Monday, April 23, 2012

Chapter 15 - Communicating Value

Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers about the products and brands they sell.  They represent the voice of the company and its brands and help build relationships with consumers.  Technology has greatly changed the way consumers process communications.  Marketers must be creative in using technology without intruding in consumers’ lives.  The marketing communications mix consists of the following major modes of communication:  advertising, sales promotion, events and experiences, public relations and publicity, direct marketing, interactive marketing, word-of-mouth marketing, and personal selling.  Marketing communications must be integrated to deliver a consistent message and achieve the strategic positioning.  Two models are useful in helping marketers understand the fundamental elements of effective communications.  A macromodel has a sender and receiver (they represent major parties); message and media (represent major tools); encoding, decoding, response, and feedback (represent major communication functions); and noise (random and competing messages that may interfere with the intended communication).  Micromodels concentrate on consumers’ specific responses to communications.  It is represented by four response hierarchy models, which assume the buyer passes through cognitive, affective, and behavioral stages, in that order. 

Developing effective communications requires eight steps.  First, identify the target audience.  The process must start with a clear audience in mind.  It is a critical influence on the communicator’s decisions about what to say, how, when, where, and to whom. 

Second, determine the communications objectives.  Four possible objectives include category need, brand awareness, brand attitude, and brand purchase intention. 

Third, design the communications.  Formulating the communications to achieve the desired response requires solving three problems.  One is what to say, which is message strategy.  Here management searches for appeals, themes, or ideas that will tie in to the brand positioning and help establish points-of-parity or points-of-difference.  Another way is to create strategy.  This is the way marketers translate their messages into a specific communication.  They can be informational appeals (elaborates on product or service attributes or benefits, assuming consumers will process the communication very logically) or transformational appeals (elaborates on a nonproduct-related benefit or image).  Another is the message source.  Messages delivered by attractive or popular sources can achieve higher attention and recall, which is why celebrities are often used as spokespeople in advertising.  They are likely to be effective when they are credible or personify a key product attribute.  Three factors identified as sources of credibility are expertise, trustworthiness, and likability.  Principle of congruity is when the communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience. 

Fourth, select the communications channels.  They may be personal and nonpersonal.  Personal communications channels let two or more persons communicate face-to-face through a phone, surface mail, or email and they derive their effectiveness from individualized presentation and feedback and include direct and interactive marketing, word-of-mouth marketing, and personal selling.  These communications include advocate channels, expert channels, and social channels.  Nonpersonal (mass) communications channels are directed to more than one person and include advertising, sales promotions, events and experiences, and public relations.  Personal communication is often more effective than mass communication, however mass media might be the major means of stimulating personal communication because if affects personal attitudes and behavior.

Fifth, establish the total marketing communications budget.  Four common methods for deciding on a budget include:  affordable method (setting the budget at what managers think the company can afford), percentage-of-sales method (setting the budget at a specified percentage of current or anticipated sales or of the sales price), competitive-parity method (setting the budget to achieve share-of-voice parity with competitors), and objective-and-task method (developing the budget by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing them).

Sixth, decide on the marketing mix.  Companies must allocate the marketing communications budget over the eight major modes of communications.  These include advertising, sales promotion, public relations and publicity, events and experiences, direct marketing, interactive marketing, word-of-mouth marketing, and the sales force.  When developing their communications mix, companies must consider several factors, such as type of product market, consumer readiness to make a purchase, and stage in the product life cycle.  Communications mix allocations vary between consumer and business markets.  Communication tools vary in cost effectiveness at different stages of buyer readiness. Communication tools vary in cost effectiveness at different product life-cycle stages.

Seventh, measuring communications results.  After implementing the communications plan, the company must measure its impact by asking members of the target audience whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and what are their previous and current attitudes toward the product and company. 

Eighth (and final), managing integrated marketing communications.  Integrated marketing communications is defined as a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.  This planning process evaluates the strategic roles of a variety of communications disciplines and skillfully combines these disciplines to provide clarity, consistence, and maximum impact through the seamless integration of messages.  Marketers should combine personal and nonpersonal communications channels through multiple-vehicle, multiple-stage campaigns to achieve maximum impact and increase message reach and impact.  Integrated marketing communications can produce stronger message consistency and help build brand equity and create greater sales impact.  It should improve the company’s ability to reach the right customers with the right messages at the right time and place.

Example:  Celebrities are often used in advertising because the product can achieve a higher attention and recall.  Jenny Craig has used celebrities over the years for the same reason.  People look up to celebrities.  If they seeing them use a product then they think it must work, or if they can do it so can the person.  The celebrities pose that the product is the best and that’s why they are using it.  Using celebrities is a way to maximize advertising effectiveness.

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