Consumer Behavior & Marketing Communication

Unit - III

Communication & its Process Marketing Communication & Objectives Integrated Marketing Communication Factors contributing IMC IMC Promotion mix & Challenges IMC Management & Planning model Integrated Marketing Communication & Supportive communication E-commerce in Marketing Communication

Learning Objectives
Understanding the concepts of communication, marketing communication & integrated marketing communication The planning & promotion mix of IMC The involvement of e-commerce in marketing communication

Communication & its Process

Chapter-1 Unit-3

Communication
Communication is the sharing of information between two or more individuals or groups to reach a common understanding. Communication, no matter how electronically based, is a human endeavor and involves individuals and groups. Communication does not take place unless a common understanding is reached.

Good communication
Good communication is essential for obtaining efficiency, quality, responsiveness to customers, and innovation, and thus a necessity for gaining a competitive advantage.

Good communication is necessary so that managers can increase efficiency by learning to take advantage of new and more efficient technologies and by training workers to operate the new technologies.

Good communication Continued.

Improving quality hinges on effective communication, since managers need to communicate to employees the importance of high quality and the routes to attaining it. Good communication can help increase responsiveness to customers Innovation, which often takes place in cross-functional teams, also requires effective communication

The Communication Process

The communication process consists of two phases. In the transmission phase, information is shared between two or more individuals or groups. In the feedback phase, a common understanding is reached. To start the transmission state, the sender, the person or group wishing to share information with some other person, decides on the message, and what information to communicate.

Communication process continued

The sender translates the message into symbols or language, a process called encoding. Noise refers to anything that hampers any stage of the communication process. Once encoded, a message is transmitted through a medium to the receiver, the person or group for which the message is intended.

Communication process continued

A medium is the pathway through which a message is transmitted to a receiver. At the next stage, the receiver interprets and tries to make sense of the message, a process called decoding. The feedback phase is begun when the receiver decides what message to send to the original sender, encodes it, and transmits it.

Communication process continued

The original sender decodes the message and makes sure that a common understanding has been reached. If a common understanding has not been reached, the sender and receiver repeat this process as many times as needed to reach a common understanding. The encoding of messages into words, written or spoken, is verbal communication. Nonverbal communication shares information by means of facial expressions, body language, and even style of dress.

Communication process continued

Nonverbal communication can be used to reinforce verbal communication. People tend to have less control over nonverbal communication and can inadvertently send a message they did not intend to. Sometimes nonverbal communication is used to send messages that cannot be sent through verbal channels.

The Communications Process

Marketing Communication & Objectives

Chapter-2 Unit-3

Marketing Communication
MARKETER INITIATED TECHNIQUES USED TO SET UP CHANNELS OF INFORMATION AND PERSUASION WITH TARGETED AUDIENCES TO INFLUENCE ATTITUDES AND BEHAVIOR Promotion Message and Media MARKETING COMMUNICATIONS MIX Tool Box of Media and Techniques Integration and Coordination Based on Communications Model

OBJECTIVES OF MARKETING COMMUNICATION

Informing Persuading Reminding Increase Market Penetration Develop Repeat Purchase Behavior Establish Customer Relationships Increase Rate of Consumption Encourage Product Trial Stimulate Impulse Buying Stimulate Demand Differentiate the Product Establish a Product Image Influence Sales Volume Establish, Modify, or Reinforce Attitudes Develop Sales Leads Stimulate Interest Establish Understanding Build Support & Acceptance

Elements of Marketing Communication Mix

Advertising Public Relation Direct Marketing Personal Selling Publicity Sales Promotion

Objectives of marketing communication

Stimulate trials Encourage Repurchase Complementary Products Increase Consumption Neutralize Competitors Support Flexible Pricing Impulse Purchasing Price Deals Coupons Avoid Price Reductions Gain/Maintain Distribution Defend Against Competitors Influence Reseller Promotion Increase Reseller Inventory Influence Price Discount

Integrated Marketing Communication

Chapter-3 Unit-3

Marketing Communications Audience

Point of Purchase Public Relation Publicity Packaging Direct Response Sales Promotions Events Out door Broad cast Print media Direct mail Internet/interactive media

Marketing Communications Audience

The concept of integrated marketing communications shows a broad perspective of an IMC approach that considers all sources of brand or company contact that a customer or prospect has with a product or service. The IMC perspective requires that a company develop a total marketing communications strategy that recognizes all of the ways a company can communicate with its customers.

It introduces the concept of integrated marketing communications and how consumers perceptions of a company and/or various brands are formed through messages they receive or contacts they have with the company.

Traditional Approach to Marketing Communications

The traditional approach to advertising and promotion where many of the marketing and promotional functions were planned and managed separately with different budgets, different views of the market, and different goals and objectives. Many of the marketing activities such as package design, sales promotion, and direct marketing services were viewed as ancillary services and handled on a project basis rather than integrating them into the IMC program. The traditional approach to marketing communications lacks coordination and consistency. The disconnected puzzle pieces are designed to demonstrate how traditional approaches to marketing communications often viewed the various IMC tools as separate pieces of the puzzle rather than having them all work together.

Basic Elements of the Promotional Mix

The promotional mix is the basic tools used to accomplish an organizations communication objectives. These tools include:
Advertising any paid form of non personal communication about an organization, product, service, or idea by an identified sponsor Direct marketing communication directly with target customers to generate a response and/or transaction Interactive/Internet marketing communication through interactive media such as the Internet, CD-ROMS and kiosks. Sales promotion marketing activities that provide extra value or incentives to sales force, distributors, or consumers to stimulate immediate sales Publicity/Public Relations Publicity is a form of non-personal communication not directly paid for or run under identified sponsorship. Public relations is a management function which executes programs of action to earn public understanding and acceptance an enhance the image of the company. Personal Selling person-to-person communication between a seller and buyer

Direct Marketing is Part of IMC

Direct marketing is a form of integrated marketing communications whereby an organization communicates directly with target customers to generate a response and/or transaction. It involves a variety of activities including:
Direct mail Direct response advertising (on TV, radio or in magazines or newspapers) Telemarketing Internet Sales Catalogs Shopping channel

Using the Internet as an IMC Tool

The rapid changes in technology have led to dramatic growth of communications through interactive media, particularly the Internet. This communication medium is unique in that it allows for the backand-forth flow of information in real time. Customers can perform a variety of functions on the Internet such as receive and alter information and images, make inquires, respond to questions, and, of course, make purchases. The Internet has changed the ways companies communicate to their customers as companies and organizations of all sizes have developed websites to promote their products and services.

Using the Internet as an IMC Tool

The Internet has changed the way companies communicate with their customers. Because of its interactive nature, it is a very effective way to communicate with customers. In addition to advertising, companies can offer sales promotion incentives such as coupons or contests, do direct marketing, and execute public relations, and personal selling functions via the Internet.

IMC Promotion mix & Challenges

Chapter-5 Unit3

Setting the Promotional Mix

Setting the Overall Promotion Mix
Determined by the nature of each promotion tool and the selected promotion mix strategy

Setting the Promotional Mix

Promotion Tools
Advertising Personal Selling Sales Promotion Public Relations Direct Marketing
Reaches large, geographically dispersed audiences, often with high frequency Low cost per exposure, though overall costs are high Consumers perceive advertised goods as more legitimate Dramatizes company/brand Builds brand image; may stimulate short-term sales Impersonal; one-way communication

Setting the Promotional Mix

Promotion Tools
Advertising Personal Selling Sales Promotion Public Relations Direct Marketing

Most effective tool for building buyers preferences, convictions, and actions Personal interaction allows for feedback and adjustments Relationship-oriented Buyers are more attentive Sales force represents a longterm commitment Most expensive of the promotional tools

Setting the Promotional Mix

Promotion Tools
Advertising Personal Selling Sales Promotion Public Relations Direct Marketing
May be targeted at the trade or ultimate consumer Makes use of a variety of formats: premiums, coupons, contests, etc. Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales Stimulates quick response Short-lived Not effective at building longterm brand preferences

Setting the Promotional Mix

Promotion Tools
Advertising Personal Selling Sales Promotion Public Relations Direct Marketing
Highly credible Many forms: news stories, news features, events and sponsorships, etc. Reaches many prospects missed via other forms of promotion Dramatizes company or benefits Often the most underused element in the promotional mix

Setting the Promotional Mix

Promotion Tools
Advertising Personal Selling Sales Promotion Public Relations Direct Marketing
Many forms: Telephone marketing, direct mail, online marketing, etc. Four distinctive characteristics:
Nonpublic Immediate Customized Interactive

Well-suited to highly targeted marketing efforts

Setting the Promotional Mix

Promotion Mix Strategies
Push strategy: trade promotions and personal selling efforts push the product through the distribution channels. Pull strategy: producers use advertising and consumer sales promotions to generate strong consumer demand for products.

Setting the Promotional Mix

Checklist: Integrating the Promotion Mix
Analyze trends (internal and external) Audit communications spending Identify all points of contact Team up in communications planning Make all communication elements compatible Create performance measures Appoint an IMC manager

IMC Management & Planning model

Chapter-6 Unit-3

IMC Planning Model

This model presents the framework for developing, implementing, evaluating, and controlling the firms IMC program and activities. This model should be reviewed very carefully at the beginning of the course to show students what is involved in the development of a complete IMC program.

It presents the framework that is used for the text and provides an opportunity to provide students with the big picture and a roadmap of what will be covered in the course.

IMC Planning Process

The first step in the IMC planning process is to review the marketing plan and objective. Before developing a promotional plan, marketers must understand where the company (or brand) has been, its current position in the market, where it intends to go, and how it plans to get there. Most of this information should be contained in the marketing plan. Marketing plans can take several forms, but general include the following five basic elements:
A detailed situation analysis, which includes an internal marketing audit and review and an external analysis of the market competition and environmental factors.

IMC Planning Process continued

Specific marketing objectives that provide direction, a time frame for marketing activities, and a mechanism for measuring performance. A marketing strategy and program that includes selection of target markets and plans for the four elements of the marketing mix A program for implementing the strategy, including determining specific tasks to be performed and responsibilities. A process for monitoring and evaluating performance and providing feedback so proper control can be maintained and necessary changes can be made in the overall marketing strategies and tactics.

Direct Marketing is Part of IMC

Direct marketing is a form of integrated marketing communications whereby an organization communicates directly with target customers to generate a response and/or transaction. It involves a variety of activities including:
Direct mail Direct response advertising (on TV, radio or in magazines or newspapers) Telemarketing Internet Sales Catalogs Shopping channel

This slide provide an overview of direct marketing and the various forms it can take.

Using the Internet as an IMC Tool

The rapid changes in technology have led to dramatic growth of communications through interactive media, particularly the Internet. This communication medium is unique in that it allows for the back-and-forth flow of information in real time. Customers can perform a variety of functions on the Internet such as receive and alter information and images, make inquires, respond to questions, and, of course, make purchases.

Using the Internet as an IMC Tool

continued.
The Internet has changed the ways companies communicate to their customers as companies and organizations of all sizes have developed websites to promote their products and services. show that the Internet has changed the way companies communicate with their customers. Because of its interactive nature, it is a very effective way to communicate with customers.

Actually, it is a medium that can be used to execute all elements of the promotional mix. In addition to advertising, companies can offer sales promotion incentives such as coupons or contests, do direct marketing, and execute public relations, and personal selling functions via the Internet.

Sales Promotion Tools

Sales promotion is defined as those activities that provide extra value or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken down into two categories:
Customer-oriented targeted to the ultimate user of the product or service and includes coupons, sampling, premiums, contests, sweepstakes, refunds/rebates, bonus packs, events, and loyalty programs. Trade-oriented targeted to marketing intermediaries such as wholesalers, distributors, and retailers and includes trade allowances, price deals, sales contests, trade shows, and cooperative advertising.

Various Uses of Sales Promotion

There are various reasons why companies choose to use sales promotion in their IMC programs. The various uses of consumer and trade promotion include: Introduce new products Get existing customers to buy more Attract new customers Maintain sales in off seasons Increase retailer inventories Enhance or tie in advertising with personal selling Combat competition

Publicity / Public Relations

Publicity refers to the non personal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. Companies attempt to get the media to cover or run favorable stories on their products, services, or causes. It usually comes in the form of a news story, editorial, or announcement.

Integrated Marketing Communication & Supportive communication

CHAPTER-7 UNIT-III

IMC Basics
Coordinate various communications approaches into a mutually supportive, thematically unified, coordinated whole

Must manage all sources of information about a product that moves the customer towards a sale and maintains loyalty

Supportive Elements

Pg.34, ch-3, Lindquist & Sirgy Shopper, Buyer & Consumer Behavior

Primary Goal of Support Elements

First task is to retain satisfied customers, not just produce new customers
Difference between creating a single sale and creating a lifelong customer

Critical to coordinate paid and unpaid media as part of IMC efforts

Timing of Message Placement Reinforcement Across Channels Compatibility of Editorial Tone

All with the goal of building relationships

 Use of public relations to directly support marketing efforts to build sales, not simply image and issue management
Planning, executing, and evaluating programs that encourage purchase and consumer satisfaction through credible communications 70% of PR billing are for Marketing PR

Power of PR
Marketers find is increasing difficult to reach consumers hearts and minds Decline of mass marketing and limited effectiveness of target advertising Power of news, events, and community programs to regain a share of voice

Credibility is Key
PR more credible than advertising Key to reaching skeptical consumers Particularly when targeting youth, who want to be told not sold
Important for building brand awareness Critical for building brand credibility

How MPR Works with IMC

Builds personal relationships with brand
Ex. Butterball Talk line, Pillsbury Bake-Off

Influences the influencers

Ex. Secondary Effects Through Opinion Leaders

Communicates new product benefits

Ex. Arm & Hammer, Aspirin, Cranberry Juice

Demonstrates social responsibility and build trust

Ex. Ben & Jerrys, Body Shop, McDonalds

Defends products at risk and gives permission to buy

Ex. Tylenol, Pepsi, Robert Downey Jr.

E-commerce in Marketing Communication

Chapter-8 Unit-3

Internet Communications Objectives

Some of the possible communications objectives sought when using the Internet. These include:
Creating awareness Generating interest Disseminating information Creating an image Creating a strong brand Stimulating trial

Internet Communications Objectives

Another use of the Internet which is to use the medium for the direct sale of goods and services. E-Commerce has become an important part of the worldwide web, both on the consumer and business to business side. E-commerce refers to the direct selling of products and services on the web which may be a primary or secondary objective for a web site.

E-Commerce on the Web

E-commerce continues to grow at a very fast pace. This growth comes from downloadable purchasesfor example books, reports, maps, tickets, and other item. The strong growth of E-commerce is expected to continue, in both the business-to-business and consumer markets. Many companies are maintaining their brick and mortar stores and operations but are now selling through the Internet as well.

Integrating the Internet into an IMC Program

As part of the IMC program, the Internet will be used most effectively if integrated with other media. This slide demonstrates the other IMC tools with which the Internet should be coordinated including:
Advertising Sales promotion Personal selling Public relations Direct marketing

The various IMC tools should be combined with the Internet to create a more effective IMC program.
Research studies have shown that by integrating the Internet with other IMC components, overall communication is more effective. In addition, the ability to have visitors come to ones website may require effective use of other IMC program elements.

Personal Selling on the Internet

The Internet will replace personal selling as we now know it, or whether it will enhance personal selling efforts. The argument in favor of replacing notes that the Internet reduces the high cost of personal selling and vastly increases reach, and is, therefore, more effective and efficient than personal selling. Numerous factors supporting the notion that the Internet will enhance selling efforts. These include:
Provision of information to prospects A source of leads Enhancement of databases Stimulating trial Improving one-on- one communications Serving as a sales conference medium

Direct Marketing and the Internet: Direct Mail

Conducting direct marketing on the Internet through the use of e-mail, including the fact that it is often used by catalogers, is highly targeted, relies heavily on lists and attempts to reach those with specific needs. Direct mail usage on the Internet continues to increase, and has recently fallen under attack as a result of significant increases in the use of SPAM or online junk mail. Like its traditional direct mail counterpart, critics of SPAM have attempted to enact legislation to prohibit or limit its use.

Infomercials on the World Wide Web

Some characteristics of another direct marketing tool that is now being used on the Internet which is the infomercial. Infomercials are now beginning to appear on the Internet with program content similar to that of television. At the same time, due to its interactive capabilities, the web allows for greater audience interaction. While not as common as email, the infomercial is gaining in popularity on the Internet.

Measures of Effectiveness
The measures of effectiveness for Internet. These include:
Tracking - measuring effects over time Sales - particularly when e-commerce is the objective Panels - designed to measure reactions to various aspects of the website Surveys used to determine everything from site usage to attitudes Recall and retention used to measure whether viewers remember seeing ads Online measuring measures of viewer behavior when visiting a web site

Internet Advantages & Disadvantages

Advantages include:
Targeting capabilities Message tailoring Interactive capabilities Information access Sales potential Creativity Exposure Speed Complementing other IMC elements

 Disadvantages include:
Measurement problems Websnarl Clutter Potential for deception Privacy issues Limited production quality Poor reach Irritation

The Internet offers numerous advantages but still has many limitations. Many of the disadvantages are in the process of being eliminated or reduced. Like any other medium, the marketer must understand the benefits and limitations of the Internet to effectively use it as part of the IMC program.