Chapter 17
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  • 1. McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 2. Consumer Behavior and Promotion Strategy Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 17
  • 3. Types of Affective Response
  • 4.
    • Marketers develop promotions to communicate information about their products and to persuade consumers to buy them
      • Advertising
      • Sales promotions
      • Personal selling
      • Publicity
    • Successful products and brands require promotions to create and maintain a differential advantage over their competitors
    Types of Promotion
  • 5. Advertising
    • Any paid, nonpersonal presentation of information about a product, brand, company, or store
      • Usually has an identified sponsor
      • Characterized as image management
        • Creating and maintaining images and meanings in consumers’ minds
      • Ultimate goal is to influence consumer’s purchase behavior
      • May be conveyed via a variety of media
  • 6.
    • Direct inducements to the consumer to make a purchase
      • Difficult to define sales promotions due to many types
      • Key aspect of sales promotions is to “move the product today, not tomorrow”
      • Most sales promotions are oriented at changing consumers’ immediate purchase behaviors
      • Coupons remain the most popular form of sales promotions
    Sales Promotion
  • 7. Personal Selling
    • Direct interactions between a potential buyer and a salesperson
      • What makes it a powerful promotion method?
        • May increase consumers’ involvement with the product and/or decision process
        • Interactive communication allows salespeople to adapt their sales presentation to individual customer needs
  • 8. Personal Selling cont.
      • Certain consumer products are traditionally promoted through personal selling
      • For other businesses, a form of personal selling by telephone, called telemarketing, has become popular
      • Direct mail has increased in popularity to counteract increasing restrictions on telemarketing
  • 9.
    • Any unpaid form of communication about the marketer’s company, products, or brands
      • Can either be positive or negative
      • Can sometimes be more effective than advertising because consumers may not screen out the messages so readily
      • Publicity can be considered more credible than advertising as it is not represented by the marketing organization
    Publicity
  • 10.
    • Ideally, marketing managers should develop a coherent overall promotion strategy that integrates the four types of promotions into an effective promotion mix
      • A controversy continues in marketing about the relative importance of advertising vs. sales promotions
      • The promotion mix of the future is likely to be more eclectic with many more options
      • Advertising seems to be having a declining influence on consumers’ behavior due to various factors
    The Promotion Mix
  • 11. A Communication Perspective
    • The cognitive processing model of decision making is relevant to an understanding of the effects of promotions on consumers
      • Consumer’s must be exposed to the promotion information
      • Attend to the promotion communication and comprehend its meanings
      • The resulting knowledge, meaning, and beliefs must be integrated with other knowledge to create
        • brand attitudes
        • make purchase decisions
  • 12. A Communication Perspective cont.
  • 13. The Communication Process
    • Developing successful promotion strategies is mainly a communication problem
      • Key factors
        • Source
        • Encode
        • Transmit
        • Receiver
        • Decode
        • Action
      • Particularly important stages for success
        • Encoding
        • Decoding
  • 14. Goals of Promotion Communications
    • Goals of promotion communications
      • Effects can be ordered in hierarchical sequence of events or actions that are necessary before consumers can or will purchase a brand
        • Consumers must have a recognized need for the product category or product form
        • Consumers must be aware of the brand
  • 15. Goals of Promotion Communications cont.
        • Consumers must have a favorable brand attitude
        • Consumers must have an intention to purchase the brand
        • Consumers must perform various behaviors to purchase the brand
  • 16. Stimulate Category Need
    • Need to create beliefs about the positive consequences of buying and using the product category or form
      • Marketers need to create beliefs about the positive consequences of buying and using the product category or form
      • Typically use advertising to stimulate category need
  • 17. Brand Awareness
    • A general communication goal for all promotion strategies
      • Level of brand awareness necessary for purchase varies depending on how and where consumers make their purchase decisions
      • Ask consumers to state the brand names they can remember or recognize as familiar
      • A company’s brand awareness strategy depends on how well known the brand is
  • 18. Brand Attitude
    • Create a brand attitude
    • Maintain existing favorable brand attitudes
    • Increase the existing brand attitude
    • Cannot analyze consumers’ brand attitudes in an absolute or very general sense without specifying the situational context
  • 19. Brand Purchase Intention
    • Most promotion strategies are intended by marketers to increase or maintain the probability that consumers will buy the brand
      • To develop effective promotion strategies directed at brand purchase intention, marketers must know when BI are formed by most of the target customers
  • 20. Brand Purchase Intention cont.
      • More typically, formation of a brand BI is delayed until well after exposure to advertising, when the consumer is in a purchase context
      • Personal selling and sales promotion are usually designed to influence purchase intentions at the time of exposure to the promotion information
  • 21. Facilitate Other Behaviors
    • Some promotion strategies are designed to facilitate behaviors other than purchase
      • Sales promotions and publicity are likely to have little influence on these other behaviors, but advertising and personal selling strategies may increase their probability
  • 22. The Promotion Environment
    • Includes all stimuli associated with the physical and social environment in which consumers experience promotion strategies
    • Two environmental factors can influence advertising and sales promotion strategies
      • Promotion clutter
      • Level of competition
  • 23. Promotion Clutter
    • The growing number of competitive strategies in the environment
      • Possible that clutter created by multiple ads during commercial breaks and between TV programs will reduce the communication effectiveness of each ad
      • Also affects other types of promotion strategies, especially sales promotions
  • 24. Level of Competition
    • A key aspect of the promotion environment
      • Comparative advertising , featuring direct comparisons with competitive brands, has become more common
      • Promotion often becomes the key element in the marketers’ competitive arsenal in fiercely competitive environments
  • 25. Promotion Affect and Cognition
    • Interpretation of promotion communications and integration processes are extremely important
    • Consumers’ comprehension processes vary in depth and elaboration, depending on their levels of knowledge and involvement
      • Concepts relevant to understanding the effects of advertising
        • Consumers’ attitudes toward ads
        • Persuasion processes
  • 26. Attitude toward the Ad
    • The affective evaluations of the ad itself can influence the attitudes toward the advertised product or brand
    • Ads that consumers like seem to create more positive brand attitudes and purchase intentions than ads they don’t like
    • A positive attitude toward an ad may not always lead to increased purchase of the brand
  • 27. The Persuasion Process
    • Changes in beliefs, attitudes, and behavioral intentions caused by a promotion communication
      • The Elaboration Likelihood Model (ELM)
        • Identifies two cognitive processes by which promotion and communication can persuade consumers
        • Also distinguishes between two types of information in the promotion communication
  • 28. Two Routes to Persuasion in the ELM
  • 29. Promotion Behaviors
    • Different types of promotions can be used to influence the various behaviors in the purchase–consumption sequence
      • Information contact
      • Word-of-mouth communication with other consumers
  • 30. Information contact
    • Consumers must come into contact with promotion information for it to be successful
      • Information contact with promotions may be
        • intentional
        • most often incidental
      • Placing information in consumers’ environments may be easy when target consumers can be identified accurately
  • 31. Promotion Behavior cont.
      • Cold calls vs. referrals and leads
      • Use of telemarketing
      • Consumers must also attend to the promotion messages
      • Level of attention also depends on how well promotion interacts with consumer characteristics such as intrinsic self-relevance and exiting knowledge
  • 32. Word-of-Mouth Communication
    • Helps spread awareness beyond those consumers who come into direct contact with the promotion
      • Placing promotion information in consumers’ environments, increases the probability that the information will be communicated to other consumers
  • 33. Managing Promotion Strategies
    • Four key activities
      • Analyze consumer–product relationships
      • Determine the promotion objectives and budget
      • Design and implement a promotion strategy
      • Evaluate the effects of the promotion strategy
  • 34. Analyze Consumer-product Relationships
    • Requires identifying the appropriate target markets for the product
      • Marketers should also understand the deeper symbolic meaning of their brand
      • The FCB grid
        • Based on consumers’ involvement and their salient knowledge, meanings, and beliefs about the product
        • Think products
        • Feel products
        • The appropriate promotion strategy depends on the product’s position in the grid
  • 35. Analyze Consumer-Product Relationships cont.
  • 36. Determine Promotion Objectives and Budget
    • Promotion strategies may be designed to meet one or more of the following objectives
      • To influence behaviors
      • To inform
      • To transform affective responses
      • To remind
  • 37. Managing Promotion Strategies cont.
    • Marketers should determine their specific promotion objectives and the budget available to support them before designing a promotion strategy
    • Some promotions have multiple objectives
    • Some promotions are designed to first influence consumers’ cognitions in anticipation of a later influence on their overt behaviors
  • 38. Design and Implement a Promotion Strategy
  • 39. Designing Promotion Strategies
    • Must be sensitive to the consumer-product relationships represented in different market segments
      • Various consumer segments to be considered
      • Appropriate promotions depend on the type of relationship consumers have with the product or brand, especially their intrinsic self-relevance
      • Promotion methods vary in their effectiveness for achieving certain objectives
      • Promotion objectives will change over a product’s life cycle
  • 40. Developing Advertising Strategy
    • Specify advertising strategy in terms of the type of relationship the consumer will have with the product or brand
      • MECCAS model, based on consumers’ means-end chains, helps marketers understand the key aspects of ad strategy and make better strategic decisions
        • Driving force
        • Leverage point
        • Consumer benefits
        • Message elements
        • The executional framework part of the creative strategy
  • 41. The MECCAS Model
  • 42. Developing Advertising Strategy cont.
      • Steps in creating an advertising strategy
        • Consumer-product relationship
          • Message elements
          • Consumer benefits
          • The driving force
          • Leverage point
        • An advertising strategy should specify how a brand will be connected to the important ends the consumer wants
          • Executional framework: the various details of the creative strategy
      • Marketers still must carefully analyze consumers and use their creative imaginations
  • 43. Developing Personal Selling Strategies
    • ISTEA model ( impression, strategy, transmission, evaluation, and adjustment )
      • Suggests salespeople’s influences depend on their skills at performing five basic activities
        • Developing useful impressions of the customer
        • Formulating selling strategies based on these impressions
        • Transmitting appropriate messages
  • 44. Developing Personal Selling Strategies cont.
        • Evaluating customer reactions to the messages
        • Making appropriate adjustments in presentation should the initial approach fail
      • ISTEA model is consistent with the communication approach to consumer promotions
      • Model emphasizes analysis of the customer as the starting point
  • 45. A Model of the Personal Selling Process
  • 46. Evaluate Effects of the Promotion Strategy
    • Involves comparing its results with the objectives
      • Determining promotion effects can be difficult
      • Promotion objectives stated in behavior terms can be hard to evaluate
      • In some cases, evaluation of promotion effects can be relatively straight-forward
  • 47. Measuring Advertising Effects
    • Wide variety of approaches have been taken to measuring advertising effects
      • Pretesting
      • Copy testing
    • Three broad criteria used as indicators of advertising effectiveness:
      • Sales
      • Recall
      • Persuasion
  • 48. Summary
    • Discussed how knowledge about consumers’ affect and cognitions, behaviors, and environments can be used by marketers in developing more effective promotion strategies
    • Described four types of promotions
    • Detailed how the basic communication model can be used
  • 49. Summary cont.
    • Discussed important aspects of the promotion environment, affective and cognitive responses to promotions, and promotion-related behaviors
    • Examined a managerial model for designing and executing promotion strategies
  • 50. Summary cont.
    • Described the various goals and objectives marketers may have for promotion strategies
    • Looked at two special models for developing advertising strategies and personal selling strategies
    • Discussed how to evaluate the effectiveness of promotion strategies