Communicating value
1. Direct Marketing is the use of consumer-direct channels to reach and deliver goods and services to customers without using marketing middlemen.
2. Sales promotion consist(s) of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.
3. Some companies set their promotion budget to achieve share-of-voice parity with competitors. This is called the Competitive-Parity Method.
4. A program designed to promote or protect a company's image or its individual products is called Public relations (PR).
5. Advertising is/are any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
Exercises:
1. Describe the eight major modes of communication in the communications mix.
Communication mix is often defined in terms of its 8 component parts or modes: advertising, sales promotion, publicity, events and experiences, direct marketing, interactive marketing, personal selling and marketing through the word-of-mouth.
Advertising is a form of nonpersonal promotion of ideas and products, which is generally paid and identifies the sponsor. Sales promotions aim to provide short-term incentives for purchase, in order to encourage first-time buyers and attract new customers. The image of the company as a whole and its products is protected and reinforced through publicity or public relations. Company encourages brand-related interactions through sponsored events and experiences. Communication can also take place in a more straightforward way, for example through telephone, e-mail etc. This approach characterizes direct marketing. The importance of interactive marketing is constantly increasing nowadays, since more and more people use internet and get involved into online activities and programs. Communication with customers can also take the form of personal selling, where salespeople directly interact with the potential customers, trying to convince them to buy the products and answer questions customers may have. Lastly, the word-of-mouth marketing is perhaps the oldest method of marketing communication. It describes the process of sharing experiences and opinions about products and services, which, however, does not have to be oral, but can also take place electronically or in a written form (Kotler & Keller, 2009).
2. Name four common criticisms of direct marketing.
Although direct marketing has a lot of benefits, some of its aspects are often criticised. The four main argument against direct marketing are privacy violation, fraud and deception, unfairness and irritation. Privacy violation argument refers to the fact that personal information about consumers is collected daily by companies for marketing research purposes. Such close study of consumer behaviour and even personal data, such as address and credit card transactions, often rises public concerns. Fraudulent information is also quite common for direct marketing. Advertisers often exaggerate the benefits of the offer or distort the actual price. As a result numerous customers all over the world complain about being “scammed” by some of the direct marketing campaigns. It is especially true for impulsive and vulnerable buyers, who cannot check the information provided in the offer. In this case, direct marketers take unfair advantage of the buyers, who are more easy to manipulate. Lastly, direct marketing may be quite irritating, especially when conducted in an unprofessional manner. Thus, late phone calls or large amount of mail promotions often cause irritation rather than encourage purchasing (Kotler & Keller, 2009).
3. List and discuss three elements that explain how many exposures, E, will produce a level of audience awareness, A.
The number of exposures produced by a certain level of audience awareness A depends on three factors: reach (R), frequency (F) and impact(I). Reach estimates the number of households (or individuals), who were exposed to a media channel during a defined time period. Frequency measures the number of times one has been exposed to a particular message during a predefined time period. Lastly, impact characterizes the effectiveness of exposure through a particular media. Total number of exposures E is calculated as R×F, also known as gross rating points (GRP). Weighted number of exposures incorporates average impact, thus the formula become WE = R×F×I. Audience awareness increases with the increase of the abovementioned characteristics, however under budget constraints there is a trade-off between frequency and reach of the message (Kotler & Keller, 2009).
4. What are the five major decisions, known as "the five M's" that marketing managers must make in developing an advertising campaign?
“The five Ms” are the five decisions, that a marketing manager should make when developing an advertising campaign. Firstly, the objectives of the campaign should be clearly defined, thus developing its Mission. The budget of the campaign, or the Money, should be carefully evaluated. The decision should be also made about the Message, which is going to be sent to the customers and the Media, that should be used for that purpose. Finally, the Measurement system should be developed in order to evaluate campaign progress and results (Kotler & Keller, 2009).
5. What are the seven design elements that effective Web sites feature? Define each of these.
Effective website, according to Rayport and Jaworski, should possess seven design elements or the 7Cs: customization, communication, connection, commerce, context, content and community (Rayport & Jaworski, 2003). It is also possible to add the eighth C – constant change, in order to assure continuous improvement. Customization is the ability to tailor the website based on the preferences of the users or give the users an opportunity to customize it themselves. Communication criterion characterizes interaction between the user and the site. Connection shows the level of connectedness of a particular website to the other sites. Commerce factor indicates the ability to conduct financial transactions via the website. Context refers to the balance between aesthetical look and functionality of the website. Effective context in this case indicates that users can easily find the right information, while the look of the website encourages emotional satisfaction from the usage. Content is the mix of audio, video, text and visual information, presented on the website. The content of the website should be considered in regards to the balance between functionality and emotional experience, visual aids, information choice and time sensitiveness of the information. Community factors shows that the design of a website should meet the demands of the user community (Fill, 2009).
References
Fill, C. Marketing communications: interactivity, communities and content. (5th ed., 2009,
pp. 758-759). Harlow, the United Kingdom: Prentice Hall.
Kotler, P., & Keller, K. (2009). Marketing management. (13 ed.). Prentice Hall.
Rayport, J. F., & Jaworski, B. (2003). Introduction to e-commerce:Mcgraw-Hill/Irwin series
in marketing. McGraw-Hill Irwin MarketspaceU.
