Integrated Marketing Communications Strategic Planning Perspectives, 5th edition Keith Tuckwell Solu

INSTRUCTOR’S MANUAL Diana Serafini Dawson College

Integrated Marketing Communications: Strategic Planning Perspectives Fifth Edition Keith J. Tuckwell St. Lawrence College

Chapter 1 Integrated Marketing Communications: An Overview Learning Objectives Students will be able to: 1. Appreciate the role of integrated marketing communications planning in business today 2. Identify the components of the integrated marketing communications mix 3. Identify the conditions that have led to the emergence of integrated marketing communications 4. Explain how knowledge of consumer behaviour concepts influence marketing communications strategies 5. Identify basic ethical issues confronting marketing communications practice 6. Describe the role that laws and regulations play in guiding marketing communications in Canada

Chapter Highlights Changes in the marketplace, changes in the media communications industry, and changes in customer behaviour have created an environment in which customers are approached in a very different manner.

Organizations are now looking for “total communications solutions” and are searching for expertise that will provide it. Disjointed marketing communications strategies are a thing of the past; organizations want integrated marketing communications strategies to resolve their business problems. Organizations today are searching for complete solutions to their communications needs and in that respect are calling upon experts in various marketing communications areas to get the job done.

Change is occurring rapidly, mainly due to technology. Organizations are incorporating new digital communications techniques with traditional media alternatives in order to respond to consumers’ changing media habits. Moreover, there has been a movement towards more targeted media and away from mass media to create the “buzz” for brands amongst consumers. There is heavier reliance on digital media options and more personalized activities, such as social media outlets and experiential marketing as opposed to the traditional broadcast (TV, radio) and print alternatives (magazines, newspapers).

A. The Integrated Marketing Communications Mix Integrated marketing communications involves the coordination of all forms of marketing communications into a unified program that maximizes the impact of the communications on customers.

Today, this must include an effective and well-planned social media strategy. It embraces branding strategies, packaging strategies, media strategies in traditional and non-traditional media, and other forms of communications such as personal selling, sales promotion, events and sponsorships, and public relations. Any customer touch-point is part of integrated marketing communications. The fundamental nature of each form of communications can be described as follows: 

Advertising – Is the placement of persuasive messages in time and space purchased in any of the mass media by organizations who seek to inform and persuade members of a target market about .

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their products, services, organization, or ideas. Advertising embraces message and media strategies that are designed to encourage awareness and interest for a brand or company. 

Promotional Advertising - Advertising is usually product-oriented, that is, it communicates something unique about the brand; or it is promotional-oriented, that is, it communicates some incentive to motivate customers to take some desired action.

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Direct-Response Communications – A form of communications that can reach an audience directly (without the use of traditional mass media). The most common forms of direct-response advertising are direct mail and direct-response television.

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Digital (Interactive) Communications – In an integrated marketing communications context digital communications are commercial messages for an organization placed on the Internet, a cell phone or other personal electronic device or a DVD. Technology is fueling the movement towards electronic forms of communications. Internet advertising, social media, Web site communications, and cell phones are effective media for reaching consumers, particularly younger consumers. Mobile communications represent a third screen to reach consumers with a video message. These forms of communications play a bigger role in the communications mix now and in the future.

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Sales Promotion – Activities and incentives that stimulate immediate reaction from consumers and distributors. Sales promotions embrace consumer promotions such as coupons, contests, and premiums that help pull a product through the channel; and trade promotions such as discounts and allowances that help push the product through the channel.

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Public Relations – A form of communications that is designed to get public understanding and acceptance. Public relations messages influence the attitudes and opinions of interest groups to an organization. Unlike advertising, which is paid for, public relations attempts to get “free” exposure for a brand or company. The goal is to generate a positive attitude toward the product or organization. It also plays a key role when a company finds itself facing a crisis situation. Company sourced social media is now an effective and critical part of public relations.

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Experiential marketing – Is a blend of marketing communications disciplines that engage people with a brand in a more personal way. The core of experiential marketing is event marketing where consumers are immersed in a branded experience. The experience could be anything from attending an event where a sponsor’s product is freely distributed to devising a specific branded event that becomes the focal point of an entire integrated marketing communications campaign. Event marketing, therefore, involves planning, organizing, and marketing an event whether it is an event for a company or a brand of a company that integrates a variety of communications elements.

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Sponsorship is considered to be a key piece of experiential marketing, and simply means that a company provides money to an event in return for specified marketing privileges for being associated with the event. Events and sponsorship programs are designed to build the image of the organization or brand. An organization can reach a consumer in an environment where they are more receptive to messages. Experiential marketing is a growing component of the marketing communications mix. Marketers are attracted to events because they reach their target market directly and improve brand awareness when associated with the right event.

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Personal Selling – The delivery of a personalized message between a seller and a buyer. Personal selling plays a key role in delivering messages to distributors who resell products and to consumers .

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who shop at retail locations. Knowledgeable salespeople play a key role in building consumers’ perceptions about a product.

The integration of these components to present a unified message creates a higher level of impact on the target audience. The right combination of promotional components best suited to meeting the brand’s communication objectives is the key to success.

B. Factors Encouraging Integrated Marketing Communications Today, companies use a cooperative approach to communications problem-solving and planning, an approach that provides creative solutions. Several key issues and trends affect and will continue to affect marketing communications practice: 

Media Consumption Trends and the Shift to Digital Media – Consumers are spending less time with print and broadcast media and more time with the Internet and mobile communications devices.

Television viewers are going “on demand” and are streaming their favorite shows to their computers or TVs, and this presents new advertising opportunities. Younger generations that have grown up with technology are still the leaders in digital media consumption trend. Consumers’ attention is also constantly shifting from one platform to another (content is consumed across multiple devices), and this highlights the challenge of reaching people with advertising messages and points to the need for well-planned strategies.

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Social Media Penetration and Popularity – Recent data indicates that Canada has the highest social media penetration in the world, with 82% of Canadians versus 75% of Americans using a social network The most popular social networks are Facebook, followed by Twitter than Google.

All age groups are now online so social media advertising is a natural extension of a brand’s communication strategy. There is also a growing number of social media metrics used to evaluate the impact of social media on sales revenue and market share, but the greatest value is in the dialogue-style of marketing present in social media.

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Mobile Communications: The Next Big Thing – Mobile communications devices are becoming a vital means for communicating product information and for conducting business transactions with consumers. In Canada, 68% of cellphone subscribers have a smartphone, and one in five households the cell phones are the only form of telephone service. With consumers’ eyeballs shifting from the “big screen” (television) to the “small screen” (laptop computers and mobile devices) companies are reacting by experimenting with new media communications mixes to more effectively reach and impact target audiences.

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Database Management Techniques and Customer Relationship Marketing – Via database management systems companies continuously collect and analyze information about customers. This buyer information is then used to design communication plans that meet the consumer’s unique needs. Organizations now possess the capability to communicate with customers individually, rather than collectively. Interactive forms of communications are the outcomes of database management programs.

Relationship management programs are concerned with establishing, maintaining, and enhancing long-term relationships. Effective promotional programs are personalized to customer needs. A good CRM program gives appropriate attention to attracting new customers and retaining existing customers. For example, some promotional activities (like samples) attract new customers while loyalty-oriented promotions help retain existing customers. .

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Demand for Efficiency and Accountability – With increasing constraints on marketing budgets, managers are demanding more efficient use of promotional expenses and more measurable return on promotional investments. There is intense pressure on managers to design and implement programs that will have a more tangible influence on business. Since digital media options tend to be more measurable (consumer responses can be tracked electronically) their popularity has increased.

C. Consumer Behaviour Essentials Consumer behaviour is the study of how people buy, what they buy, when they buy it, and why they buy.

Essentially, consumer behaviour is the psychology behind marketing and the behaviour of consumers in the marketing environment. Effective marketing communications campaigns are rooted from a solid understanding of essential consumer behaviour concepts: Needs and Motives – Individuals have a need when they perceive the absence of something useful; a motive is a condition that prompts the individual to satisfy the need. An appealing presentation of a product’s benefits acts as a source of motivation.

Maslow’s hierarchy of needs and theory of motivation has an impact on marketing communications strategy. The theory is based on two assumptions: 1. When lower level needs are satisfied, a person moves up to higher level needs.

2. Satisfied needs do not motivate. Behaviour is influenced by needs yet to be satisfied.

Individuals pass through five levels of needs: physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. People are more alert about and receptive to communications that meet their needs. Teenagers for example, are tuned into messages from fashion retailers to ensure they wear the right clothes—their social needs are a priority and clothing and accessories play key role in social acceptance.

Personality and Self-Concept – This refers to a person’s distinguishing psychological characteristics; characteristics that are influenced by family, friends, and society. The self, as explained in the SelfConcept Theory has four components:    

Real Self – You as you really are Self-Image – How you see yourself Looking-Glass Self – the way you think others see you Ideal Self – How you would like to be

Organizations understand that goods and services that help fulfill the looking-glass self and ideal self are appealing to consumers. The importance of self-image today is being expressed by male consumers who are demanding more personal care products that make them look and feel good about themselves. Both sexes are concerned about aging—they want to look and feel younger, hence the blitz in marketing activity for products such as face scrubs, moisturizers, and cleansing products are now very popular.

Attitudes – Attitudes are an individual’s feelings, favourable or unfavourable, towards an idea or object.

Typically, an organization presents its products in accordance with prevailing attitudes.

The change towards a more health-conscious lifestyle has led to many new health-oriented product developments and communication strategies that focused on this better lifestyle, such as the Kellogg’s Special K “good for you” positioning. Marketers must keep track of attitude changes. .

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Perceptions refer to how individuals receive and interpret messages. People perceive the same product differently, and for a variety of reasons. Perceptions differ because individuals are selective about the messages they receive and retain. There are three levels of selectivity:   

Selective Exposure – Noticing information of interest Selective Perception – Screening out messages that are in conflict with attitudes and beliefs Selective Retention – Remembering only what we want to remember

The challenge is to penetrate the perceptual barriers by designing messages and media strategies that will command attention and spur action. Consumers tend to tune out messages they don’ like or get annoyed by—too much of anything is not a good thing it seems. Conversely, if the consumer is contemplating buying something, say a new television or automobile, they suddenly tune in messages from products in these categories.

Reference Groups – Groups of people that individuals associate with have considerable impact on behaviour and buying decisions. When an individual joins a group there is tremendous pressure to conform to the group’s norms—to fit in! You do what the group does. You wear what the group does, and so on. In the case of a fraternity, if a certain brand of clothing such as Polo or Ralph Lauren is popular with key members, then new members or members with less seniority will likely wear that brand.

Family Influences – According to a recent study family and friends are the number-one influences on women’s decision making. Marketers look to social media to tap into influencers. Each member of a family has some influence of the behaviour of the family unit and the buying decisions of that unit.

Marketing organizations must be aware of the changing roles and responsibilities within the family and adjust their strategies accordingly. The promotional messages, as expressed in all media forms, must reflect contemporary lifestyles. Double targeting are marketing strategies aimed at reaching both genders effectively.

The new featured story entitled Boston Pizza Goes Family (IMC Highlight on page 22), demonstrates how changing demographic variables impact marketing and marketing communications decisions. Boston Pizza’s campaign takes a more inclusive approach in focusing on dads, moms and children and promoting sports and the family message. There is a recognition that both parents share the responsibility in getting their kids to various sports activities. To be different and more competitive Boston Pizza is moving away from the male focus of “hanging out with friends” and showing a “family sharing responsibility and spending time together”.

D. Business and Organizational Buyer Behaviour Consumers buy on emotion; organizations make more rational decisions. The business- to- business (B2B) market is quite different from the consumer market. The B2B market is: smaller, concentrated geographically; the buying criteria are very practical; and a formal buying process is used in order to make informed buying decisions.

The key criteria are:   

Quality – consistent quality on every order Service – prompt service initially and ongoing Continuity of Supply – long-term supply to ensure for efficient production of goods

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Price – price is evaluated in the context of other criteria (long-term savings could outweigh low initial price).

In terms of process an organization will use a buying committee or buying center. A buying committee is usually comprised of representatives from key areas such as marketing, production, engineering, finance, purchasing, and so on. Participants are comforted to know that costly decisions are shared decisions.

A buying center is an informal structure and process with members involved in certain roles:     

Users – Those who use the product Influencers – Those who assist in defining specifications Buyers – Those with authority and responsibility to select suppliers Deciders – Those with the power to select the actual supplier Gatekeepers – Those who control the flow of information to others

If this process is used, the marketer must identify key individuals and then develop appropriate and effective communications strategies to reach and influence those individuals. From the IMC mix, personal selling and direct forms of communications are vital components for influencing business buyers.

E. Integrating and Partnering Influences B2B Communications Strategies Business-to-business marketing organizations have embraced customer relationship management and marketing practices. The formation of long-term partnerships and collaborative practices among members of a channel of distribution is now very common.

Communications strategies for reaching B2B organizations are also evolving with technology. Creating awareness through traditional media is the first step. Event marketing and trade show participation keep a product on the buyer’s radar screen and direct-response communications help create interest and desire.

Web-based communications are also essential in B2B marketing. Similar media tools are employed in consumer marketing, but in B2B, the weight given to the various components is quite different.

F. Ethical Issues in Marketing Communications Practice The way an organization communicates is always under review by the public and critics of the marketing communications industry. Rightly or wrongly, planned or unplanned marketing communications sometimes deliver messages that spark controversy. Many organizations tolerate the controversy as long as the campaign is delivering sales while others bow to public pressure and remove offending messages.

The following issues make headlines on a regular basis. 

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Privacy Issues in an Online World –Data collected by organizations should not be used illegitimately. Data is available quickly and gives marketers the ability to focus their communications on personal interests. Consumers increasingly fear their privacy is being invaded.

PIPEDA (Personal Information Protection and Electronic Documents Act) provides guidelines on the disclosure of customer information.

Sex in advertising – A common complaint about advertising revolves around the use sex to sell something. As an old saying goes “Sex Sells!” Using sex to sell a product is natural, but the question is how much sex – what is considered to be gratuitous. Advertisers must walk a fine line between what is tasteful and what is distasteful. .

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Dangerous or Disturbing Advertising – When a marketer goes to extremes to get a message across, such as using disturbing situations or creating worrisome situations via email, ethical practice is being challenged.

Misleading advertising – Sometimes ads can mislead the public or simply misrepresent the brand.

Sometimes the public misinterprets the advertiser’s message and the campaign backfires. The control of misleading advertising is the responsibility of Advertising Standards Canada.

Exaggerated green claims – With a renewed public focus on the environment and sustainability, advertisers have been busying themselves making claims about how green their products and services are, and how they protect or minimize negative impacts on the environment. Recent market research shows that Canadians are considered the environmental impacts of their products and services when they make their purchases. Companies run into problems when they exaggerate these claims, or by telling half-truths or by only presenting part of the argument for and against buying a product or service.

Targeting Children – Advertising messages directed at children often bypass parents. As a result, parents are concerned about the content of these messages, which have a powerful influence on the child’s behaviour. Children may start demanding higher-priced “in” goods when parents prefer to buy less expensive alternatives. In other words, at what age do children become “brand conscious” Cultural Diversity – Canada is an increasingly diverse country from a cultural point of view, particularly our largest metropolitan centers. Advertisers must make strides to ensure that their communications efforts reflect this diversity, or risk alienating certain ethnic populations who feel they are under-represented in contemporary IMC campaigns.

Laws and Regulations Governing Marketing Communications – The marketing communications industry in Canada is highly regulated. Regulation and control come from Advertising Standards Canada, which administers regulations based on codes of practice that are voluntarily established; and the Competition Bureau (a federal agency) through the Competition Act which established laws and regulations for all marketing activity in Canada.

The rapid pace of change in business today has forced organizations to re-examine and change the way they communicate with customers. A key issue facing organizations today is the increasing use of digital media and social media by consumers. Mobile media is growing as a preferred source. Privacy concerns are growing along with this rise of digital media. More than ever before, organizations are demanding integrated marketing strategies to help resolve marketing problems and to take advantage of new opportunities.

Answers to End of Chapter Questions Review Questions 1. The components of the integrated marketing communications mix include various traditional and non-traditional media forms. Traditional media include television, radio, newspaper, magazines and a host of out-of-home advertising alternatives. Non-traditional and integrated media include direct-response communications (direct mail, direct response television, telemarketing and catalogues), digital communications (internet communications, social media and mobile technologies), sales promotions, personal selling, public relations, and experiential marketing (event marketing and financial sponsorships). Effective communication integration also considers branding strategies (brand name, logo and trademarks), the package itself, and various other consumer touch points (company communications to its public).

2. Product advertising provides information and helps build an image for a product, while promotional advertising is designed to accomplish a specific task – usually to communicate a .

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special offer to elicit some kind of immediate response from the customer. Including some kind of coupon or contest promotion with a print advertisement, for exam, is a form of promotional advertising.

3. The emergence of integrated marketing is attributed to trends such as media consumption trends (changes in consumer media habits) and the shift to digital media, social media penetration and popularity, increased use of mobile communications, the focus on customer relationship management programs via the use database management techniques, and the demand for efficiency and accountability in organizations.

4. Consumers tend to be influenced by their emotions. Therefore, a sound knowledge of fundamental consumer behaviour concepts is essential in order to devise marketing communications strategies that “press the right buttons.” Individuals are receptive to messages that are congruent with their needs, what they need now or what they may need in the future.

Maslow’s theories help to explain levels of consumer needs. Effective communications show how a certain product will satisfy those needs and the message will be presented a convincing manner appropriate for the customers being targeted.

5. The self has four components: real self (you as you really are); self-image (how you see yourself); looking-glass self (how you think others see you); and ideal self (how you would like to be). It is common for messages to focus on the looking-glass self and/or the ideal self since consumers hold a high importance on how others view or see them, and/or on their aspirations to look better with the products they purchase.

6. Assessing attitudes is very important. Communications strategies should be devised in accordance with the prevailing attitudes of the target market. Not to do so, presents risk and whenever attempts are made by communicators to change attitudes, the costs are much greater. Effective marketing research programs allow an organization to stay in touch with their customer’s attitudes. Investing money in research to gain knowledge will save money in the long-term; money that may be wasted sending out ineffective messages.

7. Peer pressure from reference group members is a significant influence on buyer behaviour. The desire to “fit in” is paramount so actions taken by a group member are designed to ensure that they fit in. This may influence decisions on what to wear, what to eat and drink, what music to listen to, what activities to participate in, and so on. Members of a group are attracted to products that show a meaningful association with the group. Mountain Dew, for example, effectively portrays a lifestyle that is popular with a segment of the teenage population.

8. Double targeting refers to marketers needing to reach both genders effectively. Purchasing patterns and roles and responsibilities are continually being redefined, and many typical male or female slanted purchases are now being influenced by the other sex or have become joint purchase decisions. For example, Car buying was typically a male dominated activity – but women are exerting more and more power over this important purchase, and the automotive companies are responding with more female influenced and family friendly designs and innovations.

9. Buyers in business and industry are rational in nature. Before making a buying decision, particularly on goods or services where the cost is high, careful attention is paid to a predetermined list of criteria. The criteria normally include quality, service, continuity of supply, and price. Price is usually considered in conjunction with the first three criteria. The lowest price is not always selected since long-term cost savings could outweigh a low initial price. .

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10. A buying committee is a formal arrangement employed by business organizations to evaluate prospective suppliers. The committee draws upon cross-functional expertise within the company and collectively the members of the committee evaluate suppliers and make decisions that are in the best interests of the company. Decisions made are shared decisions. A buying center is an informal structure where participants have varying levels of authority and control. In this situation, marketers must identify the members with authority and focus their efforts on them if a decision is to go their way. They must also impress members who influence the decisions, but do not actually make the decisions.

11. The Competition Bureau is a government body responsible for the administration and enforcement of the Competition Act, a law that governs business conduct and marketing practices in Canada. Advertising Standards Canada is the industry body committed to creating and maintaining community confidence in advertising. Its mission is to ensure the integrity and viability of advertising through industry self-regulation.

Discussion Questions 1. More and more Canadians are shifting their time from the “big screen” to the “small screen”, and in many household’s TV time has been replaced by Internet time. In the battle between the Internet and the TV, it seems the Internet is emerging as the clear winner. Recent Canadian data (2014) from Numeris RTS Canada shows that the 18-34 years old age group spends on average 33 hours per week on the internet and only 15.3 hours per week watching TV. This age group spends more than double their time on the Internet as compared to TV, a shift to digital communications is a definite trend. Social media in Canada is also growing in importance with over 16 million Facebook members (48% of the population). Nielsen research supports the fact that the reach of social networking and blogging venues are growing at twice the rate of the Internet (like portals and emails). Lastly mobile communications are a vital communication tool. There are now 24.5 million wireless subscribers in Canada and 5.7 million subscribers of mobile broadband. More and more evidence is detailing the digital, social media and mobile technology trends, and marketers are taking advantage of this cultural and technological change, by shifting their marketing spending from more traditional to new electronic and digital media.

2. According to a major international study by London based MICE Group, experiential marketing is forecast to become one of the biggest growth areas in marketing in the next five years. Spending in this area is set to grow as marketing budget holders now believe that it offers considerable advantages over other marketing tools, especially in building brand loyalty and encouraging word of mouth recommendation amongst consumers. The majority of respondents (80%) described experience-based activities as being important within their marketing mix, accounting for around one third of their entire marketing budget; a percentage set to rise in the future (Source PR Newswire). Students should be able to cite the shifting landscape in marketing spending, and see online and experiential marketing as the benefits of a decline in spending in traditional marketing channels.

3. In the context of business-to-consumer marketing, relationship marketing communications strategies will be much more of a factor in the future. A company has to balance its spending so that it is investing in programs that attract new customers (for growth) and retain current customers (to find ways do making them buy more goods). Theory holds that the costs of retaining a customer are much lower than attracting a new customer. Therefore, a wise organization is managing the customer relationship in order to maximize the value of the customer. Marketing communications plays an essential role in keeping in touch with the customer to ensure that needs .

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are being satisfied and to suggest how new products and services can be of use. Generally speaking, traditional forms of communication can be used to attract customers while nontraditional forms of communications are better suited for customer retention and maintenance.

4. To get the students started you may ask them to go to a company website to examine the various types of marketing communications they integrate on their website. The students should identify and evaluate the promotions in the context of how they employ various aspects of consumer behaviour principles, more specifically how communications are directed to consumers’ needs and motivation (Maslow’s Hierarchy of Needs), personality and self-concept, reference groups and peer influences, and family influences.

5. Since the answer calls for a strategic solution for building and sustaining a brand, student responses will vary. The objective is to get students thinking about how to best employ the various components of the marketing communications mix. They should first also consider the target market profile for each brand when making any recommendations and identify their preferred media. The students can also be encouraged to notice that the identified brands are fairly mature, with brand awareness being generally high in most markets and thus the communication objectives would most likely be based on building further preference or maintaining the brand image.

6. Responses will vary based on the examples cited by students. Students may consider that Canadian standards are more conservative than those in Europe, but may be less so that those in other countries. Students should consider the impacts of risky or controversial messages, particularly as it relates to children and under-represented minorities. Successful communication is about finding a balance that is good for both you and your customers, but considers the needs of the society as a whole. You want to be able to push the creative envelope at times, but you don’t want to court disaster buying taking a message one step too far.

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Chapter 2 Strategic Planning Principles Learning Objectives Students will be able to: 

Identify essential external trends and conditions that influence organizational planning

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Describe the steps in the strategic planning process

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Identify the distinctions and relationships between the various types of plans

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Characterize the essential elements of a corporate plan

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Outline the structure and content of a marketing plan

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Outline the structure and content of a marketing communications plan

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Show how integrated marketing planning provides solutions to marketing problems

Chapter Highlights Strategic business planning is an integrated process that involves the various management levels, operating divisions, and functional departments of an organization.

A. Strategic Planning and Factors Influencing Planning Strategic planning embraces three variables: 

Objectives – statements that outline what is to be accomplished

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Strategies – statements that outline how objectives will be accomplished

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Tactics (Execution) – the plan of action in specific detail

Strategic planning is a cyclical process (e.g., an annual occurrence with revisions while a plan is in progress). Strategic plans are influenced by various external factors: the economy, demographic trends, changing technologies, and various laws and regulations. 

Economic Influences – The state of the economy often dictates how aggressive or conservative a company is with its plans. The state of the economy is determined by such factors as growth rates in GDP, inflation rates, levels of employment, and the value of the dollar in relation to foreign currencies. The relationship among these variables is dynamic. An economy tends to go through cycles (the outcome of these variables): recession, depression, recovery, and prosperity. Companies need to adapt to each of these cycles. Some retailers, like Dollarama, Canada’s largest operator of dollar stores expanded in 2014 and benefitted from consumers’ concern for household debt and the weak economy. .

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Competitor Influences – The type of market a company operates in has an impact on the nature of planning. The various structures include monopolies, oligopolies, and monopolistically competitive markets. Competition is classified as being direct (competition from alternative products) or indirect (competition from substitute products). The lines between direct and indirect competition is less today than previously. For example, Loblaws and Wal-Mart once operated in separate markets. The addition of new product lines by each company now makes them direct competitors. As well, the trend towards online shopping has impacted retailers. In 2015, Future Shop closed its doors throughout Canada. Owned by Best Buy, the two-banner arrangement caught up with the company as it saw its retail costs increasing while customer visits to stores were dropping. The company has since decided to invest more money in e-commerce under one banner.

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Demographic Influences – Adjusting business strategies to fit with demographic trends is essential.

The key trends include the following: 1.

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The population is aging The trend towards urbanization continues Changing household formations Increasing ethnic diversity Reductions in the growth of disposable income

Generally speaking, the population is aging. The country’s largest demographic cohort (baby boomers, who are estimated to be 40% of the Canadian population by 2021), are reaching retirement age. As they age the average age of Canadians gets higher. Gen Y are tech-savvy and a main target for many companies. They are very different than baby boomers with respect to their needs and wants. There is an increasing trend toward urbanization, with 80% of Canadians living in urban areas. Household composition is also changing; the average household is smaller, and fewer couples are married. There is more acceptance of gay couples. Canada is also increasingly ethnically diverse, (20.6% immigration rising to 23% by 2017). There is also greater income inequality and reductions in the growth of disposable income. Lower- and middle-income Canadians (the masses) are more cautious about how and on what they spend their money. Walmart’s ongoing communication slogan “Save Money. Live Better” effectively taps into consumers’ need for good value pricing. 

Social Influences – It’s the role of marketers to keep track of social and cultural changes. Canadians are reporting that they are finding their lives to be increasingly hectic. Many companies have responded by providing on-the-go services to this demographic. There is also an increasing focus by Canadians to make healthier lifestyle and food choices. Lastly, there is an increasing concern for the protection of the natural environment, and Canadians are considering the environmental impacts of their purchasing decisions. There is also a greater pressure on companies to be ethical and take stands on social issues.

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Technology Influences – Technology embraces discoveries, inventions and innovations. New technologies present new opportunities for companies. Canadian society has been quick to embrace technology meaning that future marketing plans and marketing communications plans will have a technological focus. For example, the means of communicating with prospective customers will rely more on electronic communications and less on traditional mass media communications. Smart phones such as the Samsung Galaxy or the iPhone, or tablets such as the “Samsung 11” or the Mini iPad are everywhere, and Canadian companies are re-examining their media buying mix, to ensure that they have an increasing profile in digital mediums. This has resulted in a reduction in expenditures on traditional media formats such as print, TV and radio. Canadians have also .

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integrated social media. Consumer generated content on YouTube, Facebook or Twitter are a strong form of marketing communications for a brand. 

Legal and Regulatory Influences – Laws and regulations govern business practice. Industry Canada regulates Canadian businesses through the Competition Act. It cannot be assumed that all companies follow ethical practices. Numerous companies have made headline news for their corporate malaise in recent years. With regard to communications, a company must be careful about advertising claims made for its products. They cannot misrepresent the product nor mislead the public. There is also an increasing focus on privacy and the protection of personal information held by companies.

Canadians are protected by privacy laws, including the Privacy Act, which places limits on the collection, use and disclosure of personal information.

Mountain Equipment Co-op (see IMC Highlight on page 42) has carefully assessed market trends in the sporting goods market and successfully implemented a new communications campaign to pursue an urban target market.

B. Strategic Planning Process “Top down and bottom up” may describe how the planning process works. Typically, the corporate plan is formed by senior executives and passed down the functional departments. In multi-product companies marketing plans are formulated for each product. Within the marketing plan the role of marketing communications is determined and funds are allocated to carry out the plan. The integration of all components in a strategic plan for a product, and then the entire company helps the organization achieve its business objectives. As in war, a unified attack offers a better chance of success.

C. The Corporate Plan Corporate planning is done by senior management and usually includes three key elements: 

Mission Statement – A statement of an organization’s purpose. It reflects the operating philosophy of the organization and the direction the organization is to take.

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Corporate Objectives – Quantifiable goals that can be easily measured for success or failure (e.g., sales, profit, market share, and return on investment).

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Corporate Strategies – Statements outlining how objectives will be achieved. The organization assesses its strengths and weaknesses, research and development capabilities, and commitment to particular goals, and financial resources available.

The strategic direction a company takes varies but some common directions include: 

Divestment Strategies – A company decides to sell off various divisions, subsidiaries or products. (e.g., P & G sold Pringles to Kellogg’s Co in a move to focus on personal care and household goods.)

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Penetration Strategies – A company decides to pursue the competition aggressively (e.g., the “Cola Wars” between Coca-Cola and PepsiCo).

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New Product Development – Real growth often comes from new products (e.g., Apple Computer’s presence in the music industry with iPods and iTunes). .

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Strategic Alliances – Two or more companies form an alliance to collaborate their efforts in pursuing a particular market (e.g., in-store Starbucks –licensed stores.).

D. Marketing Planning Marketing planning involves analyzing, planning, implementing, and controlling marketing initiatives to satisfy target market needs and achieve organizational objectives. A target market is the group of persons for whom a firm creates and markets a product that specifically meets the needs and preferences of that group. A company creates a target market profile, which identifies demographic (age, gender, income) psychographic (lifestyle, attitudes, interests, opinions), geographic (urban/rural, region) and behavioural (consumption patterns) traits of the people or businesses that make up that market segment. A marketing plan summarizes the relevant background information leading up to the plan, and the objectives, strategies, and tactics that are part of the plan. Marketing planning involves four essential steps: 1.

2.

3.

4.

Analyzing market opportunities Planning Implementing marketing programs Managing/controlling marketing programs

Marketing plans are action-oriented and short term (1 year). It’ a good strategy to have contingency plans (alternative action plans) to modify the original plan if necessary.

A marketing plan is divided into two major sections: background and plan.

The following are key areas of the background section of the plan: 

External Influences – A review of economic trends, social and demographic trends, technology trends and regulatory trends.

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Market Analysis – An evaluation of market size and growth, regional market importance, market segment analysis, and seasonal trends.

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Target Market Analysis – The identification of the primary and secondary customer groups along with their characteristics, lifestyles, and habits. Other concerns include their degree of brand loyalty and understanding of what factors influence their buying decisions.

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Brand Analysis – A review of sales trends, market share trends, distribution trends, marketing communications programs, and any new product activity that has been recently undertaken.

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Competitor Analysis – Knowledge of key competitor’s sales volume, market share, and marketing strategies are analyzed for effectiveness.

SWOT Analysis – An attempt is made to interpret the data collected in the above sections, focusing on internal strength and weaknesses and external opportunities and threats. The marketing plan section includes the following information: 

Positioning Strategy Statement – A statement that reflects what the brand stands for. It is the desired image that the company wants to instill in the customer’s mind which guides the direction of marketing communications. (e.g., VISA gives you the confidence you can do anything.) .

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Target Market Profile – A thorough description of the customer based on demographic, psychographic, behavioural, and geographic characteristics.

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Marketing Objectives – Statements identifying quantifiable goals for a one-year period (e.g., to increase specific brand market share from 5% to 5.2% by 2017.).

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Marketing Strategies – The role and contribution of each element of the marketing mix are identified and resources are allocated to each element. These strategies provide guidance for the development of marketing communications plans.

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Marketing Execution (Tactics) – The identification of specific marketing actions (the action plan).

All details are mapped out according to type of activity, timing, and cost.

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Budget and Financial Summary – The financial implication of the plan must be communicated to senior management. Typically, a profit and loss statement for the product is included in the plan. The statement will compare previous year’s financial performance to the current year to date, and the plan year.

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Evaluation and Control – Marketing plans are reviewed while in progress to determine if changes are necessary. Marketing control is a process of measuring and evaluating results of actions taken and planning corrective action when necessary. Companies often build in contingency plans that can be quickly implemented should certain situations develop in the marketplace.

E. Marketing Communications Planning The marketing communications plan and any plans for individual components of marketing communications rely on guidance from the marketing plan. A marketing communications plan is a document that encompasses key components of various communications plans (e.g., advertising, public relations, sales promotion, events and sponsorships, personal selling, and so on). When devising the plan, it is crucial that the role and contribution of each component be identified. An integrated plan will present a unified message to the target market. It is essential to select the best mix of marketing communications components.

F. Marketing Communications Objectives Objectives tend to be diverse in nature yet specific in scope. Typical objectives include:        

Building awareness Altering perceptions Differentiating brands Attracting new targets Encouraging more use Offering incentives Creating leads Motivating distributors

To achieve such objectives a variety of communications is necessary. Advertising is good for creating awareness and interest; sales promotions are good for stimulating action; public relations are good for building image and altering perceptions. The challenge is to select the right form of communications or combination of communications to meet the challenge at hand. .

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In the IMC Highlight (page 59) Buick: Going Younger, General Motors has typically been identified as catering to a mature male market. The company assessed the brand’s positioning in the market and analyzed the social and demographic trends and decided to attract a new target market. They have realized the path to success by repositioning the Buick brand to attract new, younger, female consumers with a new campaign.

G. Marketing Communications Strategies This section of the plan provides an outline on how the various components will be used and how much financial resources will be allocated. The various components and plans include the following: 

Advertising Plan – This plan is divided into two essential areas: creative and media. The creative plan is concerned with the message and how it will be communicated. The media plan involves strategic decisions on what media to use and how much money to invest in the chosen media. The goal of the media plan is to spend the funds efficiently; that is, maximize reach and impact at minimum cost.

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Direct Response Plan – Direct response techniques are increasing in popularity since they can be measured for effectiveness. Advancing technology and database marketing techniques also encourage more use of direct response communications (e.g., direct mail, direct response television and online communications).

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Interactive Plan – Consumers are increasingly accepting the role of online advertising communications, Online communications combined with other interactive alternatives such as cell phones, CDs, DVDs, and video games also require careful planning if messages are to be delivered effectively. Overall the last couple of years’ social media forms such as Facebook, Youtube and Twitter have become increasingly common vehicles for marketers to communicate with customers and key stakeholder groups.



Sales Promotion Plan – These are plans that reach and influence distributors, consumers, and the sales force. Plans are designed to meet various sales and market share objectives. Consumer promotions are designed to encourage trial purchase, repeat purchases and to build brand loyalty.

Trade promotions are offered to encourage larger orders from distributors and to secure merchandising support at point-of sale.

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Public Relations Plan – The goal of public relations is to enhance a company’s public image. These communications can be for the entire company or for individual brands. Public relations also play a key role in communicating with the public should a company face a crisis situation. It is also a good medium for spreading good news about a company and its brands. Because it is an “unpaid” medium for the most part, it is an attractive and efficient way to get the message delivered.



Experiential Marketing Plan – These activities play a greater role today, and the focus is increasingly on engaging consumers in a brand experience. The primary vehicle for this is developing unique branded events that appeal to a highly targeted audience who have an affinity for your brand or product. A variety of marketing communications elements are incorporated into successful event planning; this information must be documented in the communications plan.



Personal Selling Plan – The sales representatives play a key role in communicating messages in the channel of distribution. There are direct links between the sales plan, the advertising plan, and sales .

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promotion plan. The sales force has direct contact with distributors who make important buying decisions. Therefore, time is well spent developing push strategies that will compliment the pull strategies of other marketing communications media. 

Calendar of Events – detailed visual of planned activities and when they occur.



Budget Summary – summary of costs associated with the planned activities.

Answers to End of Chapter Questions Review Questions 1. The external trends and conditions that must be considered when developing a plan include: economic influences; competitor influences; social and demographic influences; technology influences; and legal and regulatory influences. A company must be aware of the environment in which it operates in order to develop appropriate marketing and communication strategies.

2. The key components of a corporate plan are the mission statement, a list of overall objectives that are to be achieved; and an outline of strategies that will be employed to assist in achieving the objectives. A corporate plan provides a framework for all divisional plans and functional plans in the company. When the planning process is complete all of the various plans will complement each other and strive to achieve the business objectives that are outlined in the corporate plan.

3. A mission statement is a statement of an organization’s purpose and an indicator of the operating philosophy the organization follows. A company establishes its mission and then develops strategic plans to achieve the mission. All strategic plans and specific activities within the plans are evaluated against the mission of the company.

4. The four variables are demographics, psychographics, geographic and behaviour. Demographics refer to the characteristics of a population such as age, gender, income or occupation.

Psychographics describe a customer group in terms of lifestyle, attitudes, interests, opinions and activities. Geographic information includes the analysis of national, regional populations and the differences between rural and urban populations. Behavioural characteristics involve the study of consumption patterns for products and services by people or businesses in the target market being researched by a company.

5. A positioning strategy statement identifies what a brand stands for. Hopefully, effective communications will instill the desired perception of the brand in the customer’s mind. Such a statement provides guidance and direction for marketing strategies while serving as a standard for considering what strategies to use and not to use. For example, a client often asks: “Is this advertising on strategy?” What they mean is, does the message fit with the positioning strategy of the brand?

6. Marketing strategies are the master plans for achieving objectives. The strategy is what makes the plan “tick.” The proper strategy with less than effective execution can yield reasonable results but the wrong strategy effectively executed can be a disaster. When developing a marketing strategy, the role and contribution of each component of the mix must be identified. When developing a marketing communications strategy, the role and contribution of each component must also be identified. Plans must be integrated in a manner such that a unified message is delivered to the intended target audience. .

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7. Marketing strategy outlines how the various components of the marketing mix will be utilized and identifies the extent of resources that will be allocated to each component. Marketing execution refers to the specific program details that stem directly from the strategy section of the plan. It identifies the activity, the timing, and cost.

8. Marketing control is the process of measuring and evaluating the results of marketing strategies and taking corrective action to ensure that objectives are achieved. Plans are evaluated while in progress in order to identify appropriate changes in direction, if and when necessary.

9. In a creative plan the essential decisions involve what to say and how to say it. On the issue of what to say, the manager decides upon what product claims will take precedence. How to say it is more complex. What appeal techniques will be employed? What will the theme of the message be? In a media plan, what is the best mix of marketing communications? There are a variety of options to choose from and decisions are often based on the advertiser’s knowledge of the target audience’s behaviour and on the budget.

10. The various components of a marketing communications plan are directly linked to each other. A manager selects the appropriate forms of communication to resolve the situation at hand. From that point on he or she must ensure that the strategic direction of each option are synchronized with the other options so that a unified message is delivered. A unified approach has more impact on the target market. That is the premise upon which integrated marketing communication strategies are designed.

Discussion Questions 1. Communications objectives are diverse but a good campaign must have specific focus. This statement is true but students may have varying opinions. Opinions vary because students do not yet appreciate the role of marketing strategy and marketing communications strategy. The implementation of plans that go off indifferent directions tends to confuse the target audience.

Further, plans that attempt to deal with too many issues (or objectives) at one time become very complex. Complex messages do not break through the clutter and again create confusion in the customer’s mind.

2. Students’ opinions on this question will vary. For example, if Roots stays focused on the youth market segment it will constantly be in the business of attracting new customers. To grow, it must expand out of its niche and make the banner appealing to older age groups as well. New marketing and marketing communications strategies are needed. Encourage the students to offer specific recommendations for the future. a. Tim Hortons is one of Canada’s most successful companies. Strong marketing programs have always played a key role in the growth and development of the company. However, Tim Hortons operates in market where there is much competitor overlap (e.g., burger restaurants competing with chicken restaurants, competing with pizza restaurants, and so on). Menu duplication is prevalent. To stay in front Tim’s must continue to bring innovative products to market, find ways of serving people more quickly and maintain prices at reasonable levels so as to keep the value equation in check. Effective marketing communications have always been strength of the company. One positioning strategy statement is “Always fresh” communicating that their products are never standing, but always moving (being sold). Tim Hortons is an expert at building image with emotional advertising campaigns and a master at building loyalty through sales promotion .

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programs. Given the level of competition, fresh approaches to marketing communications may be needed.

3. The intent of this question is to get students sourcing appropriate secondary market information that is typically included in the background section of a marketing plan. Once the information is collected the student should make some observations and conclusions that would have impact on the direction to take in a marketing plan, including marketing communications.

4. Responses will vary based on the product leader and challenger chosen by the student. The intent is to evaluate the marketing communications mix employed by each brand. Are there any differences that may have an impact on brand performance?

5. Working in reverse, the idea here is to generate the prototypical target market profile based on the imagery and message communicated in the marketing communication mix. Since the product is an automobile all key elements of a profile (demographic, behavioural, psychographic and geographic) will play a role.

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Chapter 3 Branding Strategy Learning Objectives Students will be able to: 

Describe the concept of branding and the role it plays in marketing communications and other business-building programs

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Identify the various components of a brand

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Describe the benefits of branding for organizations and consumers

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Characterize the various stages of brand loyalty

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Describe the role and importance of brand positioning and its relationship to marketing communications plans

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Explain various brand positioning strategies commonly used in marketing communications

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Describe the role and influence of packaging and product design in the brand building process

Chapter Highlights Messages that are designed to create awareness and interest in a product are sent to customers from a variety of touch points (packaging, personal selling, events, promotions, publicity, etc.). The goal is to ultimately get the customer to buy! The potential impact of the message is largely based on what the brand has to offer. What are its unique selling points and how is it differentiated from competing brands?

A sound brand strategy is the foundation that ultimately positions a brand in the minds of consumers.

A. Defining the Brand A brand is an identifying mark, symbol, word(s), or combination of same, that separates one company’s product from another. A brand is also defined as a combination of tangible and intangible characteristics that combine to have an impact on customers. A brand may identify one item, a family of items, or all items of that seller. Some key components of a brand include: 

Brand Name – A name, term or symbol that identifies and differentiates one product from another.

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Brand Name – The part of a brand that can be spoken (i.e., Nike).

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Symbol or Brand Logo – The symbol or design element of a brand (i.e., the Nike swoosh).

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Design – The design of the product itself, the packaging or colour scheme employed by the manufacturer (i.e., Coke brand uses red while PepsiCo uses blue).

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Trademark – That part of a brand granted legal protection so that only the owner can use it. This is identified by TM. Note encircled r is used to identify registered trademarks. .

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Brands are more than just the tangible product. Emotional or intangible entities are added to give a brand a personality and the desired personality is personified in marketing communications programs. For example, brands of beer like Blue, Blue Light and Budweiser all have distinctive personalities that prospective drinkers identify with. When something unique stands out in the customer’s mind, favourable decisions are made.

B. Brand Image and Reputation Marketing communications play a key role in building a brand’s image and reputation. A good reputation does not just happen – it is the result of a consistent approach in marketing communications over an extended period of time. Canadian Tire is an example of a Canadian brand with a solid reputation that has withstood incredible competitive pressures from big American retailers like Walmart and Home Depot.

A list of top brands by reputation in Canada is shown in Figure 3.3.

C. Brand Loyalty Brand loyalty refers to the degree of consumer attachment to a particular brand. It is influenced by the quality of marketing communications programs. Perceptions of loyalty are influenced by product or service experience, marketing communication such as advertising, peer or family pressure and by salesperson or customer service interaction. Brand loyalty is measured in three stages: 

Brand Recognition – Through communications consumers become aware of a brand.



Brand Preference – The brand is assessed and becomes an acceptable alternative in the customer’s mind.

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Brand Insistence – The consumer buys the brand and searches for it exclusively when needed again.

Consumers in the brand insistence stage often become brand advocates. They are so convinced it is the best brand they openly and consistently recommend it to others. This phenomenon shows how word-ofmouth communications can be a powerful tool in building a brand and its image. For more insight into brand loyalty, review IMC Highlight Brand Loyalty: It’s the Emotional Connection That Counts.

D. Brand Equity Brand equity refers to the value of a brand in a holistic sense to its owners as a corporate asset. For our purposes, brand equity is defined as the value a consumer derives from a brand over and above the value derived from physical attributes. The value of the asset is determined by effective marketing and marketing communications over an extended period and is influenced by several variables: brand name awareness; the degree of loyalty expressed by customers; perceived quality; and the brand’s association with a certain attribute. Coca-Cola is consistently ranked as the leading global brand in terms do value.

The top brands that rated high based on equity include Tim Hortons, Canadian Tire, CBC, and Air Canada., Brand equity can also be defined in financial terms, as an asset. Using this criteria, the top five Canadian brand leaders are Royal Bank, TD Canada Trust, Bell, Scotia Bank, and Bank of Montreal (see Figure 3.6).

E. The Benefits of Branding For consumers the benefits are: .

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  

The brand represents a certain level of quality (trust in the brand grows with time) There are psychological rewards for possessing certain brands (prestige, status, etc.).

Brands distinguish competitive offerings

Consumers want facts about brand claims and they want brands to be environmentally friendly.

Marketing communications play a key role in providing these facts and in distinguishing one brand from another.  

A good brand name: communicates the unique selling point; that is, it’s differential advantage.

Branding allows for the creation of an image. Consistent quality builds brand loyalty among customers

In automobile marketing branding plays a key role as it influences consumer perceptions and builds consumer trust in the brand. For example, Japanese brands are generally perceived to be of higher quality than domestic brands. Trust is also a consideration when it comes to brands. Today’s best brands are using marketing communications strategically to position themselves as the most trust worthy organizations in their industries. See Figure 3.8 for a list of trusted Canadian brands in various product categories.

F. Building the Brand Brand managers are responsible for building their brands: brand image and brand equity. The process of brand building involves four steps: 1.

2.

3.

4.

Identifying and establishing brand core values and positioning strategy Planning and implementing marketing programs Measuring and interpreting brand performance Growing and sustaining brand equity (managing the brand)

Core values are the primary attributes and benefits a brand delivers to the customer. An attribute is a descriptive feature whereas a benefit is the value a consumer attaches to the brand attribute. To illustrate, Dove (based on its latest marketing communications campaign) stands for self-esteem and communicates that women should celebrate themselves as they are. Dove is marketing a self- esteem attitude more so than the product.

G. Brand Positioning Concepts Positioning refers to the selling concept that motivates purchase, or the image that marketers desire a brand to have in the minds of consumers. Marketing communications is responsible for creating the appropriate appeals to make a product standout from the competition in the minds of the target market.

Most marketing and marketing communications strategies stem from a precisely worded positioning strategy statement. Brands position themselves on dimensions that are important to consumers, and may focus in on single or multi-benefits of their product or service. The positioning strategy statement is a key part of the marketing communications strategy and gives a compelling reason why potential customers should buy the brand. It should be written in a clear, concise and uncomplicated manner. Some of the more common means of positioning a brand through marketing communications are as follows: 

Product Differentiation – The brand communicates meaningful and valued differences in order to distinguish itself. For example, Glad (wraps and bags) seal in freshness. BAND-AID competes with

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many other brands and differentiates itself based on its unique attributes of super-stick adhesive and that it will stay on longer even in the toughest conditions. 

Brand Leadership – Brands that are leaders tell their story. They portray leadership in what they say and how they say it. Coca-Cola is a brand leader. Phrases like “Always Coca-Cola”, “Can’t Beat The Real Thing” or “Open Happiness” portray the brand’s positioning strategy. Brand leaders have characteristics in common, often this includes greater consumer awareness and recall and higher marketing spend.

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Head-On – A brand is presented as an equal or better alternative, usually through some form of comparison. This strategy is common among household cleaning products. Two leading brands are compared on an important benefit with the advertised brand showing better results. The “Pepsi Challenge” is the classic example.

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Innovation – A strategy that dwells on technical leadership, research and development programs, and a desire to be perceived as new and leading edge in a market. For example, the Apple iPod changed the way we listen to music.

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Price (Value) – A strategy based on the premise that consumers search for the best possible value given their economic circumstances. Wal-Mart has a lock on the low price and good value strategy with a lot of people. The phrase “We sell for less. Everyday.” adequately summarizes its positioning strategy, and the newer slogan “Save Money, Live Better”, continue to stress low prices but also focus on how their products and services offer consumers improvements to their lifestyle.

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Image (Lifestyle) – Focusing on the intangible characteristics in order to build a desired image or personality. The brand portrays itself in a manner that it is a good fit with the lifestyle of the target market. Beer, alcohol, fragrance, automobiles and travel frequently use this strategy.

Repositioning – Changing the place a product occupies in the consumer’s mind relative to the competition. Changes in environmental factors can affect consumer preferences, leading manufacturers to reposition. .

H. Planning and Implementing Marketing Communications Programs A brand must be presented to customers with a unified voice. Therefore, all forms of marketing communications must work from a common base of information and have similar objectives to achieve.

Several steps are important in building the communications program: 

Employ Various Brand Elements Effectively – What role will name, logos, symbols, slogans, packaging and characters play in the communications? There must be a consistent presentation of all relevant brand elements across all media.



Marketing Communications is the Voice of the Brand – Regardless of the medium selected, the brand message must be delivered with clarity and continuity. Proper execution with adequate financial support should result in the desired image being planted in the customer’s mind. For example, Molson Canadian, now partly owned by the American company Coors, changed its slogan to “Made from Canada”



Use the Communications Tools Properly – There are various elements in the communications mix with each capable of performing certain roles better than others. For example, advertising is good at .

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creating awareness and interest; sales promotions; experiential marketing; and public relations are good at creating desire and action. Social media create new avenues for communicating with the customer. Selecting the appropriate medium, or mix of media for the situation at hand is crucial.

For some insight into brand building strategies, see IMC Highlight (page 84) ING Bank Becomes Tangerine. When Scotiabank acquired the successful ING Direct, a legal requirement of the transition was to provide a new brand name.

I. Packaging and Brand Building The “look” of a package plays a role in building a brand’s image. Over time, consumers start to associate the colour of a package with the brand so they know exactly what they are looking for. For example, there is Sunlight (yellow), Tide (orange), Kodak (orange), UPS (brown) and Coca-Cola (red). Many brands have made efforts to “own” a colour.

Since a majority of purchase decisions are being made at point-of-sale, marketers are placing a higher priority on packaging. The package itself is a very important selling medium. The role of a package is to: 

Protect the Product – Products move through numerous hands on the way to their final destination. The product must arrive in A1 condition.

Market the Product – The package does the same thing as an advertisement. Therefore, if it is to attract the eye of passers by, it must have an attractive and coordinated appearance. Copy on the package should also communicate essential information that will help motivate purchase. Sometimes a change in package style and design can rejuvenate interest in a brand. As an example, Colgate’s package clearly communicates the key benefit of: “repair enamel damage”, see Figure 3.19. 

Provide Convenience – A package should be easy to carry, open, handle, and reseal. Innovation in design helps in this area. For example, no drip spouts on cleaning products, handles on bulky items, and metal tins with molded metal bottoms that allow for stacking, add value to a product.



Be Environmentally Friendly- Wasteful packaging or packing disrespectful to the environment can be a turn off for consumers. For example, PepsiCo introduced a bottle made of plant material.

J. Branding by Design For products that don’t come in a package it is the design of the product itself that has an impact on consumers. Brands like Samsung are perceived as sleek and stylish (see Figure 3.23). Today companies are making efforts to integrate the brand experience into the product or service. Technology has significant influence on design. To illustrate, simply consider the evolution of televisions in the past ten years. Ugly black boxes have been replaced with sexy, flat plasma screens.

Changing the identity of a brand has its perils. Should a company change its name or logo, for example, an intensive marketing communications program must be planned and implemented to make all public aware of the change. All consumer touch points must communicate the new name and image.

Answers to End of Chapter Questions

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Review Questions 1. The key components of a brand are the brand name, brandmark (logo), the trademark, and the package itself (e.g., an outer package that carries the product or the design of the product if it is not contained in a package).

2. Some benefits of branding for consumers include: a brand offers a certain level of quality on a continuous basis; a brand offers psychological rewards through ownership of it; and a brand distinguishes one product from another in the customer’s mind. For an organization the benefits include: a brand communicates the differential advantage; a brand allows for the creation of an image or personality; and a brand that consistently meets customer expectations is rewarded in terms of brand loyalty.

3. The three stages of brand loyalty are: brand recognition (initial awareness created by marketing communications); brand preference (the brand is in the customer’s frame of reference and is perceived as useful); and brand insistence (consumers search exclusively for a particular brand).

4. Brand equity is the value of a brand in term of dollars. It is an asset that the company owns. A brand like Coca-Cola has incredibly high brand equity due to its popularity on a global scale.

5. Core values are the primary attributes and benefits a brand delivers the customer. An attribute is a descriptive feature whereas the benefit is the value customers attach to the feature.

6. Positioning is the selling concept that motivates purchase or the image that marketers desire a brand to have in the minds of customers. It is important for a brand to have a clearly worded positioning statement since all marketing and marketing communications are developed based on that statement. All strategies are evaluated against the positioning strategy statement for “fit” before they are implemented. The statement provides a compelling reason for customers to buy the product.

7. Head-on positioning refers to a situation where one brand compares itself to another in order to show its superiority on an important attribute or benefit. Brand leadership positioning involves making statements that demonstrate or confirm a brand’s position or popularity in the marketplace. A brand like Coca-Cola or McDonald’s can use this strategy effectively since they are dominant leaders in their respective categories.

8. If a product differentiation strategy is followed, the advertising messages will focus on the core attribute and how it will benefit the customer. Maytag, for example, focuses on dependability.

Volvo focuses on safety. Ford trucks focus on the “toughness” of the vehicle. Ford trucks are “Built tough.”

9. If a lifestyle positioning strategy is followed the message will focus on intangible characteristics that are associated with the product. For example, the prestige and status that comes with ownership of a Rolex watch or a BMW automobile. Product quality is a given in these situations; it is the lifestyle associations that attract people to buy these kinds of brands.

10. A lot of decisions are made at the point-of-sale so the package itself plays a significant role in the communicating a brand image. Essentially, a package performs three functions: it protects the product during the handling and transportation process; it markets the product by providing useful information that will help motivate purchase; and it provides convenience in purchase and use. .

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11. Product design has considerable influence. For example, consumers look for products that will “fit” their lifestyle or the décor of their homes. The purchase of expensive durable goods such as kitchen appliances, electronics products, and automobiles are closely linked to how people perceive and react to the design of the product. Apple showed the importance of product design when it launched the iMac line of computers. Imagine round shaped computers in a variety of colours. Apple’s unique designs were a sharp contrast to all other brands. Their strategy worked!

Discussion and Application Questions 1. A brand is much more than the physical product. A brand is a collection of tangible and intangible characteristics that combine to have influence on potential buyers. Students should link their knowledge of branding with consumer behaviour concepts to show what a brand really stands for. Since so many decisions are based on emotions, it is the intangible characteristics that often dominate the decision-making process among consumers.

2. Everything starts with a name. There are good brand names and some not so good brand names.

The Die Hard (a brand of batteries sold at Sears), for example, strongly suggests what the product offers. In the automobile industry, many believe the car is a mechanical extension of the driver’s personality. What kind of male drives a Mustang? What kind of person drives a BMW sports car?

Some names are associated with futility. The Edsel is a classic failure. More recently the Pontiac Aztec failed. People didn’t like the name or the concept—a crossover vehicle that wasn’t quite a car or a truck. Student responses to this issue will be based on the research information they uncover.

3. For this question it may be wise to assign product categories or brands to ensure a cross-section of campaigns. Students could briefly present their findings in class. There is no shortage of lifestyle campaigns available for discussion.

4. It is important for students to see the relationship between brand positioning and marketing communications strategy. One way to dramatize the role and importance of positioning is to place it in the center of a circle and have all marketing communications surround it. Link everything together with arrows. The positioning strategy statement is the foundation upon which communications plans are devised.

5. Students will have different opinions about the various companies and how they are positioned so only a few insights will be provided here. Ask students to examine the brand’s marketing communications in order to determine the positioning strategy for that brand.

6. The purpose of this question is to get students examining the role that brand names, logos and slogans play in marketing communications. For all intents and purposes it is the logo and slogan that most people remember. The combination must plant an image or message in the customer’s mind.

7. Responses will vary based on the packages selected by the students. A good package meets the various criteria mentioned in the chapter.

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Chapter 4 Advertising Planning: Creative Learning Objectives Students will be able to: 

Identify the basic elements of the communications process

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Explain the various stages of creative planning

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Explain the role of the creative brief and describe the content of such a document

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Distinguish between creative objectives, creative strategies, and creative execution

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Describe the role of creative objective statements

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Appreciate the variety of appeal techniques for developing creative strategies

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Identify various execution techniques for best presenting creative strategies

Chapter Highlights This chapter focuses on one aspect of advertising planning, that being the development and implementation of the message.

A. Communications Essentials Figure 4.1 presents an overview of the communications process. The basic elements (sender, encoding by media, competitive noise, decoding by the receiver, and feedback) should be firmly understood by students.

Understanding the processing that goes on in the consumer’s mind helps with the development of an advertising message. Essentially, a consumer passes through a series of stages. One such model of the stages is ACCA: awareness, comprehension, conviction, and action. This model is part of a theory called DAGMAR: Defining Advertising Goals for Measured Advertising Response. The effectiveness of a commercial or campaign is usually linked back to this model since research is conducted to measure levels of awareness and interest a consumer has in an advertised brand.

A description of each behavioural stage follows: 

Awareness – Learning about the product (through advertising or some other form of marketing communications). Awareness can be measured using recall tests.



Comprehension – Interest is created (the product is judged to be useful). The product is in the consumer’s cognitive realm. Attitude towards a product can measure comprehension of how the product satisfies the customer’s needs.

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

Conviction – The consumer expresses stronger feelings about the product. The product is in a preferred place in the consumer’s frame of reference. A new or changed attitude towards a product might measure conviction.

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Action – The desired action occurs, there consumer buys the product.

The purpose of advertising is to deliver a compelling message about a brand. It is the start of a potential customer relationship. The message delivers a promise about the product; the product must live up to the promise.

Another theory of communications is the degree of involvement the consumer has in the purchase decision-making process. The FCB Grid is illustrated in Figure 4.2. This theory helps a marketer communicate the product based on which quadrant it falls into. It breaks down purchases into lowinvolvement or high involvement and further classifies them into rational or emotional decision-making purchases.

Marketing Communications Planning Process Marketing communications plans are all based on the same set of information. As part of the planning process each element of the marketing communications mix is evaluated for inclusion in a plan. Plans for each element are designed and implemented separately and then integrated into a master communications plan. See Figure 4.4 for more details.

Creative Planning Creative and media planning occur together to form an IMC plan. The development of a creative plan is based on the same background information that is provided for all other forms of marketing communications. As part of the planning process the role and importance of advertising is determined and appropriate resources are allocated to it.

Advertising Planning – Creative Advertising is defined as a paid form of non-personal message communicated by the media by an identified advertiser. The goal of an advertisement is to stimulate a response from the target audience the message is delivered to.

The starting point for a new advertising project is the creative brief. The creative brief is a business document developed by the client that contains all of the vital information about the advertising task at hand. The content of a brief does vary from one client organization to another. The following information is commonly included (see Figure 4.5).

Market Information (from the Marketing Plan)  Market profile  Brand profile  Competitor profile  Target market profile  Budget

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Problem and Overall Objective  Identification of the problem advertising will solve: Typically, a campaign is designed to resolve one specific issue (e.g., to create awareness, to position or reposition a brand in the customer’s mind, to present a new image, etc.). Successful campaigns have “focus.” (See Figure 4.7 for a demonstration of a focused campaign for the Egg Farmers of Canada.)  Statement of the overall goal advertising is to achieve Advertising Objectives (based on the problem/goal)  Awareness  Interest  Preference  Action  New image  New target Quantitative objectives are stated in order to evaluate the effectiveness of the plan at a later date.

Objectives deal with behavioural issues as mentioned earlier, such as creating a certain level of awareness. Pre- and post-campaign marketing research may be needed in order to establish benchmarks and to measure results.

The text discusses the following alternative advertising objectives:  Creating or increasing brand awareness  Encouraging trial purchase  Attracting new target markets  Encouraging preference  Altering consumers’ perceptions Consider examples in Figures 4.8, 4.9, and 4.10 that relate to alternative advertising objectives. Also refer to IMC Highlight: Axe Goes Older for an illustration of attracting new target markets on page 110.

B. Positioning Strategy Statement Statement of brand benefits, personality or desired brand image: A clearly worded positioning strategy statement provides basic guidance for the development of advertising concepts. Potential concepts are evaluated against the statement. Is the ad on strategy? Agency people refer to the positioning strategy statement when trying to discover the “big idea” to build the campaign around. For example, Secret deodorant’s tagline “Strong enough for a man, but made for a woman” captures the positioning strategy of the brand. It has an emotional appeal, and says that it is effective, long lasting and offers confidence, but reaffirms the ability of women to do anything that men do. It’s a powerful positioning strategy statement that women find compelling. Alternatively, Victoria’s Secret dominates the retail lingerie market, and its positioning is all about “captivating” its female customers. It strikes the right balance between sexy and approachable in its advertising (see Figure 4.11).

Creative Objectives  Key benefit statement  Support claims statement These are statements that summarize the nature of the message to be communicated. Usually, the message focuses on the primary reason for buying the brand. For example, Maxwell House coffee is “good ‘til the last drop.” Budweiser is the “King of beers.” Usually, a key benefit statement (the promise or reason for .

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buying) and support claims statement (information that provides proof of the promise) are sometimes included. Technical data and marketing research data are frequently used in advertising to substantiate claims made.

In Figure 4.12, the Dairy Farmers of Canada are repositioning milk by demonstrating its key benefit as “an excellent post-workout recovery beverage”. The key benefit statement is a promise to the consumer.

The Dove Advanced Hair Series of shampoo products promise women fuller, more youthful looking hair.

Phrases such as “formulated with proteins and collagen, it nourishes and replenishes essential nutrients lost with age” contained in the body copy offer proof of promise and is referred to as the supporting claim, (see Figure 4.13). Note: support claims are less important for brands with intangible benefits. Here lifestyle images are key.

Creative Strategy  Central theme (big idea)  Tone and style  Appeal techniques These are statements outlining “how” the message is to be communicated. It deals with issues such as tone and style of message, the central theme in the case of a campaign, and the appeal techniques that will be used. Tone and style of advertising are usually explained by singular terms. For example, the ads will be “persuasive,” “informative,” “contemporary,” or “upbeat,” and so on. The central theme or “big idea” is the glue that binds the creative elements of the campaign together. Regardless of media used, the same message (image) must be communicated..

To illustrate theme, tone and style refer to Figure 4.14. Molson Canadian beer has used a “patriotic” theme for a long time and its tone and style decisions have had a positive impact on consumers.

Also see IMC Highlight At Scotiabank “Richer” Has New Meaning to understand further how creative strategies are developed.

The text discusses alternative appeal techniques:  Positive appeals  Negative appeals  Humorous appeals  Sexual appeals  Emotional appeals  Lifestyle appeals  Comparative appeals  Factual appeals For example, Figure 4.15 illustrates how Diesel uses sexual imagery as the appeal technique to market its jeans. In Figure 4.16, Budweiser uses emotional appeal to connect with consumers. Figure 4.17 shows how RAM trucks appeal to the lifestyle of hardworking males.

Creative Execution  Tactical considerations  Production decisions At this stage decisions are made about how to best present the message. How will the strategy be portrayed in the ads? .

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When evaluating creative executions, the creative team answers two basic questions: 1. What is the best or most convincing way to present the brand’s benefits to motivate the customer to take action?

2. Is there a specific technique that will effectively convince the consumer that this is the right brand for them?

Commonly used presentation tactics include:  Product demonstrations  Testimonials  Endorsements  Taglines and slogans Native Advertising: is a new way for advertisers to break through the clutter. It is paid advertising that matches the form and function of the user experience in the platform on which it appears.

Answers to End of Chapter Questions 1. The behavioural stages a consumer passes through are awareness (learning of a brand, usually through some form of marketing communications), comprehension (consumer expresses interest in the brand based on knowledge of it), conviction (consumer expresses stronger feelings toward the brand and may be sufficiently motivated to buy), and action (the desired action is taken).

2. A creative brief is a business document prepared by the client. It contains relevant background information, describes the advertising problem or challenge, identifies the advertising objectives and creative objectives, describes the brand’s positioning strategy, and any mandatory elements that should be included in the advertising campaign. The creative brief provides a framework for discussion between the client and advertising agency.

3. The “big idea” is the central concept of an advertising campaign. It is the concept or basic idea that brings all elements of the ad together to form a unified message. For example, Maytag’s big idea is dependability and they portray dependability by showing the idle repairman in all of their ads.

4. Ad campaigns should have a central focus. If a campaign tries to resolve too many objectives at one time the messages become complex and only serves to confuse consumers. If the objective is to create awareness, then the ads should focus on the brand name and the package. If the objective is to stimulate trial purchases the ads should include incentives that will achieve this task.

5. The positioning strategy statement describes what a brand stands for and suggests the desired image that should be instilled in the customer’s mind. It is the most important influence on the direction an advertising campaign will take. When the agency presents its creative concepts to the client, the concepts are evaluated against the positioning statement. Is the ad on strategy? If not, it is rejected.

6. A key benefit statement includes the promise that advertising makes, usually something to do with the primary benefit that customers are interested in. For example, Degree provides 24-hour .

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protection. The support claims statement provides some kind of substantiation for the promise. It may be in the form of technical data or information obtained from marketing research. Degree shows active people at play but still confident that their deodorant won’t let them down.

7. There are a variety of appeal techniques that can be considered. For a complete list and description, see pages 116 to 121.

8. Testimonial and endorsement refers to a situation where an average person is used to deliver the advertising message. An endorsement involves the use of a celebrity to deliver the message (an association with star power to sell the brand). A tagline is a summary statement for an individual ad. A slogan is a statement that summarizes the theme of an entire advertising campaign.

9. Native advertising provides advertisers a new means to break through the clutter of traditional advertising while publishers benefit from a new revenue stream. Native advertising is defined as a form of paid advertising that matches the form and function of the user experience in the platform on which it appears. It does not look like advertising and is identified as sponsored content.

Native ads are presented in a format similar to the editorial content of the medium in which it appears. For example, a printed article identified as sponsored material appears in a newspaper or magazine. A sponsored post on Facebook and or a promoted tweet on Twitter are other examples of native ads.

Discussion and Application Questions 1. There are several benefits and drawbacks to humorous advertising campaigns. On one hand they tend to break through the clutter; on the other hand, they can wear out quickly. Usually, a series of commercials are required in order to sustain a humorous campaign. Students should collect some information on this topic (e.g., the views of copywriters and art directors) and then formulate a position on the matter. Some specific examples to verify their position should be included.

2. Lifestyle advertising strategies do not communicate much about the product. The advertiser expects the lifestyle association to be attractive enough to the target audience that they will be sufficiently motivated to buy the product. Students should conduct some online research on this issue and present a position on the issue. Some specific examples should be used to support their position.

3. The purpose of this question is to get students to apply basic creative planning concepts.

Working backwards from the ad to figure out what the client and agency had in mind is an interesting exercise. This question can also be adapted to small group discussion in class if you provide the groups with the ads.

4. This question asks the student to compare and contrast the advertising strategies of two competing brands. Very often such an analysis shows the difference between, say, a brand leader and a brand challenger of brand follower. Leaders tend to have more effective ads.

5. This question asks the student to compare and contrast the advertising strategies of two competing brands. Very often such an analysis shows the difference between say a brand leader and a brand challenger of brand follower. Leaders tend to have more effective ads.

6. Responses will vary. The idea is to have students scan the media for ads using different appeal techniques. They may discover that certain techniques are more common (possibly more .

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effective) than others. This part of the question asks the student to evaluate the appeal technique and any potential impact it may have on the target audience. Do they think it is the right type of appeal technique to use or are there better alternatives?

7. The purpose of this question is to have the student evaluate the usefulness of employing a celebrity endorser. Are they worth it? What are the potential drawbacks? Opinions will vary considerably but since so many big brand use celebrities, student usually like the strategy.

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Chapter 5 Advertising Planning: Broadcast, Print, and Out-of-Home Media Learning Objectives The student will be able to: 

Describe the steps involved in media planning

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Distinguish between media objectives, media strategies and media execution

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Describe the various factors that influence media strategy decisions

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Outline the characteristics, strengths and weaknesses of various mass media advertising alternatives

Chapter Highlights The primary goal of a media planner is to reach the target audience efficiently. Efficiency refers to “gaining maximum exposure at minimum cost.” The direction a media plan takes must fit in with and be coordinated with activities recommended in other marketing communications areas.

Current trends in media are heavily influenced by technology and changes in consumer behavior. The use of tablets and smartphones generates data about consumers’ behaviours and sheds light on how to best reach them. The presence of online shopping for comparison shopping or online purchases also influences media choices. Media planners today need to consider that people are spending less time with traditional media and more time with digital media.

A. Media Planning Media planning is a process of developing a plan of action to communicate messages to the intended target audience, at the right time, and with the right frequency. In the planning process, the client provides essential background information and the agency develops the media strategy and execution. Decisions made by the creative team will influence media strategy. Thus, there should be good communication between the creative and media teams.

Media planning is a complex task and with technology advancements changing consumers’ media consumption habits it is more difficult than ever to reach audiences. The challenge lies in blending together digital media with traditional mass media alternatives. Certainly, a large part of the goal of media planning is to develop synergy between the different elements of a plan, and to ensure that they are coordinated to have the most significant impact on a target market as possible. Information provided by the client is contained in a media brief, a document much like the creative brief discussed in the previous chapter. The media brief includes the following information: 

Market Profile – Relevant information such as historical sales data, market shares, and market growth.

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Competitor Media Strategy – An assessment of the media used by the competition and how effective it is in building their business. .

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Target Market Profile – A thorough description of the target audience based on demographic, geographic, psychographic, and behavioural characteristics. The media consumption habits of the target should also be identified. There is a growing shift among people 18 – 34 to spend more hours online than with television (see Figure 5.2 for details).

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Media Objectives – Objectives usually focus on target market priorities, the nature of the message and its influence on media strategy, timing, and market coverage. Factors such as reach, frequency, continuity and engagement are also considered.

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Media Budget – Knowing the size of budget available is essential since some immediate decisions on media selection can be made. Will the budget accommodate a multi-media approach or is there a need to be very selective in choice?

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Post-buy Analysis – An analysis of the actual audience reached once the marketing communications have been run is critical in order to evaluate the extent to which the media plan delivered the audience planned.

B. The Media Plan A media plan is a document that outlines the relevant details about how a client’s budget will be spent. It includes a precise description of the media objectives, supporting strategic rationale, and tactical details.

It’s a quantitative process, and agency personnel should have a variety of data sources available at their disposal. Figure 5.3 outlines the structure and content of a media plan.

Media objectives typically deal with the following issues:     

Who is the target market?

What is the advertising message?

Where are the priority markets?

When is the best time to advertise?

How many, how often and how long?

Media strategy focuses on how the objectives will be achieved and outline how to efficiently and effectively reach the target market. The various factors that are considered when developing a media strategy are as follows: It will also dictate how often a company will advertise, the duration, where to advertise, and ultimately the choice of channels / mediums. 

Target Market Profile – A precise description of the target (demographic, geographic, and psychographic) has an influence on the efficiency of the media plan. Compatible matches (e.g., the right media to reach the target) can be recommended. In this regard three different strategies are considered: shotgun, profile match, and rifle. a) Shotgun – The message is placed in a medium that reaches a wide cross-section of people.

Such a strategy is typical of a product that has widespread appeal. Out-of-home alternatives and prime time television are good options to consider. b) Profile Matching – The message is placed in a medium or media whose readers, listeners, or viewers have a profile that is a reasonably close match to the profile of the brand’s target market. Targeted print publications such as Canadian Business to reach business executives, .

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Chatelaine to reach homemakers and career women, and YTV to reach children are examples of media useful in a profile matching strategy. c) Rifle Strategy – The message is placed in a medium where the audience shares a common characteristic. Demographic characteristics may not be that relevant; instead, some other characteristic, interest or hobby that bind this target together. To reach golfers, a golf magazine such as Score Golf or Golf Canada is selected. To reach cottagers a magazine like Cottage Life is useful. Most magazines also offer digital versions for people on the go. The internet, direct-response options and mobile communications are reasonable alternatives for this strategy. 

Nature of Message – There is a relationship between message and media. Rational appeal techniques involving considerable copy to communicate the message necessitate the use of print media and direct mail. Emotional appeal techniques that involve action and situations necessitate the use of broadcast media. If engagement with the audience is a concern, then experiential or Internet-based marketing may be considered a vehicle for communicating a message.

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Geographic Market Priorities – Marketers must also decide where to advertise, and how their budget is to be divided among regions and how it will be schedules. Media planners will consider the geographic split of sales and where the target market can generally be found. They will have the option of going with either national coverage, or going with a regional strategy. This is particularly a consideration when doing business in Canada because of the social, cultural and linguistic differences between English Canada and Quebec. Another consideration is key market coverage, with a focus on particular cities or neighbourhoods within these cities. The top six Canadian urban markets (Toronto, Montreal, Vancouver, Calgary, Ottawa-Gatineau, and Edmonton) reach 46% of the total population. For regional media opportunities, a planner considers the regional packages offered by television networks.

Strategic decisions must be made on the degree of market coverage. The budget usually determines if the plan will be national, regional or local in scope. National coverage across Canada can effectively use prime time television and general interest magazines to reach a widespread audience.

Advertisers frequently use a market development index and brand development index as a means of making market coverage decisions. For example, if a brand is overdeveloped in a particular market, funds from that market may be reduced and added to a market where there is greater growth potential. Refer to the brand development index illustration in Figure 5.5 for details.

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Timing of Advertising – Flight is the period of time for which advertising is scheduled. The best time could refer to the time of year, time of day or day of week. New products usually require special launch strategies. For example, some advertise well in advance of the product being available while others hold off until the product is actually in distribution. Either strategy can be effective. There are numerous scheduling options that can be considered (see Figure 5.6 for an illustration): a) Skip – A system of alternating the time period (e.g. every other day, week, month). b) Pulse – Scheduling flights in a predetermined pattern with the weight of advertising varying in each period. The variation creates the pulsing effect. c) Blitz – A heavy weight multi-media spending pattern in a short period of time. d) Build-Up – A low weight of advertising initially, but progressing to more intensive weight. .

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e) Seasonal – Scheduling ads at a heavy level in the pre-season. The weight level tapers off during the season. You advertise in the period when the product is in demand. f) Even/Continuous – Uniform scheduling of media advertising over an extended period. 

Reach / Frequency and Continuity – These factors are grouped together based on their interrelationships in media planning. Reach is the total audience reached at least once in a given period. Frequency is the average number of times the audience is exposed to a message in a week.

Continuity is the length of time required to ensure impact on the target audience.

The weight or amount of advertising in a market is expressed in terms of gross rating points (GRPs). Reach times frequency equals GRPs. Refer to Figure 5.7 for more information about the relationships between reach, frequency, and continuity.

Media planners must juggle all of the strategic variables in order to achieve maximum benefit with the budget that is available. Advertisers stretch their funds throughout a campaign by making crucial decision in each strategic area. Continuity is often the first variable to “give way” when budgets are tight.

 Engagement – Measures the emotional connection that a person has to a specific media when they are using it. Both the message and the medium play a role in encouraging engagement. Engagement is an important strategic factor to consider in media planning, and is a growing issue considering the fragmentation of the media universe. Planners encourage engagement by using an ad in one medium to get the consumer to go online for more information. Taking the time to go online suggests engagement. Some mediums do a better job of retaining the attention of the audience.

C. Media Execution Media execution is a process of fine tuning the media strategy and translating it into specific action plans which are usually divided into the following areas: evaluating cost comparisons of media alternatives, media scheduling, budget summaries that outline spending details, and buying media time and space. 

Media Selection – Selecting the right media usually involves three decisions: 1. Deciding on the General Type of Medium – Television, radio newspaper, magazines, outdoor, transit, and so on.

2. Deciding on the Class of Media Within Type – Will it be specific interest magazines or general interest magazines. What television networks will be chosen?

3. Selecting the particular Medium within the Class – What specific magazines will be chosen?

What specific television shows will be chosen?

Media planners consider media alternatives quantitatively, and factor in such influences as editorial content, quality of reproduction and demographic selectivity. CPM calculations play a role in determining the specific media choices. Lower CPMs tend to be more efficient all things being equal. Refer to Figure 5.8 and Appendix 1, “Media Buying Principles and Media Information Resources” for illustrations of actual cost comparisons based on CPM.

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Media Schedule and Budget Allocations – All media are scheduled on a blocking chart to show timing considerations, reach and frequency, advertising weight in GRPs, and market coverage. The budget usually shows media spending by medium, by time of year, and by region.

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Media Buying – Once the plan is approved media buyers commence negotiations with the various media. In the role of negotiator, the media buyer seeks favourable positions and rates to maximize efficiency and achieve the objectives set out in the plan.

See Appendix 2 for an example of a media plan and how it is executed.

D. Assessing Media Alternatives Media planners choose between a variety of traditional and non-traditional media alternatives. Knowledge of the media the target market refers to most frequently, and the budget available for the assignment, play a key role in the selection process. It is common for a media planner to recommend a primary medium (a medium that will get most of the budget) and secondary media (media that will receive less of the budget). 

Television – Budget permitting, advertisers have traditionally been drawn to television. It is a multisense medium that is ideal for demonstration and emotional appeal techniques. However, it is also in a state of transition as a growing number of consumers are spending more time on the “small screen” (laptops and mobile devices) than the big screen (TV). Media planners should consider online media in combination with TV. However, a research study by Numeris shows that Canadian consumers perceive television to be the most influential, most effective, and persuasive form of advertising.

Despite some shortcomings, television reaches huge numbers of people in a short space of time with a compelling message Within television, the planner may recommend: a) Network Advertising – For example, spots on CTV or CBC stations all across the country.

Popular prime time shows are shown on the major networks. b) Selective Spots – At a regional or local market level the planner can recommend spots on specific stations during prime time shows. The spots are seen only in designated markets of interest to the advertiser. c) Local Spots – This usually involves local advertisers buying spots on their local television station. d) Sponsorships – Sponsorship allows the advertiser to take “ownership” of the show. The sponsor buys a majority of the spots and sells off the rest to non-competing advertisers.

One of the most prominent sponsorship opportunities in Canada is Hockey Night in Canada, HNIC is now the property of Rogers Communications based on a 12-year deal with the NHL. For more insight into sponsorship opportunities, read about Budweiser’s decision to associate with HNIC in the IMC Highlight: Bud and Don: A Good Mix. New Strategies for Reaching a TV Audience: a) Product Placement – The visible placement of a branded product in a television show. If people are not spending time watching commercials they will get the message right in the .

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show. An example of this is Mazda plays a prominent role in Property Brothers, a popular show on the W network. b) Branded Content/Product Integration – An advanced form of product placement in which a brand is included as part of the script of a show. Ford Canada did this for Being Erica.

Two key characters in the show become co-owners of a Ford Fiesta. 

Radio – There are over 700 radio stations in Canada. FM stations are more popular and reach 79% of Canadians 12 years old and over, while AM reaches 26%. Radio consumption is on the decline and the industry is in transition and being influenced by newer technologies such as Internet, digital radio, and satellite radio. Refer to Figure 5.10 for radio listening trends and Figure 5.11 for a list of advantages and disadvantages for radio advertising. Internet radio refers to listening to radio broadcasts online. Podcasting refers to the downloading of audio content to portable music players.

Satellite radio offers commercial-free content to listeners paying a monthly subscription fee for the service.

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Newspapers – Research shows that approximately 50% of Canadians read a daily newspaper on a given day. However, consumption of newspapers is on the decline and the print advertising industry is in a crisis. With the growing popularity of tablets and mobile devices digital distribution of news and advertisements are becoming increasingly more important than print versions. However, newspapers are a popular medium among advertisers. Most media decisions about newspapers are based on circulation (the number newspapers in distribution each day) and readership (the actual total number of people that read the paper). There are different types of newspaper advertising: national advertising retail advertising, classified advertising, preprinted inserts, and sponsored content (new concept of native advertising).

Newspaper inserts remain a vital component of retail advertising (Figure 5.12). For a list of newspaper advantages and disadvantages refer to Figure 5.13.

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Magazines – Canadian magazines are distributed based on paid circulation or controlled circulation.

Paid circulation refers to subscriptions and newsstand sales. Controlled circulation refers to free distribution to target audiences based on demographic, geographic or some other characteristic.

Magazines have managed to stay relevant in the digital age (see Figure 5.14), and the combination of hard copy and digital content gives advertisers the opportunity to reach their markets. Magazines are an appropriate selection for advertisers using a profile matching strategy and the editorial quality is a good environment for ads to appear. Clutter remains a problem in most consumer magazines.

Preferred positions such as inside and outside covers are available for advertising but at a higher cost. For a list of advantages and disadvantages refer to Figure 5.15.

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Out-of-Home – If the goal of advertising is to reach a wide cross-section of the population, out-ofhome alternatives remains a good choice. Media expenditure in out-of-home advertising is on the rise with the creative opportunities offered by digital boards. With an increasingly mobile population, outdoor ads offer a convenient way to get the message to consumers. Outdoor advertising revenue is presently growing at a faster rate than any other mass media. There are several types of out-of-home advertising: a) Outdoor – This alternative includes outdoor posters (billboards), backlit posters, superboards (spectaculars), mural advertisements, newer digital video boards, street level posters, and mall posters.. Technology now provides a means of outdoor ads to be interactive and electronic signs have the capability of changing messages. Outdoor .

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advertising is ideal for advertisers following a shotgun strategy. They also offer geographic selectivity. b) Transit – Transit vehicles and stations provide a captive audience for advertisers. The primary alternatives include transit posters, door cards, station posters, and full wrap bus mural and bus back. Transit advertising offers continuous exposure over the period of a ride and reaches a wide cross-section of a market’s population. Refer to Figure 5.18 for a list of advantages and disadvantages of the various forms of out-of-home advertising. c) Other Forms of Out-of-Home – Some additional alternatives include washroom advertising, elevator advertising, arenas and stadiums, and cinema advertising. These options tend to reach a captive audience. See Figures 5.19 and 5.20 on cinema advertising.

Answers to End of Chapter Questions Review Questions 1. Media objectives outline what the media plan will accomplish (a guideline that considers who, what, when, where, when and how to advertise). Media strategies consider how best to advertise to reach the target within budget guidelines. They delineate the best media alternatives.

Media execution refers to the specific media actions plans (details on what specific media will be used, the cost, and the timing).

2. The media objective statements outline what the plan seeks to accomplish in terms of who, what, where, when, and how 3. With a shotgun strategy, more general media are used to reach a wide cross-section of the population (e.g., advertising on an outdoor poster on a key travel route). In a profile matching strategy, the brand’s target market profile is carefully defined in terms of demographics, geographics, psychographics, and behavioural variables.. This specific target profile is then matched with a medium that has a similar target profile. Rifle strategy is an even more specific strategy, whereby a medium is selected that reaches a precisely defined target, usually based on a common interest (e.g., you reach a boating enthusiast by advertising in a popular boating magazine).

4. National coverage refers to advertising in a medium that reaches a national audience (e.g., a television network or a magazine that offers high circulation in all regions of the country).

Regional coverage refers to placing advertising in geographic markets that may have more priority for the advertiser (e.g., the size and density of population in southern Ontario makes it an important market to reach so regional media that focus on that area are selected). In a key market coverage plan, advertisers give priority to cities, usually starting with the larger cities and progressing down to cities with smaller populations. Or, the advertiser focuses only on those cities where the product is available.

5. A pulse media schedule groups advertising into flights over a predetermined period and at varying weight levels. A skip schedule employs an “every other” schedule (e.g., advertise one week and not the next). A blitz schedule involves a heavy schedule of advertising initially and then it tapers off. A build-up strategy involves low media weight initially and gradually builds to an all-out campaign. The blitz and build-up scheduling strategies are good for new product introductions. .

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6. Reach, frequency, continuity and engagement are interacting variables that influence the media planning process. Rarely is there an unlimited budget, so the three variables must be juggled in such a way that the objectives of the media plan are accomplished. For example, does the media planner recommend low reach and high frequency over a long period, or high reach and lower frequency over a shorter period? The objectives of the campaign and the funds available determine how these three variables will be employed.

7. CPM stands for cost per thousand. It is a calculation used to compare alternatives within a class of media (e.g., magazines or newspapers). It is calculated by dividing the cost of the ad by the circulation of the publication in thousands. The lower the CPM, the more efficient the alternative at reaching the intended target, at least in terms of purely quantitative analysis.

8. Each of the traditional media offers certain benefits and drawbacks for advertisers. Television reaches a large audience but at high cost (high cost per thousand). Radio effectively reaches local market targets efficiently but the product cannot be seen. Newspapers also effectively reach local market target audiences but they are a black and white medium with a lot of advertising clutter.

Magazines are ideal for reaching specific targets since they are designed to attract special interest groups; and compared to other media their reach is not as high. Out-of-home advertising such as outdoor boards and transit ads are ideal for reaching a general population in local markets. The digital options with out-of-home alternatives are growing in popularity.

9. A network spot refers to an ad placed on the network. The ad is exposed to the national audience. For example, an ad that appears on a popular show like The Big Bang Theory reaches audiences across the country. A selective spot is scheduled in a national prime time show but is only seen in designated markets (markets of interest to a particular advertiser). For example, the ad only appears in Ottawa during the broadcast of Hockey Night in Canada. During a national show, such as this one, a certain amount of advertising space is allocated back to the local stations to sell to national advertisers or local advertisers.

10. Product placement refers to the insertion of a branded product into a scene of a TV show.

Branded content occurs when the branded product becomes part of the story line. Placement and branded content strategies are becoming popular since people seem to be watching regular commercials less.

11. The format of a radio station refers to type of content it delivers (e.g., country, rock, classical, Top 40, and so on). A broadsheet is a newspaper with a fold in the middle (e.g., National Post or Globe and Mail). A tabloid is a newspaper that is sold flat (e.g., Toronto Sun or Vancouver Sun).

Paid circulation refers to sales of a publication by subscription or at newsstand. Controlled circulation refers to publications that are distributed free to selected audiences. Clutter suggests too much advertising in a medium (a self-defeating principle). Cluster refers to the placement of ads in groups (e.g., a series of print pages in which ad after ad appears or a series of TV spots one after the other). Posters are outdoor ads printed on sheets of paper that are then glued to the outdoor board. A backlit poster is an outdoor ad that is reproduced on a polyvinyl material. A light appears behind the ad so that it is visible day and night. Interior cards are transit ads appearing inside vehicles. Exterior cards appear outside the vehicle.

Discussion Questions 1. What came first? Was it the chicken or the egg? The ideal situation would be for the media plan to be solely based on the challenge at hand. What are the objectives and how much will it .

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cost to achieve them? This is the task method of budgeting. Unfortunately, the budget is usually determined first and then the media plan is adjusted so that it fits the budget. It is very common for a media plan to go through numerous revisions (frustration for agency planners) before it is finally approved by a client. The central issue is usually money—there is usually conflict between how much is available and what is to be achieved. Students have to appreciate that budget related issues often rule the day!

Audience fragmentation within the TV medium due to the sheer number of choices available to viewers and the issue of advertising clutter on television remain key issues with TV as an advertising medium to effectively reach a large audience. Television has a way of redefining itself by bringing out new-style shows. Popular reality-based shows are now the hot properties on major networks. Their audiences are attractive to advertisers as they reach a more specific market consistent with a rifle strategy. Rifle media strategies are possible on television but mainly on cable channels where target audiences can be more clearly defined. ESPN in the United States and TSN in Canada effectively reach the sports junkie, Spike reaches young, urban males and HGTV reaches women.

2. Balancing reach and frequency is always a media planner’s dilemma. Factors such as the stage of a brand in the product life cycle, the overall goal of the media challenge, and competitive media activity influence media decisions about reach and frequency. Opinions for this question may vary among students.

3. The issue of using a national campaign or a series of regional campaigns boils down to cost.

Cost-benefit analysis is needed to justify a series of regional campaigns. It is much more common for a company to execute a broad stroke national campaign and then tweak that campaign for key urban markets. The tweaking may involve tailoring the message more toward tastes and increasing the media spend to include media not used in the national campaign. Such a strategy increases the reach and frequency of message in urban markets.

4. Responses depend on the magazines selected. The objective is to ensure students can apply the CPM concept.

5. To reach the BMW target audience some combination of business-oriented and professionaloriented media are suitable. Some options include newspapers such as the Globe and Mail and National Post, ROB TV, online ads at business web sites, and radio ads. BMW drivers like to drive their cars so they are listening to the radio to and from work. The inclusion of newer technologies with digital options is, of course, important.

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Chapter 6 Planning for Direct Response Communications Learning Objectives Students will be able to: 1. Describe the direct-response marketing communications planning process 2. Describe the various forms of direct-response communications 3. Assess the role of database management techniques in the design and implementation of directresponse strategies 4. Evaluate various external sources of list information and evaluate the role of these lists in building and effective direct-response campaign 5. Explain the role and nature, advantages and disadvantages of the various forms of direct-response communications.

Chapter Highlights Consumer media habits are changing. There is a move away from mass media such as print and broadcast media toward direct and interactive media. Advancing technologies have opened opportunities for companies to communicate directly with their customers. Database management techniques have created a new interest in direct-response communications among marketers. Direct-response communications embrace direct mail, direct-response communications in television, magazines, newspapers, telemarketing, and catalogue marketing.

Direct-response practices will continue to grow. There are several factors influencing future growth. First, senior managers are looking for more accountability for the marketing communications expenditures they oversee. Executives are looking for more immediate sales returns for the money they invest. Second, the trend towards customer relationship management techniques suggests the importance of forming relationships with customers. The personalized nature of direct-response techniques is ideal for managing customer relationships. Thirdly, the availability of database management systems is conducive to the implementation of direct response marketing communications programs.

A. Direct-Response Communications and Direct Marketing In direct marketing, messages about products are sent directly to consumers through a variety of media, orders are accepted, and products are then sent to consumers.

Direct-response advertising is advertising placed in any medium that generates an immediate and measurable response from the intended target. In today’s technological business environment companies are paying much more attention to the benefits of direct-response advertising and including it in their media mix. A direct-response advertisement is made of three essential ingredients: product information, a convincing sales message, and a response mechanism such as a 1-800 number or website url. Unlike other media, direct-response advertising can result in a sale and the results can be tracked daily. Directresponse involves both traditional media and digital media: .

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Direct Mail – Printed communications delivered by Canada Post or private carrier. A call to action is a key aspect of the communications. Direct mail specifically is the most common means of delivering messages directly to consumers, and is a massive industry, generating billions of dollars in Canada.

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Direct Response Television (DRTV) – Ads appear in television commercials and encourages users to respond by telephoning. Usually referred to as infomercials.

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Direct Response Print – Ads appearing in television commercials, infomercials and in print ads in newspapers and magazines. All ads include a call to action.

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Telemarketing – Outbound sales calls by a marketing organization or inbound calls from potential customers who seek more information or are placing an order.

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Catalogues – Catalogues promote the sales of goods the retailer carries and are now designed primarily to move customers online for more information to encourage sales. Catalogues also play a role in B2B marketing.

B. The Roots of Direct Response Communications and Database Management Techniques The essential ingredient for any direct-response campaign is database management. The list is the means of contacting current and prospective customers in the database, and is the backbone of the entire campaign. Since the cost of attracting new customers is significantly more than retaining existing customers, companies are compiling databases to keep track of customers and to foster better relationships with them. The best list is a well-maintained, internal list, often referred to as a house list.

Lists of prospects for any particular offer are obtained from internal and external sources. List information should be available to managers in a form they can manipulate (e.g., draw names based on pre-determined criteria and predicted future buying patterns).

Lists are compiled and utilized by internal and external data sources, collecting data, and accessing data for marketing communications purposes: 

Internal Data Sources – A good database management system is key in collecting and maintaining relevant customer information. The information needs to be stored for easy access to develop marketing strategies.

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Collecting Data – Keeping track of customer activity is essential. A good management system identifies what a customer purchases, how often they purchase, how much they spend on an average purchase, what brands they prefer, and so on. A profile of the customer can be formed. Specific offers can be designed and appropriate and individualized communications can be delivered to each customer. Adding external information about a customer can heighten the usefulness of the data.

For example, information from credit card companies and Statistics Canada are mines of information.

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Accessing Data – Information must be readily available when needed by the manager. Sales representatives and sales managers need quick access to sales history data, customer service representatives need information to handle complaints, marketing managers need access to better target their communications strategies, and so on. .

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The electronic era has produced a new process called data mining. Data mining is the analysis of information that establishes relationships between pieces of information so that more effective marketing strategies are identified and implemented. The goal of data mining is to lower marketing costs and increase efficiency by identifying prospects most likely to buy. Wal-Mart is an acknowledged leader in data mining application.

Data mining provides two essential benefits. First, it identifies the “best” and “worst” customers.

Greater emphasis must be placed on customers that produce better volume and margins. Second, it provides a means of predicting future sales. Continuous compilation and analysis of information about customers, lead to more accurate forecasting. Refer to the Figure 6.3 Molson’s Insider Database for insight into their database management practices. 

External Data Sources 1) List brokers are often used to compile names based on predetermined criteria. Canada Post is a big supplier of external data about households. The broker supplies names on a cost-per-name basis, usually quoted as cost per thousand names. A high-quality list is developed through a merge/purge computer process. Types of lists available are: a) Response Lists – A list of proven direct response buyers (higher in cost because they are “hot” buyers). ICOM Target Source Canada is a broker. b) Circulation Lists – Subscriber lists of magazine and newspaper publications. Such lists target consumers demographically, psychographically, and geographically. A list management company rents all lists made available by a publisher. c) Compiled Lists – Lists assembled from public information sources such as census data, telephone books, warranty cards, published registration indexes, and other sources. An example of a source of compiled lists is the Canadian Medical Association.

2) Online Databases – An online database is an information database accessible to anyone with proper communications facilities and a budget to purchase the information. For example, Statistics Canada information is available online (some for free but most information must be paid for). A business directory provides a profile of a company, its products, size, locations, key managers, and so on.

3) Directory Database – A commercial database that provides such company information as company profile, products, size, locations and number of employees. Canadian Business Directory is one such database.

C. The Tools of Direct Response Communications Five primary media compose the direct-response tool kit: direct mail, direct-response television, directresponse print media, telemarketing, and catalogues. Direct mail remains the dominant medium but other options are growing in importance. 

Direct Mail – The mail provides an opportunity to target consumers personally, demographically and geographically. Research shows that consumers react positively to direct mail offers. See Figure 6.5 for some facts about direct mail in Canada. From a creative perspective, it allows the marketer to “tell a story.” It is an ideal medium for managers that believe in an old saying: “The more you tell the .

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more you sell!” There are no restrictions on time and space. Also, refer to IMC Highlight on The Power of Direct Mail for an illustrative example. A typical direct mailing has several components: a) Envelope – The envelope is part of the communications. The color of the envelope should be inviting and the copy should encourage the recipient to open it. b) Letter – A letter introduces the prospect to the offer. Persuasively written copy encourages the prospect to read all information in the envelope, explains some benefits of the offer, and encourages some type of action. c) Leaflets and Folders – Either a one page or multi-page document does the bulk of the selling.

Persuasive copy supported by appropriate and colorful visuals are and effective combination.

An incentive is usually included with the leaflet. The incentive (something for free) is included to stimulate immediate action by the recipient. d) Order Form – The order form is an essential element that makes it easy for the recipient to take action. Key details about ordering procedures are clearly spelled out. e) Postage Paid Return Envelope – Eliminating the need for postage provides another incentive for the recipient to take action. f) Statement Stuffers – A stuffer or a bounce back are additional offers that ride along with the delivery of another offer. They can also be included with a monthly bill or credit card invoice.

When using direct mail the marketer has two basic options: solo direct mail and cooperative direct mail: a) Solo/Selective Direct Mail – An organization prepares and communicates a unique offer to a list of prospects. Solo direct mail plays a key role in an organization’s customer relationship management program. It is personalized and encourages two-way communication between company and customer. Response rates for solo direct mail are significantly higher than for cooperative direct mail. The personalization factor seems to pay off. b) Cooperative Direct Mail – An envelope that contains multiple offers from a variety of marketing organizations. c) Dimensional Direct Mail – Is a type of direct mail that may attract attention and generate buzz for the product. Dimensional mail is a type of direct mail that can take any form other than the typical flat piece of mail. Examples include the use of creative packaging, or the inclusion of an object in the mailing such as a pen.

See Figure 6.7 for elements of a direct mail piece, Figure 6.8 for contents of a cooperative direct mail, and Figure 6.9 for a list of the major advantages and disadvantages of using direct mail as an advertising medium. 

Direct Response Television (DRTV) – With many blue-chip companies and traditional marketing organizations engaging in direct response television, it is becoming more of a factor in the direct response communications. There are several forms: 30 – 60 second commercials on cable channels, direct home shopping (The Shopping Channel) and the infomercial. The infomercial is the most common form of DRTV. An infomercial is an extended commercial message (e.g., 30 minutes or .

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longer). Contemporary infomercials are designed to inform and entertain viewers. The key benefit of the infomercial is the extent of the message that can be communicated. This medium has appeal for pharmaceutical, automotive, packaged goods and financial institution marketers. Unlike general TV advertising, DRTV ads ask the consumer to take immediate action i.e. call and order with your credit card information. It is also ideal for communicating complex messages. As well, DRTV can help establish leads, drive retail traffic, launch new products, create awareness, and protect and enhance brand image. The ability to build an image and make a sale makes DRTV attractive to marketers. The IMC Highlight, Infomercials Move the Merchandise provides more details on this topic. 

Direct Response Print Media – Print media offer geographic and demographic selectivity to marketers. Consequently, direct-response messages can be sent to specific audiences based on some predetermined criteria. Cottage Life magazine, for example, reaches cottagers. It would attract advertisers in the cottage construction and related industries. Direct-response messages in such a magazine would encourage readers to solicit more information from potential suppliers for projects they may wish to undertake.

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Telemarketing – Telemarketing techniques do have a negative image among consumers but there is no denying its effectiveness in terms of achieving marketing objectives. Most telemarketing programs are conducted by a call center, a central operation from which a company operates its inbound and outbound calls. The call center is a vital link in the database management system. Any information collected by phone can be added to the database immediately. In 2008, life got more difficult for telemarketers, as Canada introduced a “Do-Not-Call” registry, which was implemented by the government to protect consumers from unwanted telephone calls.

The primary advantage of telemarketing is cost. It is only a fraction of the cost of traditional forms of advertising or a personal sales call. To be effective however, telemarketing calls must be carefully planned with proper sales training, and integration with other marketing programs.

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Catalogues – Catalogues are reference publications distributed by large retailers and direct marketing companies. Sears is the largest catalogue marketing organization in Canada. Sears is an integrated marketing organization that reaches customers through retail stores, catalogue merchandise pick-up locations, and a Web site. Sears operates one of the busiest commercial websites in Canada. Canadian Tire, Mountain Co-op Equipment and IKEA are other very successful catalogue marketing organizations.

Answers to End of Chapter Questions Review Questions 1. Direct marketing is a complete marketing system in which an offer is designed for a specific market with appropriate marketing communications to reach and impact the target market, and the goods are delivered without any distributor involvement. The product and communications is direct between the marketing organization and the customer. Direct-response advertising is the medium for delivering the message to an intended audience. It is designed to inform and persuade the audience to take immediate action.

2. The major forms of direct response advertising include direct mail, direct response television, direct response print, telemarketing, and catalogues. Direct mail remains the largest medium in terms of use by marketing organizations, though electronic communications are gaining ground.

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3. Data mining is the analysis of information that establishes relationships between pieces of information so that more effective marketing strategies are identified and implemented. Data mining provides an organization several benefits. It will lower overall marketing costs due to the efficiencies it creates and it identifies prospects that are most likely to buy, and in large volume.

An organization’s competitive advantage in the marketplace will become increasingly dependent upon knowing the situation better than competitors and being able to react quickly, based on what’s going on. Wal-Mart is a leader in data mining techniques, and their ability to act and react is without question. Their competitors lag far behind.

4. A list broker helps a marketing organization find prospects. The marketer provides the broker with a customer profile they wish to reach and the broker consults their list sources to seek names that match the profile. Names are sold to the marketing organization on a cost per thousand basis.

5. Merge/purge is a computer process whereby numerous lists are purchased, combined, and stripped of duplicate names. It is a process that prevents the same name being sold to a marketing organization.

6. A response list is a list of proven mail order buyers. It is a hot list and the names cost more to obtain. A circulation list is a list of subscribers of a print publication. Such lists are usually based on demographic and geographic characteristics of the publication’s readers. A compiled list is one that is compiled from information available from public sources such as telephone books and various registration and membership lists.

7. The advantages of direct mail advertising include audience selectivity (the target is reached on some predetermined characteristic), creative flexibility (a long story can be told about the product), exclusivity (mail does not compete with other media for attention), and measurability (unlike traditional media it can be evaluated for effectiveness quantitatively and in a short period). Some disadvantages include image (direct mail is not a prestigious medium), cost per exposure (when all costs of a campaign are considered the cost per thousand of reach escalates), and lack of editorial support (a mailing piece is easy to discard).

8. The components of a typical direct mailing include the envelope, letter, leaflet of folder, order form, and postage paid return envelope. Each component plays an important role in providing information and encouraging the recipient to take action. The objective is to make it easy for the recipient to respond.

9. A statement stuffer or bounce back is an additional offer that rides along with the delivery of another offer or the delivery of a monthly credit card statement.

10. In a solo direct response campaign one organization underwrites the cost of the entire campaign.

It is a unique offer designed for a target market. All marketing and marketing communications costs are absorbed by one organization. In a cooperative direct response campaign, the costs are shared by numerous organizations. Several non-competing companies join forces in one mailing to reach a target market they all have in common.

11. Dimensional Mail – Is a type of direct mail that is increasingly getting attention because of its high response rates. Dimensional mail is a type of direct mail that can take any form other than the typical flat piece of mail. Examples include the use of creative packaging, or the inclusion of an object in the mailing such as a pen. Hence, the object or packaging heightens consumer interest and causes them to stop and read it, and hopefully respond. .

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12. Direct response television varies from a 30-second spot calling for a quick decision by the viewer to a 30-minute infomercial that carefully explains the details of a complex offer. Infomercials are increasing in popularity among traditional marketing organizations. Direct response commercials do more than simply sell goods. With infomercials becoming much more sophisticated and program-like, marketers find them to be effective at creating brand awareness, establishing leads, and building and protecting brand image.

13. An insert is a single-page or multi-page document inserted into the spine of a print publication. If the document is glued to the page (usually a gum-like glue that is easily removed when the document is removed), it is referred to as a tip-in.

14. An inbound telemarketing call occurs when a prospective customer responds to an offer and calls in for more information or to place and order. An outbound telemarketing call occurs when a sales representative makes a planned call to a prospective customer to solicit an order. Both types of calls are usually handled from a call centre.

Discussion Questions 1. Most experts believe that direct response communications will play a much greater role in the future. Numerous large companies that are now using direct response successfully were mentioned in the chapter. Other organizations will follow their lead. Although the image of direct response remains an issue for many marketing organizations, and negative images make them reluctant to participate. Database management systems and the need for effective customer relationship management programs will continue to create new opportunities for direct-response marketing communications. There will be a trend away from traditional media and toward newer, nontraditional media.

2. Despite a rather negative image, direct mail remains popular with profit-based and not-for-profit based organizations. These organizations realize that the benefits of direct mail (audience selectivity, creative flexibility, exclusivity and measurability) outweigh the disadvantages (image, cost per exposure and lack of editorial support). The students should present some insight into organizations that have used direct mail successfully. For example, direct mail is the cornerstone of campaigns to raise funds for the Heart Fund, Cancer Society, Salvation Army, and so on.

3. This question asks the student to evaluate the content of the direct mail piece. Does it get the receiver involved? Does it spark interest or motivate the receiver to take the desired action? Ask for a critical evaluation or comparison of two different mailings.

4. The objective of this question is to get the student to develop a direct-response media strategy to sell the new AUDI TT automobile. Look for appropriate direct response media and database management tools.

5. The student will need to do some online research to answer this question. The student should discover that more and more big name companies are joining the ranks of direct response media users. Many success stories are out there.

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Chapter 7 Planning for Online and Interactive Communications Learning Objectives Students will be able to: 1. Assess strategies for delivering effective messages using online advertising 2. Describe the various roles by online communications play in a marketing and marketing communications environment 3. Evaluate the various advertising alternatives that are available online 4. Assess the potential of the Internet as an advertising medium 5. Assess the role of social media, mobile media, and video games as alternatives in integrated marketing communications campaigns

Chapter Highlights Online communications offer a high degree of personalization and for that reason it should be attractive to marketing organizations. The Internet also offers the ability to listen to customers and learn from them, delivering content and services tailored to their responses and actions. It can be a vital tool in the customer relationship management (CRM) process. The Internet now plays a large role in communicating complex and comprehensive information to prospective customers. Control has shifted from advertiser to customer. Communications is about giving customers the opportunity to interact with brands, a concept known as engagement.

Online interactive communications have changed at a rapid pace and today more is spent on internet advertising than any other medium. Greater consideration is being given to the host of interactive medium in order to reach and impact the target audience effectively.

A. Internet Penetration Canada has one of the highest levels of Internet penetration and broadband access. The latest data indicates that 86% (29.7 million) of Canadians are Internet users. Canadian participation ranks second in the world, just behind the UK. A typical Canadian spends on average 5 hours a day online using a computer and two hours connected to a mobile device. Figure 7.1 shows time spent by a typical Canadian with various media. The Internet is the ideal medium for reaching younger Canadians and a reasonably good one for reaching older Canadians.

B. Online and Interactive Marketing Communications The Internet is revolutionizing how companies look at advertising and other marketing communication tools. Canada’s online advertising market has reached $4.3 billion and represents 34% of net advertising revenue in Canada. Since the Internet is viewed as a “participative” medium with a true source of .

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information and entertainment for consumers, advertisers must produce advertising suitable for the online arena. Planners are reluctant to place ads online due to two reasons: viewability and click fraud. 

Viewability is a hot issue. While marketers seek reassurance that their ads are viewed, data indicates that less than 50% of ads appearing “in view” are actually seen.

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Click Fraud is a situation where bots that look like human web users click on advertisements. Since a click is a click, advertisers must pay for these ads seen by non-human traffic. The fraud that bots enable is a major problem.

The chapter cites some research studies that quote the benefits of adding an online component to the media mix. Scores for metrics such as brand awareness and purchase intent increase significantly when online is added to the mix. Refer to the IMC Highlight Nissan Altima Goes with Digital Media for more insight into the benefits of including online advertising to the communications mix.

C. Online and Interactive Communications Planning Interactive communications refer to placing advertising messages on a website, usually in the form of a banner, rich media ad, video ad, sponsorship at a website, or an ad delivered by e-mail or mobile communication device. The interactive communications plan includes the establishment of objectives, evaluation of various media options strategically, decisions on specific media, and allocation of budget.

Figure 7.3 reviews the interactive planning process.

Online Targeting – The Internet is a voluntary medium, as it is up to the individual to decide what websites they visit. Customers exchange information about themselves for increased access to product information, and enhanced privileges and rights as a customer. All websites have data on who visits and for how long. For marketers, one of the benefits of Internet communications is the ability to use this customer data to create communication messages that are tailored to the needs and wants of these customers. The Internet is much like other medium. Audiences can be targeted based on: 

Demographics – Characteristics of the population based on gender, age, income, etc.

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Daypart targeting – Placement of online ad based on time of day.

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Behavioural targeting – Delivering ads based on consumer’s surfing patterns.

The Internet allows advertisers to target customers based on their surfing behaviour. The impact of behavioural targeting is evaluated based on an impression or ad view, which is defined as a measurement of responses from a web server to a page request from a user’s browser.

Mobile communications are also shaping individual targeting practices. With the high penetration of smartphones, it is possible to reach people on the go. Location-based targeting is the concept of integrating consumer’s location information into a marketing communication strategy.

The Internet (like direct marketing) can also allow a company to complete a sale online.

Finally, the Internet deals also with the concept of mass customization, which refers to the ability of personalizing messages and targeting an audience of one – the ultimate form of targeting!

D. Online and Interactive Communications Objectives .

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Like any traditional medium online advertising is useful for achieving specific objectives. It can be employed to:      

Create brand or company awareness Build and enhance the image of a brand Offer incentives Generate leads Provide customer service Conduct business transactions in B2B and B2C environments

E. Online and Interactive Communications Strategies Today’s consumers are spending more time online, and online advertising spending has been growing steadily. Media planners must therefore be technologically savvy, recognize the value of online communications, and make appropriate recommendations for online use.

From a media strategy perspective, the Internet and other forms of interactive communications offer high reach and frequency. There are a variety of options available for advertising online, see Figure 7.6 for online advertising spending by types of advertising. Video advertising is also more popular with the benefits (like TV) of sight, sound, and motion.

The effectiveness of online advertising is measured based on the following terms: 

Impressions (Ad Views) – An ad request that was sent to a visitor (ad appears on screen).

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Frequency (Online) – The number of times an ad is delivered to the same browser in a single session.

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Ad Clicks (Clickthroughs) – The number of times a user clicks on a banner ad (a measure of engagement).

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Ad Click Rate (Clickthrough Rate) – The percentage of ad views that resulted in an ad click. It is calculated by dividing clicks by impressions.

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Unique Visitor – The number of unduplicated visitors to a website within a specific period.

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Visit – A sequence of page requests made by one visitor at a website.

Websites that attract the same audience frequently and for extended periods are referred to as “sticky” sites. For example, certain people visit their favourite financial site or sports site on a regular basis for upto-date information.

There are numerous online advertising alternatives to consider: 

Search Advertising – An advertiser’s listing is placed within or alongside search results in exchange for paying a fee each time someone clicks on your listing in those search results. Search words are auctioned off to advertiser who bid the highest for the word. Presently search revenue ranks first in terms of revenue among the various online advertising options. Google is by far the world leader in search advertising. .

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Display Advertising (Banners and Rich Media) – Display advertising includes banner ads in a variety of sizes. A banner ad appears much like that of an outdoor poster or print ad. o

The Internet Advertising Bureau (IAB) has established a universal ad package that includes specific sizes and shapes of banner ads: rectangle ad, big box, leaderboard (super banner), and skyscraper. See Figure 7.7 for the universal ad package sizes for internet advertising.

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Rich Media – Banner ads that include animation, sound, video, and interactivity.

Video Advertising – This is the fastest growing option in online advertising. Like TV, it offers the opportunity to connect with consumers on an emotional level. As more shows, news, and sports highlights are streamed online, it creates good opportunities for advertisers (see Figure 7. 9).

The inclusion of audio and full-motion video is referred to as streaming media. Streaming involves continuous delivery of small packets of compressed data that are interpreted by a software player and displayed in full-motion. Television networks like TSN, CTV, and others offer streaming video of their popular shows. Online shows include video ads in the form of pre-roll ads, mid-roll ads, and post-roll ads.

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Sponsorships – A sponsorship is a commitment to advertise on a third-party website for an extended period. Advertisers are attracted to sponsorships on the basis of Web content. If their target audience visits a particular site frequently then taking advantage of a sponsorship opportunity makes sense.

For example, an investment firm may be a sponsor of a financial news site. A beer company may be a sponsor of a sports content site, and so on. Sports websites like TSN and The Score run various sports contests throughout the year and seek appropriate corporate sponsors. For TSN this includes Kraft, who ran the “Kraft Celebration Tour” (see Figure 7.10). The more popular the website, the more potential revenue from sponsorship, and TSN is one of the most popular websites in Canada.

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E-Mail Advertising – E-mail, if used properly, is a most promising marketing communications application. The ideal situation is to have people subscribe to e-mail they are interested in. Known as permission-based e-mail, subscriber names are available to marketers from an opt-in list. There are two kinds do opt-in lists: a first-party list is comprised of people who specifically agree to e-mail from an organization; and a third-party list in which the names compiled by one company are sold to another. The latter, if used incorrectly, or without concern for subscriber privacy could lead to unwanted e-mail, often referred to as spam. Spam refers to the inappropriate use of a mailing list for the purpose of sending unsolicited junk e-mail. One of the key objectives of e-mail advertising is to establish and maintain a relationship with customers.

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Content Marketing: Websites and Social Media – Companies are creating unique video content about their products and posting it on their own websites, YouTube channels, or Facebook page.

Content marketing is the marketing practice of creating and distributing relevant content to attract and engage a target audience. Companies also establish microsites, individual webpages that function as a supplement to a primary website.

Figure 7.13 is a summary of the advantages and disadvantages of online communications.

F. Social Media Networks

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A social media network connects people who share interests on a website. Social networking is a phenomenon that has, in a very short period of time, become a fundamental aspect of the online experience. Social network sites like Facebook, Twitter, and YouTube are among the most visited sites in the online world (refer to Figure 7.14).

Canadians are married to the social web and as such it makes it a good advertising option. See Figure 7.15 for the demographic profile of social media users in Canada. 

Adapting to the Social Media Environment – In this social media era, consumers have more control over marketing communications and the communication process is more participative. The goal is to get consumers talking about brands. This shift in control is referred to as brand democratization.

Much of online social media is created by consumers. Consumer generated content is content created by consumers for consumers (C2C). When a company invites the public to participate in the marketing of its brands, it is employing a technique known as crowdsourcing.

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Options for Social Network Advertising and Marketing Communications – Several advertising opportunities exist on social media: a) Display Advertising – Form of banner ad available on social networks like Facebook and Twitter.

These offer significant target advantages. b) Sponsored (Suggested) Posts in a News Feed – Like news from friends, a sponsored post appears within an individual’s news feed. The ad usually contains minimum copy while relying heavily on visual. An illustration of this concept appears in Figure 7.16. c) Video ads – A fast growing alternative in online as well as social media. Facebook recently introduced a new ad unit called “premium video,” which is a 15-second ad that starts playing automatically as a user scrolls past it in their news feed. d) Brand Page (Fan Page) – Marketers create their own page on Facebook that users choose to join. e) Company Blogs – A website where journal entries are posted on a regular basis and displayed in reverse chronological order. A company blog can be an effective means of communicating brand information. f) YouTube Channels – Since many people view video content on YouTube, it makes sense that companies own a YouTube channel.

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Viral Marketing and Social Media Communications

Viral marketing is a strategy that encourages individuals to pass along information to others, creating the potential for exponential growth in the message’s exposure and influence. Some 91% of Internet users have a social media account and these users embrace all age groups. Therefore, social media is an essential medium to include.

The key benefits of social media communications are: a) Word-of-mouth – One of the most potent forms of influence on brand decisions.

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b) Customer engagement with a brand – The single most important benefit of advertising on social media.

The disadvantages of social media communications are: a) Absence of sound metrics (beyond click rates) – Determining return on investment is a stumbling block . b) Time and commitment – Information must be constantly refreshed in order to engage consumers over an extended period of time.

See IMC Highlight on Social Media Gives Stratford Festival a Boost.

G. Mobile Media Communications The screen is small, the audience’s attention span is short, and the environment—a park bench, a crowded restaurant, a busy subway station—is variable. Yet the possibilities of mobile marketing are capturing the attention of advertisers. Data in 2013 indicates that there are 28.4 million wireless phone subscribers in Canada and that smartphone penetration has reached 73%. As well, 6 in 10 Canadians access the Internet via mobile device. Canadians are attached to their phones—79% don’t leave home without it.

As of 2014, mobile advertising revenue reached $903 million and accounted for 24% of Internet advertising revenue. 

Mobile Marketing Communication Opportunities – Advertising on mobile devices is similar to Internet advertising only the ads are smaller. Targeting is also a key element of mobile communications. The primary means of communicating include: a) Text Messaging – refers to the transmission of text-only messages. Canadians send 270 million text messages a day. b) Display Advertising (Banner Ads) – A standard banner ad (320 x 50 pixels) usually appears at the top or bottom of a mobile screen. Refer to the image in Figure 7.17. c) Video Ads – Video is the fastest growing form of mobile advertising for two reasons: people are watching long-form video content on their mobile phones (41% of all video viewing occurs on a smartphone), and viewing embraces streamed TV shows, news, and sports highlights. Heavy usage is among the youth, but the growth is across all demographics. d) Mobile Applications – All smartphone suppliers, such as Apple and Google, offer applications that encourage in-application advertising. The number of apps available on the market is mindboggling—Google has 1.5 million and Apple has 1.4 million. Refer to Figure 7.18 for more on mobile communications. e) QR Codes – A quick response code is a two-dimensional barcode that can be scanned and read by smartphones. It is made up of small squares in black and white patters, the code allowing for sharing of text and data (see Figure 7.20).

H. Video Game Advertising .

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The video industry is huge (estimated at $15 billion in US, 2014). Advertising opportunities in video games include around-game ads, in-game ads, and advergames (branded message is blended with a fun, interactive gaming experience).

Gamers do not seem to mind the presence of ads, they expect to see ads. One study discovered that 70% of respondents felt ads made them feel better about the brands. Refer to Figure 7.21, which indicates that ads in video games offer players a sense of reality.

Answers to End-of-Chapter Questions Review Questions 1. Click fraud is a situation where bots that look like human web users click on advertisements.

Since a click is a click, advertisers must pay for these ads seen by non-human traffic. The fraud that bots enable is a major problem.

2. Behavioral targeting refers to targeting consumers based on their surfing behavior. One the person’s preferences and tendencies are known messages related to those preferences can be sent directly to the person when they go online.

3. With the high penetration of smartphones, it is possible to reach people on the go. Location-based targeting is the concept of integrating consumer’s location information into a marketing communication strategy 4. Mass customization refers to a system that can personalize messages and ultimately products to target an audience of one. Dell builds computers according to specifications of customers who buy online.

5. Online marketing communications can be useful for creating awareness, building and maintaining brand image, offering incentives, generating leads, providing customer service, e-mail marketing and conducting transactions. It complements other forms of marketing communications and facilitates e-commerce and e-business opportunities. Students should expand on each role.

6. Viral marketing is a situation where a customer is encouraged to send a message to a friend. It is an online word-of-mouth network. Word spreads fast if the message is delivered to everyone in a person’s e-mail address book.

7. Ad impressions are the number of times a banner is downloaded and seen by a visitor. Ad clicks are the number of times a user clicks on a banner ad (the user is transferred to a Web site to get more information about the product). Ad click rate is the percentage of ad views that resulted in an ad click. The percentage determines the success of an ad in attracting visitors to click on the ad. Visits are a sequence of page requests made by one user at a website.

8. A banner ad is usually a horizontal rectangular-shaped ad that appears on a third-party website. It presents a minimum amount of information but hopefully attracts the attention of users so that they click on the ad for more information.

9. Rich media is a term for advanced technology used in Internet ads, such as streaming video, applets that allow user interaction, and special effects. The ads are much like a television commercial. Streaming media involves the continuous delivery of compressed packets of data .

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that are interpreted by a player as they are received. The user views the ad while the streaming is in progress.

10. Online sponsorship involves an extended commitment to advertise on a third-party website. The advertiser selects a site where the content is of interest to the intended target market. If the site reaches the target market effectively, an extended advertising program would be much more efficient than randomly placing ads on other sites. People tend to visit their favourite sites frequently so exposure to the advertising message is ongoing. Sponsorships are the second most popular form of online advertising. A good sponsorship program can involve various forms of banner advertising and a variety of sales promotion opportunities. Encourage students to find some good examples of sponsorship communications online.

11. Permission-based e-mail is a situation where the user agrees to receive information from an advertiser. That person voluntarily signs up on an e-mail list. Sponsored e-mail occurs when a website includes a short message from a sponsor along with a link to its website when it mails information to its e-mail subscribers. An opt-in list is a list containing names of people who agree to receive certain e-mail. Spam refers to improper use of an e-mail list for marketing purposes. It is junk e-mail.

12. Consumer-generated content is content created by consumers for consumers (C2C).

13. Like news from friends, a sponsored post appears within an individual’s news feed. The ad usually contains minimum copy while relying heavily on visual.

14. The two advantages of social media are positive word-of-mouth and consumer engagement. The two disadvantages of social media are absence of sound metrics and requirement of time and commitment.

15. In mobile communications, location-based targeting refers to the concept of integrating consumer’s location information into a marketing communication strategy. With the high penetration of smartphones, it is possible to reach people on the go.

16. In-game ads are referred to as environment or immersive ads; the player can see the ads but cannot interact with them. Advergames are structured around a specific brand; the branded message is blended with a fun, interactive gaming experience.

Discussion Questions 1. One of the key objectives of e-mail advertising is to establish and maintain a relationship with customers. Students can conduct their own research on the topic. Students should conduct some online research to get to the bottom of the e-mail advertising issue. Much has been written about the amount of spam that is delivered each day and the negative effects it has on worker productivity. It seems that a small group of marketing organizations could kill the goose that lays the golden egg. Some comparisons between opt-in e-mail and spam should be part of the evaluation by students.

2. Click fraud is a situation where bots that look like human web users click on advertisements.

Since a click is a click, advertisers must pay for these ads seen by non-human traffic. The fraud that bots enable is a major problem. Students can conduct their own research on the topic. .

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3. Students are encouraged to research a variety of commercial websites and analyzes whether they are successful in achieving the alternative marketing communication objectives: building awareness, enhancing brand image, offering incentives, generating leads, and providing customer service. Students should indicate specific examples that point to attainment of these communication objectives. Having a website is extremely important. Student research should lead to this conclusion and indicate the various roles that a website can perform for a company.

For many organizations, the website is the backbone of the entire operation (an e-business operation).

4. Students can be invited to compare two competing firms in the same market (2 different brands of cars) and to analyze the use of social media for each competitive company. Students can list the various social media tools and analyze the type of content and consumer involvement.

Alternatively, students can research social media on specific packaged goods of their choosing.

The student can be asked to identify social media communications generated by the company and to evaluate how effective the social media is in convincing him/her to have a positive relationship with the company 5. Are consumers likely to continue to accept or reject the notion of delivering frequent advertising messages? Students are invited to take a position and support it. How consumers will continue to react to advertising messages on their cell phones is a controversial topic.

Many believe it is an invasion of privacy. Others see the screen as simply another medium so why shouldn’t advertising be part of the equation? The student should formulate an opinion on the issue.

6. The advantages and disadvantages of online advertising can be reviewed as part of this question. Given the growing importance of online media in today’s marketplace, one can conceive of the idea of launching a product with online communication tools as the primary medium. There are many varied online tools available and thus the correct blend is important to target the right market effectively. With online communications, there is also the opportunity to “tell more and sell more.”

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Chapter 8 Sales Promotion Learning Objectives Students will be able to: 1. Distinguish between consumer promotions and trade promotions 2. Describe the steps in the sales promotion planning process 3. Assess the role of consumer promotions in achieving specific marketing communications and marketing objectives 4. Assess the role of trade promotions in achieving marketing communications and marketing objectives 5. Outline the nature of various consumer promotion and trade promotion activities 6. Assess various criteria for integrating sales promotion strategies with other integrated marketing communications strategies.

Chapter Highlights A coordinated effort is required to make a sales promotion a success. This chapter assesses the role of consumer and trade promotions and how they are integrated with other forms of marketing communications to help an organization grow and prosper.

A. Sales Promotion Sales promotion is activity that provides special incentives to bring about immediate response from customers, distributors, and an organization’s sales force. It is divided into two primary areas: consumer promotions and trade promotions. 

Consumer Promotion – Activities designed to stimulate purchases or encourage loyalty. Some alternatives include coupons, free samples, contests, rebates, price incentives, and rewards programs. These promotions help “pull” a product through a channel of distribution. As mentioned previously, companies have been reporting a rise in the use of experiential marketing activities, often referred to as buzz marketing. According to a poll conducted with Canadian consumers, tools that would best convince them to try a new brand of beer are product sampling and testing (42.6 %), giveaways (20.6%), and contests (14.3%).

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Trade Promotion – Price-oriented offers made to distributors to encourage marketing and merchandising support for a product. Some alternatives include discounts and allowances, cooperative advertising allowances, dealer premiums, and point-of-purchase material. These promotions help “push” a product through a channel of distribution.

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B. Sales Promotion Planning A well-timed sales promotion offer that coincides with an image-building advertising campaign could be just the right combination to get a consumer to respond. Such a relationship suggests that integration of advertising strategies and promotion strategies are essential, and on a larger scale, their integration with other forms of marketing communications, is what promotes a company or brand with a sense of continuity. Advertising campaigns have a long-term perspective while sales promotions tends to look short-term. While advertising builds brand image, sales promotion can encourage a spike in sales.

Figure 8.2 outlines the promotion planning process. Sales promotion activities are usually devised by external sources that specialize in this area. Typically, the client organization provides them with a brief that sets the stage for the development of a sales promotion plan. The sales promotion brief typically includes the following information: 

Market Profile – A review of sales and market share trends to determine brand leaders, challengers, and followers.

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Competitor Profile – An assessment of the marketing communications strategies used by competitor brands. The goal is to determine what brands are growing and what factors are contributing to their growth.

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Target Market Profile – A complete profile based on demographic, geographic, psychographic and behavioural characteristics.

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Sales Promotion Objectives – A plan usually draws from three objectives: encouraging trial purchases, encouraging repeat or multiple purchases and building long-term brand loyalty. Trade promotion objectives dwell on securing marketing support by channel members.

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Budget – A provision for spending on sales promotions must be known to determine the extent of a promotion offer. Will it be large-scale national promotion or restricted to specific areas or regions?

C. Sales Promotion Plan A sales promotion plan is a document that outlines relevant details about how a client’s budget will be spent. It clearly describes objectives, strategies, and executions.

D. Sales Promotion Objectives The nature of a promotion (e.g., consumer promotion versus trade promotion) determines the objectives.

Though they are different in nature, objectives in both areas tend to compliment each other. 

Consumer Promotions – Objectives focus on trial purchases in the early and growth stages of a product life cycle; they shift to repeat purchases and multiple purchases once a product is in the maturity stage of the life cycle. Since customer relationship management programs are important at all stages, loyalty-oriented objectives can occur ant any time.

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Trade Promotions – When a product is new the objective is to secure listings (obtain distribution among channel members). Financial incentives play a key role here. A second objective is to build volume on a seasonal or pre-determined cyclical basis throughout a planning year. A third objective is to secure merchandising support, a situation where retail distributors are encouraged to perform .

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in-store marketing functions on behalf of the product offering the incentive (e.g., set up a display and offer a lower price temporarily).

E. Sales Promotion Strategy Decisions about sales promotion strategy involve selecting the right types of promotion incentives to achieve the objectives and allocating the appropriate resources. 

Consumer Promotions – There are numerous options such as coupons, free samples, contests, rebates, premiums, and loyalty programs. Each provides a different incentive and is appropriate for use at different stages of a product’s life cycle. How much money will be allocated to the consumer promotion activity?

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Trade Promotions – Funds are allocated between the different alternatives. Depending on the objectives there could be more or less emphasis on listing allowances, trade and performance allowances, and cooperative advertising allowances.

Another strategic decision involves the balance needed between consumer promotion and trade promotion. Successful promotions utilize both in an integrated manner. Finally, the planner must consider advertising strategy. A promotion must be advertised! Therefore, plans must be devised to integrate the promotion offer into brand advertising. The promotion must fit the product and the target market.

Since a promotion is an added incentive, it temporarily becomes the brand’s unique selling point or it serves to further distinguish a brand from competing brands. A sales promotion will only work if it receives the necessary media support. The advertising strategy will create awareness for the promotion and provide details about how consumers can take advantage of the offer. A blend of broadcast, print and online /social media is effective for generating awareness while in-store communications draw attention to the offer at the right time.

Sales representatives must make the trade customers aware of all consumer promotions. The representatives integrate the consumer promotion offers with trade promotion incentives (a combination of pull and push) to maximize the impact of dollars being invested in the promotion. Getting trade customer support of a consumer promotion is crucial!

F. Logistics and Fulfillment The final planning stage involves developing a system to get the offer to the consumer. For example, fulfillment details that surround a major contest promotion are complex and time consuming. Consumers become disgruntled if the back-end of a promotion offer does not work effectively. The goal is to have an entire promotion run seamlessly from the front-end (announcing the promotion) to the back-end (delivering prizes to winners).

G. Measurement and Evaluation A sales promotion plan is evaluated for success or failure. Results are measured against the objectives of the promotion. If the desired response was trial purchase, how many new users were attracted to the offer (marketing research may be necessary to determine this)? If the objective was brand loyalty, are current customers buying the product more frequently (this data may be available in an internal database)?

Contests may be evaluated based on numbers of entries received and coupons may be evaluated on redemption rates. If there is a method of projecting revenues generated by a promotion, then it is possible .

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to estimate some kind do financial payout for the promotion. For more insight into the role of sales promotion in building market share, see IMC Highlight Quick Serve Coffee Wars.

H. Consumer Promotion Execution The popularity of consumer promotion alternatives varies from one industry to another. For example, packaged goods companies tend to use coupons and contests frequently whereas the automobile and appliance companies tend to migrate to rebates and other financial incentives such as low rate loans. 

Coupons – A price-saving incentive offered to stimulate quicker purchase. Coupons are ideal for achieving trial purchase among new users early in a product’s life cycle and for achieving repeat purchases among present users at any time. They are the preferred form of sales promotion in packaged goods markets. When products are in the early stages of the PLC, coupons are distributed by various alternatives: media-delivered coupons, free-standing inserts (FSI), and email and mobile devices. In latter stages of the PLC, on-package coupons may become more suitable. On-package coupons take on many forms (in-pack self-coupon, on-pack self-coupon, instantly redeemable coupon, and cross-ruff (cross-coupon). An example of the return on investment for a coupon offer is shown in Figure 8.8.

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Product Samples – An expensive but effective way of generating trial purchase. A free sample may be a trial-size package or an actual-size package. Unlike any other type of consumer promotion, a free sample is the only option that converts a trial user to a regular user based on product satisfaction. The sample eliminates the risk associated with any new purchase. In-store sampling is becoming popular and involves the free distribution of goods at selected locations (e.g., booths strategically set up in stores to intercept customers as they shop). Sampling is the second most popular form of promotions next to coupons. The sample must meet consumer expectations for sampling to work. It is best used during the early stage of the product life cycle.

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Contests – Contests help create temporary excitement for a brand. There are various types of contests.

A sweepstakes is a chance promotion usually involving a large prize giveaway, much like a lottery.

The objective of a sweepstakes offer is to light a fire under sales. It will be promoted heavily. A game contest involves repeat visits to collect game pieces (often promoted as “play and win”). An instant win involves pre-determined, pre-seeded winning tickets, in the overall fixed universe of tickets. Tim Horton’s “Roll Up the Rim” is an example of a long running successful instant win promotion.

Contests are good for achieving repeat purchase objectives and are quite common in the mature stage of the product life cycle. The success in contests depends on consumers’ perception of perceived value of prizes. A combination of media advertising, social media, and in-store promotional materials is necessary for contest success. Note: all contests must abide by the Criminal Code and the Competition Act. Figure 8.15 provides tips for planning a successful contest.

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Rebates – A predetermined amount of money returned directly to the customer by the manufacturer after a purchase has been made. The most common type is the single-purchase refund in which the consumer receives a portion of their money back once they have purchased a specified product.

Rebates are ideal for products in the mature stage of the product life cycle since they encourage multiple purchases of inexpensive packaged goods. They are also popular among automobile manufacturers. Often consumers have good intentions of following through and claiming their rebate but fail to do so for a variety of reasons. This phenomenon is referred to as slippage. Technology at point of sale is decreasing slippage.

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Premium Offers – An additional item given free, or greatly discounted, to induce purchase of a primary brand. A premium provides added value and tempts consumers to buy. Premiums are offered by mail, as an in- or on-pack offer; and by order form at point-of-purchase or a website. Tangible gifts are often used as a reward for loyalty and can be a key ingredient in a customer retention program. The major consumer packaged goods companies frequently use their packages to distribute free premiums. For example, Corn Pops is offering an in-pack premium to stimulate impulse purchase at P-O-P (see Figure 8.16). Bonus packs are also classified as a premium. A bonus pack offers the customer more content for the regular price, for example, “buy one get one free.” A good premium offer helps differentiate one brand from another at a crucial time—when the customer is ready to buy.

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Loyalty Programs – An offer that encourages long-term loyalty, also referred to as a frequent buyer program. These programs involve the collection of points that can be redeemed for merchandise at a later point in time. This is commonly used in the travel industry, for example Intercontinental Group of Hotels operates has a program called “Priority Club Rewards” which allows customers to redeem accumulated points on merchandise. This type of promotion has database management capabilities as many organizations mine their data for future applications. Figure 8.17 discusses another popular reward loyalty program at Shoppers Drug Mart. Consumer fatigue may be setting in regarding loyalty programs. While consumers’ wallets are bulging with cards, in many cases the perceived value of the cards diminish over time. The true value of loyalty programs is the data that companies glean voluntarily from its members. Transaction data is perceived to be particularly useful, and is the key source of profiling information that goes into creating individualized marketing programs. Read the IMC Highlight Canadian Tire Money Keeps Customers Happy for details of another Canadian successful loyalty program.

I. Trade Promotion Execution Canadian retailers have considerable control in many channels of distribution (e.g., hardware, home improvement and grocery products). With control comes considerable demand for more and more trade promotions. A distributor’s loyalty to any supplier can waiver if they do not receive the trade promotion offers they feel they deserve. Manufacturers choose between several different trade promotions. 

Trade Allowance – A temporary price reduction to encourage larger volume purchases by distributors. Trade allowances are offered as free goods (buy 10 and get one free), off-invoice allowances (direct deduction on an invoice), and bill-backs (orders are accumulated and the discount is transferred once the deal period is over).

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Performance Allowance – A discount that encourages a distributor to perform a merchandising function on behalf of the manufacturer. Merchandising functions may include price reductions, dealer displays, automatic distribution to stores, and an ad mention in the distributor’s weekly flyer.

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Cooperative Advertising Allowance – A fund that is allocated to pay for a portion of a distributor’s advertising. The manufacturer offers to pay for a percentage of the distributor’s advertising. “Intel Inside” is a good example of a cooperative advertising campaign.

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Dealer Premiums – An incentive offered a distributor to encourage special purchase of a product or to secure additional merchandising support from a retailer. They are usually offered in the form of merchandise and delivered by a sales representative. Branded merchandise such as golf shirts and equipment, caps, and recreational equipment are examples of dealer premiums. Sometimes called “payola” the use of premiums is often discouraged. Spiff, another type of premium, is an incentive offered to retail salespeople to promote a specific brand. Companies who receive premiums .

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question their benefit. Does the buyer benefit or does the organization benefit? It is a controversial issue. 

Collateral Material – Material such as display posters, shelf talkers, channel strips and advertising pads are all useful at point-of-purchase. Display material can be either temporary or permanent.

Jeans for example, are often merchandised in retail stores, in display racks provided by the manufacturer. Refer to Figure 8.18 for an example of shelf-talkers and poster advertising to draw a consumer’s attention. Often temporary display material doesn’t get fully utilized; stores simply refuse to use it. A poor location also diminishes the intended impact of a display.

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Trade Shows – Shows are effective for introducing new products. Since potential customers attend trade shows so it is very cost-efficient medium. Virtually every industry has some sort of annual trade show where the latest and greatest products are showcased.

To maximize the benefits of trade promotion funds and activities, numerous offers are combined to form an integrated plan.

J. Additional Considerations for Sales Promotion Planning Sales promotions must be carefully planned and integrated with other marketing communications plans.

Decisions must be made regarding how frequently promotions are offered, what types of promotions will have a positive impact on brand image, and how they will build brand value in the long-term. 

Frequency of Promotions – Promotions are complimentary in nature so that suggests something about frequency. They should be used to enhance brand image; if used too frequently there is a possibility that brand image will be cheapened.

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Brand Image – Since so many promotional offers have lower price implications it is possible that consumers could perceive sale prices to be more like the regular prices. Offering discounts too frequently can hurt brand image and profit margins. Automobile manufacturers face this concern with their rebate programs. People wait for a rebate before they buy! Consumers may also think that a brand that is always on sale is a brand in trouble. Why should I buy it?

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Brand Equity – The goal of marketing communications is to help build brand equity. Promotions however are a chaotic sequence of deals and events that create noise in the marketplace. Since they are not a sustaining message there must be a consistent approach to them in order to build relationships with the trade and consumers. Such promotions as Tim Horton’s RRR UP the Rim, Gillette’s Cavalcade of Sports, and Canadian Tire money are examples of promotions that help build brand equity.

Answers to End of Chapter Questions Review Questions 1. A pull strategy involves the use of promotional incentives to create demand for a good among consumers. Such demand draws consumers into the stores and places pressure on distributors to stock and resell the product. A push strategy involves incentives being directed at distributors to encourage them to carry and resell the product. .

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2. The primary objectives of consumer promotions are to encourage trial purchases, encourage repeat and multiple purchases, and encourage long-term brand loyalty.

3. The primary objectives of trade promotions are: to secure listings, build sales volume during the promotion period, and to encourage merchandising and marketing support among distributors of a product.

4. It is essential to integrate sales promotion strategies with advertising strategies. Sales promotion strategies tend to be short-term in nature so they must blend well with the overall advertising strategy that builds brand image in the long-term. On a temporary basis, the sales promotion activity may be the focal point of advertising messages. Sales promotions should support and compliment advertising strategies.

5. Logistics and fulfillment refer to back-end activities associated with sales promotions. For example, if the promotion involves a contest, what procedures are in place to keep track of entry forms, determine winners, and to deliver prizes to winners. A promotion must be a seamless operation from start to finish.

6. Terms described as: a)

Redemption rate – Refers to the number of coupons returned expressed as a percentage of the number of coupons in distribution for a particular offer.

b)

In-pack self coupon – A coupon for the same product included inside the package. The coupon encourages a second purchase.

c)

Cross-ruff – A coupon offer for one product carried by another product.

d)

On-site sampling – The free distribution of a branded product at a specific location (e.g., at a beach, in a park, on a street corner, etc.)

e)

Instant win promotion – A contest promotion that involves game tickets and the chance of winning a prize instantly once purchase has been made—please play again!

f)

Slippage – A situation where a consumer starts collecting labels or some other proof of purchase in order to claim a rebate or premium, but stops collecting for some reason and does not follow through. Multiple purchases are necessary to qualify for the purchase.

g)

Bonus pack – A promotion whereby a larger-size product is offered for the price of the regular size product (e.g., 25% more!).

7. In the early stages of the product life cycle any media-delivered alternative is suitable since the objective is usually to build trial purchases. The media creates awareness for the product and the offer. In the later stages, it is better to use the product for delivering coupons. The objectives at later stages of the PLC are usually repeat purchases and building loyalty among existing customers so coupons inside a package encourage continued purchases.

8. A free sample offer is a very effective method for initiating trial purchase. It virtually eliminates the risks in the customer’s mind that are associated with the purchase of anything new. Compared .

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to other promotion alternatives, free samples are the most expensive to implement. A cost benefit analysis is necessary prior to choosing the free sample option.

9. The elements that contribute to the success of a contest include: significant investment in media advertising to create awareness and interest; the inclusion of in-store merchandising material to generate interest at point-of-sale; and a prize package that is structured so that interest and perceived value among consumers is maximized. Do it right or don’t bother doing it, is the mantra of many contest planners.

10. The objective of a consumer premium offer is to provide added value to a product. The added value is another form of product differentiation even if only available on a temporary basis.

Including collectable Simpson’s characters inside boxes of Kellogg’s cereal provides added value. It attracts new and present consumers who like the characters.

11. Loyalty programs foster better customer relationships due to the “rewards” aspect of the program.

The information collected about consumers and their purchase tendencies provides input for creating future marketing programs (database marketing at work). They also add to the costs of a business in terms of additional employees and computer systems requirements.

12. Trade allowances, performance allowances and cooperative advertising are designed to achieve different objectives. However, if they are used in conjunction with each (a coordinated effort behind a brand) it will lead to better results (higher unit volume sales in the short-term).

13. A spiff is a deal in which a retail representative is encouraged to recommend a specific brand to a customer because of an incentive offered to the retailer by the manufacturer of the product. A dealer premium is an incentive offered to a distributor by a manufacturer to encourage the special purchase of a product or to secure additional merchandising support. Collateral materials are visual resources provided by sales representatives to assist in the sale of a product. Point-ofpurchase material includes posters, channel strips, shelf talkers and other in-store signage that draws attention to a product.

Discussion and Application Questions 1. Assuming adequate funds are available in the launch of a new snack food, the initial emphasis will probably be on advertising and trade promotion. Advertising is essential for creating awareness among consumers and trade promotions are essential to ensure widespread distribution quickly. Trade promotions can also be used to lower the price initially to encourage trial purchase. If an incentive is necessary, the distribution of small-size samples represents good opportunity. Samples could be distributed at point-of-purchase (e.g., open samples at a display table). Students will have other suggestions.

2. Students will probably find that trade promotion spending is a controversial issue and that manufacturers feel they are spending too much in this area. Control in the channel of distribution has shifted to distributors and away from manufacturers over the past twenty years. Due to this “loss of control,” manufacturers now spend much more on trade promotions, as a percentage of their total marketing budget, than they did previously. The manufacturers feel they are spending too much on short-term activity at the expense of long-term brand building activity.

3. Consumer premium offers do encourage brand switching. The added value offered by the premium is an attraction to new users. In theory, the consumer may like the product quality and .

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decide to purchase it regularly (without other incentives) but a good many consumers revert to the product they like best or have always bought (habits are hard to break). Managers should not lose site of the fact that most promotions do have short-term objectives. The primary goal is to increase sales during the promotion period. You may also say there is no long-term without a series of short-terms, so promotion offers like a premium do play a key role.

4. Open your wallet. How many loyalty cards do you carry? How often do you experience the rewards offered by these cards? Much research has been done loyalty cards and it reveals that the sponsoring companies benefit the most from them. Sophisticated loyalty promotions such as Air Miles are nothing more than an elaborate database management tool. For most consumers, it takes considerable time and expense to reap any rewards from it. Meanwhile, participants are leaving a trail of information that marketers can use to get them to buy even more goods. There is also a trend toward cards that offer more immediate rewards (they are the real rewards programs). The intent of a rewards program is to keep a customer coming back for more. Consumers are tired of being offered incentives but not being able to capitalize on them.

5. Opinions will vary on the type of sales promotions best suited for the listed products. Trial incentives are best suited for the introductory and growth stages while repeat and multiple purchase incentives are best suited to the late growth and mature stage of the life cycle. Any form of trade promotion at any time is suitable for any of the products listed.

6. Tim Hortons is active in sales promotions. RRRoll Up the Rim is a very successful promotion that is executed annually. Customers look forward to this promotion (a chance to win a prize instantly) and it has a significant impact on sales during the promotion period. The promotion is supported with media advertising (television, outdoor, and in-store signs). Tim Hortons also promotes its annual “Send a Disadvantaged Child to Camp” promotion. This one day a year event sees all stores across the country donate the day’s coffee sales to the camp fund. Tim Hortons and its customers are participating in a worthwhile and socially responsible cause. Indirectly, this promotion helps build Tim Hortons image in the community. Other promotions could be mentioned in this question.

7. Rebate programs in the automobile industry are a big issue with manufacturers. Essentially, the manufacturers have created their own problem. They have overused rebates to the point where consumers will wait for a rebate on the car they are interested in buying. Why pay full price when a rebate is just around the corner? This was not the original intent of rebate programs. Rebates add to the cost of all automobiles produced so one way or the other consumers are paying for their rebate. Manufacturers would love to get out of the rebate business and once again focus on building band image for all of their product lines. Students will uncover many issues on this topic in their secondary research.

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Chapter 9 Public Relations Learning Objectives Students will be able to: 1. Identify and assess the various roles of public relations communications in achieving marketing and business objectives.

2. Describe the various steps in the public relations planning process 3. Identify and evaluate various public relations execution techniques for potential application in public relations plans 4. Identify and assess the various techniques that evaluate and measure public relations strategies.

Chapter Highlights Public relations is often misunderstood and linked to the negative situations that an organization confronts. It is closely associated with words like “spin” as in what is the PR spin on the situation. If used properly however, public relations can be a powerful and persuasive form of communications and it can be used to promote positive organizational situations. The growth of digital information and social media has elevated the importance of public relations in the marketing communications mix. Technology is also changing the way public relations is practiced. The use of public relations is growing for almost every organization; corporate, public, and not-for-profit engage in public relations.

A. Defining Public Relations Public relations is a form of communication designed to gain public understanding and acceptance.

Public relations uses publicity that does not necessarily involve payment. Public relations help build rapport between an organization, the media, and the various stakeholders of an organization.

An organization’s publics may be divided into two groups: Internal publics involve those who the organization communicates with regularly and include employees, distributors, suppliers, shareholders and customers. External publics are more distant and communicated with less often, and include the media, governments, prospective shareholders, the financial community, and community organizations.

Except in the case where a company posts messages directly on their websites and social media sites., public relations is not controlled by the company. An organization must appreciate that the media acts as a “filter” and reports part or all of the information provided by an organization. In addition, consumers now post comments on brands, rendering “word-of-mouth” viral.

B. The Role of Public Relations Public relations can perform several key roles: 

Corporate Communications – A company likes to communicate “good news” about itself. Corporate advertising, a paid form of advertising designed to convey a favourable image about the company, .

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shows the good things an organization is doing. For example, it may talk about the social responsibility initiatives that the company has undertaken. Issue management involves corporate communications about how a company stands on a particular issue. The economic downturn and some of the resultant corporate scandals of 2008 and 2009 have resulted in an increase in public relations activities by affected organizations. Public relations specialists must be skilled in dealing with “bad news,” and being able to anticipate and interpret public opinion. 

Reputation Management – When a company is in the headlines for all the wrong reasons, public relations communications are vital. Carefully planned and executed campaigns play a key role in crisis situations. They can reassure the public that all necessary actions and precautions are being taken. The goal is to manage the company’s reputation through the crisis. Being prepared is critical!

Figure 9.2 offers tips for handling a crisis situation. Maple Leaf’s handling of the 2008 listeriosis crisis is used to show that decisive action and transparent communications can help to minimize the impact of a scandal. See IMC Highlight Maple Leaf Effectively Manages Crisis for more details.

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Product Publicity – Publicity is newsworthy information about an organization, product or service, or a person that appears in the print and broadcast media. It may include news about a discovery, securing a significant contract that will create new jobs, or celebrating success. Publicity is but one aspect of public relations. It can play a very important role. The Oreo example (Figure 9.3) provides an example of how Kraft used product publicity to celebrate Oreo’s 100th anniversary.

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Product Placement and Branded Content – Product placement refers to the insertion of a branded product in a television show, movie, or video game. Product placement may be positioned as a form of product publicity or as an alternative to media advertising. During one year, Apple products appeared 1000 times on television shows and 40% of top grossing movies. Value is gained when a branded product gets live exposure on a show. Branded content weaves the brand name right into the storyline of the show. TD Canada Trust was carefully written into the script of 3 shows, Being Erica, Heartland, and Little Mosque on the Prairie. The bank was put in a positive light by actors on the show.

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Product seeding occurs when a product is given to a group of trendsetters who in turn promote the product to whoever asks about it. This is often referred to as word-of-mouth marketing. Many companies are creating “WOM” for new products by simply putting them on the street—people start talking! This has been particularly the case lately, as brands are using trendsetters or influencers who spread opinions about brands through social networks. An example of this was demonstrated at the Toronto International Film Festival, where George Clooney and Sean Penn were each given the keys to an Audi R8 and were seen throughout town at every special event driving the cars. This is great exposure for the vehicle and is powerful word of mouth for Audi. BMW chauffeured Fairmont Hotels & Resorts loyalty program members during their stay at a Fairmount hotel. This gave prospects experience with a BMW vehicle.

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Community Relations – Sensing the need for social responsibility and being committed to communities in which a company operates, companies are investing in community relations programs. Local and regional sponsorships of important community events help build a company’s image very quickly. Many organizations such as Tim Hortons and CIBC partner with non-profit organizations to help raise funds. This generates positive messages to the community about the company.

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Fundraising – In the non-profit sector, public relations is a key role in fundraising. National organizations like United Way (see Figure 9.5) use PR activities to help educate the public as to how funds are utilized.

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Internal Communications – Refers to a system whereby employers, employees, and colleagues share information and build mutual understanding. It is important to communicate internally to build employee morale.

C. Public Relations Planning Public relations plans are designed to fit into marketing communications plans and to meet organizational objectives. Unlike media advertising, a form of communications that the marketer pays for, public relations offers economy, since it is an unpaid for method of communications. If all components of the marketing communications plan work effectively together, the potential effectiveness of an organization’s message strategy is maximized.

Public relations plans are best left to specialists, though some companies do plan and prepare their own public relations campaigns. The planning process involves the writing of appropriate objectives, strategies and executions. 

Public Relations Objectives Objectives usually involve creating awareness, shaping attitudes, altering behavior, and engaging consumers. While these objectives are difficult to measure, the level of publicity generated by a plan can be measured. Message exposure is measured in terms of gross impressions. When a story appears in a newspaper or magazine, figures for circulation and readership can be gathered. For any plan to succeed the message must be delivered by the right medium. Depending on the nature of the news story, general media may be required to reach a broad audience or targeted media may be required to reach a specific target audience. Alternatively, publicity can be measured by its equivalent advertising value. Unilever created a dedicated website called “The Adrenalist” for Degree deodorant. Men were encouraged to visit with featured news, videos and hyperlinks of interest to men. This proved to be an engaging experience with more than 750,000 unique website visits within 4 months (see Figure 9.7).

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Public Relations Strategy PR messages provide for enhanced credibility. News stories about a company or brand seem more authentic than advertising messages. Media relations involve working with the media to enhance corporate image. Some companies now use blogs to their advantage. A blog is a website where journal entries (things written about a company) are posted on a regular basis and displayed in reverse chronological order. Companies develop their own blog to communicate favourable information.

The strategic role of PR should focus on how to best:    

Reach opinion leaders well in advance of the general public Maximize the news value of product introductions, advertising campaigns, and sponsorships Time public relations events to reinforce advertising and promotion campaigns Reach markets defined by demographics, psychographics and geographic location

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PR strategy should deal with informing and educating the public. Unlike advertising strategy there is much more time and space to tell the story. Sometimes a borrowed interest strategy is employed (see Figure 9.8 on Canadian Tire’s Jumpstart program). In such cases a related topic becomes the focus, for example, a company offering financial support of a worthwhile cause or community activity, should garner positive press. McDonald’s signing on as a lead sponsor for the Vancouver 2010 Olympic games is newsworthy, and generates valuable publicity for the company. Refer to Figure 9.10 for keys steps in developing a Media Relations Strategy. 

Public Relations Execution A variety of tools are available to communicate with various publics: 

Press Release – A document containing all the essential elements of a story (who, what, when, where, and why). Figure 9.10 offers elements of a good press release. Copies of the release are delivered to a list of preferred journalists or to a national wire service. It should also be posted on the company website.

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Press Conference – A gathering of news reporters invited to witness the release of important information about a company or product. A media kit is usually distributed at the conference. A media kit includes biographical information if relevant, a press release, historical fact sheets, a backgrounder, photographs, and copies of speeches. The kit gives the media much more information to assess before they report the story. The previously mentioned example of Maple Leafs handling of the “listeriosis” crisis highlights the important role a timely, strategic press conference can have on the handling of a public relations crisis.

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Web Site – Websites are becoming a staple public relations tool. It must be designed to provide essential information quickly (e.g., easy for a visitor to navigate). The website can be updated instantaneously so the very latest news can always be reported. It is common to post all press releases at a company’s website. Many brands have their own dedicated websites, or micro sites accessible from the company’s website.

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Newsletters – A newsletter communicates important news in a concise format. Since they are distributed with regularity (a predetermined schedule), it is an efficient medium for delivering messages to a specific audience. Organizations frequently have their own newsletter that is distributed to employees, and associations and community organizations often publish newsletters, that keep members and other interested parties up to date.

Newsletters are now distributed in a digital format.

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Booklets and Brochures – A booklet is a brand-sponsored, multiple page document that is distributed to consumers and other stakeholders (e.g., Campbell’s distributes recipe booklets via their website). Booklets like these encourage greater frequency of use for the products they promote. Streamlined versions of booklets are referred to a leaflets or flyers.

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Annual Reports and Special Interest Reports – An annual report typically documents a company’s financial status and other relevant information (e.g., social responsibility programs). Such reports are essential to attract prospective shareholders so they must present the company in the best possible light. Many organizations publish separate reports or special interest reports that focus on specific issues that are important to .

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customers. RBC Financial Group, for example, publishes annually, its Corporate Responsibility Report. See Figure 9.12 for further details. 

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Social Media – Social media tools such as blogs, YouTube, Twitter and Facebook have become increasingly important in marketing in general, and in public relations in particular. They allow stakeholders to share content, insights, experiences, perspectives and media itself, thus facilitating conversations and interaction online between groups of people. With the growth of social media, companies need to be more transparent while engaging consumers in the conversation. Blogs, can be particularly powerful. A blog is a chronological publication of information that anyone can create. In other words, it can also distribute unfavourable company information. Since a firm cannot control this situation it may establish its own blog to publish favourable company information. Blogs have changed the nature of public relations. Consumer content in a personal blog has just as much weight as information presented by a company through mass media outlets.

Consumers are in control; a new environment that companies must operate in. Blogs have the power to change the very nature of PR activity. For an example, see Figure 9.13.

Many companies now also have their own blogs to deliver relevant information.

Timeline and Budget As in any other plan, all public relations activities must be scheduled for implementation and coordination with other activities. A new product launch, for example, will involve many different forms of marketing communications—timing is critical! All costs of public relations programs must be accounted for in a budget.

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Measurement and Evaluation While public relations activities are difficult to measure, public relations agencies define measurement in terms of outputs, outgrowths, and outcomes: 

Outputs – Output measures involve tracking everything that is written and broadcast about a company and its brands (articles, news broadcast mentions, video coverage, etc.). An equivalent advertising value is placed on the media coverage.

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Outgrowths – Outgrowth involves determining if the target market received and understood the message. The collection of this information usually involves qualitative and quantitative marketing research.

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Outcomes – Outcomes involve measuring shifts in behaviour as a result of exposure to the PR message. Pre-campaign and post-campaign marketing research is necessary to measure outcomes. See IMC Highlight Apple’s PR Buzz for an example of a successful PR campaign.

D. Public Relations as a Communication Medium 

Advantages of Public Relations There are three essential benefits:

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Credible Source of Information – Messages delivered by a third party carry more weight with consumers. If the news is positive, it acts much like an endorsement.

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Impact on Sales – Third party endorsements by media personalities can have positive impact on sales (e.g., positive message exposure on prime-time television shows).

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Building Customer Relationships – Ongoing dialogue with customers and other stakeholders helps solidify relationships. A good PR campaign can break through the message clutter much faster than an advertising campaign.

Disadvantages of Public Relations There are two main drawbacks: 

Absence of Control – The media controls the message. The media doesn’t twist the facts but some times the reporting of a company’s message is incomplete. In a crisis situation the company’s message may be reported inaccurately or mislead the public—a situation that calls for even more public relations! This is particularly the case with blogs and social media, as mentioned earlier one has to actively manage your public relations in the new digital age, as both positive and negative news spread at great speeds through word of mouth channels.

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Waste – The constant challenge of catching the attention of editors (the media gatekeepers) is daunting. A lot of material flows into a newsroom but only a small portion of it ever gets used. Managers must recognize the waste factor and simply enjoy whatever publicity they get for their efforts.

Answers to End of Chapter Questions Review Questions 1. Media advertising is bought and paid for. The marketing organization controls the message.

Advertising is primarily used to build brand awareness, encourage trial purchases and repeat purchases and build a good image. Public relations involve communications that are not paid for (the exception being corporate advertising). The media controls the message and consequently only publish information they judge to be newsworthy.

2. Public relations has various roles: a) Corporate Communications – Advertising designed to create and sustain a favourable company image. b) Reputation Management – A form of communication that is necessary when an organization finds itself in a crisis (bad news) situation. PR helps reassure the public that action is being taken to correct the situation. c) Product Publicity – Communication that is designed to create favourable publicity and help promote a brand (e.g., the launch of a new product). d) Product Seeding – Also referred to as “word-of-mouth marketing” allows trendsetters to use a company product in the hopes of stirring up publicity for the product. .

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e) Community Relations – The sponsorship of community activities to show good corporate citizenship and social responsibility. An organization should tell a community what it is doing for the community.

3. Product placement is the insertion of a branded product into a television show, movie or video game. It is becoming popular in TV shows because audiences are paying less attention to advertising and watching TV less than they used to. Branded content is a situation where the brand is weaved right into the story line. Product seeding involves giving a product to a group of trendsetters in the hopes that it will create positive publicity and stir up interest in the product. It is becoming a common strategy for launching new products.

4. The key elements of a public relations strategy are setting goals and objectives, establishing a PR strategy, and following through with a well-executed list of activities. Execution includes press releases, press conferences, websites, newsletters, leaflets and brochures, annual reports, and special interest reports.

5. A borrowed-interest strategy promotes a newsworthy marketing activity that is related to the product. It could be a new sales promotion offer, a sponsorship program, or some community event.

6. A media kit is distributed at a press conference and usually includes copies of speeches, historical facts, a list of company officials, a backgrounder on the company, pictures, sample products, and other relevant information. The kit acts as a central source of information for media officials that attend a press conference.

7. A special interest newsletter is one that is distributed to lifestyle clubs, recreational clubs, and like organizations and associations. The goal of the newsletter is to keep members up to date on organizational happenings. A special interest report is usually a report issued by an organization that focuses on one specific activity. A social responsibility report, for example would be classified as a special interest report.

8. Outputs measure the transmission of a message in terms of exposure, placements and audience impressions. Outgrowths measure audience reception and understanding of the message.

Outcomes measure attitude and behavioural change among those receiving the message.

9. Public relations advantages include: it is a credible source of information and has stronger impact on consumers than advertising does; it can impact sales when an independent party (the media) says good things about the product; and it can help build sound customer relationships through ongoing communications at relatively low cost. The disadvantages of public relations include: the lack of control by the organization sending the message, so it is possible that the media could mislead or misrepresent the message to the public; and the media can quickly dismiss the information even though the organizations sending the information thinks it is important—this leads to a lot of waste in terms of time, energy and materials.

Discussion and Application Questions 1. Students will probably conclude that public relations will play a larger role in the future. Factors such as management accountability, shrinking marketing communications budgets, shifting media patterns among consumers, and the need for organizations to constantly be communicating with various audiences are trends that public relations will benefit from. .

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2. These new PR techniques are here to stay. With regards to product placement and seeding, they are responses to the newly fragmented media landscape. Consumers are avoiding watching traditional TV advertising with the use of VCR, DVR/ PVR technology, or by watching ondemand video online. Product placement and seeding appear in the actual entertainment content, the show or the movie, so there is a much greater chance that they will be viewed. As per social media communications, the many tools that we have outlined in this chapter such as blogs, YouTube, Facebook and Twitter, are likely to grow in importance. Advertising and public relations spending is increasingly being moved to online resources, and there is no sign that this trend is abating. This is particularly the case as tech savvy Gen Y and Gen X professionals start to take over the leadership positions in many of the world’s largest and influential organizations, with the impending retirement of the Boomer generation. Review the IMC Highlight Apple’s PR Buzz.

3. Moderation of a company website and social media channels will, and has already become an everyday activity for many organizations. Public relations professionals need to be tech savvy, and need to stay on top of the constant evolution of the Internet and social media channels for communication. It used to be that public relations professionals were primarily consumed with managing media and primary stakeholder response to publicity, but today, the Internet and social media provide the medium for anybody to spread positive or negative word of mouth on your organization. So yes, the landscape has changed.

4. By analyzing the Facebook pages of two competitive brands in the same market, students will gain a stronger understanding of the value of public relations at various PLC stages. Students can appreciate the role of PR in the pre-launch stage of a new product introduction: to build demand prior to the product being available. Movie producers do this all the time and it works! Students will explore many examples of products using Facebook as a PR tool. The purpose of this question is to have students evaluate competing social media activities. Their opinions will vary but they should be able to state why one company is more effective than the other.

5. By visiting the press release section of a company’s website, students will start to appreciate the role that public relations can play. By analyzing the press release information, students will get a clearer understanding of the importance of PR tools. Through this website research, students will see how PR can be an effective medium for delivering all kinds of news about the company and its products.

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Chapter 10 Experiential Marketing, Events, and Sponsorships Learning Objectives Students will be able to: 1. Explain the role and importance of event marketing as a vehicle for building relationships with customers 2. Explain the importance of event marketing and sponsorships in contemporary marketing 3. Differentiate among the various forms of event sponsorships 4. Evaluate the role of event marketing in the marketing communications mix 5. Assess the criteria that a marketing executive considers before participating in event marketing and sponsorships 6. Identify and assess the various evaluation techniques that determine the effectiveness of event marketing and sponsorship activities 7. Describe the steps in the event marketing planning 8. Evaluate various marketing strategies for making an event successful 9. Identify and explain the key elements of event marketing execution

Chapter Highlights Traditional forms of marketing tend to bombard consumers with messages, and they are used mostly because of their extensive reach and frequency. In many of these mediums, the communication is nonpersonal; hence there is not a true connection between the brand and the consumer. Experiential marketing, however, focuses on giving a target audience a brand relevant customer experiences that adds value to their lives. When used effectively it’s a dialogue between the brand and the consumer.

Experiential marketing is a form of marketing that creates an emotional connection with the consumer in personally relevant and memorable ways. Although a new term, experiential marketing is not new. It includes product sampling, special product promotions, public relations, product seeding, and special events.

In terms of investment, marketing budgets are shifting towards engagement oriented activities. Marketers are particularly increasing marketing budgets on social networking activities. Social media can play an important role in getting consumers to experience a product. Brands encourage digital participation by posting product demonstrations, and other interactive content on YouTube, Facebook, and other social media. Many of these social media sites also promote and communicate the events. Events are the centerpiece of an experiential marketing campaign. Examples of events are product launches, trade shows and customer appreciation days. Refer to Figure 10.1.

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One key element of experiential marketing is shopper marketing. Shopper marketing involves understanding how consumers behave as shoppers in all channels (retail, catalogue, and online), and then targeting these channels with appropriate marketing communications to enhance the sales of a brand.

Shopper marketing is essential since 3 out of 4 purchase decisions are made in-store. Successful shopper marketing needs collaboration between supplier and retailer. Brand interaction and communication should be consistent across these three shopping environments.

See Figure 10.2 for additional, unique examples on experiential marketing.

A. Event Marketing and Sponsorships Event marketing and sponsorships are important components in many experiential marketing programs.

Event marketing is the process, planned by a sponsoring organization, of integrating a variety of communication elements behind an event theme. It involves developing, managing and promoting the event. Promotion is essential to build awareness, sell tickets, and to generate publicity. Molson Coors and Labatt include events in their marketing mix.

Event sponsorship is the financial support of an event in return for specified advertising and promotion privileges. For brands such as Nike and Adidas, sponsorship of FIFA World Cup soccer, national soccer teams, and star soccer players play an essential role in building sales and marketing share for their sports equipment and apparel. Large events usually have numerous sponsors; some who contribute more financial support than others. The larger the investment by the sponsor the greater the privileges granted.

The most recent information available suggests that the value of event marketing in North America is $20.6 billion (2014). The Canadian event marketing market is estimated to be $2.85 billion. Consumer packaged goods companies and automotive manufacturers are among the leading industries involved in sponsorships. Figure 10.4 shows leading sponsorship investors in North America.

Classifications of Event Marketing Event marketing is divided into five main areas: 1. Sports Marketing Sponsorship – Support of amateur and professional sports varies from global participation down to grassroots participation in local communities. In Canada, sponsorship investments account for 58% in sports, 16% in films and festivals, 5% in cause marketing, 4% in entertainment, and 1% in the arts. Large organizations such as banks and financial institutions, automobile manufacturers, oil companies, and beer companies are active in sports event marketing. 

Ambush marketing is a recent trend in sports marketing. An ambush marketer leaves an impression of being a sponsor by advertising near the event. Their presence confuses consumers as to who the actual sponsor is. Nike is an expert at ambush marketing dating as far back as the 1996 Olympic Games in LA. At the 2012 Olympic Games in London, Adidas paid $155 million to be an official sponsor. However, Nike upstaged Adidas by having athletes wear their Nike brand clothing. Read IMC Highlight All Is Fair in Love and Sport for more insight into ambush marketing and its merits.

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Venue marketing or venue sponsorship is another hot trend. This involves naming rights to sports facilities for considerable sums of money (e.g., Air Canada Centre and .

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Bell Centre). Another trend is value-added sponsorships. This usually involves sponsorship of a prominent participant in a sports event Reebok has invested heavily in Crosby hoping he will help build their hockey business (see Figure 10.9).

2. Entertainment Sponsorships – This involves company and celebrity relationships among high profile entertainers and events. They are and are very popular with companies wishing to reach younger audiences (e.g., Molson and Pepsi wanting to reach 19- to 14-year-olds at rock concerts).

Opportunities in this area include film festivals and a variety of television sponsorships (e.g., the Academy Awards has an audience of 40 million in the US alone – an audience that is 62% female. It’s also affluent and well-educated, an ideal fit for sponsor brands such as Apple, Samsung, and JC Penny.

3. Festival and Fair Sponsorships – Festivals that embrace film, theatre, and comedy are enticing as they reach a cross-section of adult audiences. Sponsors get to hobnob with the stars when involved in this activity. Sponsorship revenue for the Toronto International Film Festival (TIFF) averages $4 million annually, with the top sponsor spot occupied by Bell Canada. Festival organizers may tailor a sponsorship package to meet the specific needs of a potential sponsor. In other words, different sponsors have different objectives and need to leverage the event in different ways.

4. Culture and the Arts Sponsorships – This area embraces dance, film, literature, music, painting, sculpture and theatre. Audience size is the differentiating feature of cultural sponsorships.

Typically, the audience is smaller but more upscale so it is attractive to marketers of luxury goods (e.g., luxury automobiles such as BMW and Infiniti) and financial services companies (e.g., RBC Financial and others). Arts and cultural sponsorships generate goodwill for the sponsor. The public perceives such sponsors as good contributing members of the community. Most firms view this type of sponsorship as strategies for reaching their corporate citizenship objectives.

5. Cause Marketing Sponsorships – This involves supporting issues that are important to the company and its customers. Companies often do marketing research to determine what issues are paramount among its customers. CIBC, for example, supports “Run for the Cure” and Bell actively markets the “Let’s Talk Day.” Bell Canada is a good example of a company supporting a worthwhile cause of reducing the stigma associated with mental illness (see Figure 10.11). Both these above mentioned cause marketing programs are fully supported by media advertising that encourage the public to participate or give.

6. Television Sponsorships – Ongoing sponsorships on TV shows can also be added as a 6th element in the sponsorship mix. Television sponsorships represent new opportunities with the waning impact of the 30-second TV commercial. One of the hottest sponsorship properties in Canada is on Rogers Sportsnet channels and TSN regional hockey broadcasts. Hockey is a natural fit for companies such as Molson, Canadian Tire, Scotiabank, and Tim Hortons.

C. Strategic Considerations for Participating in Event Marketing Generally when companies are considering an event sponsorship, they aim to achieve two goals – the first is creating a favourable impression with their target audience, and the second being audience engagement with their brand. An important consideration is “fit.” The event is a good fit if it enhances the reputation of the company and the consumer’s awareness of the brand. Event sponsorship is a vehicle for building brand awareness and enhancing the reputation of a company or brand. Several considerations should be examined before jumping in: .

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Select Events Offering Exclusivity – Direct competitors must not be involved. Also, if there are too many sponsors, the value of the sponsorship is diluted. Many companies signing a sponsorship deal for an event are looking for exclusivity. For example, as a major, ongoing sponsor of the Olympic Games, McDonald’s shuts out all other fast food restaurants from the event. Sponsors should be prepared for possible ambush marketing, and anticipate competitive promotional tactics to combat the profile they have gained from such a sponsorship.

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Use Sponsorships to Complement Other Promotional Activities – The event must fit in with advertising and promotion strategies. Tire companies and oil companies are a natural fit for automobile racing sponsorships as cars and speed may be part of advertising messages placed elsewhere. In the months preceding the Super Bowl game, PepsiCo leverages their sponsorship of the Super Bowl with advertising of a Super Bowl contest associated with their Pepsi-Cola and Frito Lay brands.

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Choose the Target Carefully – Make sure the event reaches your target. For example, symphonies reach older, upscale targets while rock concerts reach younger audiences. Matching the target is more important than the size of the audience.

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Select an Event with an Image that Sells – Can you benefit from the prestige and status of the event? The Olympics are a global event and very suitable for a global marketer such as Coca-Cola or Visa. They reap positive publicity from this association. The event and the products that sponsor the event should have comparable images.

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Formalize Selection Criteria – Determine the long-term benefits and assess them against the shortterm costs. Events come and go quickly! It is wiser to be associated with an event that is popular and long-term. Objectives for such things as brand association with the event, image improvement, and sales should be determined in advance of the event.

For insight into how companies make sponsorship decisions, refer to Figure 10.14. Also, refer to IMC Highlight Hockey Star Subban in Demand for insight into why leading brands see P.K. Subban as an ideal sponsor partner.

D. Measuring the Benefits of Event Marketing Despite large sums of money spent on event marketing, true results are difficult to measure. However, the same can be said for a lot of other forms of marketing communications. Primary research in the form of pre-event and post-event measures may be necessary to gauge effectiveness. Some indicators of effectiveness include the following: 

Awareness – Do people recall the event sponsor and is there an association of the brand with the event?

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Image – Was there a change in image among the target audience based on event participation?

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New Clients – Did the event produce a new list of customers?

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Sales – Did sales or market share increase in the post-event period?

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Target Reach – Did the event delivery constituency? Reaching the desired target in small numbers is more important than reaching a large audience that is not part of the target. .

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Media Coverage – What editorial coverage was generated? A common benchmark in sports event marketing is 4:1, meaning $4 in coverage for every $1 invested in the event.

Successful sponsorships are integrated seamlessly with corporate marketing and marketing communications plans.

E. Planning the Event Planning an event is an exhaustive process so the task is best left to a specialist. An organization’s primary role is to identify the objectives, the target audience and the timing. How much money is available to plan and promote the event is another consideration. The event planner’s role is to stage the event, have adequate and trained staff available, ensure that operations run smoothly, and be prepared on safety and security issues. Figure 10.15 outlines the experiential marketing and event planning process. 

Event Concept Development – The initial planning stage involves concept development. The event’s purpose must be established. Will the event inform or entertain prospective clients? The purpose will have an impact on the tone and style of event. For example, a trade show is very different from an annual fair such as the Calgary Stampede. The theme of the event is linked to the purpose and should consider the needs of the audience. The next consideration is venue. Will the venue be a traditional setting or someplace unique? Technical issues such as sound and lighting will influence the venue decision. Financial resources must be considered immediately. Event planners make quick decisions based on the funds that are available. Finally, timing is considered. Some events are held at the same time each year while others are linked to the season or the weather. Time related factors include season, day of week, time of day, and duration of the event.

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Designing the Event – With the concept in place, attention turns to design. The text gives an illustration for designing a business conference. Design considerations include venue, room layout (for various functions, see Figure 10.20), how to employ technology, managing food and beverage requirements, dealing with external suppliers and ensuring adequate numbers of hotels rooms are available.

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Setting Objectives – Quantitative objectives are needed to justify the financial investment.

Objectives may relate to the size of audience reached, the ability to reach a specific audience (the quality of reach), sponsor recognition levels, sales of sponsor products, the economic impact of the event, and profit. A direct link to sales is not possible but it may be possible to measure changes in awareness or intent to purchase based on attendance at an event.

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Planning Tools – The initial stage of planning is the proposal. See Figure 10.17 for key elements of an event proposal. The proposal identifies the objectives and details about organization, layout, venue, technical requirements, and any other key considerations. A timeline chart is a vital planning tool. The timeline indicates when various planning activities start and finish. A schedule of daily events, often called a run sheet, is also essential. Figure 10.18 identifies a sample run sheet for the Ontario Colleges’ Marketing Competition, November, 2002.

F. Marketing the Event Marketing an event is no different than marketing a product. An event requires strategic use of the marketing mix:

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Product Strategy – Features and benefits of the event are identified in order to attract the desired target audience. Why should someone attend? This question must be answered. What will motivate the target to want to participate in the event?

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Pricing Strategy – Price plays a role in motivating attendance. Charge too much and the value is questioned. Charge too little and the value is questioned. The price-value relationship has to be perceived as fair. Pricing an event is much like pricing a product – considerable psychology is involved. How people purchase the tickets must be considered as well, and as such a plan for purchasing of tickets is also important.

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Marketing Communications Strategy – Initial communications decisions are branding decisions (e.g., name, logo, color scheme, and image). A consistent presentation results in a “branded” look for the event. Advertising strategies are based on the target market profile and how best to reach the target given the resources available. The content of the message and the style of delivery are such that it will motivate the audience to attend. The size of the media budget dictates media decisions.

Many events also have sponsorship partners who help defray operational costs. The sponsor’s brand advertising and promotion strategies are often tied to the event and help create awareness and interest in the event. Public relations play a role in generating publicity for the event. Appropriately timed press conferences and press releases help build pre-event publicity. See Figure 10.19 for an illustration of an event (the Rogers Cup) where a brand with a branded look appears in all forms of communications.

G. Event Marketing Execution Execution involves specific details and planners usually work from checklists to ensure that all activities occur on time. 

Site Selection and Staging – The scene of the action (the stage) is determined based on considerations such as theme, sound and lighting requirements, and availability of essential services (e.g., food, accommodation, technical support and venue management experience). The venue should also be consistent with the event’s purpose and theme. See Figure 10.10 for information on variety of room layouts that an event planner can choose from.

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Staffing – How many people are required to make the event a success. Organization charts that outline roles and responsibilities are needed in the pre-event, event, and post-event stages.

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Operations and Logistics – Everything must start and finish on time. Event set-up is referred to as bump-in and involves setting up structures and facilities required for the event. Logistics is about getting people and equipment into the right place at the right time so things run smoothly. The process of tearing everything down is called bump-out.

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Safety and Security – There must be a plan that considers crowd behaviour and methods for controlling crowds should the need arise. Risk management plans for major events such as Grand Prix racing need to prepare for nearly every eventuality. This includes managing crowd behaviour and controlling crowds should the need arise. Everyone at an event, including participants, volunteers, and staff must feel safe.

Answers to End of Chapter Questions

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Review Questions 1. Marketing communications activities include all forms of promotion and any kind of interaction that a consumer or business has with your brand. Experiential marketing pertains specifically to a consumer or businesses interaction with your brand that utilizes one or more of our five senses.

The goal is to create a unique, memorable and hopefully emotional connection with the consumer which creates a positive impression of that brand in their mind. The key benefits are that it is truly interactive and engages your target audience with your brand directly.

2. Shopper marketing involves managing a consumer’s experience across all retail mediums.

Shopper marketing ensures that consumers are engaged, and that they are having a positive, consistent retail experience with your brand no matter the medium.

3. Event marketing involves, planning, managing and promoting an event whereas sponsorship only involves paying a fee to be part of an event and get advertising privileges in return.

4. Ambush marketing occurs when a sponsor places advertising (usually a lot of it) near an event that is being sponsored by a competitor. The presence of the ambusher instills some confusion into the minds of consumers to the point they may not be sure which brand is the actual sponsor.

Compared to the high cost of sponsoring big events, this is a cost-effective way to reap marketing benefits. Some believe such a practice is unethical.

5. The main classifications of event marketing are sports marketing; entertainment; festivals and fairs; culture and the arts; cause marketing; and television sponsorships. Refer to the chapter highlights section for a brief description of each.

6. The basic criteria to consider prior to participating in event marketing include: is there exclusivity; will the sponsorship complement other advertising and promotions; will the event reach the target; does the event have an image that sells; and will it help achieve sales and market share objectives.

7. Some common measures of event marketing effectiveness include: awareness improvement (association with the event), image enhancement, ability to attract new clients, increases in sales and market share, ability to reach as specific target, and media coverage (publicity generated by the event).

8. The basic steps in the event marketing planning process include: developing the event concept (purpose, theme and venue, financial resources, and timing); designing the event (venue, layout, food and beverages, suppliers, and hotel rooms); setting objectives; developing an event marketing strategy (applying the marketing mix to the event); and marketing execution (schedules and timelines to ensure everything happens on time).

9. When developing the event concept, the key decision areas include: defining the purpose of the event; establishing an event theme that can be marketed to the intended target; selecting the right venue; identifying adequate resources so that the event will be successful; and timing the event to maximize participation.

10. When designing the event the key decision areas include: determining who should attend (there could be a variety of targets); making sure that the venue meets all expectations (location and facilities available); ensuring that the layout of all rooms meets expectations and that technology .

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is available); and ensuring that proper and experienced suppliers can meet demands in the time frame provided.

11. A proposal includes the objectives of the event, details about organization, layout, venue, technical requirements, and any other key considerations. A timeline chart indicates when various activities start and finish. The timeline chart is an essential tool in the planning stages (it constantly changes). A run sheet is a schedule of daily events that shows the dates, times, and locations of all activities.

12. Defining the event involves product related decisions. An event is much like a product so unique selling points and benefits must be determined. The benefits are used in marketing communications strategies and executions to attract potential participants to the event.

13. A key decision is site selection, when the site is selected based on the size of the event; the suitability of the site for planned activities; the primary field of play (where main event is planned); the availability or proximity of accommodations, food and attractions; and the availability of technical support. Staging involves the layout of the event. Staffing usually involves the use of paid staff and volunteers and determining the roles and responsibilities of all staff involved in the event. Operations and logistics involve allocating time for proper set-up (bump-in); executing the event smoothly; and tearing down materials after the event (bump-out).

Safety and security is concerned with implementing the event with a minimum of disruption and ensuring that all participants and staff are in a safe and protected environment.

Discussion and Application Questions 1. Students should uncover some good reasons why a company should be involved with causerelated event marketing. For certain it helps promote goodwill and presents a solid and desirable corporate image. Many people don’t perceive big business in a favourable light, but the facts show that businesses do make a very worthwhile social contribution to society.

2. Answers to this question will vary. It could be a big waste of money, particularly if the celebrity fades fast. Benefits for Reebok to sponsor Sidney Crosby include building Reebok’s hockey business, increasing the value of the Reebok brand, and reinforcing the Reebok slogan “I am what I am.”

3. Responses to the mix and match question (company with type of sponsorship) will vary. Ask the students to provide an explanation for their choices. Also, remind students that the “fit” is the most important factor. Sometimes small sponsorships that reach the intended target specifically are much better than large scale events that go well beyond the target profile.

4. Responses will vary. Ensure that the students develop both qualitative and quantitative objectives. Also, evaluate the recommended strategies and tools to achieve awareness and interest in the event.

5. Experiential marketing aims to create an emotional connection with the consumer in a memorable way and involves the use of product sampling, product promotions, product seeding, special events, and public relations. Students should be able to develop a reasonable list of strengths and weaknesses and can determine situations when such promotional strategies are worthwhile.

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Chapter 11 Personal Selling Learning Objectives Students will be able to: 1. Understand the role of personal selling in retail, business-to-business, and direct selling environments and its relationship to integrated marketing communications.

2. Describe the evolution of personal selling strategies and evaluate the role that relationship selling plays in integrated marketing communications programs.

3. Identify the human variables that contribute to the successful application of personal selling strategies.

4. Learn how to apply this knowledge to a variety of personal selling situations.

5. Identify the fundamental roles and responsibilities of a sales representative.

6. Identify the essential steps in the selling process and the key elements required for preparing a successful sales presentation.

7. Assess how selling strategies need to adapt to a changing business environment.

Chapter Highlights Various components of the marketing communications mix are impersonal in nature. They rely on various media to deliver a message. Personal selling is the exception. It is dependent on a salesperson to deliver a message. Personal selling is a key ingredient in any organization’s plan to build a customer relationship management program.

See IMC Highlight The Personal Touch, a new feature story which demonstrates the role that selling, personal interaction, and service have on customers of Harry Rosen, a successful men’s fashion retailer.

A. Personal Selling and Integrated Marketing Communications Personal selling is a personalized form of communications that involves sellers presenting the features and benefits of a product or service to a buyer face-to-face in order to make a sale.

Personal selling is divided into three main areas: retail selling, business-to-business selling, and direct selling. See Figure 11.1 on the classifications of personal selling. 

Retail Selling – This type of selling involves transactions on the sales floor of a department store, at an insurance agent’s office, or the service desk of an automobile dealer, to name just a few examples.

The quality of service provided and the degree of satisfaction held by the customer influences whether the customer will return. Since the goal is repeat transactions it is in the best interests of the retailer to foster good relations with customers. Loyal customers produce profit! .

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Business-to-Business Selling – A form of selling where salespeople sell products for use in the production and sale of other products, or sell products to channel members who resell them. Field sales force is a company’s external sales representatives who are thoroughly trained and prepare the presentation in advance of making calls. They make presentations to current and prospective customers and provide ongoing customer contact in order to establish a good business relationship.

An inside sales force, often referred to as order takers are often used by B2B sellers as well.

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Direct Selling – A form of selling that employs the telephone or the Internet as the medium for delivering the presentation. Telemarketing techniques are now commonplace in B2C selling and B2B selling. Telemarketing is popular with companies because it reduces costs (e.g., the cost of keeping a sales representative on the road). It is also useful for prospecting at the front end and building relationships in the back end of the selling process. Online selling refers to the use of websites for conducting business transactions. The B2B side of online selling is growing dramatically. In 2013, B2B sales rose to $138 billion, a 13% increase over the previous year. See Figure 11.2 for more information about the roles played by telemarketing in personal selling.

B. The Evolution of Selling Over the years, the nature of selling has changed and has moved through four distinct stages: 

Consultative Selling – This form of selling stresses open two-way communications between sellers and buyers. The seller probes the customer to determine needs and then develops a presentation to meet those needs.

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Strategic Selling – Advancing technology, higher customer expectations, and global sourcing of products and services moved selling into the strategic selling phase. Customers are treated as unique and the seller offers unique solutions to the customer’s problems. As the saying goes: “the business is built one customer at a time.”

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Relationship Selling – The goal is to develop a plan of action to establish, build, and maintain customers. It involves a long-term perspective on selling since relationships take time to build.

Success is based on how well the seller positions products in the minds of customers, how effectively they present the benefits, and how well they guard the relationship in the long-term. See Figure 11.5, for the key elements of relationship selling.

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Partnership Selling – This form of selling takes relationship selling and relationship management a step further. It is a strategically developed, long-term relationship that involves selling products, providing comprehensive post-sale service, and effective two-way communications to ensure complete customer satisfaction. The partnership must be prosperous for both parties. With so many companies offering so many good and similar products, sellers are focused on the relationship as a means of differentiation from the competition.

C. Personal Selling – The Human Communications Component To be effective, a salesperson uses several strategies and focuses on three primary areas: personal characteristics, verbal communications, and nonverbal communications. A well-prepared seller knows how to communicate verbally and nonverbally. 

Personal Characteristics: Salespeople are confident, flexible, and optimistic. They look for the positives and learn from their mistakes while moving forward. Good salespeople develop the proper .

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mindset: they have a positive self-image; they develop expertise in a certain area; and they develop a positive outlook. 

Verbal and Nonverbal Communications: Good salespeople have good verbal skills. They are generally comfortable addressing people. Nonverbal communication or body language is another essential aspect of self-confidence. Having positive body language plays a role in influencing how people respond. Looking buyers directly in the eye and having a firm handshake suggest confidence.

See IMC Highlight What Separates Successful Salespeople from Everyone Else? for more insight into these characteristics.

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Preparation and the Importance of Knowledge: Salespeople provide solutions. Product configuration is the bringing together of various products and services to form a solution for the customer. To do so requires advance preparation. Preparation is divided into three areas: product knowledge, company knowledge, and competitor knowledge. 

Product Knowledge – Product knowledge is classified into four areas: product development and quality improvement processes; performance data and specifications; maintenance and service; and price and delivery. The salesperson must be ready to answer all questions posed by the buyer.

As well, they must be able to draw comparisons with competing products when called upon to do so. Knowledge can be the point of differentiation in a sales presentation so the seller must be prepared!

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Company Knowledge – The salesperson is the company to the buyer. Therefore, the perceptions a buyer develops about the company are based on the attitude, style, and communications ability of the salesperson. Wise salespeople integrate company information into the presentation, especially information about service and the level of service provided and how the company is interested in forming business relationships and partnerships. Buyers often seek out suppliers that possess similar corporate cultures.

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Competitor Knowledge – A good seller knows the competitor’s product almost as well as his/her own. Talking about competitor products is difficult so the best policy is to be open and honest.

Avoid being critical since the customer may be doing business with the competitor. How a salesperson deals with competing products will influence a buyer’s perceptions.

D. Roles and Responsibilities of Salespeople There are several key roles for salespeople: 

Gathering Market Intelligence – In this role the seller must be attuned to trends in the industry. Data collected from all sources is reported back to the head office for appropriate consideration.

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Problem Solving – In this role the seller must listen attentively and respond to the needs of the buyer.

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Locating and Maintaining Customers – In this role attention is divided between searching for new customers while providing adequate service to retain current customers.

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Follow-up Service – The sale is never over! The relationship begins once the seller commits to appropriate and consistent after-sales service. The personalized role of the salesperson is instrumental in building relationships. .

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E. Personal Selling Strategies Selling is a sequential process involving the following 7 steps (see Figure 11.8). 

Prospecting – A systematic procedure of developing sales leads. Leads are usually obtained through referral or by cold canvas calling.

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Pre-approach – The process of gathering information about potential customers before actually making sales contact. Qualifying a customer is a procedure for determining if the customer needs the product, has the authority to buy it, and can pay for it.

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Approach – The initial contact with the prospect, usually a face-to-face selling situation.

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Presentation – The presentation is a persuasive delivery and demonstration of the product’s benefits.

Since buyers have different needs, a successful presentation is one that is flexible and adaptable to numerous situations. The seller must listen attentively to buyer’s responses and make adjustments to the presentation while in progress. Well-planned presentations include technology (where appropriate) and demonstrations. A good tactic is to let the buyer handle the product or the materials relevant to it. Such action gives a feeling of ownership and helps with the buying decision. See Figure 11.9 for useful reminders on planning a sales presentation.

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Handling Objections – An objection is an obstacle that must be overcome by the seller. It is a cue from the buyer that more information is needed. Salespeople should not take objections personally.

Being prepared for unexpected objections is a good rule to follow.

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Closing – Asking for the order. A good salesperson attempts a close whenever a point of agreement is reached with the buyer. If the attempt to close fails it is referred to as a trial close. Specific closing techniques are itemized in the textbook. A buyer usually gives the seller closing signals—something a simple as a nod or smile at the right time. The seller must close when such instances occur. See Figure 11.10 for a list of successful closing techniques.

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Follow-up – An activity that keeps the seller in touch with the buyer after the sale has been made.

The goal is to keep the customer satisfied. The level of satisfaction has a direct impact on repeat business and the formation of a mutually beneficial relationship.

For more insight on tips for successful selling, see Figure 11.11.

F. Selling in a Changing Business Environment The nature of selling is changing. To be successful an organization must consider the importance of teamwork, the importance of building long-term relationships with customers, and the importance of adapting to technologies that directly influence the selling process. Today, companies sell relationships with their customers, not products to their customers. Despite new technologies, customers still prefer buying from people they like.

Answers to End of Chapter Questions Review Questions

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1. Consultative selling stresses open two-way communication. The seller seeks information from the buyer and uses the information to develop a sales presentation. Strategic selling takes consultative selling a step further. It considers changing conditions in the market, the influence of technology, and focuses on serving customers one customer at a time. The goal is to remain flexible while providing unique solutions to each customer. Relationship selling involves a process that establishes, builds and maintains customers. It takes a long-term perspective and considers that good relationships create rapport, trust and respect. Relationships like this create new sales opportunities.

2. “Positioning the product in the customer’s mind” means that the right product must be presented to the right customer, the right way. A product must be differentiated so that the customer appreciates the unique value it offers. The key to positioning is knowledge, specifically knowledge of the customer. A good salesperson continually updates his or her files with customer information.

3. Partnership selling involves a strategically developed, long-term relationship that involves selling products, providing comprehensive post-sale service, and effective two-way communications to ensure complete customer satisfaction.

4. Personal characteristics that are essential for successful selling include a positive self-image, being self-motivated, and being flexible and optimistic even when confronted with difficult customers and situations. Nonverbal characteristics that influence buyers’ perceptions include things such as facial expressions, personal appearance, and manners.

5. Advance preparation depends on knowledge and knowledge in the right areas is crucial. A good salesperson is knowledgeable about the product, the company, and the competition. All three areas must be factored into a convincing sales presentation.

6. The primary roles of a salesperson are: to gather market and competitor information, to solve customer’s problems, to locate and maintain customers, and top provide follow-up customer service.

7. The steps in the selling process are prospecting, pre-approach, approach, presentation, handling objections, closing the sale, and follow-up service. An explanation of each is included in the Chapter Highlights section.

Discussion Questions 1. Technology is changing the nature of personal selling. Already much of the “personal” nature of selling is being removed by sophisticated forms of telephone selling and computers are eliminating the spoken word in favour of visuals and pre-planned audio-video messages. We can’t stop technology so sellers must continue to adapt to the changing environment created by technology.

2. Students will discover that partnership selling is very prevalent. The focus of business today is on customer retention strategies so anything to do with improving customer relationships plays a key role in generating profit. There is more profit to be made from existing customers than new customers.

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3. Follow-up is extremely important. “The relationship begins once the sale is made.” Wise salespeople devote an extraordinary amount of time to follow-up service programs in order to maximize customer satisfaction. A satisfied customer is a repeat customer.

4. The purpose of this question is to show students how personal selling strategies vary from one retailer to another. They may face “hard sell” tactics and “soft sell” tactics and can compare which approach is more effective. A retail environment where commission sales occur is often more pressure packed than an environment where salespeople work for hourly wages. Students should also look for comparisons in terms of needs assessment, approaches, presentation styles, closing techniques, and potential follow-up service. Answers to this question will depend on the nature do the interview conducted by the student.

5. The purpose of this question is to have students plan a sales presentation, and recognize the importance of being prepared (identifying potential probing questions to determine customer needs and objections that are foreseen). Substitute products can be added to the question to show how sales presentations can vary depending on the nature of product being sold. Also, different types of customers could be considered to show how a presentation varies from one customer to another.

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Chapter 12 Evaluating Marketing Communications Programs Learning Objectives Students will be able to: 1. Define the role and scope of marketing research in contemporary marketing organizations.

2. Describe the methodologies for collecting primary research data.

3. Distinguish between qualitative data and quantitative data.

4. Determine the influence of primary data and information on the development of marketing communications plans.

5. Assess the variety of marketing research procedures and methodologies that measure and evaluate behavioural responses to communications messages.

6. Identify the unique methods that measure the effectiveness of individual components of marketing communications.

Chapter Highlights A considerable sum of money is invested in marketing communications programs. Since managers are now more accountable for their investment in marketing communications there is a real need for evaluation and measurement. Carefully planned and effectively timed marketing research is a tool that provides organizations with the insight necessary to take advantage of new opportunities.

A. The Role and Scope of Marketing Research Marketing research can be viewed as a form of insurance. It helps ensure that an organization is making the right decisions and following the right course of action. Based on the data collected, for example, is this the best direction to proceed? Marketing research is the function that links the consumer, customer and public to the marketing organization through information. The information is used to define problems and opportunities, to generate and refine marketing strategies, to monitor performance, and to improve understanding of the marketing process. The Proctor & Gamble example outlined in the book talks about the role data gleaned from market research had on positioning Febreze effectively with its target market.

In this case, information discovered customers did not believe odours lived in fabric. A new marketing communications plan was developed around the idea that Febreze eliminates odours and freshens. The scope of research is very broad. In a marketing communications context research is used for:      

Seeking consumer insights (inputs for message consideration) Testing advertising for impact Tracking brand awareness Measuring customer satisfaction Pre-testing and post-testing advertising messages Measuring changes in behaviour .

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Marketing research data must be reliable (results are stringent) as well as valid (data measures what was intended). The experience and intuitiveness of the marketing decision-maker is added to the quantitative data collected through research.

B. Research Techniques for Marketing Communications When measuring the potential impact of messages on consumers, primary research is necessary. For the steps involved in primary research refer to Figure 12.1. 

Primary Research: This refers to the process of collecting new information, referred to as primary data. A research procedure is implemented that involves a clear description of the study’s objectives and hypotheses. The collection of primary data is a complex process, and it is frankly beyond the scope of many marketing organizations. Hence, most companies farm out market research to external service providers such as full service advertising agencies and market research boutiques.

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Objectives: These are statements that outline what the research will accomplish while hypotheses are statements of predicted outcomes.

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Sample Design: Researchers must identify the people they would like to participate in the study. This process is referred to as sample design. A sample is a representative portion of an entire population used to obtain information about that population. Several steps occur when developing the representative sample:

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Define the Population (Universe) – The characteristics of the respondents are described based on demographic, psychographic and geographic characteristics.

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Identify the Sampling Frame – The sampling frame is a list that can be used to reach the sample (e.g., a customer list, credit card list).

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Determine the Type of Sample – The researcher chooses between a probability sample and non-probability sample. In a probability sample respondents have a known or equal chance of selection and are randomly selected from the population. In a non-probability sample respondents have an unknown chance of selection. They are chosen based on factors such as convenience or judgment of the researcher.

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Determine the Sample Size – The larger the sample the more accurate the results. There must be enough respondents so that the data collected is statistically reliable. The manager must have confidence in the data when making decisions.

Data Collection Methods: Data is collected by surveys, observation techniques, and experimental research. Refer to Figure 12.2 for a summary of data collection methods. o

Survey Research – A survey provides a systematic and consistent method of collecting data. A variety of questioning techniques are used including fixed-response questioning (providing predetermined responses), open-ended questions, and screening questions (questions that ensure the right respondents are participating).

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Observation Research – A method that observes actions and reactions to situations. Respondents are viewed from behind mirrors, by hidden camera, or by electronic measuring devices. Cookies, for example, are a means of observing an individual’s behaviour online. Ford has used social .

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media such as blogs to observe online chatter about its products, and this information has allowed them to develop better marketing communications strategies. o

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Experimental Research – One or more factors are manipulated under controlled conditions, while other elements remain constant. Reactions to the changes can be monitored and evaluated.

Test marketing is a form of marketing research.

Qualitative Data and Quantitative Data Qualitative data are collected from small samples in a controlled environment. Data is often collected from a focus group, a group of 8 to 10 people with common characteristics brought together to discuss issues related to the marketing of a product. The word “focus” implies that the discussion concentrates on one topic or concept. Since the sample size is small, additional research may be necessary before making any concrete decisions. Qualitative research usually provides insights that can be used in quantitative research procedures.

Quantitative data puts feelings, attitudes, and opinions into numbers and percentages. Data is gathered using structured questionnaires and large sample sizes to ensure accuracy and reliability.

The interpretation of results is based on the numbers compiled.

Figure 12.3 draws a comparison between qualitative and quantitative data. With so much risk involved in major decisions about marketing communications, the wise marketing organization employs both forms of data collection.

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Survey Methodology Researchers choose between personal interviews, telephone interviews, mail surveys, and online surveys. Personal interviews involve face-to-face communications with focus groups or individuals.

Telephone interviews are generated from central locations under supervised processes. Mail interviews collect information silently using Canada Post as the means of delivering surveys. Online surveys are a less invasive means of collecting data and are proving to be less costly and timelier than other methods for collecting data. They are proving to be very effective in measuring new product concepts and feedback on advertising. Many organizations include surveys on their websites. See Figure 12.4 for the advantages and disadvantages of each survey method.

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Data Transfer and Processing In the data transfer stage answers from questions are transferred from the survey to the computer.

Answers are pre-coded to facilitate transfer. Data is tabulated. Tabulation is a process of counting the various responses to questions to arrive at a frequency distribution (the number of times each answer is chosen). Cross-tabulation is the comparison and contrasting of the answers of various subgroups with the total group responses.

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Data Analysis and Interpretation Data analysis refers to the evaluation of responses on a question-by-question basis, a process that gives meaning to data. Data interpretation involves relating the accumulated data to the problem under review and to the objectives and hypotheses of the research study. Interpretation uncovers solutions to problems, relating the information to the problem.

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Recommendations and Implementation The recommendations outline suggested courses of action that the sponsoring organization should take based on the data collected. The results are presented to the client in a report and a presentation.

C. Measuring and Evaluating Advertising Messages 

Client Evaluation: The first form of evaluation is usually a qualitative assessment by the client to determine if the message conforms to the strategic direction that was provided the agency. Clients using this managerial approach for evaluation may include some or all the following criteria: 1. In terms of content does the advertisement communicate the creative objectives and reflect the positioning strategy of the brand (company)?

2. In terms of how the ad is presented (strategy and execution), does it mislead or misrepresent the intent of the message?

3. Is the ad memorable?

4. Is the brand recognition effective?

5. Should the advertisement be researched?

This evaluation process can take place at any stage of creative development.

For additional insight on evaluating advertising messages, see the IMC Highlight Research Insight Sparks Scotia B Campaign.

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External Research Techniques and Procedures: Some of the more common research techniques include pre-testing and post-testing. Pre-testing involves evaluation before final production or media placement so that the strengths and weaknesses of the ad may be determined. Post-testing involves evaluating and measuring the impact of the message after it has run.

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Recognition and Recall Testing: To determine the impact of messages, recognition and recall tests are conducted. In a recognition test, respondents are tested for awareness—awareness of the ad and the brand in the ad. In a recall test, respondents are tested for comprehension—it measures recall of key selling points, characters used in the ad, and slogans.

Two specific research procedures for implementing recognition and recall tests are the Starch readership test and the day-after-recall test. In a Starch readership test, respondents evaluate print ads in three categories: o o o

Noted – the percentage of readers who remember seeing the ad Associated – the percentage of readers who saw any part of the ad that clearly indicated the brand or advertiser Read Most – the percentage of readers who read half or more of the written material

The Starch test is used to see if the ad is seen and read and evaluates an ads ability to break through the clutter of advertising. Ads with higher scores on the three criteria above do break through!

In broadcast media, the day-after-recall test (DAR) is conducted a day after message exposure by telephone survey. Respondents are asked for recall of specific information including primary selling message, what they like and dislike about the ad, and purchase motivation. The client can effectively assess if an ad was viewed and what was communicated. .

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Opinion-Measure Testing involves exposing an audience to a test commercial in the context of a television program (a simulated viewing situation). The test measures three key attributes: the audience’s awareness of the commercial based on brand name recall; the extent to which the main idea is communicated; and the effect the commercial could have on purchase motivation. This procedure is often referred to as a forced exposure test, a name that suggests its potential weakness: the artificial environment in which it occurs.

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Physiological-Response Testing: Advertisers also employ physiological testing techniques that measure involuntary responses. An eye movement-camera test tracks eye movement when participants are exposed to test ads—a hidden camera tracks the movement of the eye. A pupilometer test measures a person’s pupil dilation and how it changes based on emotional arousal.

Positive responses result in wider pupil dilation. A voice-pitch analysis test measures a change in voice pitch caused by emotional responses. The change in pitch indicates the degree of impact of the message.

Testing procedures and the results they generate are often controversial. Many creative directors believe too much testing defeats the creative process (e.g., it stifles creativity). They believe that “what people say in research and do in real life” can be completely different.

D. Measuring and Evaluating Direct Response Communications In direct response efforts, the numbers of inquiries received can be compared to past offers to determine effectiveness of a present offer or to forecast returns for a prospective offer. Response cards are another measure of impact and can collect information about consumers for future use (information that is added to the organization’s database).

E. Measuring and Evaluating Internet Communications In the online world, cookies track Internet responses. Cookies are an electronic identification tag sent from a web server to a user’s browser to track the users browsing patterns. Online observation is a common form of recording and analyzing usage patterns. Online advertising campaigns are typically measured based on impressions, clicks, and click rates. 

An impression (ad view) refers to the number of times a banner ad is downloaded.

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Clicks or clickthroughs refer to the number of times that users click on the banner ad.

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Click rate is the percentage of impressions that result in an ad click.

Most online advertising campaigns are designed to transfer a person from an ad to a website. Therefore, a campaign can be evaluated based on: 

Increase in web traffic

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Length of visit

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Page views

F. Measuring and Evaluating Social Media Communications People use social media to socialize not view advertising, as such low click rates are expected.

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There are two ways to measure social media communications: ongoing analytics (track activity over time), and campaign-focused metrics (generate hard and fast numbers that help justify the investment).

Numeric indicators involve: 

Reach – The number of likes on Facebook, followers on Twitter, video views, subscribers on a YouTube channel, and LinkedIn connections.

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Engagement – Proportion of users interacting with an ad.

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Share of Voice – How large a share of the conversation it has as compared to competition.

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Conversion – A measure of how many people took the desired action, after exposure to a message, i.e., e-mail subscriptions, registration for content downloads, and online sales.

The viral nature of social media is another means of measuring success.

See IMC Highlight TD Bank Takes Pride in Its Achievement, which illustrates how the bank’s Pride Week campaign was planned, implemented, and measured.

G. Measuring and Evaluating Sales Promotions Sales promotions are designed to increase sales in the short-term. A variety of alternatives are available for encouraging trial purchases, repeat purchases, and brand loyalty. Specific sales promotion measures include response rates to coupon offers, the number of cash rebate forms returned to a company, and the number of entries received in a contest. Redemption rates (number of coupons returned as a percentage of coupons distributed) are also evaluated. Beverage companies such as Pepsi-Cola, Coca-Cola, Coors Light, and Bud Light regularly employ a summer contest as a sales promotion. Marketing managers carefully analyze the results from these contests to identify the elements of the promotion that lead to higher degrees of interest on behalf of consumers. See Figure 12.5 for a detailed calculation of a coupon redemption rate in measuring the effectiveness of a coupon promotion.

H. Measuring and Evaluating Public Relations Communications A clipping service is often used to count the number of times a company (brand) is in the news. The number of times the company is mentioned can be evaluated against the number of press releases that went out. The number of impressions generated based on the circulation of the medium is another good measure. For example, circulation multiplied by the number of readers of the publication gives a gross impression figure. These kinds of measures involve positive mention of the company and negative mention of the company. Some believe that “any publicity is good publicity.”

Other PR measures include website traffic, social media mentions, and advertising equivalency, which translates the number of brand mentions and the space occupied by the public relations message into a similar amount of advertising. For example, a one-page article in a magazine has a value equal to the cost of one page of advertising. The true impact of public relations communications may involve precampaign and post-campaign research, but considering the expense this type of research is rarely done.

I. Measuring Experiential Marketing, Events, and Sponsorships The most common measure of an event’s success is determined by how well the event reaches the target audience and how well the brand or company is associated with the event. The true benefit of event marketing is media exposure, since sports events like hockey games are broadcast and covered by both traditional media (newspapers) and non-traditional media (digital media alternatives). The other benefits of sponsorship are measured based on awareness and association measures as well as changes in image .

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perceptions among customers. Pre- and post-event marketing research is necessary to measure changes in attitudes and perceptions. Another common measure is the impact on brand sales. The effect could be immediate (during the event) or in the post-event period. If the event doesn’t attract new clients or generate increases in sales in the longer-term, continued participation is not wise. Organizations carefully assess the strengths and weaknesses of different sponsorship relationships, and the costs and benefits associated with them.

J. Measuring the Integrated Marketing Communications Effort It is important to look at the bigger picture rather than individual components of the mix since it is a combination of all forms of communications that shape customer attitudes and brand sales.

An increase in market share indicates greater acceptance by more customers, more brand loyalty among present customers, and a strong competitive position. Marketing managers are responsible for producing sales while keeping cost and expenses at reasonable levels. Therefore, sales must be high enough to generate an adequate level of profit.

Every employee in an organization plays a role in providing customer satisfaction. Therefore, all employees must adopt a marketing attitude. Employees play a role in implementing communications strategies, particularly, personal selling strategies.

With regards to social responsibility objectives, public relations play a key role. Brand equity and company image are directly influenced by the quality of social programs. Research may be necessary to determine how the public perceives an organization on social issues.

Answers to End of Chapter Questions Review Questions 1. Research terminology: a) Research objectives are statements outlining what the research will accomplish. Hypotheses are statements of predicted outcomes. b) Observational research involves monitoring one’s activities in person or electronically.

Experimental techniques refer to studies where various stimuli are altered to evaluate their impact on consumers. c) Population refers to the description of the respondents that will participate in a survey.

Sampling frame is the means to access the sample (e.g., a list). d) Qualitative data are collected from small samples in a controlled environment. The data is subjective in nature and, therefore, inconclusive. Quantitative data are collected from large samples through various survey techniques. The data is objective in nature and is statistically reliable assuming proper sampling procedures have been followed. e) A probability sample means that respondents have a known and equal chance of selection.

The data such a sample produces can be statically evaluated for validity and reliability. A non-probability sample means respondents have an unknown chance of selection. They are chosen for reasons such as convenience. The data cannot be evaluated statically for validity and reliability. .

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f) A frequency distribution shows the number of times each answer is chosen for a question.

Cross-tabulation involves comparing and containing answers to a question among sub-groups in the sample. g) Tabulation is the process of counting the various respondents to each question. Crosstabulation is the counting of responses within sub-groups of the sample. Sub-group responses are compared to total group responses in the analysis and interpretation stage. h) Data analysis is the evaluation of responses on a question-by-question basis to give meaning to the data. Data interpretation involves relating the accumulated data back to the problem and objectives of the study.

2. The four steps in sample design are: define population (a description of potential respondents is identified); identify the sample frame (accessing a list to reach potential respondents); determine the type of sample (deciding if a probability or non-probability sample will be used); and determine the sample size (clarifying how many respondents will be needed to collect reliable data).

3. A focus group is a qualitative technique in which a small group of people with common characteristics are brought together to share their opinions on a specific marketing issue. The discussion is led by a skilled moderator.

4. A researcher can choose between telephone, personal interviews, mail, and online survey methodologies. The method chosen is based on three characteristics: nature of information sought, cost and time parameters and the respondent’s location. A telephone interview is used for a quick and brief interview in which simple questions are asked.

5. Pre-testing involves testing an advertisement before final production or media placement. Posttesting evaluates and measures effectiveness after an advertisement has run.

6. A recognition test measures awareness of something among respondents. A recall test delves deeper as respondents are tested for comprehension. Do they recall the brand, the characters, and the unique selling points?

7. The three categories of measurement in a Starch readership test are: noted (the percentage of readers who remember seeing the ad); associated (the percentage of readers who saw any part of the ad that clearly indicated the brand or advertiser: and read most (the percentage of readers who read more that half of the written material).

8. The primary ways of measuring the impact of social media communications are with campaignfocused metrics including reach, engagement, share of voice, and conversion. See Chapter Highlights for a brief explanation of each measurement.

9. The three primary ways of evaluating public relations include: comparing press clipping to press releases (the higher the percentage the more effective the campaign); calculating the number of impressions generated by mentions in the print and broadcast media; and advertising equivalency, a procedure that translates public relations exposure into equivalent advertising value.

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10. Event marketing is measured for success based on: how well the event reached the target market; awareness and brand or company association with the event; consumers’ perceptions of the brand or company due to their association with the event; and sales generated due to event participation.

Discussion and Application Questions 1. Opinions will vary on this question. Qualitative research allows a manager to act quickly if they have faith in the data collected. Otherwise, it is safer to proceed with quantitative research in order to confirm opinions that the qualitative research raised. From a competitive point of view there is a desire among managers to make decisions more quickly. If they delay they fear that competitors will act before them and take advantage of the situation. Some very good decisions have been made with qualitative data only.

2. Creative directors openly express their opinions about marketing research. Research has its place in the creative development process but it must not stifle creativity and there should not be too much information resulting in information overload. Students should discover a good crosssection of opinion on this controversial issue.

3. Online research offers great potential as they allow a company to gather information quickly in a less invasive and cost-efficient manner. Consumers tend to be more willing to divulge information on the Internet and this method is effective to test new ideas and concepts. On the downside, recruiting is a lot like fishing and the validity of information collected is questionable.

Many experts believe the Internet is the future of marketing research.

4. Many companies get involved with event marketing and sponsorships for its public relations value. It helps build a company’s image in the community and an emotional connection with participants. It is perceived as a very tangible and real form of marketing. The event is something real, something where potential customers congregate to have a good time. As a sponsor the company is part of that good time. It is very different from traditional means of communications such as advertising and sales promotion. They are intangible and less direct in terms of contact with customers. All forms of marketing communications offer value to a company. It is a matter of selecting the right combination for any specific situation.

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Case Guidelines and Instructions Case Studies – Some Thoughts on How to Use Cases Included in this section are a case study model and two different models for preparing a marketing communications plan (a detailed model and a streamlined model). You may also wish to refer to models in the textbook. There is no right and wrong way of preparing and presenting a marketing communications plan. Select an alternative that is appropriate for your students and your course.

Each of the cases can be completed using the standard case study format or by using the marketing communications plan format. Refer to both models that are included in this section. Each of these cases has been class tested. They work! Students will quickly identify with the various products and situations and will quickly see how they are marketed in Canada.

Naturally, cases become outdated as soon as they are written so it is assumed that you will instruct your students to conduct appropriate secondary research to update essential case facts. Each case provides some data about market size, sales volumes and market shares, but conditions in the marketplace change quickly as new brands, new trends, and other external influences enter the picture.

Each of the three cases requires as a minimum some blend of marketing communications to resolve the problem that is presented. In some cases, specific requirements are stipulated. Advertising will play a role in each case. The Instructor should review each case before hand to ensure it meets your requirements and expectations. You may choose to specify components of the marketing communications mix you would like the students to consider. It’s up to you! You have the flexibility to stay focused or grant true freedom to the student to see what unique communications ideas they come up with.

Each case can be used for the purposes of a written submission or as a written submission with presentation. Since time is always a problem, my preference is for one case to be a written submission using the case study format and another case to be a written submission with a presentation near the end of the course. Personal experience shows that only one or two cases can be accommodated in a onesemester course. Three cases are provided for you to choose from.

Special Note: Please pay attention to the challenge in the Canadian Tea Challenge Case. In this case the student (individuals or teams) are to play the role of one of the two competing company brands; either Tetley or Lipton. The case is structured as a competitive situation with both brands wanting to take market share from each other. In this scenario you will be able to evaluate the plans from different competitive viewpoints.

The case studies and the key challenge in each case are as follows: Case 1 – Red Bull Red Bull is a mature brand in a saturated energy drink market. They have relied upon buzz marketing strategies to build the brand and have been successful in doing so. New competition from Coca-Cola and Pepsi-Cola, extremely large and resourceful brands, will force Red Bull to re-evaluate its marketing communications practices if the brand is to protect and build its position in this growing market. .

Case 2 – Wendy’s Restaurants

Wendy’s shares 2nd place in the Canadian fast food market with Burger King. The company has been floundering ever since the campaign that featured Dave Thomas (the founder of Wendy’s) was terminated. Wendy’s is trying to reposition itself as a higher quality fast food alternative. They have lost their price conscious customers to competitors MacDonald’s and Burger King, both of whom are offering cheaper menus. Numerous campaign ideas have been tried but none have clicked. Wendy’s is looking for a new marketing communications strategy that will build its image and drive traffic to the restaurants.

Case 3 – The Canadian Tea Challenge Tetley Tea and Lipton (Unilever) dominate the Canadian tea market with several key brands. The tea market is experiencing rapid growth based on the recent success of green tea and specialty tea sales. Both Tetley and Lipton want to build market share and require an “umbrella” campaign (family brand campaign) that will encourage consumers to try their particular brand of tea.

Case Study Model The following is a proposed case study model. Feel free to adapt and modify it to suit your own teaching and learning needs.

When preparing a case solution it is expected that students will conduct additional secondary research. The research of good information will enhance the quality of the analysis and the recommendation.

Executive Summary (Written Report Only) The executive summary should include a concise statement of the problem, a short summary of the major points arising from your analysis, and the major recommendations from your analysis.

Introduction The decision to include and introduction is left to the discretion of the writer. If it is included, the introduction should be brief and include information regarding the nature of the company, the product, the market, etc.).

Problem Identify the problem in a clear, concise manner. Ensure that the problem is distinguished from symptoms. Don’t state the problem as a choice between a number of alternative strategies. The problem should pose a question searching for a solution.

Situation Analysis Most reports include some form of “situation analysis” (often referred to as SWOT analysis). In this stage, it is important that you don’t regurgitate the facts of the case. The reader/listener is only concerned about strengths, weaknesses, opportunities, and threats that have implications for the problem or solution of the problem. Interpretive comments should be provided for strengths, weaknesses, opportunities and threats. Typically, strengths and weaknesses are internal in nature (e.g., corporate objectives, resources, expertise, etc.) while opportunities and threats are external in nature (e.g., competition, market characteristics, technology, social trends, etc.). .

Alternatives Identify a series of alternatives that could resolve the problem. Make sure that issues such as segmentation and targeting, positioning, and the pros and cons of each alternative are discussed.

Recommendation Make a specific recommendation to resolve the problem. Proper justification must accompany the recommendation, and the recommendation must consider company objectives, marketing objectives, and the resources of the company. See the next section for more details.

Summary Plan Be concise as possible while providing proper detail on the various components of the marketing communications mix you are recommending. Provide details about the following: 1.

2.

3.

4.

Marketing Objectives Marketing Communications Objectives Target Market Profile Positioning Strategy Statement

From this point on the content will include specific objectives, strategies, and executions (or appropriate details based on your preferences) for whatever components of the marketing communications mix you are recommending.

5. Marketing Communications Mix  Advertising (Creative and Media)  Direct Response Communications  Online Communications  Sales Promotion  Public Relations  Event Marketing and Sponsorships  Personal Selling 6. Timeline for Activities 7. Budget Allocation for Recommended Activities

Marketing Communications Plan Model (A) The following is a proposed model for completing a marketing communications plan. It has been developed based on Figures 2.7 and 2.11 in Chapter 2 of the textbook. Please adapt it so it meets your own teaching style and needs.

Marketing Background External Influences  Economic Trends  Social and Demographic Trends  Technology Trends  Regulatory Trends

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Market Analysis  Market Size and Growth  Market Segments (Product Classifications)  Seasonal Analysis Competitor Analysis  Market Share Trends  Marketing / Marketing Communications Strategy Assessment Target Market Analysis  Consumer Data  Brand Loyalty Product (Brand) Analysis  Sales Volume Trends  Market Share Trends  Marketing / Marketing Communications Assessment  Image and Reputation

Marketing Communications Plan Target Market Profile  Demographic  Geographic  Psychographic  Behavioural Positioning Strategy  Positioning Strategy Statement  Positioning Grid Budget  Budget Available for Plan Advertising Objectives (whatever is relevant to plan)  Awareness  Preference  Trial  Usage  Image Creative Plan  Creative Objectives  Key Benefit Statement  Support Claims Statement  Creative Strategy  Creative Execution Media Plan .

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Media Objectives Media Strategy Media Execution

Should any of the marketing communications mix components listed below be included in the plan, appropriate objectives, strategies, and execution details will be included for each component.

Direct Response Online Communications Sales Promotion Public Relations Event Marketing and Sponsorships Personal Selling Media Blocking Chart  By Media  By time of year Calendar for Other IMC Activities  By Activity  By time of year Budget Summary  Allocation of dollars by various media, activities, time of year, etc.

Alternative Marketing Communications Plan Model (B) (Streamlined Version) Market Analysis  Size and Growth  Market Segments (and shares of market) External Influences  Economic  Demographic  Social  Technology  Other Competitor Analysis (Highlight key aspects of marketing strategy)     

Product (Advantage) Price Distribution IMC Image (perceptions held by consumers)

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Brand Analysis (Highlight key aspects of current marketing strategy)     

Product (Advantage) Price Distribution IMC Image (perceptions held by consumers)

Target Market Profile  Demographic  Geographic  Psychographic  Behavioural Marketing Objectives  List key objectives that IMC will help achieve Marketing Communications Objectives  List key objectives Positioning Strategy  Provide a clear positioning strategy statement that will guide the plan and recommendations IMC Strategy  Identify IMC components that are recommended along with justification IMC Execution (Action Plan)  List all activities, timing, location, cost details (accurate budgets are essential)  Blocking Chart (1-page summary calendar showing the timing of all activities)  Budget Summary ((by IMC activity)

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Case Study 1 Red Bull Communications Brief Red Bull Profile Red Bull is an Austrian-produced energy drink that competes in a small niche of the carbonated soft drink market. The product is an adaptation of a Tai beverage named Krating Daeng, which translated into English is Red Bull.

Dietrich Mateschitz, an Austrian entrepreneur, learned of the beverage while traveling in Thailand in the 1980s. He approached the manufacturer and was granted a licensing agreement to market the product in other countries. Red Bull is marketed internationally by Red Bull GmbH. Red Bull is marketed in 120 countries and is the leader in the energy drink segment. Global sales are estimated to be in the neighborhood of $2 billion.

Product Concept and Benefits Red Bull’s innovative product created the energy drink segment. The drink is designed to combat mental and physical fatigue. The combination of ingredients interacting with each other provides the energy-building benefit. The key ingredients are taurine (1000mg), glucuronolactone (600 mg) and caffeine (80 mg) in a 250 ML can. Sweeteners such as glucose and sucrose are also part of the formula.

Red Bull is a functional product developed especially for periods of increased mental and physical exertion. It can be consumed at any time: at sport, while studying, driving and socializing. Red Bull promises to improve performance during times of stress or strain; it will increase concentration and improve reaction speed; and it will stimulate one’s metabolism. Red Bull revitalizes the body and mind.

Red Bull contains twice the amount of caffeine (80 mg) of a can of Coca-Cola and sells for twice the price (a unique cost-benefit proposition). It is a berry-flavored beverage.

To clarify the product and benefit, understand that Red Bull is not a product like Gatorade.

Gatorade and its competitors rehydrate the body and are products closely associated with exertion during sports participation. Red Bull is not designed for this purpose and does not promote such a benefit.

U.S. and Canadian Market The latest information available (2006) indicates the energy drink market in the U.S. is worth $US540 million. Energy drinks are classified as “functional” drinks that include products such as sports drinks and nutrient-enhanced drinks. Red Bull’s U.S. market share is estimated to be 46%

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and is therefore, the commanding leader in the market segment with retail sales of $US248 million.

The Canadian market is estimated to be about 8 percent of the U.S. market. The retail market is valued at approximately $44 million. Red Bull’s Canadian market share is 50% producing retail sales of $22 million.

Competition Double-digit annual growth in this category has attracted the attention of large and resourceful national competitors as well as small, regional competitors.

Both Pepsi-Cola and Coca-Cola are active in this market. Pepsi markets Mountain Dew Amp and SoBe No Fear. Coca-Cola markets two brands under the names Rockstar and Full Throttle. Two other competitive brands called Monster and Lost are marketed by Hansen Natural Corporation.

Refer to Figure 1 for a summary of market share data for North America.

Figure 1 Market Share – Energy Drinks North America Brand Red Bull Hansen (Monster and Lost) Pepsi-Cola (Mountain Dew Amp and SoBe No Fear) Coca-Cola (Rockstar and Full throttle) All Other (independent and regional brands) Total

Market Share 50 18 10 17 5 100

Coca-Cola and Pepsi-Cola stand to gain significant ground on Red Bull based on the strength of their distribution network in North America. Their brand availability in supermarkets, vending machines and at college campuses where exclusive distribution contracts are in effect offers significant potential to gain market share. At one time neither Coca-Cola nor Pepsi-Cola were in the bottled water business but now they control the two leading brands (Dasani and Aquafina).

Coca-Cola and Pepsi-Cola are leaders, not followers.

Consumer Behaviour Red Bull has been able to hold its ground in the energy drink segment because consumers show preference for niche brands. In this segment there is a certain cache associated with the name Red Bull.

Consumers of energy drinks seem to prefer non-traditional marketing approaches and are influenced more by word-of-mouth and by opinion leaders than they are by traditional forms of advertising.

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In accordance with the benefits offered by Red Bull and other brands, people consume energy drinks to stay sharp; they are searching for products that will give them a “boost” during the day.

Consumers are curious about energy drinks and will try various brands while in the “trial” stage of buying. Research studies indicate that taste is an important buying criterion.

Image The category is experiencing negative public perceptions. Many critics of Red Bull cite the addictive nature of the ingredients if consumed in large doses and potential long-term side effects. Doctors and nutritionists warn of the dangers of combining caffeine and alcohol in excessive quantities but their warnings have fallen on deaf ears—it’s more like an invitation for the target market to try the combination! Red Bull has been linked to the death of a basketball player in Ireland and three consumers in Sweden. Denmark, Norway and France have banned the sale of Red Bull. Image issues and effective marketing has produced some slang names for Red Bull. Among these names are “liquid cocaine” and “speed in a can.”

Target Market Most brands including Red Bull target young urban males 16 to 29 years old (though others in need of a boost do consume the drink). Typically, these males live on the edge or aspire to do so.

They are interested in adventure, extreme sports, video games and challenging recreational activities.

This description defines the generation of consumers referred to as Generation Y or the millennial generation. It is widely believed by many, that this generation is cynical of traditional marketing strategies. As well, they are perceived to be a notoriously fickle bunch by marketers.

In a more general sense anyone, be it a busy executive working long hours or a truck driver putting in long hours, is a candidate for an energy drink.

Marketing and Marketing Communications Strategy Red Bull presents itself as kind of an “anti-brand” based on the type and style of marketing it undertakes. Consequently, Red Bull has an almost “cult-like” following. It’s one of those brands like Harley-Davidson or Apple that are set apart from the mainstream.

In terms of marketing and marketing communications Red Bull avoids mass marketing preferring to focus on “buzz marketing” strategies and word-of-mouth to build the brand.

Red Bull, like Coke and Pepsi, uses distribution to its advantage, but in a very different way.

Rather than being readily available, Red Bull actually restricts distribution in order to attract “opinion leaders” who in turn help create good word-of-mouth for the brand.

Considering the target market profile, Red Bull associates itself with adventure and risk-taking sports. Red Bull sponsors Formula One racing teams, motorcycle racing, and mountain bike and .

snowboard events. On an international scale Red Bull has a sponsorship presence in the following events:     

KTM Factory Motocross Team Champ Auto Car Racing Formula One Racing World Rally Car Championships BMX racing

Red Bull actually owns two Formula One racing teams: Red Bull Racing (formerly Jaguar Racing) and a newly formed team called Scuderia Toro Rosso Racing. Of the $600 million Red Bull spends annually on marketing, $100 million is devoted to these racing teams, a venture that only generates $70 million in revenue.

Red Bull is also active in soccer, a very popular sport in Europe, South America and Africa. Red Bull recently purchased two soccer teams, one in Europe and one in North America. The team SV Austria Salzburg is now called Red Bull Salzburg and the New Jersey soccer team in the North American Soccer League is no called Red Bull New York.

Red Bull’s advertising efforts have been restricted to a campaign using the theme and slogan “Red Bull gives you wings.” The slogan aptly summarizes the primary product benefit. The commercials employ an animation technique and its impact may be wearing thin with potential customers. Television ads for this campaign typically play on cable channels attractive to the primary target market.

Red Bull employs street level marketing activities to deliver its message. Some recent street activities include the following:  Small pickup trucks are painted in the Red Bull blue and silver colors; a giant can of Red Bull is in the back of the truck. The vehicle is a mobile display in urban areas  Giving free samples away on the street to people who look like they need a “boost.”  Giving free product to DJs for distribution in clubs. Empty cans left on tables help create some buzz for the brand.

Present Situation and Challenge Red Bull has been operating profitably in a niche segment of the market but the presence of Coca-Cola and Pepsi-Cola brands could change things. Strong financial backing and lots of mainstream marketing by Coke and Pepsi brands will expand the niche over the next few years.

Their efforts will attract new and different users. Red Bull will have to work much harder to protect and build its position and in doing so may need to consider adding mainstream media and marketing communications activities to its mix.

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Red Bull has experienced incredible success but it can now be classified as a mature brand in a saturated market. Several challenges lie ahead:  The original target market is growing up so a new youth group must be attracted to the brand  A different image may be needed to meet the needs of the existing yet older target market (a repositioning strategy) Whatever is recommended the overall goal is to expand Red Bull’s presence in the energy drink market. What message should Red Bull be delivering and what media and marketing communications activities should be employed to deliver the message?

Part of the challenge is to establish a reasonable media and marketing communications budget for the Canadian market. Knowing the market is worth $C44 million at retail and Red Bull has 50% market share, annual sales revenue at retail are in the area of $22.0 million. To arrive at sales revenue at the point of manufacture, retail and wholesaler mark-ups (30%) must be deducted. Therefore, Red Bull (the company) generates $16 million in sales in Canada.

What is a reasonable amount to spend on marketing communications over a 1-year plan period in the Canadian market?

Procedure Guidelines Prior to undertaking this challenge you should research the energy drink market further in order to update case facts and to ensure you are familiar with the latest trends in the market, and with the latest marketing communications activities of Red Bull and its key competitors.

You must prepare a media and marketing communications plan that will include the components of the marketing communications mix that you recommend. Refer to the marketing communications plan model in the textbook or any other model your instructor may provide you to complete this task.

Sources: Elizabeth Furman, “Rush of Energy,” Beverage Industry, July 2006, www.bevindustry.com, “Global Energy Drinks,” The Information Shop, www.the-informationshop.com, www.wikipedia.org/wiki/Energy_drink, “A look at a key feature of Red Bull’s business,” www.buzed.ac.uk/compfact/redbull/redbull7.htm, Roger Dillworth, “Doubledigit growth – health is main market driver,” Soft Drinks International, April 2005, www.beveragemarekting.com/news3d.htm, Kerry A. Dolan, “The Soda with Buzz,” Forbes, March 28, 2005, www.forbes.com, www.redbull.com, www.redbullusa.com.

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Case Study 2 Wendy’s Restaurants Communications Brief Corporate Profile Wendy’s, opened in Ohio in 1969, by Dave Thomas, a protégé of Kentucky Fried Chicken founder Col. Harland Sanders, is credited with pioneering the use of the drive-thru window to allow consumers to purchase without having to park or exit cars.

Wendy’s is now the third largest quick-serve hamburger chain in the world with more than 6500 restaurants (80% of them are franchised). Wendy’s serves the best hamburgers in the business made with fresh beef hot-off-the-grill and a choice of fresh toppings.

Other menu items include chicken sandwiches, French fries, salads, grilled sandwiches, baked potatoes, chili, soft drinks and Frostys.

Wendy’s owns Tim Hortons, Canada’s largest coffee and fresh baked goods restaurant chain as well as Baha Fresh Mexican Grill, the market leader in fast-casual Mexican food.

Canadian Market The quick serve restaurant market (QSR) in Canada is estimated to be $11.6 billion retail (2006).

The market is divided among hamburger restaurants, chicken restaurants, pizza restaurants and fresh sandwich restaurants.

Fast food restaurants have been losing market share to another segment of the market referred to as fast-casual. The fast-casual segment includes restaurants such as Montana’s, Kelsey’s and Boston Pizza. These and other similar restaurants serve somewhat better and more expensive foods.

Burger restaurants such as Wendy’s and McDonald’s have been losing market share to sandwich restaurants. Subway, in particular, has experienced significant growth in sales and market share based on the consumers’ preference for fresher and healthier foods in the early 2000s.

The fast food market is stable and experiencing marginal growth from year-to-year. Consumers are attracted to fast food restaurants due to the proprietary benefits most chains provide:    

Quick preparation of food at relatively low cost Quality of food is reassuring to consumers when traveling Offers a break from the routine of home cooking Convenience offered is important to time-pressed consumers

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Market Share Among hamburger chains, McDonald’s is the clear leader with 50% market share. Being so far ahead, the other chains tend to compete with each to build share. Present market shares are summarized in Figure 1: Figure 1 Market Shares – Quick Serve Hamburger Restaurants Brand McDonald’s Wendy’s A&W Burger King Harvey’s All Other Total

Market Share 50 12 12 10 8 8 100

Industry Trends The healthier living phenomenon of the early 2000s triggered action among all participants in the fast food market. Healthier menu items such as salads and fruits were added to menus and cooking procedures were altered to reduce fat content on present items such as French fries.

In the mid-2000s the health trend started to fade. Consumers started to indulge again. Their emphasis on carbohydrates and fat content was replaced by a desire to have tastier food. For example:  Burger King introduced the Enormous Omelet Sandwich  Pizza Hut introduced the triple cheese stuffed crust pizza  KFC is fried again and is reverting to its former name of Kentucky Fried Chicken Even in the age of better educated consumers, decadence is beating decorum. Consumers are passing on “better for you” items and some chains are dropping them from menus.

Offering efficient drive-thru services is paramount to meeting consumers demand for speed and convenience.

Gift cards and loyalty cards are becoming more important as they spur additional spending by consumers (the psychology of using a card versus laying out cash).

A recent research study bodes well for fast food hamburger restaurants. The study revealed that hamburgers and French fries are the two most popular fast food items purchased by both men and women (see Figure 2).

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Figure 2 Most Popular Items Ordered Men Food Item 1 Hamburger 2 French Fries 3 Pizza 4 Breakfast Sandwich 5 Side Salad

Women 1 2 3 4 5

Food Item French Fries Hamburger Pizza Side Salad Chicken Sandwich

Public Image Wendy’s and other leading restaurants are recognized and respected for their community involvement and sponsorships of local and national events.

The industry is criticized heavily for offering unhealthy items since excessive consumption can lead to obesity; for exploiting young children through targeted advertising campaigns; and for environmental damage from excessive packaging.

Consumer Attitudes and Brand Loyalty A research survey conducted by TNS Intersearch (U.S.) reveals that fast food consumers are not that loyal to a particular brand. Some top line data from their research follows:  30% of consumers are not committed to any particular brand because the decision of where to go is not that important  50% of consumers choose the same restaurant over and over or spread their dollars across a few favourite restaurants  20% of consumers remain loyal to their brand In terms of commitment and loyalty Subway and Wendy’s have an advantage over other restaurants. Research indicates a higher degree of commitment among visitors to these restaurants (see Figure 3 for details).

Figure 3 Customer Commitment to Fast Food Restaurants Brand Subway Wendy’s Taco Bell McDonald’s Burger King Pizza Hut KFC Domino’s

% of Users Committed 12 10 7 6 4 3 2 2 .

The commitment data suggest Subway and Wendy’s are providing offerings that are attractive to more than a single target market.

Wendy’s Present Situation The effectiveness of marketing communications and the image created by the communications is a key factor driving consumers to a particular restaurant. Even though Wendy’s is in an enviable position in terms of commitment and loyalty it faces the same challenge as their competitors. To continue to grow and prosper they must build commitment (more commitment) among a broader consumer base while maintaining their core brand identity.

Wendy’s has always differentiated their brand on the basis of quality. From the very start the hamburgers have been made with the freshest ingredients and served just the way customers want them. The phrase “Quality is our Recipe” is part of the company logo. Wendy’s is also perceived as the chain with the “healthiest” offerings when compared to rivals such as McDonald’s and Harvey’s.

Since 2004, Wendy’s has experienced problems with its marketing communications program.

For decades Dave Thomas was the primary spokesperson for Wendy’s and his folksy image and pleasing smile was a hit with consumers of all ages. A very successful strategy had to be terminated when Dave died.

A campaign featuring a new character, Mr. Wendy was tried for about a year. Mr. Wendy set unsuspecting consumers straight about the quality of Wendy’s food but he turned out to be somewhat of an irritating and annoying character to consumers. The Mr. Wendy campaign was not helping business so it was dropped in 2005.

In 2006 a new campaign was launched with the slogan, “Do Wendy’s. Do what tastes right.” In mouth-watering fashion the television commercials focus directly on the products, showing scrumptious looking hamburgers and grilled chicken sandwiches.

The “Do what tastes right” campaign is perceived to be a maintenance campaign by company executives. Company executives realize Wendy’s no longer possesses its differential advantage of quality and variety. McDonald’s, Burger King and Harvey’s now serve similar quality and offer much more variety than they used to. The executives have determined they urgently need a campaign that starts to build a new image for Wendy’s, a campaign that starts with solid advertising but can be extended successfully into other forms of marketing communications.

The Challenge Wendy’s has asked your marketing communications company to devise a new marketing communications strategy. You are responsible for preparing a complete marketing communications plan that includes each component of the marketing communications mix you recommend. Wendy’s is looking for a communications concept that will “turn up the heat” in the fast food market. .

The overall goal of the campaign is to build market share to a reasonable level (the share objective will be determined by you) and get more traffic onto the restaurants.

Some competitors (Burger King and Harvey’s) now focus on a narrower target market (younger males) at the expense of other age segments. Wendy’s is not certain if this is the right approach to take but wants your recommendations on the target market or markets to pursue. You must also determine how Wendy’s will differentiate itself from the competitors and devise a clearly worded positioning strategy statement that will guide the development of your marketing communications plan.

The marketing communications plan will be a 1-year launch plan (January to December) with a $6 million budget. The budget must cover all advertising and other marketing communications expenses.

Procedure Guidelines Prior to undertaking this challenge you must research the fast food market further in order to update key facts and to ensure you are familiar with the latest trends that are influencing the market and the brand choices made by consumers. You must also have a firm understanding of the advertising and marketing communications strategies of the primary competitors.

The extent of execution detail (ads, press releases, event lists, budget detail, and so on) required is left to your discretion and the expectations of your instructor. Please consult with your instructor for clarification and expectations.

Refer to the marketing communications plan model in the textbook or any other plan model that your instructor may provide to complete this task.

Adapted from Bruce Horovitz, “Restaurant sales climb with bad-for-you food,” USA Today, may 5, 2005, www.usatoday.com, www.wendy’s-invest.com, “Wendy’s to refocus advertising (press release), November 4, 2004, www.yahoo.com/prnews/041104, Kate McArthur, “Wendy’s winged by surging rivals,” Advertising Age, October 25, 2004, pp. 3, 45, Dave Sholz and Gilbert Paquette, “Jumping on or off the fat bandwagon,” Marketing (online version), March 8, 2004, “A&W rises again,” Marketing (online version), May 5, 2003, Melody Vargas, “Consumers show little commitment to fast food brands,” About, July 24, 2003, www.retailindustry.about.com/b/a/013398.htm, www.wikipedia.org/wiki/fast_food.

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Case Study 3 Canadian Tea Challenge Communications Brief Market Data Tea is the world’s favorite beverage, after water. It is more popular with consumers than beer and soft drinks.

In Canada, tea represents 1.1% of all beverage revenues. Among hot beverage choices coffee and tea do battle with each other but as of now coffee remains the leader. Coffee accounts for about 63% of hot beverage sales compared to tea at 23%. Other types of hot beverages account for the remaining market share.

The Canadian tea market is comprised of both hot tea and cold tea. Combined these two markets are worth $267 million (2005). Sales of hot tea account for $158 million in sales annually.

The hot tea market is segmented into several categories: regular black tea; flavored black specialty tea; green tea; and herbal tea.

In recent years, green tea sales have been fueling growth in the tea market. In fact, consumers in Canada now spend more on green, herbal, and flavored teas than they do on traditional black teas. Growth in the green tea segment is significant: +31% in 2004; and +37% in 2005. Regular black tea sales are declining marginally from year-to year averaging -3% per year over the past three years. Refer to Figure 1 for a summary of the retail value of each hot tea segment.

Figure 1 Hot Tea Segment Sales – Retail ($million) Segment Regular Black Flavored Black Specialty Green Herbal

$ Sales 2004 87.6 23.9 14.2 29.3

$ Sales 2005 84.7 25.3 19.4 28.8

Growth -3% +6% +37% -2%

Growth in the tea category is attributed to several factors:  Consumers are seeking products they perceive to be healthier  Demand for comfort foods and stress relievers remain high  There is a general desire to lead a “healthier” lifestyle On a regional basis there is a variation between black tea sales and green and specialty tea sales.

The migration to green tea is higher in the West than in the East. In the Western provinces the .

ratio of black tea sales to green and specialty tea sales is 60/40 in favor of green and specialty tea. In Ontario and Quebec the ratio is 50/50 and in Atlantic Canada it is a mere 20/80 ratio.

Competitors The Canadian retail tea market is dominated by two companies: Tetley and Unilever. Tetley is the leader with 40% share of the regular black tea market and a 20% share of the specialty tea market (green tea and herbal tea combined). Unilever’s market share is 25% divided across three key brands: Lipton, Lipton Red Rose and Lipton Salada. Refer to Figure 2 for a summary of market shares for the key brands.

Figure 2 Key Brand Market Share – Canadian Tea Market (2005) Brand Tetley Regular Black Tetley Specialty Teas Lipton Lipton Red Rose Lipton Salada All Other and Private Label Total

Market Share % 40 20 8 10 7 15 100

Corporate Profiles Tetley Tea is owned by Tata Tea Group, an India-based company and one of India’s largest tea growers. Tata markets tea in 30 countries around the world. Tetley Tea was acquired by Tata in 2000 for $475 million. On an international basis sales of Tata teas amount to $702.8 million.

Unilever is a multinational food and personal care products company. Key products and brands include Hellmann’s, Calvin Klein, Birds Eye, Slim Fast, Axe, and Dove, among many others.

Unilever is a large resourceful company with annual sales of $46.9 billion internationally and profit of %4.5 billion. Lipton is the biggest tea brand around the world accounting for about 10% of all tea sold. Lipton is very popular in Europe, the Middle East and Asia. Lipton sells both hot and cold teas.

Product Benefits Consumed regularly, tea can improve vascular function, combat fatigue, reduce cholesterol levels, and increase feelings of vitality. Tea contains high amounts of natural antioxidants called flavonoids, which are linked to reducing the risk of heart disease, stroke and certain forms of cancer.

Part of the green tea phenomenon in recent years is the link to certain health benefits though the degree of accuracy of these links is suspect. Green tea has been linked to everything from .

warding off arthritis to blood clots and curing the common cold (or at least making one feel better).

Ironically, tea is tea. Research shows that black tea and green tea come from the same source so they offer comparable health benefits. The perceived benefits of green tea compared to black tea is either due to inaccurate media hype of misleading information communicated by tea producers. Consumers willingly pay more for green tea.

Tea is a healthy beverage. It does not contain any calories, salt, fat or carbohydrates. Tea does keep a person hydrated and contains beneficial plant compounds. As a result, it has become a beverage of choice for “quality of life” seekers. Drinking tea of any kind is a natural way to increase dietary exposure to antioxidants and at pennies per serving it is not surprising that tea sales are skyrocketing.

Consumer Behaviour The following are some facts about tea consumption in Canada:  77% of Canadians drink tea  50% drink a cup at least once a week  Canadians drink twice as much tea as Americans  Consumers select the type of tea they drink based on mood, time of day, and occasion  Specialty teas appeal to younger consumers as well as more affluent consumers (50% of young drinkers are drinking green tea or herbal tea)  Older age groups still prefer black tea  Consumers will pay two to three times as much for green tea or herbal tea based on the perceived benefits these teas offer  The main reason people drink tea is the “sheer pleasure of drinking it.” (30% response in a research survey) Canadians are drinking tea as part of a healthy lifestyle, whether to relax from the daily stresses or to improve their health. Tea is a naturally refreshing beverage that Canadians of all ages can enjoy.

Present Situation and Challenge It was only 2001 when the Canadian tea market was absolutely flat but since then growth has escalated at a phenomenal rate, largely due to the sudden interest in green tea and herbal tea. Hot tea is “cool” again! .

Given the trends in the market there is an opportunity for all brands to build market share while expanding the overall tea market. To do so, the various brands must tempt consumers of other beverages such as coffee and juices, to try tea, tea of any kind.

How various age groups perceive tea will be a factor in expanding the market and building share for a particular brand. It is possible that different strategies (targeted strategies) will be needed to attract different audiences.

You are assigned the challenge of building market share for one of the key brands mentioned in this brief: Tetley or Lipton. In other words, some students will be preparing a marketing communications plan for one brand and some will prepare a plan for the other, a competitive situation.

The mandate is to prepare a 1-year marketing communications plan for your brand. Part of the challenge is to determine the marketing communications budget to meet the challenge. To do so you must consider the overall market sales and market shares of the key brands and allocate a portion of the sales to marketing communications. How much of their sales revenue should be devoted to the marketing communications budget?

The client wants you to develop and “umbrella” campaign (family campaign) that presents a compelling reason for consumers to buy your brand of tea. The campaign will be designed to attract consumers to the brand, not a specific type of tea within the brand franchise. The benefits of the campaign will have an impact on the various sub-brands in the brand family.

Procedure Guidelines You must immediately undertake some online secondary research to determine and evaluate the latest trends in the market and to gather marketing and marketing communications information about the brand you select and its primary competitors.

Your communications plan will include discussion of the various components of the marketing communications mix you are recommending.

The extent of “execution” detail required is left to your discretion and the expectations of your instructor. Consult with your instructor for clarification and expectations.

Refer to the marketing communications plan model in the textbook for further guidance or to any model you instructor may provide to complete this task.

Sources Andy Hoffman, “The tea industry sees money in green,” Globe and Mail, December 29, 2005, pp. B1, B4, “Tea’s Popularity Continues to Grow,” press release of the Tea Council of Canada, April 24, 2004, “Demand for Comfort Fuels Double Digit Growth for Canadian Tea Industry,” press release of the Tea Council of Canada, September 23, 1999, “Tea is Tops for Healthy Canadians,” press release of the Tea Council of Canada, March 4, 2004, “Experts say tea combats variety of conditions,” CBC News, October 1, 2002, www.euromonitor.com/reportsummary.aspx?folder=Hot_Drinks., www.unilever.ca/ourbrands/ffod/lipton_tea.asp. .

Solutions to Questions in Appendix Media Buying Principles and Media Information Resources All solutions are based on information contained in rate cards in Appendix 1 of the textbook.

Question 1 Newspaper: The Globe and Mail‐ Sports Section National Edition Size of ad: 4 columns wide X 10 columns inches deep Total number of agate lines = (4 x6 x 14) x 2 per week x 8 weeks = 5376 agate lines Cost = 5376 x $31.88 (transient rate in sports section for Monday and Wednesday) = $171,386.88.

Question 2 Magazine: Canadian Geographic Ad Size: double‐page (assume 4‐colour ) 4 insertions (use rate for 3 insertions) $31,855 x 4 = $95,565

Question 3 Magazine: Canadian Geographic Ad Size: ½ page (assume 4 –colour) 8 insertions (use rate for 6 insertions) $12,190 x 8 = $97,520

Question 4 Radio Campaign with Specific Time Spot Requests Total number of spots (8 breakfast + 8 drive) x 16 weeks = 256

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Based on the number of spots the rate charged is from Grid 3 Breakfast: 128 spots x $250 = $32,000 Drive: 128 spots x $210 = $26,880 Total: = $58,880

Question 5 Radio Campaign with a Reach Plan Cost of a 16‐spot weekly reach plan over 16 weeks Cost of Reach Plan: 256 spots x $200= $51,200 Advertiser saves money by using the reach plan Specific Request Plan (from question 6) = $58,880 Reach Plan (question 7) = $51,200 Savings: = $58,880 ‐ $51,200 = $7,680

Question 6 Outdoor Transit Shelter Campaign: 20 weeks in all markets All rates are based on 4 week schedules.

Toronto: $71,431 x 5 = $357,155 Calgary: $56,430 x 5 = $282,150 Halifax: $8925 x 5 = $44,625 Vancouver: $36,997 x 5 = $184,985 Total Cost: = $868,915

Question 7 Outdoor Poster Campaign: Continuity Varies from Market to Market Rates are based on horizontal posters and on 4 week continuity St. John’s, 50 GRP, 12 weeks: $8510 X 3 = $25,530

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Quebec City, 50 GRP, 16 weeks: $37,800 X 4 = $151,200 Hamilton, 75 GRP, 16 weeks: $44,176 X 4 = $176,704 Winnipeg, 50 GRP, 12 weeks: $16,830 X 3 = $50,490 Total Cost: = $403,924

Question 8 Direct Mail Campaign Rate = $8.00 per 1000 for one page premium size including a $2.00 coupon Frequency is once Printing and Distribution Cost: (4 000 000 /1000 ) X $8.00 = $32,000 Redemption cost: 4 000 000 x .025 x $2.00 = $200 000 Total Cost = $232, 000

Question 9 Banner Campaign: 5 million impressions globeandmail.com, canvas unit, lifestyle section Cost: (5 000 000 / 1000) x $56= $280 000

Question 10 Banner Campaign: 6 million impressions globeandmail.com, standard IAB unit, business section Cost: (6 000 000 / 1000) x $45 = $270 000

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