Advertisement and Sales Promotion

Chapter: 2

The Role of IMC in the Marketing Process

          In this chapter, we take a closer look at how marketing strategies influence the role of promotion and how promotional decisions must be coordinated with other areas of the marketing mix. In turn, all elements of the marketing mix must be consistent in a strategic plan that results in an integrated marketing communications program.

The Marketing and Promotions Process

          This is a process developing of a marketing program that requires an in depth analysis of the market. This analysis may make extensive use of marketing research as an input into the planning process.

The Marketing and Promotions Process Model

Marketing Strategy an Analysis

          Any organization that wants to exchange its product and services in the marketplace should have a strategic marketing plan to guide the allocation of its resources. A strategic marketing plan usually evolves from an organization’s overall corporate strategy and serves as a guide for specific marketing programs and policies.

·         Opportunity Analysis

          Market Opportunities are areas where there are favorable demand trends, where the company believes customer needs and opportunities are not being satisfied, and where it can compete effectively.

·         Competitive Analysis

          An important aspect of marketing strategy development is the search for competitive advantage, something special a firm does or has that gives it an edge over competitors.

·         Target Marketing

          Target Marketing (Target Market Selection) is the process of selecting one or more market segments as a target market by developing different marketing strategies to satisfy different consumer needs.

The Target Marketing Process

          Target marketing involves four basic steps:

1.      Identifying Markets with Unfulfilled Needs

2.      Segmenting the Market

3.      Targeting Specific Segments

4.      Positioning One’s Product or Service through Marketing Strategies

1.      Identifying Markets

          The marketer identifies the specific needs of groups of people (segments), selects one or more of these segments as a target, and develops marketing programs directed to each.

          Target market identification isolates consumers with similar lifestyles, needs, and the like, and increases our knowledge of their specific requirements. The more marketers can establish this common ground with consumers, the more effective they will be in addressing these requirements.

2.      Market Segmentation

          Market Segmentation is dividing up a market into distinct groups that

a.       have common needs

b.      will respond similarly to marketing action

The segmentation process has five distinct steps:

1.      Finding ways to group according to their needs.

2.      Finding ways to group marketing actions – usually the products offered – available to the organization.

3.      Developing a market-product grid to relate the market segments to the firm’s products or actions.

4.      Selecting the target segments toward which the firm directs its marketing actions.

5.      Taking marketing actions to reach target segments.

Bases for Market Segmentation

·         Geographic Segmentation – Markets are divided into geographic units. These units may include nations, states, countries, or even neighborhoods.

·         Demographic Segmentation – Dividing the market on the basis of demographic variables such as age, sex, family size, education, income, and social class.

·         Psychographic Segmentation – Dividing the market on the basis of personality and/or lifestyles.

·         Behavioristic Segmentation – Dividing consumers into groups according to their usage, loyalties, or buying responses to a product

·         Benefits Se4gmentation – The grouping of consumers on the basis of attributes sought in a product.

3.      Selecting a Target Market

          Target Marketing involves two steps:

A.     Determining How Many Segments To Enter

          In determining the number of segments to enter three market coverage alternatives are available:

a.       Undifferentiated Marketing – involves ignoring segment differences and offering just one product or service to the entire market.

b.      Differentiated Marketing – involves marketing in a number of segments, developing separate strategies for each.

c.       Concentrated Marketing – is used when the firm selects one segment and attempts to capture a large share of this market.

B.     Determining Which Segments Offer Potential

          The firm must examine the sales potential of the segment, the opportunities for growth, the competition, and its own ability to compete. Then it must decide whether it can market to this group.

4.      Market Positioning

          Positioning is defined as “the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.”

          Approaches to Positioning

                     Positioning strategies generally focuses on either the consumer or the competition. The consumer approach does so by linking the product with the benefits the consumer will derive or creating a favorable image. The competition approach positions the product by comparing it and the benefit it offers with the competition.

           Developing a Positioning Strategy

                    

                      A number of positioning strategies might be employed in developing a promotional program. Below are six suggested strategies.

1.      Positioning by Product Attributes and Benefits – is setting the brand apart from competitors on the basis of the specific characteristics or benefits offered. Sometimes a product may be positioned on more than one product benefit. Marketers attempt to identify salient attributes (those that are important to consumers and are the basis for making a purchase decision).

2.      Positioning by Price/Quality – one way to do this is with ads that reflect the image of a high-quality brand where cost, while not relevant, is considered secondary to the quality benefits derived from using the brand. Another way to use price/quality characteristics for positioning is to focus on the quality or value offered by the brand at a very competitive price.

3.      Positioning by Use or Application – another way to communicate specific image or position for a brand by associating it with a specific use or application. It is also an effective way to expand the usage of a product.

4.      Positioning by Product Class – Often the competition for a product comes from outside the product class. For example, airlines know that while they compete with other airlines, trains and buses are also viable alternatives. Amtrak has positioned itself as an alternative to airplanes.

          The California Avocado Information Bureau launched a major IMC campaign strongly positioning itself as a fruit (as opposed to vegetable). A recent Mountain High yogurt ad positions the product as a substitute for other baking ingredients.

5.      Positioning by Product User – positioning product by associating it with a particular user or group of users. This campaign emphasizes identification or association with a specific group.

6.      Positioning by Competitor – In today’s market, an effective positioning strategy may focus on specific competitors within the same product category. Example, Avis positioned itself against car-rental leader, Hertz, by saying, “We are number two, so we try harder.” Here, a marketer must often employ another positioning strategy as well differentiate the brand.

7.      Positioning by Cultural Symbols – Cultural symbols are used to differentiate a brand. Examples: Ronald MacDonald, Jolly Green Giant, the Keebler Elves, Speedy Alka-Seltzer. These symbols has successfully differentiated the product is represents from competitors.

8.      Repositioning – involves altering or changing a product’s or brand position. Repositioning a product usually occurs because of declining or stagnant sales or because of anticipated opportunities in other market positions. Repositioning is often difficult to accomplish because of entrenched perceptions about and attitudes toward the product or brand. Many companies’ attempts to change their positions have met with little or no success.

          Determining the Position Strategy

                          The development of a positioning platform can be broken into a six-step process:

1.      Identifying competitors

2.      Assessing consumer’s perceptions of competitors

3.      Determining competitors position

4.      Analyzing the consumer’s preferences

5.      Making the positioning decision

6.      Monitoring the position

Market Planning Program Development

          This stage of the marketing process involves a cohesive, effective marketing program. Each marketing mix element is multi-dimensional and includes a number of decision areas. Likewise, each must consider and contribute to the overall IMC program.

Decision Areas:

A.    Product Decisions

          The Product is anything that can be marketed and that, when used or supported, gives satisfaction to the individual. It is not just a physical object; it is a bundle of benefits or values that satisfies the needs of the consumers. The needs may be purely functional, or they may include social and psychological benefits.

          The term Product Symbolism refers to what a product or brand means to consumers and what they experience in purchasing and using it.

          Product planning involves decisions not only about the item itself, such as design and quality, but also about aspects such as service and warranties as well as brand name and package design. Consumers look beyond the reality of the product and its ingredients.

          In an effective IMC program, advertising, branding, and packaging are all design to portray the product as more than just a bundle of attributes. All are coordinated to present an image or positioning of the product that extend beyond its physical attributes.

          Branding or choosing a brand name for a product is important from a promotional perspective because brand names communicate attributes and meaning. Marketers search for brand names that can communicate product concepts and help position the product in customer’s minds.

          One important role of advertising is respect to branding strategies is creating and maintaining brand equity, which can be thought of as an intangible asset of added value or goodwill that results from the favorable image, impressions of differentiation, and/or strength of consumer attachment to a company name, brand name or trademark.

          Packaging is another aspect of product strategy that is important. The role and function of the package have changed because of the self-service emphasis of many stores and the fact that more and more buying decisions are made at point of purchase. The package is often the first exposure of the product, so it must make a favorable first impression.

B.     Price Decisions

          The Price Variable refers to what the consumer must give up to purchase a product or service. The cost of the product to the consumer includes the dollar amount exchanged for an item, time, mental activity, and behavioral effort. A firm must consider a number of factors in determining the price it charges for its product or service, including costs, demand factors, competition, and perceived value.

          From an IMC perspective, the price must be consistent with the perceptions of the product as well as the communication strategy. Higher prices will communicate a higher product quality, while lower prices reflect a bargain or “value” perceptions. A product positioned as highest quality but carrying a lower price than competitors will only confuse consumers. In other words, the price, advertising, and distribution channels must present one unified voice speaking to the product’s positioning.

C.    Distribution Channel Decisions

          One of a marketer’s most important marketing decisions involves the way it makes its products and services available for purchase. A product must be available where the customer wants it, when the customer wants it, and with the proper support and service.

          Marketing Channels, the place element of the marketing mix, are “sets of interdependent organizations involved in the process of making a product or service available for use or consumption.

          Channel decisions involve selecting, managing, and motivating intermediaries such as wholesalers, distributors, brokers, and retailers that help a firm make a product or service available to customers. These intermediaries also called resellers, are critical to the success of a company’s marketing program.

           A company can choose not to use any channel intermediaries but instead sell to its customers through direct channels. This channel arrangement is used by firms using direst selling programs.

          Most consumer product companies distribute through indirect channels, usually using a network of wholesalers and /or retailers.