The Internet and Interactive Media

Internet Communications Objectives

E-Commerce

The Internet also offers the opportunity to sell directly to customers in both the consumer market and the business-to-business market. This direct selling of goods and services has been labeled e-commerce.

Web 1.0 and 2.0

Internet Advertising Models

Personal Selling on the Internet

Measures of Internet Effectiveness

Perspectives on Consumer Behavior

Consumer behavior can be defined as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires. For many products and services, purchase decisions are the result of a long, detailed process that may include an extensive information search, brand comparisons and evaluations, and other activities. Other purchase decisions are more incidental and may result from little more than seeing a product prominently displayed at a discount price in a store. Think of how many times you have made impulse purchases in stores.

Problem Recognition

Examining Consumer Motivations

Marketers recognize that while problem recognition is often a basic, simple process, the way a consumer perceives a problem and becomes motivated to solve it will influence the remainder of the decision process. For example, one consumer may perceive the need to purchase a new watch from a functional perspective and focus on reliable, low-priced alternatives. Another consumer may see the purchase of a watch as more of a fashion statement and focus on the design and image of various brands. To better understand the reasons underlying consumer purchases, marketers devote considerable attention to examining motives—that is, those factors that compel a consumer to take a particular action.

Maslow's hierarchy of needs

Psychoanalytic Theory

A somewhat more controversial approach to the study of consumer motives is the psychoanalytic theory pioneered by Sigmund Freud. Although his work dealt with the structure and development of personality, Freud also studied the underlying motivations for human behavior. Psychoanalytic theory had a strong influence on the development of modern psychology and on explanations of motivation and personality. It has also been applied to the study of consumer behavior

by marketers interested in probing deeply rooted motives that may underlie purchase decisions.

Information Search

Once consumers perceive a problem or need that can be satisfied by the purchase of a product or service, they begin to search for information needed to make a purchase decision. The initial search effort often consists of an attempt to scan information stored in memory to recall past experiences and/or knowledge regarding various purchase alternatives.9 This information retrieval is referred to as internal search. For many routine, repetitive purchases, previously acquired information that is stored in memory (such as past performance or outcomes from using a brand) is sufficient for comparing alternatives and making a choice.

Perception

Knowledge of how consumers acquire and use information from external sources is important to marketers in formulating communication strategies. Marketers are particularly interested in (1) how consumers sense external information, (2) how they select and attend to various sources of information, and (3) how this information is interpreted and given meaning. These processes are all part of perception, the process by which an individual receives, selects, organizes, and interprets information to create a meaningful picture of the world.

Selective Perception Process

Ways to Change Attitudes

Multi-attribute models help marketers understand and diagnose the underlying basis of consumers’ attitudes. By understanding the beliefs that underlie consumers’ evaluations of a brand and the importance of various attributes or consequences, the marketer is better able to develop communication strategies for creating, changing, or reinforcing brand attitudes.

Integration Processes and Decision Rules

Another important aspect of the alternative evaluation stage is the way consumers combine information about the characteristics of brands to arrive at a purchase decision. Integration processes are the way product knowledge, meanings, and beliefs are combined to evaluate two or more alternatives.Analysis of the integration process focuses on the different types of decision rules or strategies consumers use to decide among purchase alternatives.

The Consumer Learning Process

The discussion of the decision process shows that the way consumers make a purchase varies depending on a number of factors, including the nature of the product or service, the amount of experience they have with the product, and the importance of the purchase. One factor in the level of problem solving to be employed is the consumer’s involvement with the product or brand.

Behavioral Learning Theory

Behavioral learning theories emphasize the role of external, environmental stimuli in causing behavior; they minimize the significance of internal psychological processes. Behavioral learning theories are based on the stimulus–response orientation (S–R), the premise that learning occurs as the result of responses to external stimuli in the environment. Behavioral learning theorists believe learning occurs through the connection between a stimulus and a response. We will examine the basic principles of two behavioral learning theory approaches: classical conditioning and operant conditioning.

Classical Conditioning: Classical conditioning assumes that learning is an associative process with an already existing relationship between a stimulus and a response.

Operant Conditioning:

In the operant conditioning approach, the individual must actively operate or act on some aspect of the environment for learning to occur. Operant conditioning is sometimes referred to as instrumental conditioning because the individual’s response is instrumental in getting a positive reinforcement (reward) or negative reinforcement (punishment).

Cognitive Learning Theory

Since consumer behavior typically involves choices and decision making, the cognitive perspective has particular appeal to marketers, especially those whose product/service calls for important and involved purchase decisions. Cognitive processes such as perception, formation of beliefs about brands, attitude development and change, and integration are important to understanding the decision-making process for many types of purchases.

External Influences on Consumer Behaviour 

Creative strategy: Implementation & Evaluation

"The appeal can be said to form the underlying content of the advertisement, and the execution the way in which that content is presented." - William Weilbacher

Advertising appeals

The appeals can be mostly categorized in two categories:

1. Rational appeals: Focus on the consumer’s practical, functional, or utilitarian need for the product or service and emphasize features of a product or service and/or the benefits or reasons for owning or using a particular brand. The content of these messages emphasizes facts, learning, and the logic of persuasion. Ex - comfort, convenience, economy, health, and sensory benefits.

There are a lot of appeals that fall under this category: Feature, Competitive advantage, Favorable, Price, News and Product/service popularity appeals

 2. Emotional appeals: Relate to the customers’ social and/or psychological needs for purchasing a product or service. Advertisers for many products and services view rational, information-based appeals as dull. Many advertisers believe appeals to consumers’ emotions work better at selling brands that do not differ markedly from competing brands, since rational differentiation of them is difficult.

Combining Rational and Emotional Appeals In many advertising situations, the decision facing the creative specialist is not whether to choose an emotional or a rational appeal but, rather, determining how to combine the two approaches. Consumer purchase decisions are often made on the basis of both emotional and rational motives, and attention must be given to both elements in developing effective advertising.

Other types of appeals:

1. Reminder advertising -  building brand awareness and/or keeping the brand name in front of consumers
2. Teaser advertising - build curiosity, interest, and/or excitement about a product or brand by talking about it but not actually showing it

Advertising execution

Creative execution is the way an advertising appeal is presented. While it is obviously important for an ad to have a meaningful appeal or message to communicate to the consumer, the manner in which the ad is executed is also important.

An advertising message can be presented or executed in numerous ways

1. Straight sell or factual message
2. Animation
3. Scientific/technical evidence
4. Personality symbol
5. Demonstration
6. Fantasy
7. Comparison
8. Dramatization
9. Testimonial
10. Humor
11. Slice of life
12. Combinations

Components of a print advertising:'

1. Headlines: The most important function of a headline is attracting readers’ attention and interesting them in the rest of the message. Headlines also perform a segmentation function by engaging the attention and interest of consumers who are most likely to buy a particular product or service. They are of two types: direct and indirect headlines
2. Subheads: Subheads are often used to enhance the readability of the message by breaking up large amounts of body copy and highlighting key sales points. Their content reinforces the headline and advertising slogan or theme.
3. Body copy: Body copy content often flows from the points made in the headline or various subheads, but the specific content depends on the type of advertising appeal and/or execution style being used.
4. Visual elements: The visual portion of an ad must attract attention, communicate an idea or image, and work in a synergistic fashion with the headline and body copy to produce an effective message. In some print ads, the visual portion of the ad is essentially the message and thus must convey a strong and meaningful image.
5. Layout: The layout shows where each part of the ad will be placed and gives guidelines to the people working on the ad. The layout can also guide the art director in determining the size and type of photos.

Components of a TV Commercial:

1. Video: The visual portion generally dominates the commercial, so it must attract viewers’ attention and communicate an idea, message, and/or image. A number of visual elements may have to be coordinated to produce a successful ad.
2. Audio: Voices are used in different ways in commercials. They may be heard through the direct presentation of a spokesperson or as a conversation among various people appearing in the commercial. A common method for presenting the audio portion of a commercial is through a voice-over, where the message is delivered or action on the screen is narrated or described by an announcer who is not visible.

Evaluation

“A fine line: Make sure the sales message is not lost, but be careful not to stifle the efforts of the creative specialists and force them into producing dull, boring advertising.”

Basic guidelines for evaluation are:

1. Is the creative approach consistent with the brand’s marketing and advertising objectives?
2. Is the creative approach consistent with the creative strategy and objectives?
3. Does it communicate what it is supposed to?
4. Is the creative approach appropriate for the target audience?
5. Does the creative approach communicate a clear and convincing message to the customer?
6. Does the creative execution keep from overwhelming the message?
7. Is the creative approach appropriate for the media environment in which it is likely to be seen?
8. Is the ad truthful and tasteful?

Chapter 10 - Media Planning and Strategy

Media Planning and Strategy

There are many changes taking place in the media environment in the present times. Perhaps at no other time in history have so many changes taken place that significantly alter the media decision process. As a result, media planning has become more complex than ever before.

An overview of media planning

The options in the media planning process include mass media such as television, newspapers, radio, and magazines (and the choices available within each of these categories) as well as out-of-the-home media such as outdoor advertising, transit advertising, and electronic billboards. While at first glance the choices among these alternatives might seem relatively straight-forward, this is rarely the case. The characteristics of each alternative must be considered, along with many other factors. The product or service being advertised affects the media planning process.

Basic Terms and Concepts

Media planning is the series of decisions involved in delivering the promotional message to the prospective purchasers and/or users of the product or brand. The media plan is the guide for media selection. It requires development of specific media objectives and specific media strategies (plans of action) designed to attain these objectives.

The medium is the general category of available delivery systems, which includes broadcast media (like TV and radio), print media (like newspapers and magazines), direct mail, outdoor advertising, and other support media. The media vehicle is the specific carrier within a medium category. Reach is a measure of the number of different audience members exposed at least once to a media vehicle in a given period of time. Coverage refers to the potential audience that might receive the message through a vehicle. Finally, frequency refers to the number of times the receiver is exposed to the media vehicle in a specified period.

The media plan

The media plan determines the best way to get the advertiser’s message to the market.

Problems in Media Planning

Insufficient Information

While a great deal of information about markets and the media exists; media planners often require more than is available. Some data are just not measured, either because they cannot be or because measuring them would be too expensive.

Inconsistent Terminologies

Problems arise because the cost bases used by different media often vary and the standards of measurement used to establish these costs are not always consistent.

Time Pressures

It seems that advertisers are always in a hurry—sometimes because they need to be; other times because they think they need to be. Actions by a competitor require immediate response.

Difficulty Measuring Effectiveness

Because it is so hard to measure the effectiveness of advertising and promotions in general, it is also difficult to determine the relative effectiveness of various media or media vehicles.

Developing the media plan

Activities involved in developing the media plan

Establishing media Objectives

Just as the situation analysis leads to establishment of marketing and communications objectives, the media situation analysis should lead to determination of specific media objectives. The media objectives are not ends in themselves. Rather, they are designed to lead to the attainment of communications and marketing objectives.

Developing and Implementing Media Strategies

The Media Mix

A wide variety of media and media vehicles are available to advertisers. While it is possible that only one medium and/or vehicle might be employed, it is much more likely that a number of alternatives will be used. The objectives sought, the characteristics of the product or service, the size of the budget, and individual preferences are just some of the factors that determine what combination of media will be used.

Target Market Coverage

The media planner determines which target markets should receive the most media emphasis. Developing media strategies involves matching the most appropriate media to this market by asking, “Through which media and media vehicles can I best get my message to prospective buyers?

Geographic Coverage

The objective of weighting certain geographic areas more than others makes sense, and the strategy of exerting more promotional efforts and dollars in those areas follows naturally.

Scheduling

The primary objective of scheduling is to time promotional efforts so that they will coincide with the highest potential buying times. For some products these times are not easy to identify; for others they are very obvious. Three scheduling methods available to the media planner are - continuity, flighting, and pulsing.

Reach versus Frequency

Since advertisers have a variety of objectives and face budget constraints, they usually must trade off reach and frequency. They must decide whether to have the message be seen or heard by more people (reach) or by fewer people more often (frequency).

Graph of effective reach

Creative Aspects and Mood

The context of the medium in which the ad is placed may also affect viewers’ perceptions. A specific creative strategy may require certain media. Because TV provides both sight and sound, it may be more effective in generating emotions than other media; magazines may create different perceptions from newspapers. In developing a media strategy, marketers must consider both creativity and mood factors.

Flexibility

An effective media strategy requires a degree of flexibility. Because of the rapidly changing marketing environment, strategies may need to be modified. If the plan has not built in some flexibility, opportunities may be lost and/or the company may not be able to address new threats. Flexibility may be needed to address market opportunities and threat, availability of media and changes in media.

Budget Considerations

One of the more important decisions in the development of media strategy is cost estimating. The value of any strategy can be determined by how well it delivers the message to the audience with the lowest cost and the least waste.

Evaluation and Follow-up

Measures of effectiveness must consider two factors: (1) How well did these strategies achieve the media objectives? (2) How well did this media plan contribute to attaining the overall marketing and communications objectives? If the strategies were successful, they should be used in future plans. If not, their flaws should be analyzed.

Computers in Media Planning

Advanced planning models have been around since at least 1963; for the most part these models have met with limited success. Programs based on linear programming, simulation and iteration have been adopted by a number of agencies, but there remains a great deal of skepticism regarding their practicality. Computers have been used, however, to automate each of the four steps involved in planning and strategy development. While the art of media strategy has not been mechanized, advances in the quantitative side have significantly improved managers’ decision-making capabilities while saving substantial time and effort.

Characteristics of Media

To this point, we have discussed the elements involved in the development of media strategy. One of the most basic elements in this process is the matching of media to markets. Each medium has its own characteristics that make it better or worse for attaining specific objectives.

Into Serious Reading...Chapter 1

An introduction to Integrated Marketing Communication

Objectives

The major objectives of this section are to examine the growing importance of promotion and advertising in the marketing programs of firms, to introduce the concept of Integrated Marketing Communication (IMC), to introduce various elements of promotional mix and consider their role in IMC and finally to introduce a model of IMC planning process and examining the steps required to develop an successful marketing campaign by integrating various elements of marketing and promotion.

Introduction

In the last decade or so the competition in various sectors have increased many fold, customers have lot many options to choose from and hence organizations have realized having a good product or service is just not important to distinct them from others. Equal emphasis needs to be laid on effectively communicating that quality or difference and hence increasing the focus on effective marketing. One of the tested and successful ways to achieve what has been said above is to integrate and coordinate various marketing activities of the firm namely- sales promotion, personal selling, direct marketing, PR activities and event sponsoring. The recognition of this fact is more so clear from the figures- advertising expenditure on average for firms outside US has increased from approx. 50 billion US $ per year to more than 200 billion. Only those organizations will stand the test of the time that are able to better coordinate all these discussed marketing activities so that all of them send the same right message to the intended targeted audience. Appropriate budgetary allocation and its distribution among these activities will again be a major challenge.

What is marketing? - The Basics

The key word in the definition of marketing is to create exchanges. Exchanges here means where one party provides the goods and/ or services (it might be social recognition and psychological satisfaction of altruism by donation) and the second party provides money or may be other goods or services in exchange.  Another major shift in today’s world is towards relationship marketing here the focus is on not only developing relationships with customers but also maintaining and strengthening them over time to increase the exchanges (directly with that party itself) or indirectly (through word of mouth publicity) or by both. This is also beneficial as recent research have shown acquiring new customers are much more costly them retaining present customers.  Today’s customers want customized products, on time, cost effectively through a convenient platform. Hence this need for mass customization has made the coordination between various marketing tools even more important.

The marketing approaches used by organizations to better focus on their effort on relationship marketing can be categorized under three levels- corporate level, marketing level and marketing communication level. At the corporate level communication with the customer to develop and maintain relationships is done through its mission, vision, annual reports and CSR activities. At marketing level it is through the 4Ps price, promotion, place and product attributes. And finally at the marketing communication level – company tries to send the message through integration of its various promotion activities like direct selling, PR activities, advertisements etc.  One important thing that needs to be kept in mind is that all these activities should be sending the same message. By effectively coordinating these activities organizations can take advantage of synergies and avoiding duplication of efforts hence saving precious money and time.

       The Integrated Marketing Communication Concept

Promotion Mix as an IMC tool

If we try to summarize numerous factors which have led towards search for better marketing alternatives and hence the invent of Integrated Marketing Communication- they can be written as increasing emphasis on more cost effective and directed marketing means, a shift in marketing power from manufacturers to retailers due to consolidation, the rapid growth of database marketing and the increasing penetration of Internet.

One of the major reasons for the growing importance of integrated marketing communications over the past decade is that it plays a major role in the process of developing and sustaining brand identity and equity. With more and more products and services competing for consideration by customers who have less and less time to make choices, well-known brands have a major competitive advantage in today’s marketplace. Building and maintaining brand identity and equity require the creation of well-known brands that have favorable, strong, and unique associations in the mind of the consumers. Brand identity is a combination of many factors, including the name, logo, symbols, design, packaging, and performance of a product or service as well as the image or type of associations that comes to mind when consumers think about a brand. It encompasses the entire spectrum of consumers’ awareness, knowledge, and image of the brand as well as the company behind it. The challenge is to understand how to use the various IMC tools to make such contacts and deliver the branding message effectively and efficiently.

Promotion has been defined as the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea. The basic tools used to accomplish an organization’s communication objectives are often referred to as the promotional mix. Traditionally the promotional mix has included four elements: advertising, sales promotion, publicity/public relations, and personal selling. However, in this text we view direct marketing as well as interactive media as major promotional-mix elements that modern-day marketers use to communicate with their target markets. Each element of the promotional mix is viewed as an integrated marketing communications tool that plays a distinctive role in an IMC program. 

Advertising is defined as any paid form of nonperson communication about an organization, product, service, or idea by an identified sponsor. An occasional exception to this is the public service announcement (PSA), whose advertising space or time is donated by the media. The non-personal component means that advertising involves mass media (e.g., TV, radio, magazines, newspapers) that can transmit a message to large groups of individuals, often at the same time. The non-personal nature of advertising means that there is generally no opportunity for immediate feedback from the message recipient (except in direct-response advertising). Another advantage of advertising is its ability to strike a responsive chord with consumers when differentiation across other elements of the marketing mix is difficult to achieve. Popular advertising campaigns attract consumers’ attention and can help generate sales.

Direct marketing, is the one in which organizations communicate directly with target customers to generate a response and/or a transaction. Direct marketing is much more than direct mail and mail order catalogs. It involves a variety of activities, including database management, direct selling, telemarketing, and direct response ads through direct mail, the Internet, and various broadcast and print media. One of the major tools of direct marketing is direct response advertising, whereby a product is promoted through an ad that encourages the consumer to purchase directly from the manufacturer. Direct-marketing tools and techniques are also being used by companies that distribute their products through traditional distribution channels or have their own sales force. Direct marketing plays a big role in the integrated marketing communications programs of consumer-product companies and business-to-business marketers.

Interactive/Internet Marketing- Interactive media allow for a back-and-forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time. Unlike traditional forms of marketing Communications such as advertising, which are one-way in nature, the new media allow users to perform a variety of functions such as receive and alter information and images, make inquiries, respond to questions, and, of course, make purchases. In addition to the Internet, other forms of interactive media include CD-ROMs, kiosks, and interactive television. Thousands of companies, ranging from large multinational corporations to small local firms, have developed websites to promote their products and services, by providing current and potential customers with information, as well as to entertain and interact with consumers.

Sales Promotion- it is generally defined as those marketing activities that provide extra value or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into two major categories: consumer-oriented and trade-oriented activities. Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and includes couponing, sampling, premiums, rebates, contests, sweepstakes, and various point-of-purchase materials. These promotional tools encourage consumers to make an immediate purchase and thus can stimulate short term sales. Trade-oriented sales promotion is targeted toward marketing intermediaries such as wholesalers, distributors, and retailers. Promotional and merchandising allowances, price deals, sales contests, and trade shows are some of the promotional tools used to encourage the trade to stock and promote a company’s products.

Publicity/ Public Relations- Publicity refer to nonperson communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. It usually comes in the form of a news story, editorial, or announcement about an organization and/or its products and services. Like advertising, publicity involves nonperson communication to a mass audience, but unlike advertising, publicity is not directly paid for by the company. The company or organization attempts to get the media to cover or run a favorable story on a product, service, cause, or event to affect awareness, knowledge, opinions, and/or behavior. Techniques used to gain publicity include news releases, press conferences, feature articles, photographs, films, and videotapes. An advantage of publicity over other forms of promotion is its credibility, as the information comes from a source generally perceived as unbiased.

Public Relations: It is important to recognize the distinction between publicity and public relations. When an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives, it is really engaging in a function known as public relations. Public relations uses publicity and a variety of other tools—including special publications, participation in community activities, fund-raising, sponsorship of special events, and various public affairs activities—to enhance an organization’s image.

Personal Selling: This is a form of person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s product or service or to act on an idea. Unlike advertising, personal selling involves direct contact between buyer and seller, either face-to-face or through some form of telecommunications such as telephone sales. Personal selling also involves more immediate and precise feedback because the impact of the sales presentation can generally be assessed from the customer’s reactions.

Promotional management involves coordinating the promotional-mix elements to develop a controlled, integrated program of effective marketing communications.

The IMC Planning Process

The integrated marketing communications programme is developed by reference to a number of factors, i.e.

• The overall marketing plan, including marketing objectives and competitor analysis.
• The promotional programme situation, e.g. internally – previous experience and ability with respect to promotions – and externally – consumer behaviour analysis, segmentation, targeting and positioning decisions.
• Communications process analysis – e.g. communication goals, receiver's response processes, source, message and channel factors.

Finally, the available budget and decisions with respect to budget allocation will input into the planning process.