Marketing Kerin Chapter 18

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Discuss integrated marketing communication and the communication process.

Integrated marketing communication is the concept of designing marketing communications programs that coordinate all promotional activities—advertising, personal selling, sales promotion, public relations, and direct marketing—to provide a consistent message across all audiences. The communication process conveys messages with six elements: a source, a message, a channel of communication, a receiver, and encoding and decoding. The communication process also includes a feedback loop and can be distorted by noise.

Describe the promotional mix and the uniqueness of each component.

There are five promotional alternatives. Advertising, sales promotion, and public relations are mass selling approaches, whereas personal selling and direct marketing use customized messages. Advertising can have high absolute costs but reaches large numbers of people. Personal selling has a high cost per contact but provides immediate feedback. Public relations is often difficult to obtain but is very credible. Sales promotion influences short-term consumer behavior. Direct marketing can help develop customer relationships although maintaining a database can be very expensive.

Select the promotional approach appropriate to a product's target audience, life-cycle stage, and characteristics, as well as stages of the buying decision and channel strategies.

The promotional mix depends on the target audience. Programs for consumers, business buyers, and intermediaries might emphasize advertising, personal selling, and sales promotion, respectively. The promotional mix also changes over the product life-cycle stages. During the introduction stage, all promotional mix elements are used. During the growth stage advertising is emphasized, while the maturity stage utilizes sales promotion and direct marketing. Little promotion is used during the decline stage. Product characteristics also help determine the promotion mix. The level of complexity, risk, and ancillary services required will determine which element is needed. Knowing the customer's stage in the buying process can help select appropriate promotions. Advertising and public relations can create awareness in the prepurchase stage, personal selling and sales promotion can facilitate the purchase, and advertising can help reduce anxiety in the postpurchase stage. Finally, the promotional mix can depend on the channel strategy. Push strategies require personal selling and sales promotions directed at channel members, while pull strategies depend on advertising and sales promotion directed at consumers.

Describe the elements of the promotion decision process.

The promotional decision process consists of three steps: planning, implementation, and evaluation. The planning step consists of six elements: identify the target audience, specify the objectives, set the budget, select the right promotional elements, design the promotion, and schedule the promotion. The implementation step includes pretesting. The evaluation step includes posttesting.

Explain the value of direct marketing for consumers and sellers.

The value of direct marketing for consumers is indicated by its level of use. For example, 68 percent of them have made a purchase by phone or mail, and 12 million people have purchased items from a television offer. The value of direct marketing for sellers can be measured in terms of three types of responses: direct orders, lead generation, and traffic generation.

what are the six elements required for communication to occur?

a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

a difficulty for u.s. companies advertising in the international markets is that the audience does not share the same ___.

field of experience.

a misprint in a newspaper is an example of ___.

noise.

explain the difference between advertising and publicity when both appear on television

since advertising space on tv is paid for, a firm can control what it wants to say and to whom and how often the message is sent over a broadcast, cable, satellite, or local tv network. since publicity is an indirectly paid presentation of a message about a firm or its goods or services, the firm has little control over what is said to whom or when. instead, it can only suggest to the tv medium that it run a favorable story on the firm or its offerings.

cost per contact is high with the ________ element of the promotional mix.

personal selling

which promotional element should be offered only on a short-term basis

sales promotion

describe the promotional objective for each stage of the product life cycle

introduction-to inform
growth- to persuade
maturity- to remind
decline - to phase out

at what stage of the consumer purchase decision process is the important of personal selling highest? why?

the purchase stage of the consumer purchase decision process because salespeople can provide sales assistance to prospective customers and negotiate terms of the sale.

explain the differences between a push strategy and a pull strategy

in a push strategy, a firm directs the promotional mix to channel members to gain their cooperation in ordering and stocking the product. in a pull strategy, a firm directs the promotional mix at ultimate consumers to encourage them to ask retailers for the product, who then orders it from wholesalers or the firm itself.

what are the characteristics of good promotion objectives?

1. be designed for a well-defined target audience 2. be measurable 3. cover a specified time period.

what is the weakness of the percentage of sales budgeting approach?

sales cause promotion. by using this method, a company may reduce its promotion budget because of downturns in past or projected future sales- situations where promotion may be needed the most.

how have advertising agencies changed to facilitate the use of IMC programs?

some agencies have adopted 1)a total communications solutions approach 2) a long term perspective in which all forms of promotion are integrated 3)an imc audit to analyze the internal communication network of their clients.

what are the three types of responses generated by direct marketing activities?

they are direct orders, lead generation, and traffic generation.

the ability to design and use direct marketing programs has increased with the availability of ______ and ______.

information technology; databases.

advertising

any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor

all-you-can-afford budgeting

allocating funds to promotion only after all other budget items are covered.

channel of communication

this means (a salesperson, advertising media, or public relations tools) of conveying a message to a receiver during the communication process.

communication

the process of conveying a message to others that requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

competitive parity budgeting

allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share. aka matching competitors or share of market.

decoding

the process of having the receiver take a set of symbols, the message, and transform them back to an idea during the communication process.

direct marketing

a promotion alternative that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.

direct orders

the result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.

encoding

the process of having the sender transform an idea into a set of symbols during the communication process.

feedback

in the feedback loop, the sender's interpretation of the response, which indicates whether the message was decoded and understood as intended during the communication process.

field of experience

a mutually shared understanding and knowledge that the sender and receiver apply to the message so that it can be communicated effectively during the communication process.

hierarchy of effects

the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). the stages include awareness, interest, evaluation, trial, and adoption.

integrated marketing communications (imc)

the concept of designing marketing communications programs that coordinate all promotional activities--advertising, personal selling, sales promotion, public relations, and direct marketing- to prove a consistent message across all audiences.

lead generation

the result of a direct marketing offer designer to generate interest in a product or service and a request for additional information

message

The information sent by a source to a receiver during the communication process.

noise

Extraneous factors that work can work against effective communication by distorting a message or the feedback received during the communication process...

objective and task budgeting

allocating funds to promotion whereby the company: 1) determines its promotion objectives 2) outlines the tasks to accomplish these objectives; 3)determines the promotion cost of performing these tasks...

percentage of sales budgeting

allocating funds to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold...

personal selling

the two-way flow of communication between a buyer and seller , often in a face-to-face encounter, designed to influence a person's or group's purchase decision...

promotional mix

the combination of one or more communication tools used to 1) inform prospective buyers about the benefits of the product 2) persuade them to try it and 3) remind them later about the benefits they enjoyed by using the product...

public relations

a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers. prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services...

publicity

a nonpersonal, indirectly paid presentation of an organization, good, or service...

pull strategy

directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product....

push strategy

directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product....

receivers

consumers who read, hear, or see the message sent by a source during the communication process...

response

in the feedback loop, the impact the message had on the receiver's knowledge, attitudes, or behaviors during the communication process...

sales promotion

a short-term inducement of value offered to arouse interest in buying a good or service...

source

a company or person who has information to convey during the communication process...

traffic generation

the outcome of a direct marketing offer designed to motivate people to visit a business.

The promotional mix consists of communication tools that include advertising, personal selling, sales promotion, direct marketing, and ___

public relations

When Procter & Gamble bought the Old Spice brand in 1990, it planned to transform the old, stagnating brand into a men's "personal-care powerhouse." The ads that P&G developed shed the older-man image and the message is now targeted at the 18 to 34 year old age group. In terms of the communication process, the _________ would encode the message.

source.
Encoding is usually done by the source--in this case, the company selling the product.

For a message to be communicated effectively, the sender and receiver must have a mutually shared __________.

For the message to be communicated effectively, the sender and receiver must have a mutually shared field of experience—a similar understanding and knowledge they apply to the message.

Which element of the promotional mix has the inherent weakness of high absolute costs and difficulty in receiving good feedback?

advertising.
Advertising's weaknesses are its high absolute costs and difficulty in receiving good feedback.

When a news story covers a terrible disaster and viewers are asked to send donations to the American Red Cross, the organization benefits from __________

publicity
Publicity is a nonpersonal, indirectly paid presentation of an organization, product, or service that can take the form of a news story, editorial, or product announcement, among others.

At which stage in the product life cycle would a company's promotional objective most likely be to increase the level of consumer awareness?

introduction.
Informing consumers in an effort to increase their level of awareness is the primary promotional objective in the introduction stage of the product life cycle.

Cake mix is in the maturity stage of its product life cycle. A manufacturer selling cake mixes would most likely use advertising to

remind buyers of the marketer's and its brand's existence.
In the maturity stage, the need is to maintain existing buyers, and advertising's role is to remind buyers of the product's existence.

Like many consumer products manufacturers, Hallmark Cards provides its retailers with case discount allowances of 10 percent to induce them to carry its products. In this example, Hallmark uses a __________ strategy.

push.
When a manufacturer directs the promotional mix to channel members to gain their cooperation in ordering and stocking the product, it is using a push strategy.

the best approach to promotion budgeting is the __________ budgeting method.

objective and task

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