Marketing Chiara Mauri 8 Integrated marketing communication The

Marketing Chiara Mauri 8. Integrated marketing communication

The promotion mix Advertising Sales promotion Public relations Direct marketing Personal selling

Advertising Paid form of non-personal communication about an organization, its products, or its activities that is transmitted through a medium to a target audience. https: //www. youtube. com/watch ? v=-8 ys. N 7 AKAn. E January 2016 Maybelline New York, the world’s number one make up brand, unveils its evolution of the brand spirit – Make It Happen. Maybelline New York shows strong commitment to bring hot & smart make-up products in order to inspire all women to define their own beauty, express themselves and make things happen! Together with the announcement of the brand new positioning “Make It Happen”, ….

Sales promotion Activity that offers customers, sales personnel, or resellers a direct inducement for purchasing a product (discount, coupon, sweepstake, etc. )

3 main targets of sales promotions Final consumers or users Middlemen Price deals Sales contests Points sponsored by suppliers (loyalty cards) Gifts Merchandising aids Company’s own salesforce

Public relations Non personal form of communication that seeks to influence the attitudes, feelings and opinions of customers, stockholders, suppliers, employees, and political bodies about an organization. A popular form is publicity, a non-paid form of communication in the form of a news story - News releases - News conference - Sponsorship PUMA and Maybelline New York Up the Makeup Game with Limited Edition Athleisure. Inspired Collection NEWS PROVIDED BY Maybelline New York Jan 17, 2019 https: //www. loreal-finance. com/eng

Direct marketing Consists of a direct and possibly interactive dialog between the marketer and the customer. Its goal is to generate leads, orders, visits, requests for info. https: //www. maybelline. ca/en-ca/newsletter

Personal selling: face-to-face communication with customers to inform and persuade them to buy.

Strengths and weaknesses of promo elements Element Strengths Weaknesses Advertising Efficient for reaching many buyers simultaneously Effective to create brand image Variety of media Reaches many people who are not potential buyers Total cost may be high Exposure time is short Sales promotion Stimulates demand Variety of tools Effective in changing shortterm behavior Risks inducing brand loyal customers to stock up Impact limited to short term Price-related sales promotion may hurt brand image Public relations Total cost may be low Media-generated messages appear more credible Media may not cooperate Little control over the message

Element Strengths Weaknesses Direct marketing Message can be customized and prepared quickly Managing and maintaining up-to-date database is costly Low customer response Personal selling Sales people can be persuasive and influential Two-way communication Message can be targeted to specific individuals High cost per contact Salespeople may be hard to recruit and motivate Presentation skills may vary among salespeople

The AIDA model ( Purchase funnel) Marketing and adv managers use this model to target all touchpoints through a customers’ purchase journey, from getting to know the product to its purchase

How various promo tools contribute to product choice Element Adv Awareness XXX Sales promo Public relations XX Interest XXX XX XX Direct marketing Personal selling X Desire X Action XXX X X XX XX/X

2 key advertising decisions 1. Determining the size of the adv budget: how much to invest Criteria 2. Allocating the adv budget: – Message strategy – Media mix

Adv budget decision: 6 main criteria - % sales Rationale is that adv is needed to generate sales, and the percentage can be easily adjusted - Per-unit expenditure: a fixed sum is spent on adv for each unit of the product expected to be sold. Popular with high price products - All you can afford: adv as % of revenues or profits Rationale is that it fixes a limit - Competitive parity, a followershio technique Rationale is that adv is defensive - Research approach: budget is determined on the basis of research findings Experiment in test market(s) - Task approach: First adv goals, then the tasks to accomplish, then how much it will cost

Comparison between criteria In 2018 Company X sold 1. 000 units of product A at an average unit price of 10€. With sales of 10. 000€, A’s market share is 10% (in volume). The main competitor of A has a market share of 15% in volume, with a unit price of 11€, and spends 7% of its revenues on adv. In 2019 Company X expects a sales increase of 10%, at the same average unit price of 10€. Total sales are increasing at a rate of 5%/year in volume. Company X wants to increase product A’s market share from 10% to 12% in 2 years. Company X’s net profits are 5% of revenues. Let’s compare the different criteria of fixing adv budget for product A

Sales (vol) 2018 Company A 1. 000 Competitor 1. 500 2019 1. 100 Price Revenues Market share 2018 € 10, 00 € 10. 000, 00 10, 0% € 11, 00 € 16. 500, 00 15, 0% A) Same % as competitor: 7% € 770, 00 B) Per unit expenditure: 0, 8€ € 880, 00 C) All you can afford: % of profit € 500, 00 D) Competitive parity € 1. 155, 00 E) Research approach F) Task approach: goal is MS=12% 2019 -20 12, 0% Tot market (vol) 2018 2019 10. 000 10. 500 Adv exp. (share%) Adv exp. 7, 0% € 1. 155, 00 Net profit (%) Net profit 5% € 500, 00

Allocating the adv budget The planning of an adv campaign and the creation of persuasive messages require the collection of some critical information: 1. Who the firm’s (potential) customers are – their demographic, economic and psycological characteristics Demand segmentation 2. How many such customers there are 3. How much of the firm’s product they are currently buying and are expected to buy in the short and long term Forecasting 4. Which individuals , other than customers, influence purchasing decisions 5. Where they buy the firm’s product 6. When they buy, and frequency of purchase 7. Which competitive brands they buy and frequency of purchase 8. How they use the product 9. Why they buy particular types of products

Media mix Offline media TV Radio Newspaper Magazines Outdoor Direct mail Others, unconventional Online media Direct email Internet Social media

Useful KPI’s for media selection and comparison One of the most used KPI for media selection is Cost per thousand, or CPM, that is, the cost of reaching 1. 000 prospects. Media are compared in terms of circulation and audience size. An effective KPI to measure adv pressure is the Gross Rating Point (GRP) = Reach x Frequency Reach: number of different targeted audience members exposed at least once to the advertiser’s message within a predetermined time frame Average frequency: Number of times, on average, the audience members are exposed to an advertisement within a time period.

The marketer’s dilemma To develop a media schedule that both: a) Exposes a sufficient number of the targeted customers (reach) to the firm’s product b) Exposes them enough times (frequency) to the product to produce the desired effect

Major decisions in advertising management Message decision: • Generation • Evaluation and selection • Execution Objectives setting: • Communication objectives • Sales/Market share objectives Advertising evaluation: • Communication impact • Sales impact Budget decisions: 6 main criteria • • Media decision: Reach & frequency Media types Media vehicles Media timing