoms = marketer-originated messages, placed in various media, their
purpose being to sell the brand by showing it, saying things about it, or both, in a
manner that establishes the marketer’s desired position for the brand in the
minds of target customers.
Two major forms of marcoms: advertising and promotions
Advertising = the purpose of advertising is to ‘turn the mind’ of the prospective
customer ‘toward’ the brand. There are three main forms of advertising.
Brand-building advertising – refers to ads that are placed in mass media
such as TV, radio, cinema, newspapers, magazines, and outdoor. It is ‘mind
turning’ purpose rather than directly seeking purchase of the brand or
brand-item.
Direct-response advertising – refers to ads placed in mass media or in
narrower, direct-to-customer media (online, telephone or direct mail) which
attempts to be ‘immediately mind turning’ towards the brand or brand-
item so as to produce a sales inquiry, retail visit, or direct purchase. This
has the ‘act now’ characteristic of a promotion, although it is never called
a promotion.
Corporate image advertising, sponsorships, and public relations (PR) – all
three activities are forms of ‘mind turning’ advertising which advertise the
branded company or organization, or the ‘master’ brand, rather than
specific brand-items.
,Promotion = the aim of promotions is to produce immediate purchase of the
brand (or to produce some other immediate action that will increase the
opportunity for purchase of that brand, such as store visits or online inquiries).
Sales promotions offer an incentive to act now. In practice, promotions are most
often advertised promotions, that is, they are included in advertisements. Four
forms of promotions:
Manufacturer promotions – manufacturers originate three different forms
of promotions: sales force promotion (sales commissions, frequent-flyer
points (bezoekersaantallen) rewards, and other non-cash bonuses), trade
promotions (which are nearly always monetary incentives offered to
wholesalers and retailers to carry and sell the manufacturer’s products or
services) & direct-to-customer promotions (such as to encourage trial,
product or service sampling, manufacturers warranties (garanties), and
rebates (kortingen), and to encourage repeat purchase, promotions such
as multiple-purchase coupons and bonus offers).
Retailer promotions – also many forms:
o Physical store layout (and website layout) chosen to facilitate the
flow of customer traffic
o Store atmosphere thought to encourage increased purchasing, such
as lighting, color, in-store music, and perhaps in-store scent.
o Retail feature ads advertise promotional deals on the products
offered by the retailer, and are placed in mass media or narrower
media such as direct mail.
o In-store point of sale (POS) displays and price-off promotions
(mentioned together because displays are usually price-off
promotions): many retailers offer their own brands at a price below
that of manufacturer’s brand which is, in effect, a sales promotion.
Direct-marketing promotions – are originated by the manufacturer or by
the retailer. The most effective direct-marketing promotions make use of
customer database marketing to, firstly, direct introductory offers to new
prospects, and secondly to reward, via a loyalty program, those customers
who make repeat purchases.
Personal selling and telemarketing – two other forms of marcoms: personal
selling (face-to-face selling) and telemarketing (selling by telephone) are
also best considered as promotions, because their emphasis is on
persuading prospects to act now.
Brand equity is the most popular measure of marketing effectiveness. It applies
to the corporate brand and to brand-items.
Brand valuation – Interbrand’s brand valuation procedure for measuring
corporate brand equity has emerged as world-leading, because its
valuations are accepted by the world’s leading stock markets. Corporate-
brand valuation is based on expert assessment of 7 main marketing
characteristics: leadership, internationally, stability, market strength,
market trend, support and protection.
To measure and track brand equity for a specific brand-item, Moran’s method is
the best. Moran’s method is based on tracking the brand-item’s “price elasticity
of demand” which refers to the brand-item’s responsiveness to both price cuts
and price increases.
, The brand item’s value equity is indicated by its upside elastic. High
upside elasticity means that the brand-item’s sales go up sharply in
response to even a small price cut because the brand-item is seen as
better value at this price, where value is benefits received for the price
paid or, in everyday terms ‘value for money’.
The brand-item’s uniqueness equity is indicated by its downside
elasticity. High uniqueness of the brand-item is indicated by low downside
elasticity, that is its sales do not go down much, if at all, when the brand-
item’s price is raised of when competitors lower their prices. When the
price is raised and there is a lack of sales fall-off, this means that
customers see the brand-item as comparatively unique in the category.
And they are therefore less likely to switch to a relatively lower-prices
brand.
Strategy selection based on value equity and uniqueness equity – Moran goes on
to consider strategy based on the results from his method. There are four main
scenarios:
1. High value, high uniqueness. This is the most desirable. Use bursts of
brand-building advertising to remind customers of the good value of the
brand-item, then each burst should be followed immediately by a slight
price-off promotion, as sales will respond sharply upwards. Promoting on
the back of an advertising burst is known as the ratcheting strategy.
2. High value, low uniqueness. Good, but could be better. Find or develop a
unique benefit for the brand-item, and advertise this benefit as ‘this brand
only’ while also reminding customers of its good overall value.
3. Low value, high uniqueness. Good but could be better. Try to broaden
distribution of the brand-item and also raise its price, within reason.
Continue to emphasize perceived uniqueness in the advertising.
4. Low value, low uniqueness. This is the most undesirable and most difficult
and expensive to fix. Use R&D and consumer research to find a benefit
that adds value and also differentiates the brand. The brand-item’s
advertising then has to advertise both value, via the new benefit, and
uniqueness compared with other brand-items in the category.
There are three levels of effects going on simultaneously during marketing
communications:
, Level 1: ad or promotion processing
The processing responses occur during the exposure to each ad or promotion
offer and again if the same ad or promotion offer is seen or heard again. There
are four responses that can be made during exposure:
Attention – the attention response must precede each of the other three
responses. Processing responses keep looking back to attention (as you
can see in the diagram). Repeated attention responses are necessary for
the prospective customer to fully process the ad, or to process a detailed
promotion offer.
Learning – this might be the end of processing. Learning responses are
necessary for learning the brand name, learning what the logo or pack
looks like, and also for learning the brand name etc.
Emotion responses – alternatively, after attention, only an emotion
response might be made in processing. For instance, you may hate the as
and never learn which brand it advertises; or you might experience the
simple positive emotion of liking which could influence your choice only if
you later recognize or recall that brand.
Acceptance – it’s a combination of learning and emotion (it is the result of
learned benefit beliefs subjectively perceived as ‘true’ of the brand, and
which are positively emotionally weighted). Acceptance responses in
processing are necessary only when advertising a brand to customers for
whom its purchase of this brand is high risk or when making a promotion
offer.
Level 2: brand communication effects
The brand communication effects are:
- Category need – the particular brand has to be connected to the
customer’s needs for the product or service to produce the next
communication effect: brand awareness. A particular brand, usually the
market leader, may attempt to grow the category, which means creating
category need among more potential customers.
- Brand awareness – which is necessary in order that the brand can be
considered for purchase. The brand either has to be recognized as an item
of that category (brand recognition) or recalled as an item the category
need arises (brand recall) in the decision process.
- Brand attitude – the brand’s functional benefit beliefs and positive
emotions associated with the brand combine to produce brand attitude.
The manager needs to create or reinforce a positive absolute attitude
toward the brand and a relative preference for it over other brands..
- Brand purchase intention – for high-risk or ‘high-involvement’ purchases
(for example a car or a house), brand purchase intention or other
purchase-related action intention must occur consciously as a self-
instruction to act. Not necessary if it is a ‘low-involvement’ purchase.
- Purchase facilitation – a communication effect that is necessary in some
cases so that the customer can complete the brand purchase.
The five effects do not have to be acquired hierarchically. For example:
The customer’s category need may arise after he or she has become
aware of the brand and learned a preference for it.
The second and third communication effects (brand awareness & attitude)
are usually acquired simultaneously. An ad usually attempts to make
people aware of the brand, or to regenerate their brand awareness, and
