Recap of the last Class:

Channel flows & Channel levels Utilities desired by the customers Types of distribution Vertical vs. Horizontal marketing systems Marketing Logistics Types of warehouses Diff b/n retailers & wholesalers

Surprise Quiz 2
Explain concept of brand ladder (2 mks) With example explain the difference between brand & line extension (2 mks) With examples explain difference b/n the two types of order processing methods? (2 mks) Explain with e.g. the concept of target costing (2mks) Explain with e.g. the difference between perceived value pricing & value pricing (2 mks)

Marketing Communications & Promotion Decisions:

Marketing Communication Mix consists of various modes of communication:

Advertising: Paid form of non-personal presentation Sales promotion: Short term incentives to encourage trial & purchase Company Sponsored Events PR & Publicity: Companys image promotion Personal Selling: Face to face interaction Direct Marketing: Use of mail, e-mail, telephone etc Interactive marketing & W-o-m marketing

Macro Model of the Communications Process:

Sender Encoding

Media/ Message

Decoding

Receiver

Noise

Feedback

Response

Eight Steps of Developing Effective Communication:

Step 1: Identify Target Audience

Determine target audiences perception about the company and its products

Step 2: Determine Communication Objective

Make consumers identify a latent need Make consumers aware of a given brand Develop a favorable brand attitude Enforce brand purchase intention
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Eight Steps of Developing Effective Communication (Cont.):

Step 3: Design the Communications

Message & Creative Strategy: What to say & how to say it?
Rational/Informational Emotional/Transformational

Message Source: Who should say the message?

Based on expertise, trustworthiness & likeability Principle of Congruity

Global Adaptations
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Eight Steps of Developing Effective Communication (Cont.):

Step 4: Selecting Communication Channels:

Choice between personal vs. non-personal communication channels

Step 5: Establishing Total Marketing Communication Budget:

Affordable Method Percentage-of-Sales Method Competitive-Parity Method Objective and Task Method
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Eight Steps of Developing Effective Communication (Cont.):

Step 6: Decide on Marketing Communication Mix:

Which of the major modes of comm. to use? Various factors also decide this

Step 7: Measure Communication Results Step 8: Managing and Coordinating Integrated Marketing Communications

Synergistic use of various modes of marketing communications

5 Major Decisions in Developing Advertising Program:

Mission: Advertising Objectives Money: Advertising Budget Message Media Measurement

Mission: Adverting Objectives

Informative Advertising Persuasive Advertising Reminder Advertising

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Money: Determining Ad. Budget

Factors considered while setting Ad. Budget are:

Stage in PLC Market Share To gain more market share, more ads. Are required Competition and Clutter Advertising Frequency Product Substitutability

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Deciding on the Message

Message Generation

Message Evaluation & Selection

Message Execution

Social Responsibility Review

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Deciding on the Media

Step 1: Decide on reach, frequency & Impact

Reach (R): No. of persons exposed to a particular media schedule during a specified time period Frequency (F): No. of times that people are exposed to a message in a specific period Impact (I): Qualitative value of exposure Total No. of Exposure (E): R*F Weighted No. of Exposure (WE): R*F*I
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Deciding on the Media (Cont)

Step 2: Choosing among major media:

Target audiences media habits Type of product Type of message Cost

Step 3: Selecting specific vehicles:

Specific media vehicle comes within a chosen media type

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Deciding on the Media (Cont)

Step 4: Deciding on Media Timing:

When to start the ad. campaign?

Step 5: Deciding on Geographical Allocation: National vs. Regional

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Measurement: Evaluating the advertising effectiveness

Communication-Effect Research:
Determines if the ad. is communicating effectively. Also called COPY TESTING Three methods of doing copy testing are:
Direct Rating Method: To rate the ads on various parameters Portfolio Test: Show a customer portfolio of ads and then ask them to recall an ad. Laboratory Test: Measure physiological reactions e.g. heartbeat, BP etc.
These tests measure attention getting power but reveal nothing about impact of ad on beliefs, attitudes or intentions

Sales Promotion:
Short term incentives to encourage trial & purchase Major Decisions taken in Sales promotion are:

Establish objectives: e.g. induce trial, encourage switching Select Tools Develop programs Pretest Program Implement and Control it Evaluate its results

Public Relations:
It involves programs aimed at promoting and protecting companys image and that of its individual products Major Decisions taken are:

Establish Objectives Choose Messages and Vehicles Implement the plan Evaluate the results

Personal Selling Process

1.

2.
3. 4. 5. 6. 7.

Prospecting and Evaluation Pre Approach Approach Presentation Handling Objectives Closing Follow-up