Strategic marketing 9edi.chapter12
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    Strategic marketing 9edi.chapter12 Strategic marketing 9edi.chapter12 Presentation Transcript

    • Strategic Marketing 1. Imperatives for Market-Driven Strategy 2. Markets and Competitive Space 3. Strategic Market Segmentation 4. Strategic Customer Relationship Management 5. Capabilities for Learning about Customers and Markets 6. Market Targeting and Strategic Positioning 7. Strategic Relationships 8. Innovation and New Product Strategy 9. Strategic Brand Management 10. Value Chain Strategy 11. Pricing Strategy 12. Promotion, Advertising and Sales Promotion Strategies 13. Sales Force, Internet, and Direct Marketing Strategies 14. Designing Market-Driven Organizations 15. Marketing Strategy Implementation And Control
    • CHAPTER 12 Promotion, Advertising, and Sales Promotion Strategies Promotion Strategy Advertising Strategy Sales Promotion StrategyMcGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
    • PROMOTION STRATEGY The Composition of Promotion Strategy Developing Promotion Strategy Communications Objectives Deciding the Role of the Promotion Components Determining the Promotion Budget Promotion Component Strategies Integrating and Implementing the Promotion Strategy Effectiveness of Promotion Strategy 12-3
    • Promotion Strategy:planning, implementing, andcontrolling an organization’scommunications to its customersAnd other target audiences. 12-4
    • Composition of Promotion Strategy Interactive/Internet Marketing Direct AdvertisingMarketing Promotion Components Personal Sales Selling Promotion Public Relations 12-5
    • U. S. Annual Expenditures (billions) $600 Sales Promotion Personal Selling $400 Advertising $200 0 12-6
    • INTERNET Brand Advertising On-Line Has FEATURE Taken OffSEARCH WORKSGoogle and Yahoo! Have demonstrated the power of the Web by using customers’ searchqueries to connect them with advertisers.CUSTOMERS ARE ONLINEMore than half of American households have always-on Net connections. And the Webreaches millions at the office. The Big Three portals—Yahoo, AOL, and MSN—reach acombined 50 million a day–-twice the TV audience of a World Series game.VIDEO ROCKSThe adoption of broadband, which can handle videos, lets advertisers put TV-like ads online.Longer spots by BMW and Adidas have reached cult status. As demand for video soars,portals sell choice slots in advance, much like TV’s up-front sales.FEEDBACK IS INSTANTMarketers and online publishers have tools to track an ad’s performance in real time allowingthem to make quick adjustments if customers aren’t clicking. This turns the Net into a vastmarketing lab. And as video grows, it becomes a test bed for TV ads.CUSTOMERS LEAVE TRAILSIt was an empty promise during the dot-com days, but now advertisers have the technologyto follow customers, click by click, and to hit them with relevant ads. The upshot? No wastedmoney peddling dog food to cat owners. Source: Stephen Baker, “The On-Line Ad Surge,” BusinessWeek, November 22, 2004, 79. 12-7
    • Illustrative Communications Objectives Need Recognition Finding Buyers Brand Building Evaluation of Alternatives Decision to Purchase Customer Retention 12-9
    • Deciding the Role of the Promotion Components Expected contribution for each of the promotion components. Which communication objective(s) will be the responsibility of each component? What part of the budget will go to each component? 12-10
    • Factors Guiding the Role Assigned to Each Component Market Target(s) Desired Positioning Role of Promotion in Positioning Product Characteristics Stage of Life Cycle Situation Specific Factors 12-11
    • Determining the Promotion Budget Objective and TaskAll You Can Budgeting Percent of Afford Approaches Sales Follow the Competition 12-12
    • Budgeting Methods Features Limitations Percent of Sales Percent of Sales Fixed percent of sales, often based on  The method is very arbitrary. Budget may past expenditure patterns. be too high when sales are high and too low when sales are low. Comparative Parity Comparative Parity Budget is based largely  Differences in marketing strategy may upon what competition is doing. require different budget levels. Objective and Task Objective and Task Set objectives and then determine  The major issue in using this method is tasks (and costs) necessary to meet deciding the right objectives so the objectives. measurement of results is important. 12-13
    • Integrating and Implementing Promotion StrategyAvoiding fragmentationDifficulty in evaluating productivityDifferences in prioritiesSeparate organizational unitsAssigning integration responsibility 12-14
    • Illustrative Factors Affecting Promotion StrategyAdvertising/ sales Balanced Personal sellingpromotion driven drivenLarge Number and dispersion of buyers Small Buyers’ information needs HighLow Size and importance of purchase LargeSmall DistributionChannel Direct Product Complexity HighLowNo Post-purchase contact required Yes 12-15
    • Promotion Strategy Issues Expense/Response Relationships Allocation Impact on Brand Equity Integration of Promotion Components Effectiveness of the Strategy 12-16
    • ADVERTISING STRATEGY Setting Objectives and Budgeting Creative Strategy Media/Scheduling Decisions Role of the Advertising Agency Program Implementation and Measuring Effectiveness 12-17
    • The Internet is Shifting the Power Position to the Customer* How the Money is Spent is Changing.* The Amount Spent on Internet Advertising is a Small Fraction of the Total, but Very Powerful and Growth is Accelerating.* Consumers Spend 10 hrs/person/day with Media of all Kinds—How Much is Media Multi-Tasking?* Ad Spending Versus Consumers’ Time Allocations.* Advertising Agency Consolidation and Reorganization—the Big 4.* Do Companies Recognize the Revolutionary Implications of Newly Empowered Consumers?* The Internet Will be the Most Prominent Medium in the Lives of the 18-34 Age Group. Source: The Economist, “Crowned at Last: A Survey of Consumer Power,” April 2, 2005, 1-16. 12-18
    • Advertising StrategyTarget Audience Advertising Objectives Advertising Budget Creative Strategy Advertising Media and Programming Schedules Evaluate the Effectiveness of the Strategy 12-19
    • Advertising ObjectivesExpose communication to targetaudience Create awareness Change attitude(s) Increase Sales Generate profits 12-20
    • Alternative Levels for Setting Advertising Objectives Increasing Uncertainty About Impact on Purchasing Behavior Type of Objective • Exposure • Awareness • Attitude Change • SalesIncreasing Difficulty • Profitof Measurement 12-21
    • Budget DeterminationOBJECTIVE AND TASK METHOD HAS THE MOST SUPPORT Budget Determination Media/ Creative Scheduling Strategy Decisions 12-22
    • The Vuitton Machine* Inside the world’s biggest, most profitable luxury brand BENCHMARKING VUITTON Brand 2003 Sales Percent Operating Billions Change* Margin Louis Vuitton $3.80 +16% 45.0% Prada 1.95 0.0 13.0 Gucci** 1.85 -1.0 27.0 Hermès 1.57 +7.7 25.4 Coach 1.20 +34.0 29.9*At constant rate of exchange **Gucci division of Gucci Group Data: Company reports. BW Vuitton increased advertising 20% in 2003—spends only 5% of revenues on advertising—about half the industry average *BusinessWeek, March 22, 2004, 98-102. 12-23
    • CREATIVE STRATEGYThe creative strategy is guided by the market target and the positioning strategy. Product Distribution Price Promotion Advertising (How to communicate intended positioning to buyers and others influencing the purchase.) Provide a unifying concept that Creative Strategy binds together the various parts of the advertising campaign. 12-24
    • Media/Scheduling Decision Television Radio Magazines Online Website Outdoor 12-25
    • Relative accessto the targetaudience Favorable zone Unfavorable zone Relative cost of reaching the target group(s) 12-26
    • Advertising Agencies in Perspective Fast change has come to the advertising industry. Huge, integrated agencies face a challenging future. Do clients want a full-service agency? The business model is in need of change. The basis of compensation continues to be debated and altered. Specialists (e.g. media buying services) are being used. Importantly, the core of the creative process is the agency. Several methods are available to evaluate advertising results. 12-27
    • Role of the Advertising AgencyTarget Audience Advertising Objectives Advertising Budget Creative Strategy Advertising Agency Advertising Media and Programming Evaluate the Effectiveness of the Strategy 12-28
    • Advertising Strategy Implementation and Effectiveness Decide how to measure effectiveness beforeimplementing the strategy. Assign responsibility for tracking performance. Assessing the quality of advertising is important. Exposure to advertising is not a very sensitivemeasure of effectiveness. Several methods are available to evaluate advertising results. 12-29
    • Rating Services Sales and Test Expense AnalysisMarketing MEASURING ADVERTISING EFFECTIVENESS Controlled Recall Tests Tests 12-30
    • SALES PROMOTION STRATEGYSALES PROMOTIONconsists of various incentives, mostly shortterm, intended to stimulate quicker and/orgreater purchase of particulargoods/services by consumers or the trade. 12-31
    • STRATEGY The Realities of Mail-in FEATURE Rebates* Consumers hate the hassles, companies love unredeemed rebates, and regulators are investigating the consumer complaints.* As much as 40% of rebates never get redeemed.* Some 400 million rebates are offered each year with a total value of $6 billion.* Unclaimed rebates translate into more than $2 billion of extra revenue for retailers and their suppliers each year.* Complex filing rules and long delays discourage consumers.* Companies emphasize the filing processes are intended to discourage fraud.* The largest rebate processor monitors 10,000 addresses suspected of submitting bogus rebates.* Rebates offer companies an opportunity to promote small discounts without marking the products down.* Rebates have become very popular with computer and consumer- electronics companies. 12-32
    • * The value of rebates has also increased.* Regulators are intensifying their scrutiny of the companies offering rebates.* The developing back-lash against rebates is pushing some companies to halt rebate strategies.* Others are encouraging online filing.* Fulfillment houses are revising their processing systems, using computer technology to validate claims.* Consumers would like mail-in rebates to go away but want the best price they can get. Source: Brian Grow, “The Great Rebate Runaround,” BusinessWeek, December 5, 2005, 34, 36, and 37. 12-33
    • Sales Promotion Activities and Targets Activities include trade shows, specialty advertising, contests, displays, coupons, recognition programs, and free samples. SALES PROMOTION TARGETSConsumer Salespeople Buyers Business Value Chain Buyers 12-34