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2 Marketing (Subject) / ACTIONS- Promotion (Lesson)
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- 10.1 Roles of Advertising Informative: Conveys information to consumers about the existence of sellers the price and qualities Persuasive: Shape consumers' perceptions wants and needs
- 10.3 The 6th M - Market Choose the audience Mass-Marketing Segment-Marketing Customized Marketing - personal preference based C2C - WOM, interactive, co-creatin How to adress them Unidirectional - Firm to Customer (personal or non-personal) Bidirectional: give and take conversation between firm and consumer Multidirectional: consumers being co-producers Customer: Word-of-mouth Choose Channel Strategy Push Strategies: Designed to motivate distribution channels or intermediaries to sell product to consumers Pull Strategies: Build demand with end consumer so that their desire for the product brings them to the point of sale. Choose Social Media Strategy Outbound vs. Inbound Marketing
- 10.3 The 5 Ms: Media PAID (Pop-Up Store; TV) Attract target market come to OUR (owned) Website Create Awareness & Reach mass audience and build interest in the product Might attracts strangers OWNED (Newsletter, Facebook, Web-site) Attract customers to owned media Converting as many People as possible to first Purchase EARNED (Reviews, Blog Posts) Attracts Fans? Brand Advocacy
- 10 The Role & Objective of Markcoms a) Stimulate Trial: Foster consumers’ awareness of the product, knowledge about its features, interest in purchasing to the point of making a trial purchase likelihood of trying the product b) Keeping customers: After trial, Promotion (and all 5P’s) have the role of keeping the customer Role of Advertising: Informative: conveys information to consumers about existence of sellers and their price and qualities Persuasive: Shape consumer’s perceptions, wants and needs Hierarchy-of-effect models assume Advertising = Persuasion
- 10.1.1 Trial: Marcoms in the DMP Problem Recognition: Help identify new problems & remind of existing needs Information search: Make aware of product & educate about features & benefits Evaluation of alternatives: Assist in making comparisons among solution options Purchase decision: Prompt consumers into making a purchase Post-Purchase assessment Encourage product usage & make them feel good about purchase decision 2. Messaging By Stage Initially (Problem Recognition): Only broad idea what they want; focus on high-level goals; preferences construed at a high level Better response to messages that address high-level goals After information search: Customers shift focus to specific product attributes and develop narrowly construed preferences Better response to messages that display specific products Dynamically retargeted ads work only on customers with narrowly construed preferences 3. Most influential touchpoints in the DMP Company-Driven marketing: Initial Consideration Set Past Experience: Initial Consideration Set Consumer-Driven Marketing: Evaluation, & Closure Store Interaction: Closure
- 10.2 Sales Promotion Action-focused marketing event whose purpose is to have a direct impact on the firm’s customers. (1) Consumer Target (Consumer & Retailer Promotion) - Defend Market Share- Increase PPB Increase category consumption Enhance repeat purchase rates - Increase Penetration Attract brand switchers Attract new triers Tools Consumer Promotion (Manufacturer -> Consumer) CouponsContestsSweepstakesSamplesPrice or Value PacksContinuity ProgramsFinancing incentives Tie-Ins Tools Retailer Promotion (Trade -> Consumer) Price CutsBoy One Get One FreeDisplaysFeature Ads (2) Trade Target (Retailer Promotions) Gain / Maintain distribution Induce retailer merchandising activities Incentives to Retail sales force Load Retailer with inventory Tools: Case allowancesAdvertising allowancesDisplay allowancesFinancing incentives Scan-Backs
- -10.2.1 Effect of Promotion on Sales Is the sales increase during the promotion period due to customers switching from other brands, or is the brand borrowing sales from the future? Importance of the Couterfactual: What would our Sales look like had we not undertaken the measure? It is important to understand the “sources” of the sales increase associated with a promotion Purchase Acceleration: change in purchase timing or quantity Stockpiling: increase in quantity and change timing appropriately (Cannibalization) Brand Switching: purchase a different brand from that which would have been purchased had the promotion not been available Category Expansion: total consumption of the product category is increased new purchase occasion created increased consumption rate accelerated purchase timing with no cannibalization of future purchases
- 10.3 The 5 Ms MISSION - Break Down communication objectives Commercial Objectives: Grow size of the product category by X new customers & avoid cannibalization Marketing objective: Drive 10 % penetration of households in Year 1 (= 2.6M households) Communication objectives: Reach 30% awareness in first 6 months after launch MONEY - Launch budget and allocation across media types 44% TV Campaign Feb-Apr 5% 32% Outdoor 14% Press 5% Online (Display, Mobile, Social) MESSAGE - Focus on product attributes, Expectations (i.e. encourage trial) MEDIA PAID: Awareness & Appetite Appeal: Reach a mass audience and build interest in the product OWNED: Trial - Converting as many People as possible to first Purchase EARNED: Advocacy & WOM - Create belief through positive recommendation from those who have tried MEASUREMENT - How should we evaluate the results? Tracking measure: Awareness and consideration uplifts Incremental sales # packs coming from new purchasers % penetration Overall: Total Media Spend = 2.9M Incremental revenue: 3.62RROI: 1.25 %
- 10.1.1 Trial: Hierarchy-of-effects models How Advertising Works: Hierarchy-of-effect models assume Advertising = Persuasion Customers are good at avoiding ads, especially in their initial consideration of product choices The funnel-shape represents that only a small portion of consumers who have engaged with a brand will move to the next stage; a leaky funnel is costly in inefficient -> Marcoms need to deliver engaging and useful content at convenient places AIDA: attention, interest, desire, action DAGMAR: awareness, comprehension, conviction, action (Defining Adv. Goals for Measured Adv. Results) Lavidge & Steiner: awareness, knowledge, liking, preference, purchase (Think-Feel-Do sequence of events) Tweaks in Think-Feel-Do: Feel-Do (perfume), Do-Think-Feel (product trial, emotional connection)
- 10.1.2 Repurchase: The Role of Marcoms for an Established Brand Goal: Maintain the brand’s salience; being a brand consumer buys or considers buying Market shares in mature markets are remarkably stable. A Brand's customers mostly have split-loyalties among habitual brands. Advertising for an established brand works largely by mu positively nudging their tendency to buy the brand. Advertising is the maintenance necessary to preserving the value of the brand but does not directly affect sales Advertising both gets sales up & is needed to maintain sales. To maintain high brand sales in an achievement The Role of Advertising Effectiveness: Advertising spend (“the engines of sales”) - when Ad spend stays up everything is fine; but when Ad spend stops, the sales descent starts. The effectiveness of branding (“the aerodynamic design of the sales”) - by spending the same money, we take sales higher if Ad has a creative, or better design; if we cut Ad spend, the better brand sales will stay up longer
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- 10.3 The 5 Ms: Measuring Awareness Aided Brand - I will read a lift of soft drink brands. For each, tell me if you heard of it Unaided Brand - Which are all different soft brands that you can think off? First Brand – What is the first brand that comes to mind when you think of soft drinks? Unaided Advertising - Which brands have you seen advertised during the past month? Aided Advertising - Have you seen any advertising for Pepsi during the past month? Fully Aided Tracer Penetration - Have you seen any advertising for Pepsi using the Slogan X during the past month? Partially Aided Tracer Penetration - Which brand of soft drink advertises the following Slogan, Message, or Spokesperson?
- 10.3 The 5 Ms: Measuring Advertising Effectiveness Measuring “success” is not easy and should be integral to the planning process. Performance vs. Objectives - Need to specify (quantifiable) objectives up front if we wish to be accountable. Importance of the counterfactual — “what would our sales have been had we not undertaken this activity?” Attribution Challenge - disentangling the effects of multiple activities Ad Spend → Sales Advertising response function: roughly S-shaped -> spending too little is a waste, as is spending too much. Ad Spend → Exposures → Awareness → Sales Reach: % of the population exposed to at least one advertisement {Penetration} Average Frequency: Average number of exposures among those people reached {PPB} Gross Rating Points (GRPs):Total exposures / 100 people {Market share} Awareness response shows Decay and Time lad in exposures Implication: Calculate ad stock required to get certain level of Awareness GRPst + λ Adstockt‒1 = GRPst + λGRPt‒1 + λ2GRPst‒2 + λ3GRPst‒3 + … Extensions: Allow for competition (Share of Voice), the differential effectiveness of different media vehicles