Integrated Advertising Promotion and Marketing Communications Eighth Edition

Chapter Objectives (1 of 2) 1. What makes marketing research critical to the IMC

Chapter Objectives (2 of 2) 5. How do marketing communication objectives interact with the

Tim Hortons • Iconic coffee chain • Integrated campaign • Billboard, transit, and social

Chapter Overview • IMC planning process • Communications research – Target markets – Positioning

Figure 4. 1 The IMC Planning Process Copyright © 2018 Pearson Education Ltd. All

Communication Research • Understand customers purchase benefits • Product-specific research – Key selling points

Tests to Determine if a Particular Market Segment Is Viable • The individuals or

Figure 4. 2 Methods of Segmenting Consumer Markets • Demographics • Psychographics • Generations

Gender Segments Based on Demographics • Gender-based products • Gender differences in communications •

Marketing to Mothers • Buyers of i. Phones • Like media websites • Share

Marketing to Men • Shopping more • Focus on product performance • Prefer looking

Age Segments Based on Demographics • Target specific age group • Combine with other

Figure 4. 3 Influence of Tweens Influence/Opinion Percent Want instant gratification 56% Want customized

Income • Closely related to education • Lower income – necessities • Higher income

Ethnicity • Buying power - $2. 5 trillion • Significant part of identity •

Psychographic Segmentation • Describe consumers • AIO measures – Activities – Interests – Opinions

VALS Psychographic Segmentation • Innovators – successful, sophisticated – upscale products • Thinkers –

Figure 4. 4 Characteristics of Generation Segments Name of Segment Year of Birth Millennials

FIGURE 4. 5 The Millennial Generation Source: Based on “Infographic: Marketers Are Spending 500%

Geo-Targeting • Geographic area or region • Retailers use • Smartphones – GPS devices

Geodemographic Segmentation • Combines – Demographic census data – Geographic information – Psychographic information

Benefit Segmentation Fitness Industry • Winners • Dieters • Self-improvers Copyright © 2018 Pearson

Usage Segmentation • Usage or purchase history • Create clusters • Target specific clusters

Figure 4. 6 Methods of Segmenting Bto-B Markets • Industry (NAICS/SIC codes) • Size

Methods of Segmenting B-to-B Markets A business-to-business ad that can be targeted to a

Product Positioning • Is the perception created in the consumer’s mind regarding the nature

Figure 4. 7 Product Positioning Approaches • Product Attributes • Competitors • Use or

Elements of Positioning • Never completely fixed • Applies to business-to-business also • International

Marketing Communications Objectives Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 9 Methods of Determining Marketing Communication Budgets • Percentage of sales •

Types of Budgets (1 of 3) • Percentage of Sales – – Sales of

Figure 4. 10 Ad Spending and Market Share of Top Credit Card Companies Rank

Types of Budgets (2 of 3) • What we can afford – Set after

Types of Budgets (3 of 3) • Payout planning – – Ratio—advertising to sales

Communication Schedule • Pulsating schedule • Flighting schedule • Continuous schedule Copyright © 2018

IMC Components • Traditional advertising • Trade promotions • Consumer promotions • Media spending

Figure 4. 11 Breakdown of Marketing Expenditures Copyright © 2018 Pearson Education Ltd. All

Figure 4. 12 Ad Spending as Percent of Sales for Select Industries Source: Based

Figure 4. 13 Global Ad Spending by Media Source: Based on Ingrid Lunden, “Nielsen:

Figure 4. 14 Successful Globally Integrated Marketing Communications Tactics • Understand the international market

Blog Exercises • Motel 6 • Carnival Cruise Line • Segmentation & Positioning Copyright

Copyright © 2018 Pearson Education Ltd. All Rights Reserved

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Chapter Objectives (1 of 2) 1. What makes marketing research critical to the IMC planning process? 2. What categories are used to identify consumer target markets or market segments? 3. What categories are used to identify business-tobusiness market segments? 4. How do the various approaches to positioning influence the IMC planning process? Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Chapter Objectives (2 of 2) 5. How do marketing communication objectives interact with the other elements of the IMC planning process? 6. How are communications budgets established? 7. What elements are considered in developing an IMC program? Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Tim Hortons • Iconic coffee chain • Integrated campaign • Billboard, transit, and social media marketing • “Dark Experiment” publicity campaign • In-store television screens Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Chapter Overview • IMC planning process • Communications research – Target markets – Positioning strategies – Communication objectives • IMC components Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Communication Research • Understand customers purchase benefits • Product-specific research – Key selling points – Desirable features • Consumer-oriented research – – Context of product use Anthropological approach Sociological analysis Psychological motives • Target-market research – Identifies feasible market segments Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Tests to Determine if a Particular Market Segment Is Viable • The individuals or businesses within the segment are homogeneous. • The market segment is different from the population as a whole and distinct from other market segments. • The market segment is large enough to be financially viable to target with a separate marketing campaign. • The market segment must be reachable through some type of media or marketing communications method. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 2 Methods of Segmenting Consumer Markets • Demographics • Psychographics • Generations • Geographic • Geodemographics • Benefits • Usage Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Gender Segments Based on Demographics • Gender-based products • Gender differences in communications • Female consumers – – – Control 66% of spending ($12 trillion) Involved in purchasing high-priced electronics (96%) Deal with financial advisors (90%) Buy and sell stocks (80%) Household’s primary accountant (70%) Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Tips for Marketing to Women • Focus on how brand can improve life • Engage them with the brand • Focus on practical, not trivial • Tell a story that resonates • Provide details • Be positive Bonus Slide Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Marketing to Mothers • Buyers of i. Phones • Like media websites • Share photos/news • 20% of online users • Largest web spenders – Online – Mobile devices Bonus Slide Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Marketing to Men • Shopping more • Focus on product performance • Prefer looking for specific information • Favor products that reflect status • Like well-known brands Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 3 Influence of Tweens Influence/Opinion Percent Want instant gratification 56% Want customized product 59% Want what others have 41% Sometimes visit online stores 31% Shop online 28% Influence on household purchases Movies 55% Food 29% Personal care products 26% Family vacation destination 27% Technology 23% Source: Based on Lucia Moses, “Tweens Have a Big Say in Household Spending, ” Adweek, June 26, 2013. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Ethnicity • Buying power - $2. 5 trillion • Significant part of identity • Need to understand ethnic groups • Translation insufficient • Holistic approach Copyright © 2018 Pearson Education Ltd. All Rights Reserved

VALS Psychographic Segmentation • Innovators – successful, sophisticated – upscale products • Thinkers – educated, conservative, practical – durability, value • Achievers – goal-oriented, conservative, career, and family • Experiencers – young, enthusiastic, impulsive, fashion, social • Believers – conservative, conventional, traditional • Strivers – trendy, fun-loving, peers important • Makers – self-sufficient, respect authority, not materialistic • Survivors – safety, security, focus on needs, price Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 4 Characteristics of Generation Segments Name of Segment Year of Birth Millennials 1978 -2002 Spend money on clothes, automobiles, college, televisions, and stereos. Ninety percent live at home or in a dorm or rent an apartment. Generation X 1965 -1977 Focus on family and children. Spend on food, housing, transportation, and personal services. Younger Boomers 1954 -1964 Focus on home and family. Spend on home mortgage, pets, toys, playground equipment, and large recreational items. Older Boomers 1952 -1953 Spend on upgrading homes, ensuring education and independence of their children, and luxury items, such as boats. Seniors Up to 1951 Most have fixed incomes. Spend heavily on health care and related medical items. Characteristics Source: Author-created from Dana-Nicoleta Lascu and Kenneth E. Clow, Marketing Principles (Cincinnati, OH: Textbook Media Press, 2012). Copyright © 2018 Pearson Education Ltd. All Rights Reserved

FIGURE 4. 5 The Millennial Generation Source: Based on “Infographic: Marketers Are Spending 500% More on Millennials than all Others Combined, ” Adweek, November 7, 2015, http: //www. adweek. com/news/technology/infographic-marketers-are-spending-500 -more-millennials-all -others-combined-168176. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Geodemographic Segmentation • Combines – Demographic census data – Geographic information – Psychographic information • PRIZM – 66 market segments § Southside City § Towns and Gowns Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Usage Segmentation • Usage or purchase history • Create clusters • Target specific clusters • Create marketing programs for each cluster • Measure growth and migration Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 6 Methods of Segmenting Bto-B Markets • Industry (NAICS/SIC codes) • Size of business • Geographic location • Product usage • Customer value Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Product Positioning • Is the perception created in the consumer’s mind regarding the nature of the company and its products relative to the competition? • Positioning is created by factors such as product quality, price, distribution, image, and marketing communications. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 7 Product Positioning Approaches • Product Attributes • Competitors • Use or application • Price/quality • Product user • Product class • Cultural symbol Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Elements of Positioning • Never completely fixed • Applies to business-to-business also • International positioning important • Critical component of image and brand management Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 8 Communication Objectives • Develop brand awareness • Increase category demand • Change customer beliefs and attitudes • Enhance purchase actions • Encourage repeat purchases • Build customer traffic • Enhance firm image • Increase market share • Increase sales • Reinforce purchase decisions Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 9 Methods of Determining Marketing Communication Budgets • Percentage of sales • Meet-the-competition • “What we can afford” • Objective and task • Payout planning • Quantitative models Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Types of Budgets (1 of 3) • Percentage of Sales – – Sales of current year, or next year Simple Tends to work in the opposite direction Does not meet special needs • Meet the competition – Seeks to prevent market share loss – Highly competitive markets – Dollars may not be spent efficiently Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 10 Ad Spending and Market Share of Top Credit Card Companies Rank Credit Card Market Share Ad Spending (millions) 1 American Express 25. 1% $336 2 JP Morgan Chase 19. 4% $200 3 Bank of America 10. 7% $139 4 Citibank 8. 3% $214 5 Capital One 6. 7% $317 6 Discover 4. 4% $132 Source: Based on “U. S. Market Leaders by Category: Credit Cards, ? ” Ad Age’s Marketing Fact Pack 2016, December 21, 2015, p. 10. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Types of Budgets (2 of 3) • What we can afford – Set after all other items budgeted – Do not view marketing as important • Objective and task – Budgets determined by objectives – Best method of budgeting – Used by 50% of firms Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Types of Budgets (3 of 3) • Payout planning – – Ratio—advertising to sales or market share Larger percent at product launch Lower percent when brand established Based on threshold effect • Quantitative models – Computer simulations – Develop models based on historical data Copyright © 2018 Pearson Education Ltd. All Rights Reserved

IMC Components • Traditional advertising • Trade promotions • Consumer promotions • Media spending • Alternative media spending • Business-to-business media spending Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 12 Ad Spending as Percent of Sales for Select Industries Source: Based on “ 2012 Ad-to-Sales Ratios, Schonfield and Associates, July 2012”. Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 13 Global Ad Spending by Media Source: Based on Ingrid Lunden, “Nielsen: Old School TV Reigns Supreme at 58% of Ad Spend, Internet Display up 27% in Q 2, ” https: //techcrunch. com/, October 22, 2013 Copyright © 2018 Pearson Education Ltd. All Rights Reserved

Figure 4. 14 Successful Globally Integrated Marketing Communications Tactics • Understand the international market • A borderless marketing plan • Thinking globally but acting locally • Local partnerships • Communication segmentation strategies • Market communication analysis • Solid communication objectives Copyright © 2018 Pearson Education Ltd. All Rights Reserved