Marketing Communications

Marketing
Integrated Communications and Direct (Digital) Marketing (Chapter 14, 15 and 17)
1. Define/compare the five elements of the promotion mix. Give examples of each. What is AIDA? In designing a promotion mix strategy, discuss when in the purchase behavior cycle (using AIDA) it is best to use each of the promotion tools
The five elements of the promotion mix are: i) advertising – raising awareness such as through mass media adverts; ii) public relations – promoting goodwill such as offering sponsorships to needy students, iii) sales promotion – marketing through discounts and incentives such as free gifts, iv) direct marketing – marketing directly to a customer such as sending personalized messages, and v) direct marketing – promotion through sales representatives. The AIDA is a four-step model that explains the cognitive processes involved in the making of purchase decisions. The AIDA purchase cycle includes awareness, interest, desire and action. Awareness involves creating awareness about the brand through advertising. Interest involves generating buyer interest by explaining the value of benefit of the product/organization to the general population of buyers. Creation of interest requires the use of public relations and direct marketing elements, while desire involves building an emotional connection with the buyer through sales promotion and direct (personalized) marketing.
2. Explain the methods for setting the total promotion budget and the strengths/weaknesses of each
The affordable method sets the promotion budget based on affordability. This method is cost-effective, ensuring that the organization does not spend too much resources on promotion. However, its use makes long-range planning difficult as it disregards aspects such as sales volume. The percentage of sales method sets the promotion budget as a percentage of sales. It allows for better long-term planning for increases in sales, but does not take into account the affordability of the same. The competitive parity method sets the promotion budget equal to the amount spent by competitors on promotion. It helps avoid promotion wars as the promotion budget is in parity for all organizations. However, it ignores variations in resources and objectives. Finally, the objective and task method calculates the budget based on pre-determined objectives. The method aligns with the specific objectives of an organization, but encourages promotion wars in the industry, which could be unhealthy.
3. Why is there a need for integrated marketing communications and how do marketers implement it?
Integrated marketing communications ensure cohesion in communication and minimize the risk of disjointed marketing messages that could be annoying and could negatively influence customers’ attitudes towards the company. Marketers implement integrated marketing communications by working with employees in other departments such as sales, advertising, public relations, and direct mail to collect and share data that will help in the development of a single cohesive, integrated message that is relevant to all customers.
4. What role does social media play in a communication and influence strategy? How do you use social media to engage customers in a way that they value?
Social media helps to create digital communities. Effective social media marketing involves engaging members of the digital community through two-way communication and allowing them to participate in the communication. Creating platforms for ‘sharing’ is one strategy by which social media could be used to engage customers. For instance, a company’s marketer could use a Facebook Ad to invite fans to an offline event geared at creating awareness on a product. The Ad could be designed in such a way that members are allowed to share the same with their friends via their timelines as well as on other popular social media platforms such as Instagram, and can then earn rewards such as free gifts.
5. Outline the communication process and steps in developing effective marketing communications
The basic communication process begins when a sender encodes (designs) a message, selects an appropriate channel and then sends the message to the receiver, who decodes it and sends feedback. Effective marketing communications involve a similar process. The marketer first determines the target market for their product/service and understands the market’s purchase patterns and demographics. The second step is to determine the objectives of the marketing communication, after which the marketing message is designed, indicating why the customer should choose the product. The final step involves choosing the medium of communication based on the marketing objectives and target market.
Services, Products, and Branding (Chapters 8 and 9)
1. Define product and services and discuss the major differences between products and services
A product is a tangible commodity for sale or consumption, while a service is an intangible outcome of work or effort by a service provider towards a customer (Kotler & Armstrong, 2017). Products are transferable and can be separated from the owner, while services cannot be separated from their owners or service providers (Kotler & Armstrong, 2017). Thirdly, products can be stored for multiple or future use as there is a time lag between production and consumption. Services, however, cannot be stored as their production and consumption occurs simultaneously
2. Name and define the stages of the product life cycle. Do all products follow this pattern? Explain with examples
The product life cycle is the course of a product’s profits and sales over its lifetime (Kotler & Armstrong, 2017). It incorporates five stages: i) product development – carrying out market research and testing, as well as competitor analysis to assess its potential performance; ii) introduction – the initial entry of the product into the market; iii) growth – the product begins to gain market share; iv) maturity – sales and market share begin to stabilize; and v) decline – sales and market share fall as competition has increased (Kotler & Armstrong, 2017). Some products such as fashion do not, however, go through all five stages – they often rise to a sudden peak immediately after introduction then quickly drop into the decline, with the maturity and growth stage often imperceptible.
3. Name and define the four characteristics affecting marketing of services and explain the additional marketing considerations required
Intangibility – as services cannot be touched or seen; the key marketing consideration for service organizations is to provide customers with honest evidence of their capability (Kotler & Armstrong, 2017). Inseparability – services cannot be separated from the service provider and the key marketing consideration is to enhance the customer-provider interaction to make it as fulfilling for the customer as possible (Kotler & Armstrong, 2017). Variability – quality varies with the provider, as well as with where and how a service is provided. The key marketing consideration is to keep service employees satisfied for greater service value (Kotler & Armstrong, 2017). Perishability – services cannot be stored for later use. The marketing consideration is to design strategies that can adequately match demand to supply, such as offering discounts during off-peak seasons to attract more customers in the peak season (Kotler & Armstrong. 2017).
4. Explain the meaning of this statement “brands represent consumers’ perceptions and feelings of a product and its performance – everything that the product/service means to its customers”. What strategies do marketers adopt to build strong brand perceptions?
How a brand positions itself vis-à-vis competing brands is the chief determinant of perceptions and image that customers hold about it. Successful brand positioning creates positive and distinctive brand perceptions. Marketers build strong brand perceptions by i) incorporating benefits or motivating attributes to influence brand choice and category spending, ii) capitalizing on the weaknesses of competitors and making these weaknesses the main strengths of their product, and iii) delivering open opportunities that existing brands do not deliver.
Pricing Strategy (Chapter 10 and 12)
1. Compare and contrast value and cost-based pricing strategies. What are two examples of value-based and cost-based pricing?
Cost-based pricing involves setting prices based on the production costs, while value-based pricing involves setting prices based on customers’ perceptions on brand value (Kotler & Armstrong, 2017). The two examples of cost-based pricing are cost-plus pricing and target return pricing (Kotler & Armstrong, 2017). Cost-plus pricing involves setting the price as a standard markup over the cost of production (Kotlker & Armstrong, 2017). Target return pricing involves setting a price such that the seller realizes a targeted return or just meets the costs of production and marketing (breaks even) (Kotler & Armstrong, 2017). The two examples of value-based pricing are good-value pricing and value-added pricing. Value-added pricing involves attaching value-added services and features such as after-sales services then charging a higher price than competitors (Kotler & Armstrong, 2017). Good-value pricing involves offering optimal combinations of good service and quality at a fair price (Kotler & Armstrong, 2017).
2. Identify the three major pricing strategies and discuss the importance of understanding consumer value perceptions, company costs, and competitor strategies in price-setting
The three main pricing strategies are: i) value-based pricing, cost-based pricing and competition-based pricing (Kotler & Armstrong, 2017). Competition-based pricing involves setting prices based on competitors’ costs and prices (Kotler & Armstrong, 2017). To employ the competition-based strategy, a marketer needs to understand the competition’s costs and prices. Further, to employ cost-based and value-based pricing effectively, they require an adequate understanding of their production and marketing costs as well as customer value perceptions respectively.
Place (Distribution) Strategy (Chapter 12 and 13)
1. Explain why companies use marketing channels and discuss the functions these channels perform. Discuss how channel members interact and how they organize to perform the work of the channel
Marketing channels help to make a product or service available in the final consumer market (Kotler & Armstrong, 2017). They gather information on market research and provide market intelligence to producers, carry out promotion, and make contact with prospective buyers (Kotler & Armstrong, 2017). Members of a basic marketing channel include producers, customers, and distributors. In the absence of the distributor, producers link up directly with customers - the number of channel transactions is relatively high, which increases the risk of ambiguity and product replication. However, with the distributor present, the number of contacts is reduced as producers link up with the distributor, who then delivers the product/service to the customer (Kotler & Armstrong, 2017).
2. Describe the concept of shopper marketing and explain why it has grown in prominence. Cite two examples of how this concept works
Shopper marketing involves using in-store advertising and promotions to sell one’s brand to shoppers at the point-of-sale (Kotler & Armstrong, 2017). One example of shopper marketing is retail store marketing, where sales representatives are stationed inside a store to influence shoppers’ purchasing decisions in favor of their own product. Another example is non-store retailing, where sales representatives market to final consumers via telephone, catalogs, direct mail, and the internet (Kotler & Armstrong, 2017).
3. Principles of retail marketing strategy and the future role of retailers
Retail marketing strategy can be summarized using the 4Ps of marketing: product, price, place, and promotion. Under product; retailers market themselves through huge product assortments and unique store experiences (Kotler & Armstrong, 2017). The huge assortment makes it possible for them to offer lower prices (Kotler & Armstrong, 2017). They make place and promotion decisions that are accessible by the target market (Kotler & Armstrong, 2017). However, the role of retailers in the distribution channel is changing and is (will) evolve into several huge mega-retailers due to retail convergence. The growing popularity of non-store retailing, coupled with the merging of the different forms of retail makes it difficult to differentiate different retailers’ product assortments. As such, retailers are fast merging to form a small number of mega-retailers, who will be the direct link between manufacturers and customers.
References
Kotler, P., & Armstrong, G. (2017). Principles of Marketing (17th ed.). Upper Saddle River, NJ: Prentice Hall.