Bus169 Kotler Chapter 12


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Bus169 Kotler Chapter 12

  1. 1. Advertising and Public Relations
  2. 2. Chapter Objectives <ul><li>Describe integrated marketing communication (IMC) and classify IMC media, tools and technologies. </li></ul><ul><li>Outline the steps in developing IMC, including identifying a target audience and determining the response sought. </li></ul><ul><li>Describe the communication process: selecting a message, choosing the media, selecting a message source and collecting feedback. </li></ul><ul><li>Define the ways of setting an IMC budget: affordable, percentage-of-sales, competitive parity and objective-and-task methods. </li></ul>
  3. 3. Cont’d <ul><li>Explain the nature of each IMC tool – advertising, public relations, direct and digital marketing, sales promotion and personal selling- and the factors involved when setting the IMC program: type of product and market, push versus pull strategies, buyer-readiness states and product life-cycle stage. </li></ul><ul><li>Describe the nature of media advertising, including the main decisions involved: advertising budgeting, setting strategy, creative execution, media selection and evaluation in terms of communication and sales outcomes. </li></ul>
  4. 4. Cont’d <ul><li>Define public relations and outline the more common forms of this IMC tool. </li></ul><ul><li>Explain the need for socially responsible marketing communication and describe how this is achieved. </li></ul>
  5. 5. Marketing Promotion <ul><li>Communication by marketers that informs, reminds, or persuades potential buyers of the product, so that they can be positively influenced towards the product. </li></ul>
  6. 6. Integrated Marketing Communication (IMC) <ul><li>IMC is the coordination of a firm’s promotional efforts using major communication elements such as: </li></ul><ul><ul><li>Advertising . </li></ul></ul><ul><ul><li>Sales promotion . </li></ul></ul><ul><ul><li>Public relations . </li></ul></ul><ul><ul><li>Direct and digital marketing . </li></ul></ul><ul><ul><li>Personal selling . </li></ul></ul>
  7. 7. Cont’d <ul><li>A firm’s IMC program will consist of a specific blend of the communication elements that will most effectively meet their objectives to inform , persuade , and remind consumers of the firm’s product; as well as to reinforce the consumers’ attitudes and perceptions. </li></ul>
  8. 8. Cont’d <ul><li>Advertising </li></ul><ul><ul><li>Impersonal, one-way mass communication paid for by the firm to raise awareness of the firm or its product </li></ul></ul><ul><li>Sales Promotion </li></ul><ul><ul><li>Specific additional marketing activities to generate a significant short-term increase in sales volume </li></ul></ul><ul><li>Public Relations </li></ul><ul><ul><li>Additional publicity from credible sources to help create a positive image within the general community </li></ul></ul><ul><li>Direct and Digital marketing </li></ul><ul><ul><li>Inexpensive means of targeting large numbers of consumers </li></ul></ul><ul><li>Personal Selling </li></ul><ul><ul><li>Direct approach aimed at convincing consumers to buy the particular product </li></ul></ul>
  9. 9. Marketing Communication System
  10. 10. Developing IMC <ul><li>Communication has nine elements - Fig 12.2. </li></ul><ul><ul><li>There are: </li></ul></ul><ul><ul><li>Two major parties; the sender and the receiver of the information. </li></ul></ul><ul><ul><li>Two major communications tools; the message and the media used. </li></ul></ul><ul><ul><li>Four major communication functions; encoding , decoding , response and feedback . </li></ul></ul><ul><ul><li>The final element is noise (message interference). </li></ul></ul>
  11. 11. Elements in the Communication Process <ul><li>Sender . The party sending the message. </li></ul><ul><li>Encoding . The process of putting thoughts and ideas into symbolic form ready for transmission. </li></ul><ul><li>Message . The set of symbols that are sent to the intended target - the actual advertisement. </li></ul><ul><li>Media . The communication channel through which the message moves from sender to receiver. </li></ul><ul><li>Decoding . The process by which the receiver assigns meaning to the symbols encoded by the sender - consumer watches the advertisement and interprets the words and illustrations it contains. </li></ul>
  12. 12. Cont’d <ul><li>Receiver . The party that receives the message - the consumer who sees the advertisement. </li></ul><ul><li>Response . Reactions of the receiver after being exposed to the message - many possible responses. </li></ul><ul><li>Feedback . That part of the receiver's response which is communicated back to the sender - research can indicate whether or not the advertisement was liked. </li></ul><ul><li>Noise . The unplanned distortion of the message during the communication process that results in the receiver getting a message that is different to the one the sender had intended. </li></ul>
  13. 13. Elements in the Communication Process
  14. 14. Steps in Developing IMC
  15. 15. Decisions in developing IMC <ul><li>Identify the Target Audience </li></ul><ul><li>Determine Communication Objectives </li></ul><ul><li>Design a Message </li></ul><ul><li>Select a Media </li></ul><ul><li>Select a Message Source </li></ul><ul><li>Collect Feedback </li></ul>
  16. 16. 1. Identifying the Audience <ul><ul><li>Must start with a specific audience in mind </li></ul></ul><ul><ul><li>The audience may be potential buyers or current users; those who make the buying decision; or those who influence the decision </li></ul></ul><ul><ul><li>The audience may be individuals; groups; special publics; or the general public </li></ul></ul>
  17. 17. 2. Determining Objectives <ul><li>What response is the marketer trying to achieve through the message? </li></ul><ul><li> Marketer needs to know what the target audience’s </li></ul><ul><li> ‘ state of readiness’ is, in regard to the product. </li></ul><ul><ul><li>Awareness - may not even recognise product </li></ul></ul><ul><ul><li>Knowledge - aware, but knows very little </li></ul></ul><ul><ul><li>Liking - knows enough to like or dislike </li></ul></ul><ul><ul><li>Preference - likes product, but prefers others </li></ul></ul><ul><ul><li>Conviction - prefers, but not committed to buy </li></ul></ul><ul><ul><li>Purchase - needs more incentive to buy </li></ul></ul>
  18. 18. 3. Designing the Message <ul><ul><li>Rational Appeal - highlight the benefits </li></ul></ul><ul><ul><li>Emotional Appeal - positive / negative </li></ul></ul><ul><ul><li>Moral Appeal - highlight what is ‘right’ </li></ul></ul><ul><ul><li>Message Structure - what approach? </li></ul></ul><ul><ul><ul><ul><ul><li>- how to present the ‘argument’ </li></ul></ul></ul></ul></ul><ul><ul><li>Message Format - how to convey the </li></ul></ul><ul><ul><li> message. </li></ul></ul>
  19. 19. Cont’d <ul><li>Ideally the firm’s message should : </li></ul><ul><ul><li>Get A ttention </li></ul></ul><ul><ul><li>Hold I nterest </li></ul></ul><ul><ul><li>Arouse D esire </li></ul></ul><ul><ul><li>Obtain A ction </li></ul></ul><ul><ul><li>( A framework known as the AIDA model) </li></ul></ul>
  20. 20. Designing Message - Content <ul><li>Rational Appeals </li></ul><ul><ul><li>These relate to the audience’s self interest, and indicate to the consumer that the product will produce desired benefits. </li></ul></ul><ul><li>Emotional Appeals </li></ul><ul><ul><li>These attempt to generate positive or negative emotions in consumers that can motivate them to make a purchase. </li></ul></ul><ul><li>Moral Appeals </li></ul><ul><ul><li>These are directed to the audience’s sense of what is socially and morally right. </li></ul></ul>
  21. 21. Message - Structure/ Format <ul><li>Message Structure - three structure issues: </li></ul><ul><ul><li>Whether to draw a conclusion, or leave it to the audience </li></ul></ul><ul><ul><li>Whether to present a one-sided or two-sided argument </li></ul></ul><ul><ul><li>Whether to present the strongest argument first, or last </li></ul></ul><ul><li>Message Format </li></ul><ul><ul><li>The communicator needs a strong format for the message. </li></ul></ul><ul><ul><li>In print advertisements, the communicator decides on the headline; copy; illustration; and colour. </li></ul></ul><ul><ul><li>For radio, chooses words; sounds; and voices. </li></ul></ul><ul><ul><li>For TV, all elements, plus body language, are considered. </li></ul></ul>
  22. 22. <ul><li>Personal Communication channels </li></ul><ul><ul><li>Channels through which two or more people communicate directly with each other, including face-to-face; person-to-audience; telephone; or through the mail. </li></ul></ul><ul><ul><li>Extra important for ‘high risk’ purchases </li></ul></ul><ul><li>Non-personal communication channels </li></ul><ul><ul><li>Channels that carry messages without personal contact or direct feedback, including media; events; and particular environments. </li></ul></ul>4. Selecting Media
  23. 23. 5. Selecting Message Source <ul><li>The impact of the message on the audience is also affected by how the audience views the sender of the message. </li></ul><ul><li>Messages delivered by a highly credible source are more persuasive, e.g. entertainers; athletes; industry professionals. </li></ul><ul><li>Sources are made credible by those who are well liked, trusted; or viewed as an expert. </li></ul>
  24. 24. 6. Collecting Feedback <ul><li>After sending the message, the communicator must assess what effect the message had on the target audience </li></ul><ul><li>This might involve asking target audience if it: </li></ul><ul><ul><li>remembers the message; how many times it was seen; what specific points are recalled; how they felt about the message; past and present attitude to the product or company. </li></ul></ul>
  25. 25. Setting the IMC Budget <ul><li>Common methods used to set total IMC budget: </li></ul><ul><ul><li>Affordable method </li></ul></ul><ul><ul><ul><li>only what the firm can afford to spend . </li></ul></ul></ul><ul><ul><li>Percentage-of-sales method (cause or result?) </li></ul></ul><ul><ul><ul><li>as a % of current or projected sales . </li></ul></ul></ul><ul><ul><li>Competitive-parity method </li></ul></ul><ul><ul><ul><li>to match what competitors spend . </li></ul></ul></ul><ul><ul><li>Objective-and-task method </li></ul></ul><ul><ul><ul><li>estimate the cost of the tasks to meet set objectives . </li></ul></ul></ul><ul><ul><ul><li>the most logical approach, but the most difficult to use . </li></ul></ul></ul><ul><ul><li>Each method has advantages/ disadvantages </li></ul></ul>
  26. 26. Setting the IMC Mix <ul><li>The marketer needs to divide the total IMC budget among the major communication categories, using specific media, tools, and technologies to achieve marketing objectives: </li></ul><ul><ul><li>Media advertising </li></ul></ul><ul><ul><li>Public relations </li></ul></ul><ul><ul><li>Sales promotion </li></ul></ul><ul><ul><li>Direct and digital marketing </li></ul></ul><ul><ul><li>Personal selling </li></ul></ul><ul><ul><li>Different companies within the same industry can </li></ul></ul><ul><ul><li>differ greatly in how they design their IMC mix. </li></ul></ul>
  27. 27. Considerations in Developing IMC <ul><li>Companies need to consider many factors when developing their IMC program, including </li></ul><ul><ul><li>type of product and market; </li></ul></ul><ul><ul><li>‘ push’ versus ‘pull’ strategy; </li></ul></ul><ul><ul><li>buyer-readiness state; </li></ul></ul><ul><ul><li>product life-cycle stage. </li></ul></ul>
  28. 28. Type of Product/ Market <ul><li>Business vs. Consumer product </li></ul><ul><li>Cost of the product </li></ul><ul><li>Level of ‘risk’ involved </li></ul><ul><li>Major differences in B2C and B2B markets </li></ul><ul><li>Consumer (B2C) </li></ul><ul><ul><li>more emphasis on advertising and sales promo </li></ul></ul><ul><ul><li>much less on personal selling </li></ul></ul><ul><li>Industrial (B2B) </li></ul><ul><ul><li>greater emphasis on personal selling </li></ul></ul>
  29. 29. Push/ Pull Strategies <ul><li>PUSH strategy involves pushing the product through marketing channels (intermediaries), who are then expected to generate interest from the final consumers/ end-users to encourage purchase of the product </li></ul><ul><li>PULL strategy aims the marketing activities directly at final consumers who are then expected to ‘demand’ that intermediaries make the product available to enable consumers to buy. </li></ul>
  30. 30. Buyer Readiness <ul><li>The ‘state of readiness’ helps determine which communication approach will be most effective </li></ul><ul><ul><li>Awareness and Knowledge stages </li></ul></ul><ul><ul><ul><li>Use of Advertising and PR </li></ul></ul></ul><ul><ul><li>Liking; Preference; and Conviction stages </li></ul></ul><ul><ul><ul><li>Use of Personal selling and Advertising </li></ul></ul></ul><ul><ul><li>Ready to Purchase stage </li></ul></ul><ul><ul><ul><li>Use of Direct marketing; Sales calls and Sales promotion </li></ul></ul></ul>
  31. 31. Which stage in the PLC <ul><li>Introduction; Growth; Maturity; Decline </li></ul><ul><li>Each stage of the Cycle will display different characteristics and, therefore, each may require a different approach </li></ul><ul><li>Some IMC elements are more / less suited to particular PLC stages </li></ul>
  32. 32. Main Decisions in Advertising <ul><ul><li>Advertising Objectives </li></ul></ul><ul><ul><li>specific tasks for specific audience </li></ul></ul><ul><li> Budget Decisions </li></ul><ul><ul><li>will depend on item/ market/ competitors </li></ul></ul><ul><li> Message Decisions </li></ul><ul><ul><li>what needs to be communicated, and how </li></ul></ul><ul><ul><li>Media Decisions </li></ul></ul><ul><ul><li>Media type/ message frequency </li></ul></ul>
  33. 33. Main Decisions Fig 12.7
  34. 34. Setting Advertising Objectives <ul><li>The objective is a specific communication task to be accomplished with a specific target audience, during a specific period of time. </li></ul><ul><li>Advertising objectives can be classified by purpose, whether their aim is to inform; persuade; or remind. Will result in: </li></ul><ul><ul><li>Informative advertising. </li></ul></ul><ul><ul><li>Persuasive advertising. </li></ul></ul><ul><ul><li>Comparison advertising. </li></ul></ul><ul><ul><li>Reminder advertising. </li></ul></ul>
  35. 35. Possible objectives Fig 12.8
  36. 36. Setting Advertising Budget <ul><li>After determining its advertising objectives, the company can set its advertising budget for each product . </li></ul><ul><li>The role of advertising is to positively affect the level of demand for the product . </li></ul><ul><li>A company wants to spend only that amount of money needed to achieve the sales goal . </li></ul>
  37. 37. Cont’d <ul><li>Specific factors to consider include : </li></ul><ul><ul><li>Stage in the product life cycle: new products need larger budgets. </li></ul></ul><ul><ul><li>Market share: high market-share brands usually need more advertising spending as a percentage of sales. </li></ul></ul><ul><ul><li>Competition and clutter: in a market with many competitors, more advertising is necessary. </li></ul></ul><ul><ul><li>Advertising frequency: many repetitions requires more budget. </li></ul></ul><ul><ul><li>Product differentiation: a brand that closely resembles other brands will require more advertising to help differentiate it from the competition. </li></ul></ul>
  38. 38. Developing Advertising Strategy <ul><li>A large advertising budget does not guarantee a successful advertising campaign. Two advertisers can spend the same amount on advertising, yet produce very different results. </li></ul><ul><li>The first step in creating effective advertising messages is to decide what general message will be communicated to consumers. </li></ul><ul><ul><ul><ul><li>this is the message strategy </li></ul></ul></ul></ul>
  39. 39. Message Execution <ul><li>Slice-of-life : shows the product being used in a typical situation. </li></ul><ul><li>Lifestyle : shows how product fits a particular lifestyle. </li></ul><ul><li>Fantasy : creates a fantasy (suggested situation) around the product or its use. </li></ul><ul><li>Mood or image : builds a mood or image around the product, such as beauty; love; or serenity. </li></ul><ul><li>Musical : shows people or cartoon characters singing a song about the product. </li></ul>
  40. 40. Cont’d <ul><li>Personality symbol : creates a well known character that represents the product. </li></ul><ul><li>Technical expertise : shows the company’s expertise in making the product. </li></ul><ul><li>Scientific evidence : presents survey or scientific evidence to indicate that the brand is better, or better liked, than other brands. </li></ul><ul><li>Testimonial evidence : features a highly believable or likeable source endorsing the product. </li></ul>
  41. 41. Selecting Advertising Media <ul><li>The advertiser chooses advertising media to carry the message. </li></ul><ul><li>The major steps in media selection are: </li></ul><ul><ul><li>Deciding on reach, frequency and impact. </li></ul></ul><ul><ul><li>Selecting major media types. </li></ul></ul><ul><ul><li>Deciding on media timing. </li></ul></ul><ul><ul><li>Selecting specific media vehicles. </li></ul></ul>
  42. 42. Profiles of Main Media Types
  43. 43. Advertising Evaluation <ul><li>Measuring communication effect (copy testing). </li></ul><ul><li>Three major methods of advertising ‘ pre-testing’ </li></ul><ul><ul><li>Direct rating ads rated by panel of consumers </li></ul></ul><ul><ul><li>Portfolio tests level of consumer recall </li></ul></ul><ul><ul><li>Laboratory tests physiological testing (attention getting) </li></ul></ul><ul><li>Two popular methods of advertising ‘post-testing’ </li></ul><ul><ul><li>Recall tests how well the ad was noticed </li></ul></ul><ul><ul><li>Recognition tests how ad compares to competitors </li></ul></ul>
  44. 44. Measuring Sales Effect <ul><li>The effect of advertising on sales is often much harder to measure than the communication effect, because sales are influenced by many other factors. </li></ul><ul><li>What volume of sales might be generated by an ad that increases brand awareness by 20%, and brand preference by 10%? </li></ul><ul><li>One way to measure the effect advertising has on sales is to compare past sales with past advertising expenditures. Another is to conduct experiments. </li></ul><ul><li>However, measuring the results of advertising expenditure is difficult and inexact. </li></ul>
  45. 45. International Advertising Decisions <ul><li>The major decision is the extent to which global advertising should be adapted to the unique characteristics of markets in various countries. </li></ul><ul><li>Standardisation delivers benefits, such as lower costs and greater coordination of global efforts, but ignores important elements like cultural differences. </li></ul><ul><li>Most companies try to think globally and act locally. </li></ul><ul><li>Costs and legislative requirements in different countries will always need to be considered. </li></ul>
  46. 46. Public Relations Decisions <ul><li>Another major mass-communication tool is public relations, which aims at building good relations with the company’s various publics, using different tools: </li></ul><ul><ul><li>Press relations </li></ul></ul><ul><ul><li>Product publicity </li></ul></ul><ul><ul><li>Public affairs </li></ul></ul><ul><ul><li>Lobbying </li></ul></ul><ul><ul><li>Investor relations </li></ul></ul><ul><ul><li>Development </li></ul></ul><ul><ul><li>The objective is to build a good ‘corporate image’ </li></ul></ul>
  47. 47. Major Public Relations Tools <ul><li>News </li></ul><ul><li>Public speeches </li></ul><ul><li>Special events – public openings </li></ul><ul><li>Written materials </li></ul><ul><li>Audiovisual materials </li></ul><ul><li>Corporate identity materials </li></ul><ul><li>Community service activities </li></ul>
  48. 48. Socially Responsible Marketing Communication <ul><li>Advertising </li></ul><ul><ul><li>Companies must avoid false/ deceptive advertising. </li></ul></ul><ul><ul><li>Advertisers must not create advertisements that have the capacity to deceive the audience. </li></ul></ul><ul><ul><li>Sellers must avoid bait-and-switch advertising that attracts buyers under false pretences. </li></ul></ul><ul><li>Personal selling </li></ul><ul><ul><li>Companies must ensure their salespeople follow the rule of ‘fair competition’ when selling products directly to the public. </li></ul></ul>
  49. 49. Cont’d <ul><li>Direct and Digital Marketing: </li></ul><ul><ul><li>Direct and digital marketers and their customers usually enjoy mutually rewarding relationships. </li></ul></ul><ul><ul><li>However, unfairness, deception and fraud from aggressive markets can sometimes occur. </li></ul></ul><ul><ul><li>Direct marketing can also have a major impact on individual privacy . </li></ul></ul>