Conversing with the Customer: Promotional Strategy, Interactive Marketing, and Database Marketing

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Chapter 14

• Conversing with the Customer Promotional
  Strategy, Interactive Marketing, and
  Database Marketing

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Chapter Objectives_1

• Understand the communication model
• List and describe the elements of the promotion
  mix
• Explain the stages in developing the promotion
  plan
• Explain the current trend toward interactive
  promotion strategies

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Chapter Objectives_2

• Explain why database marketing is increasingly
  popular and how databases are developed and
  managed
• Explain how firms implement integrated marketing
  communications and why some marketers resist it

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Role of Promotion

• Promotion is communication by marketers that
  informs, persuades, reminds, and builds
  relationships with potential buyers of a product
  to influence an opinion or elicit a response.
• IMC is a plan for optimal use of the elements of
  promotion advertising, personal selling, sales
  promotion, and public relations

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Promotion Mix

• Advertising
• Sales Promotions
• Public Relations
• Personal Selling

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Advertising

• Non-personal communication from an identified
  sponsor using the mass media
• can convey rich and dynamic images
• can establish and reinforce brand identity
• can communicate factual information
• can remind customer to buy

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Sales Promotion

• Programs that build interest or encourage
  purchase of a product through the use of an
  incentive in a specified time period
• coupons
• contests
• rebates
• premiums

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Publicity and Public Relations

• Portray an organization and its products
  positively by influencing the perceptions of
  various publics
• writing press releases
• holding special events
• conducting and publishing consumer surveys
• putting a positive spin on negative news

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Developing the Promotion Plan

• Framework for developing, implementing, and
  controlling the firms promotional activities

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Step 1 Establish Promotion Objectives

• Objectives will change depending on where
  consumers are on the path to loyalty
• Some objectives might be
• create awareness
• inform the market
• create desire
• encourage trial
• build loyalty

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Step 2 Identify Influence on the Promotion Mix

• Mix must be tailored for each situation
• Push means that the company seeks to move its
  products through the channel by convincing
  channel members to offer them and entice their
  customers to select these items
• Pull means that the company relies on consumers
  to learn about and express desire for its products

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Step 3 Determine and Allocate the Total
Promotion Budget

• Top-down budgeting techniques
• percentage-of-sales method
• competitive parity
• Bottom-up budgeting technique
• objective-task method

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Step 4 Allocate Budget to Specific Promotion Mix

• Organizational factors
• Market potential
• Market size

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Step 5 Designing the Promotion Mix

• Which elements of promotion will be used?
• What message is to be communicated?
• Type of appeal?
• Structure of appeal?
• What communication channels should be employed?
• What role will advertising, sales promotion,
  public relations, and selling play?

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The AIDA Model

• Attention
• Interest
• Desire
• Action

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Step 5 Evaluate the Effectiveness of the
Promotion Mix

• Is the plan working?
• Measure response to sales promotions
• Measure brand awareness, recall, and image before
  and after ad campaign
• Analyze and compare sales performances by
  territory and sales force
• Clip articles appearing in media

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Interactive Marketing

• Attention Economy
• The amount of information seems infinite our
  ability to get it is limited by the time we can
  spend looking
• Interactive media are in the business of buying
  and selling peoples attention
• Customized marketing communications yield a
  measurable response in the form of a purchase or
  request for more information

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Levels of Interactive Response

• First-order response product offer directly
  yields a transaction
• Second-order response product offer results in
  some form of customer feedback but it isnt a
  transaction
• request for more information
• request NOT to receive more information

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Database Marketing

• Critical to interactive marketers as they seek to
  track responses to messages and develop a
  dialogue with customers
• Allows the organization to learn customer
  preferences, fine-tune and test offerings, build
  relationships

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Database Marketing

• Is interactive
• Builds relationships
• Locates new customers
• Stimulates cross-selling
• Is measurable
• Is trackable

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Putting It All Together

• Integrated Marketing Communications (IMC) is a
  strategic business process used to plan, develop,
  execute, and evaluate coordinated, measurable,
  persuasive brand communication programs over time
  with consumers, customers, prospects, and other
  targeted, relevant external and internal
  audiences.

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Characteristics of IMC Approach

• Focus on customer need for communications
• Reliance on customer database to focus messages
• Use of consistent messages via diverse
  communications vehicles
• Careful planning of delivery to generate a steady
  stream of consistent information
• Use of several elements of the promotional mix

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The IMC Planning Model

• Start with a Customer Database
• Develop Promotional Strategies
• Implement Specific Promotional Tactics
• Evaluate IMC Communications
• First-order responses
• Second-order responses
• Attitudes toward brand and firm