prentice hall, copyright 2009 1 communicating customer value: advertising and public relations...

Communicating Communicating Customer Value:Customer Value:

Advertising Advertising and and

Public RelationsPublic Relations

Chapter 12Next Exit

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Rest Stop:Rest Stop: Previewing the ConceptsPreviewing the Concepts

1. Discuss the process and advantages of integrated marketing communications in communicating customer value.

2. Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix.

3. Describe and discuss the major decisions involved in developing an advertising program.

4. Explain how companies use public relations to communicate with their publics.

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GEICO – PastGEICO initially targeted

government employees and noncommissioned military officers with exceptional driving records.

Used direct mail and telephone to market directly to consumers.

Passed cost savings on to customers via lower premiums.

GEICO –GEICO – Building RelationshipsBuilding RelationshipsCase StudyCase Study

GEICO – PresentPurchased by Warren Buffet

who increased ad spending.All ads feature the “15 minutes

could save you 15% or more on car insurance” value proposition.

Funny ads (talking gecko, “good news,” “Cavemen,” testimonials with celebrity translation) have resulted in 91% awareness and double-digit market share gains.

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Figure 12.1Figure 12.1Integrated Marketing Integrated Marketing

CommunicationsCommunications

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Several factors are changing the face of marketing communications:– Consumers are better informed and more

communications empowered.– Mass markets have fragmented, leading to

a shift away from mass marketing.– Changes in communications technology

have created new media for interacting with targeted consumers.

Integrated Marketing Integrated Marketing CommunicationsCommunications

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Firms are doing less broadcasting and more narrowcasting.– Specialty magazines– Cable TV– Video on demand– Internet catalogs– Podcasts– Product placements in TV and video games

Integrated Marketing Integrated Marketing CommunicationsCommunications

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Integrated Marketing Integrated Marketing CommunicationsCommunications

A strong need for integrated marketing communications (IMC) exists because conflicting messages from different sources can create confusion or blur brand perceptions.

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Integrated Marketing Integrated Marketing CommunicationsCommunications

Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling

message about the organization and its products.

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Nikon Uses IMC

Nikon’s TV and print ads are consistent and direct consumers to their Web

site.

Marketing in Action

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Shaping the Shaping the Overall Promotion MixOverall Promotion Mix

Nature of advertising:– Can reach masses of geographically

dispersed buyers at a low cost per exposure– Can repeat a message many times– Consumers view advertised products as

more legitimate– Is impersonal, one-way communication– Can be very costly for some media types

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Nature of personal selling:– Involves personal interaction between two

or more people– Most effective tool at building preferences,

convictions and actions– Allows relationship building and two-way

communication– Requires long-term commitment– Most expensive promotion tool

Shaping the Shaping the Overall Promotion MixOverall Promotion Mix

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Nature of sales promotion:– Wide assortment of tools– Attracts consumer attention– Can be used to dramatize product offers– Offers strong incentives to buy– Invites and rewards quick consumer

response– Effects are short-lived

Shaping the Shaping the Overall Promotion MixOverall Promotion Mix

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Nature of public relations:– Very believable– Reaches people who avoid salespeople and

ads– Can dramatize a company or product– Tends to be used as an afterthought– Planned use can be effective and

economical

Shaping the Shaping the Overall Promotion MixOverall Promotion Mix

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Nature of direct marketing:– Many forms of direct marketing exist– Direct marketing forms share four primary

characteristics:• Nonpublic

• Immediate

• Customized

• Interactive

– Well suited to highly targeted marketing

Shaping the Shaping the Overall Promotion MixOverall Promotion Mix

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Promotion Mix StrategiesPromotion Mix Strategies

Push strategy:– Promotion strategy that calls for using

the sales force and trade promotion to push the product through channels.

Pull strategy:– Promotion strategy that calls for

spending a lot on advertising and consumer promotion to induce final consumers to buy the product.

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Figure 12.2Figure 12.2Push vs. Pull Promotion StrategyPush vs. Pull Promotion Strategy

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AdvertisingAdvertising

Advertising has been used for centuries. U.S. advertisers spend more than $285

billion each year; worldwide spending exceeds $604 billion.

Advertising is used by:– Business firms– Not-for-profit organizations– Professionals– Social agencies– Government

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Figure 12.3Figure 12.3Major Advertising DecisionsMajor Advertising Decisions

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Major Advertising DecisionsMajor Advertising Decisions

Advertising objective:– Specific communication task to be

accomplished with a specific target audience during a specific period of time.

Advertising objectives can be classified by their primary purpose:– Inform– Persuade– Compare– Remind.

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What’s This Ad’s Objective?

Marketing in Action

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Major Advertising DecisionsMajor Advertising Decisions

Setting the advertising budget:– Affordable method

– Percentage-of-sales method

– Competitive-parity method

– Objective-and-task method

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Advertising StrategyAdvertising Strategy

The strategy by which the The strategy by which the company accomplishes its company accomplishes its advertising objectives. It advertising objectives. It

consists of two major consists of two major elements: creating advertising elements: creating advertising

messages and messages and selecting advertising media.selecting advertising media.

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Developing advertising strategy:– Creating advertising messages

• Message strategy and message execution must break through the clutter

– Selecting advertising media• Set reach, frequency, and impact goals

• Choose among major media types

• Select specific media vehicles

• Decide on media timing

Major Advertising DecisionsMajor Advertising Decisions

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““Madison & Vine”Madison & Vine”

A term that has come to represent A term that has come to represent

the merging of advertising and the merging of advertising and entertainment in an effort to break entertainment in an effort to break through the clutter and create new through the clutter and create new avenues for reaching consumers avenues for reaching consumers with more engaging messages.with more engaging messages.

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Melding Ads and Entertainment

Marketing in Action

The aim of advertainment is to make ads so fun, entertaining, or useful that people want to watch them.

Branded entertainment involves making the brand an inseparable part of some other form of entertainment.

Visit the brandgames.com Web site, click “The Work” button, and learn more.

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Major Advertising DecisionsMajor Advertising Decisions

Planning the message strategy:– Identify customer benefits

– Develop compelling creative concept—the “Big Idea”

– Advertising appeals should be:•Meaningful

•Believable

•Distinctive

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Major Advertising DecisionsMajor Advertising Decisions

Technical Expertise

Scientific Evidence

Testimonial Evidence or Endorsement

Slice of Life Lifestyle Fantasy Mood or Image Musical Personality

Symbol

Message Execution Styles:

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Quick FlickQuick Flick

Marketing American Express

Click to play video

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Major Advertising DecisionsMajor Advertising Decisions

Message execution process:– Choose the execution style– Choose a tone

•Use memorable, attention-getting words

– Choose format elements:• Illustration

•Headline

•Copy

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Analyze This Ad!

Marketing in Action

What is the message execution style?

What is the tone of the ad?

Are the words used attention-getting and memorable?

How does the illustration work with the rest of the ad?

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Major Advertising DecisionsMajor Advertising Decisions

Consumer-generated messages:– Tapping consumers for message

ideas or actual ads can involve:•Searching existing Web video sites

•Holding contests or inviting consumers to submit ad message ideas and videos

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Crash the Super Bowl

Marketing in Action

The Doritos “Crash the Super Bowl Challenge” contest invited consumers to create their own video ads.

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Major Advertising DecisionsMajor Advertising Decisions

Setting media objectives:– Reach: Percentage of people exposed

to ad.

– Frequency: Number of times a person is exposed to advertisement.

– Media Impact: The qualitative value

of a message exposure through a given medium.

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Major Advertising DecisionsMajor Advertising Decisions

Consumer-generated messages:– Benefits of consumer-generated

messages:•Collects new ideas and fresh brand

perspectives at relatively little expense.

•Boosts consumer involvement and gets consumers talking and thinking about the brand.

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Fuel for ThoughtFuel for Thought

Think about the consumer-generated advertisements that you might have seen recently.

How did you find out about them?

What makes consumer-generated ads worth watching?

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Major Advertising DecisionsMajor Advertising Decisions

Each media type has specific advantages and disadvantages.

Choosing among media types requires consideration of the:– Medium’s impact– Message effectiveness– Cost

Media mix should be regularly reexamined.

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Major Advertising DecisionsMajor Advertising Decisions

Media vehicles:– Specific media within each general media

type, such as Newsweek. Factors to consider when choosing

vehicles:– Cost– Audience quality– Audience engagement– Editorial quality

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Major Advertising DecisionsMajor Advertising Decisions

Must also decide how to schedule the advertising over the course of a year.– Follow seasonal pattern– Oppose seasonal pattern– Same coverage all year

Choose the pattern of the ads:– Continuity– Pulsing

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Evaluating Advertising and Evaluating Advertising and Return on Advertising InvestmentReturn on Advertising Investment

Return on advertising investment:– Is equal to the net return on advertising

investment divided by the costs of the advertising investment.

Evaluating advertising involves:– Measuring the communication effects of an

ad—“Copy Testing.”– Measuring the sales effects of an ad:

• Is the ad increasing sales?

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Other Advertising Other Advertising ConsiderationsConsiderations

Organization of ad function:– Small companies—one person in firm– Large companies—ad department that may

also work with an ad agency– Advertising agencies employ specialists

who perform ad tasks better then the company’s own staff can.• Bring outside viewpoints to problem-solving

• Wide range of experience

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Other Advertising Other Advertising ConsiderationsConsiderations

International advertising issues:– To what degree should global advertising be

adapted to various countries?• Greater need for standardization of global

brand advertising strategies.

• Specific advertising programs must usually be adapted to local cultures and other factors.

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Standardized Worldwide Advertising

Marketing in Action

Gillette’s ads for its Venus razor are virtually the same worldwide.

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Public RelationsPublic Relations

Public Relations:– Building good relations with the firm’s

various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

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Public RelationsPublic Relations

Public relations departments perform the following functions:– Press relations or press agency– Product publicity– Public affairs– Lobbying– Investor relations– Development

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Public Relations Role and ImpactPublic Relations Role and Impact

Public relations:– May strongly impact public awareness

at a lower cost than advertising

– Can yield spectacular results

– Is beginning to play an increasingly important brand-building role

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Major Public Relations ToolsMajor Public Relations Tools

Corporate identity materials

Public service activities

Social networking Company Web

site

News Speeches Special events Written

materials Audiovisual

materials

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Company Web Sites

Marketing in Action

Company Web sites can be important PR vehicles. Butterball’s site offers recipes, carving tips, and more.

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Rest Stop:Rest Stop: Reviewing the ConceptsReviewing the Concepts

1. Discuss the process and advantages of integrated marketing communications in communicating customer value.

2. Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix.

3. Describe and discuss the major decisions involved in developing an advertising program.

4. Explain how companies use public relations to communicate with their publics.

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