IMC: Direct Marketing, Advertising and Public Relations

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IMC Direct Marketing, Advertising and Public
Relations

• 04/04/05 04/06/05

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Types of Direct Marketing

• Direct mail can be used for all types of
  communication (inform, differentiate, persuade,
  remind).
• Catalogs are the most popular form of direct
  marketing. They are used to sell to both
  individual and business consumers.
• Telemarketing (usually used to inform or sell
  products/services)
• Vending machines are used for low priced,
  convenience goods like sodas, stamps
• Direct-action advertising is used to obtain an
  immediate response from consumers (Call 1-800)

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Objectives of Direct Marketing

• Build customer relationships
• develop and maintain continuous buyer-seller
  relationships
• Elicit a direct response or transaction
• direct order - response in the form of an order
• lead generation - request for further information
• traffic generation - visit to a store or business
  for the purchase of specific good or service

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Direct Marketing Benefits

• Customers
• Convenience
• Control
• Fun
• Marketers
• Personalization
• Relationship building
• Less competitive scrutiny
• Measurable

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Direct Marketing Requirements

• Develop and maintain database(s)
• up-to-date, accurate, relevant information
• Technology-based interactive marketing system
• combine computers, software, databases, and
  telecommunications technology
• Procedure for measuring results

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Direct Marketing Productivity

• Multiple-vehicle, multi-stage campaign
• News campaign ? Paid ad with response mechanism ?
  direct mail ? outbound telemarketing ? face-face
  sales call ? ongoing communication
• Response compression
• multiple media utilized within a tightly defined
  time frame can substantially increase response
  rates
• For example, a Citibank campaign to market home
  equity loans. Instead of direct mail 800
  number, they used direct mail coupon 800
  number telemarketing print ads. This resulted
  in a 15 increase in the number of new accounts
  obtained.

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Direct Marketing Issues

• Customers may not be very comfortable with
  interactive technology
• Privacy/ethical issues
• Deceptions and fraud lower credibility
• Success depends on ability to target effectively

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Conclusions

• Examine the role of direct marketing in your IMC
  plan
• It is useful for selectively targeting consumers
  and could be very cost effective if the response
  rate is high

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IMC Advertising

• Advertising is any paid form of non-personal
  presentation by an identified sponsor
• Types of advertising
• Product (inform, persuade, remind)
• Institutional (advocacy, pioneering, competitive,
  reminder)

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Advertising strategy

• In developing advertising, marketing managers
  usually have to decide the 5 Ms
• Mission What is the advertising objective?
• Message What should the message say?
• Media Where and how should we communicate?
• Money How much should we spend?
• Measurement How can we evaluate the results?

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Mission Advertising Objective

• Advertising can have 3 different objectives
• Inform Mainly creating awareness.
• Persuade Creating or changing beliefs about
  brand attributes, changing importance of
  attributes.
• Remind Mainly reinforce existing attitudes,
  maintain top-of-mind awareness (especially for
  low risk products).

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Persuasion Models

• Attitudes include beliefs (cognitive component),
  feelings (affective component) and behavior
• Attitudes can be changed by changing any or all
  of these components
• There can thus be three ways to change attitudes
• Learn-feel-do (Change the cognitive component
  first)
• Feel-learn-do (Change the affective component
  first)
• Do-feel-learn (Change the behavior first)

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Persuasion Different models

• The learn-feel-do model
• High involvement decision making
• Consumers form attitudes based on ad information
• Relates to cognitive processes
• Examples

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Persuasion Different models

• The feel-do-learn model
• Ads evoke feelings in consumers
• Feelings can be product-oriented or ad-oriented
• These feelings trigger purchase response
• Occurs at all involvement levels
• Relates to affective processes
• Examples

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Persuasion Different models

• The do-feel-learn model
• Applicable to low involvement situations
• Low perceived risk prompts purchase response with
  little thinking
• Relates to short-cuts people take to avoid
  intense cognitive processing
• Examples

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Message

• The advertising message will depend on the
  persuasion model selected as well as the specific
  communication objective
• Usually, all advertising messages will focus on a
  single or few key points. Too many messages in
  the same ad could diffuse its impact
• Creativity in message execution is very important

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Message Types of advertisements

• Rational
• Emotional
• Fear
• Sex
• Humor
• Testimonials
• Celebrity
• Others
• Comparative

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Media

• There are three elements to any media objective
• Reach refers to the total number of people you
  wish to expose to your message
• Frequency refers to the number of times each of
  these people is exposed to your message
• Impact is a qualitative factor that refers to the
  value of a single exposure
• Example
• 60 reach _at_ 3 refers to exposing at least 60 of
  your target audience at least 3 times to your
  message

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Media

• Higher reach/frequency objectives translate to
  higher costs (CPM)
• Impact is dependent on your message quality as
  well as the media channel selected. Thus, the
  same message would have a different impact via TV
  and on radio.

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Media Selection

• Select your media after considering
• Your target market media habits
• Your product
• Timing
• Cost

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Media vehicles

• Television
• Radio
• Print
• Internet
• Outdoor
• Direct mail

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Media scheduling

• Continuous or steady
• Flighting or intermittent
• Pulse or burst

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Budget

• I know that 50 of my advertising budget is
  wastedthe problem is that I dont know which
  50! - David Ogilvy
• Carryover effect of advertising
• Advertising in one time period can continue to
  affect sales over the next few time periods. The
  carryover period depends on the total impact of
  the advertising message
• Carryover transforms advertising from an expense
  to an investment

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Budget

• There are 5 factors that you can consider while
  setting the advertising budget
• PLC New products require larger budgets than
  established products.
• Market share Higher market share brands usually
  require less advertising.
• Competition and clutter Greater competition
  requires more advertising

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Budget

• Advertising frequency The complexity of the
  advertising message influences the number of
  repetitions required. The higher the number of
  repetitions required, the more it will cost
• Product substitutability Undifferentiated brands
  require greater advertising spends to remain in
  the top-of-mind slot amongst consumers

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Advertising Effectiveness

• Depends on the advertising objective
• Typical measures
• recall
• Recognition
• brand name awareness
• attitudes
• buying intentions
• Advertising sales relationship?
• Share of voice

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Advertising Effectiveness

• Share of voice share of market ratio
• Established brands 11 new brands 1.5-21
• Sometime, new entrants in a marketplace may not
  have enough resources to gain a high share of
  voice
• In such cases, creative advertising and creative
  media can make the message stand out

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Some recent research

• Ads are more effective when their message is in
  line with their surroundings.
• People may pay greater attention to negative
  messages than positive messages.

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Publicity and Public Relations

• Publicity is non-paid commercially significant
  news or editorial comment about ideas/products/
  institutions
• Public Relations are activities aimed at
  promoting or protecting a companys image or its
  products
• It includes press relations, product publicity
  and lobbying
• PR is particularly important when dealing with
  negative events

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The role of the internet

• Internet advertising has become big business
  recently
• Promotion Trends 2000
• Spending on web-based consumer promotions
  increased 95 to 926 million
• The bulk of this money is diverted from
  advertising (40) and offline consumer promotions
  (21) while only 10 is additional money added to
  the IMC budget
• Some reasons for the Internets popularity are
  immediacy of response, high level of
  customization and high accessibility to some
  consumers

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The role of the internet

• The internet is also important as a source of
  publicity
• WOM/ Buzz is very common and widespread and very
  difficult to control as the source of news is
  difficult to trace
• Example