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  • 1. IMC: Direct Marketing, Advertising and Public Relations 04/04/05 & 04/06/05
  • 2. Types of Direct Marketing
    • Direct mail can be used for all types of communication (inform, differentiate, persuade, remind).
    • Catalogs are the most popular form of direct marketing. They are used to sell to both individual and business consumers.
    • Telemarketing (usually used to inform or sell products/services)
    • Vending machines are used for low priced, convenience goods like sodas, stamps
    • Direct-action advertising is used to obtain an immediate response from consumers (Call 1-800)
  • 3. Objectives of Direct Marketing
    • Build customer relationships
      • develop and maintain continuous buyer-seller relationships
    • Elicit a direct response or transaction
      • direct order - response in the form of an order
      • lead generation - request for further information
      • traffic generation - visit to a store or business for the purchase of specific good or service
  • 4. Direct Marketing: Benefits
    • Customers
      • Convenience
      • Control
      • Fun
    • Marketers
      • Personalization
      • Relationship building
      • Less competitive scrutiny
      • Measurable
  • 5. Direct Marketing Requirements
    • Develop and maintain database(s)
      • up-to-date, accurate, relevant information
    • Technology-based interactive marketing system
      • combine computers, software, databases, and telecommunications technology
    • Procedure for measuring results
  • 6. Direct Marketing: Productivity
    • Multiple-vehicle, multi-stage campaign
      • News campaign  Paid ad with response mechanism  direct mail  outbound telemarketing  face-face sales call  ongoing communication
    • Response compression
      • multiple media utilized within a tightly defined time frame can substantially increase response rates
      • For example, a Citibank campaign to market home equity loans. Instead of direct mail + 800 number, they used direct mail + coupon +800 number + telemarketing + print ads. This resulted in a 15% increase in the number of new accounts obtained.
  • 7. Direct Marketing: Issues
    • Customers may not be very comfortable with interactive technology
    • Privacy/ethical issues
    • Deceptions and fraud lower credibility
    • Success depends on ability to target effectively
  • 8. Conclusions
    • Examine the role of direct marketing in your IMC plan
    • It is useful for selectively targeting consumers and could be very cost effective if the response rate is high
  • 9. IMC: Advertising
    • Advertising is any paid form of non-personal presentation by an identified sponsor
    • Types of advertising
      • Product (inform, persuade, remind)
      • Institutional (advocacy, pioneering, competitive, reminder)
  • 10. Advertising strategy
    • In developing advertising, marketing managers usually have to decide the 5 Ms
      • Mission: What is the advertising objective?
      • Message: What should the message say?
      • Media: Where and how should we communicate?
      • Money: How much should we spend?
      • Measurement: How can we evaluate the results?
  • 11. Mission: Advertising Objective
    • Advertising can have 3 different objectives
    • Inform : Mainly creating awareness.
    • Persuade : Creating or changing beliefs about brand attributes, changing importance of attributes.
    • Remind : Mainly reinforce existing attitudes, maintain top-of-mind awareness (especially for low risk products).
  • 12. Persuasion Models
    • Attitudes include beliefs (cognitive component), feelings (affective component) and behavior
    • Attitudes can be changed by changing any or all of these components
    • There can thus be three ways to change attitudes
      • Learn-feel-do (Change the cognitive component first)
      • Feel-learn-do (Change the affective component first)
      • Do-feel-learn (Change the behavior first)
  • 13. Persuasion: Different models
    • The learn-feel-do model:
      • High involvement decision making
      • Consumers form attitudes based on ad information
      • Relates to cognitive processes
    • Examples
  • 14. Persuasion: Different models
    • The feel-do-learn model:
      • Ads evoke feelings in consumers
      • Feelings can be product-oriented or ad-oriented
      • These feelings trigger purchase response
      • Occurs at all involvement levels
      • Relates to affective processes
    • Examples
  • 15. Persuasion: Different models
    • The do-feel-learn model:
      • Applicable to low involvement situations
      • Low perceived risk prompts purchase response with little thinking
      • Relates to short-cuts people take to avoid intense cognitive processing
    • Examples
  • 16. Message
    • The advertising message will depend on the persuasion model selected as well as the specific communication objective
    • Usually, all advertising messages will focus on a single or few key points. Too many messages in the same ad could diffuse its impact
    • Creativity in message execution is very important
  • 17. Message: Types of advertisements
    • Rational
    • Emotional
      • Fear
      • Sex
      • Humor
    • Testimonials
      • Celebrity
      • Others
    • Comparative
  • 18. Media
    • There are three elements to any media objective
      • Reach refers to the total number of people you wish to expose to your message
      • Frequency refers to the number of times each of these people is exposed to your message
      • Impact is a qualitative factor that refers to the value of a single exposure
    • Example
      • 60% reach @ 3+ refers to exposing at least 60% of your target audience at least 3 times to your message
  • 19. Media
    • Higher reach/frequency objectives translate to higher costs (CPM)
    • Impact is dependent on your message quality as well as the media channel selected. Thus, the same message would have a different impact via TV and on radio.
  • 20. Media Selection
    • Select your media after considering:
      • Your target market media habits
      • Your product
      • Timing
      • Cost
  • 21. Media vehicles
    • Television
    • Radio
    • Print
    • Internet
    • Outdoor
    • Direct mail
  • 22. Media scheduling
    • Continuous or steady
    • Flighting or intermittent
    • Pulse or burst
  • 23. Budget
    • “ I know that 50% of my advertising budget is wasted…the problem is that I don’t know which 50%!” :- David Ogilvy
    • Carryover effect of advertising
      • Advertising in one time period can continue to affect sales over the next few time periods. The carryover period depends on the total impact of the advertising message
    • Carryover transforms advertising from an expense to an investment
  • 24. Budget…
    • There are 5 factors that you can consider while setting the advertising budget
      • PLC : New products require larger budgets than established products.
      • Market share : Higher market share brands usually require less advertising.
      • Competition and clutter : Greater competition requires more advertising
  • 25. Budget…
      • Advertising frequency : The complexity of the advertising message influences the number of repetitions required. The higher the number of repetitions required, the more it will cost
      • Product substitutability : Undifferentiated brands require greater advertising spends to remain in the top-of-mind slot amongst consumers
  • 26. Advertising Effectiveness
    • Depends on the advertising objective
    • Typical measures
      • recall
      • Recognition
      • brand name awareness
      • attitudes
      • buying intentions
    • Advertising – sales relationship?
      • Share of voice
  • 27. Advertising Effectiveness
    • Share of voice: share of market ratio
      • Established brands 1:1; new brands 1.5-2:1
    • Sometime, new entrants in a marketplace may not have enough resources to gain a high share of voice
    • In such cases, creative advertising and creative media can make the message stand out
  • 28. Some recent research
    • Ads are more effective when their message is in line with their surroundings.
    • People may pay greater attention to negative messages than positive messages.
  • 29. Publicity and Public Relations
    • Publicity is non-paid commercially significant news or editorial comment about ideas/products/ institutions
    • Public Relations are activities aimed at promoting or protecting a company’s image or its products
    • It includes press relations, product publicity and lobbying
    • PR is particularly important when dealing with negative events
  • 30. The role of the internet
    • Internet advertising has become big business recently
    • Promotion Trends 2000
      • Spending on web-based consumer promotions increased 95% to $926 million
      • The bulk of this money is diverted from advertising (40%) and offline consumer promotions (21%) while only 10% is additional money added to the IMC budget
    • Some reasons for the Internet’s popularity are immediacy of response, high level of customization and high accessibility to some consumers
  • 31. The role of the internet
    • The internet is also important as a source of publicity
    • WOM/ Buzz is very common and widespread and very difficult to control as the source of news is difficult to trace
    • Example