Marketing Channel Management Price Product Target Position

Marketing Channel Management Price Product Target & Position Place Promo Distribution Channels Media Channels SMC IMC thru Supply Chain Management thru Integrated Marketing Communication

The Changing Worlds of Distribution & Promotion Channel Integration ØSupply Chain Mgt- Shared Info replaces inventory ØIntegrated Marketing Communication ØDeveloping Creative & Media Strategy ØThe “New” Media & Advertising-Promotional techniques…

Changing World of Distribution Old World Marketer’s distribution decisions not extend much beyond level of intensity(Convenience, Selective or Exclusive)

Levels of distribution intensity Mfgr. Channel Strategy Exclusive Distribution When mfgr. restricts distribution to single/ select few retailer(s) Specialty Products l l Expensive Infrequently purchased Sought after by consumers Require considerable after-sale servicing

Levels of distribution intensity Mfgr. Channel Strategy Selective Distribution brands Product available in multiple retail outlets Shopping goods Buy less frequently l High-Mod. price l Comparison shop l l i. e Clothing, appliances e ver fin e Where e sold” “ ar

Levels of distribution intensity Mfgr. Channel Strategy Intensive Distribution Convenience products - sold thru virtually every available retail outlet in a particular market Buy frequently, immediately l Low priced l Mass advertising l

Changing World of Distribution Old World Independent Middlemen Separate functions handled by separate businesses Focus only on your link in the chain New World Supply Chain Team Integrate all members of SC thru shared info - system Coordinate supplyproductiontransportation & Distribution

Changing World of Promotion Old World New World Mass Media & Mass Middlemen Integrated Marketing Communication Separate functions Communication Dominated by Advertising handled by “experts” in & Ad departments separate Agencies Integrate all channels of promotional mix under one strategic umbrella Focus on mass media Mass media advertising serves supportive role in overall Marketing Communications effort

SCM & IMC l. Getting the Right Things lto the Right Places lat the Right Times lw/ Minimum cost & Maximum levels of Customer l Getting the Right Messages l to the Right people l at the Right Times l w/ Minimum waste & Maximum effect

Product & Message Distribution Commonalities To get Product out: l l Effective Communication w/ distributors Effective Distribution Channel strategy & mgt. To get the Message out: l l Effective Communication w/ consumers Effective Media Channel strategy & mgt.

Advertising Webvertising Events & Sponsorships Direct Marketing In Sync Packaging Public Relations Sales Promotion Personal Selling

Manufacturers Transporters In Sync Distributors Shippers Warehouses Suppliers Retailers

Supply chain team Logistics information system Free & Immediate movement of Information & down supply chain up Sourcing & procurement Production scheduling Order processing Inventory control Warehouse & materials handling Transportation

Information Distortions and the “Bullwhip Effect Sales rate volatility Production rate volatility

The “Bullwhip Effect” 1200 Customer Demand 900 600 300 0 4 8 12 16 20 24 Mo. 1200 900 Retailer Orders 600 To Distributor Inventory is insurance against supply chain uncertainties 300 1200 Distributor Orders To Manufacturer 900 600 0 4 8 12 16 20 24 Mo.

Supply chain management substitutes information for inventory

Logistics Costs Continue to Fall

Wireless/Mobile IMS Key Point: Distribution functions can be improved w/ INFOintegration (“compunication”, Scanning & RFID technologies) l l l Receiving Product storage/ “putaways” Order Fulfillment/ “Picks” Inventory Shipping l l l Increased productivity Increased accuracy Increased space efficiencies – Better customer service=satisfactio n– order processing time & effort; Better (fresher)

Integrated Marketing Communications Wherein a Company Integrates & Coordinates all its Communications

Co-ordinate, Synthesize, Orchestrate all Marketing Communications… Mass Media campaign strategy Creative Concept PR Cust. Service Execution of single strategy & concept across all communication channels In-store New Media

Broader Perspective of Promotion Conceptualize IMC in terms of “All Contacts” between customer & brand

Integrated Marketing Communication More Continuous Maximum Impact! More Consistent

More Impact IMC helps Cut Thru Message Clutter IMC Strategy

More Continuity & Impact Integrate Comm. Across Time & Channels High Personal selling Importance Sales promotion Direct Marketing Public Re la tions Advertising Low Pre-purchase Post-purchase Stage of consumer’s purchase decision

“IMC Simple in Concept Need only 1. Have something interesting & compelling to say 2. Have an effective means of reaching logical prospects

Developing IMC Campaigns Need only 1. Have something interesting & compelling to say 2. Have an effective means of reaching logical prospects (Media Strategy) Creative Strategy l l Campaign Concept“the big idea” Message Executionstyle & format

Can’t be pulled out of a hat … …nor from of a book

The Creative Work-plan üThe Situation üThe Target üThe Product üThe Message

Developing the Communication Campaign Concept Suits-- “Its not creative unless it sells” Director of Marketing Brand Manager Ad Agency AE Creative Director Copy Chief Copywriter Art Director Poets– Artistic; value entertainment & originality Artist

The Situation n Key fact- major problem / opportunity to emerge from sit. analysis n Marketing Goals- sales, votes, memberships… n Advertising Goalscommunication based

The Target n Prospect Definitionall relevant descriptors n Key Dimensionsmost relevant descriptors

The Product n n n Benefits & Attributesreal, imagined, inuse, result-use, social, psycho… Competition— what/how are they selling Position- in consumer’s evoked set l - l -

The Message n Concept- “The Big Idea” n Promise / USP — what “really” offering n Support- words, facts, reasons, images backingup promise n Slogo- visual/verbal ID

We’re ready to go when you are… That’s why We’re #1 in the #2 Business Johnny-on the Spot

Having developed WHAT your going to say– next decide HOW to say it User-Testimonial Scientific/Technical Expert Animated-Personality Unique Character, Image, Persona—that Celebrity Endorsement represents the Brand— (Leo Burnett School: School Slice of Life l Tony the Tiger l The Keebler Elf FORMATS Fantasy l Jolly Green Giant l Charlie the Tuna l Morris the Cat Demonstration Music Video

Creative Brief Del Monte • The Objective – Increase awareness of the smaller-size cans with pull-top lid. • Target Audience – senior citizens, especially those that live alone and suffer from arthritis. • Message Theme – The new cans not only contain a smaller portion but are easier to open. • Support – 30 cent introductory coupon to encourage usage. • Constraints – copyright logo, toll free number, website address, legal requirements of a

The message theme of this milk advertisement was that milk will provide calcium. The calcium will provide the customer with benefit of strong bones.

Humor

Humor

Evaluating Campaign Two Measures of Success Demonstrates process of Communication Testing Communication Effects Sales Effects

nowlling ad ’t kre se ood doney’ n g I h at t a dam whit’s but

What makes message Effective

Tell A Story

The Ultimate Evaluative Criteria: You Know you have succeeded when: l You get people to buy things they don’t need… l With money they don’t have… l To impress people they don’t like!

Developing Marketing Communication Campaigns l Creative strategy – Campaign Concept & Execution l Media Channel strategy – Media Planning

Basic Media Decisions 1. Deciding on Message Weight: Reach, Frequency, Continuity & Budget & Message Weight. GRP’s & CPM 2. Choosing Media Channels & Vehicles

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM What % of market – target sees -reads, hears -Message

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM How often target audience exposed to message

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM When are the best times to reach the target audience?

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM -Spend 1. What can afford 2. % of sales 3. What need to spend to achieve certain level R&F 4. What competitors spending

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM (Message Weight) Gross Rating Points= Reach x Frequency

Media-Plan Metrics Reach Frequency Continuity Cost GRP CPM Cost- Per Thousand Cost * (x 1000) (Audience size) Statistic allows comparison of cost efficiency of different media vehicles

Basic Media Decisions 1. Deciding on Message Weight: Reach, Frequency, Continuity & Budget & Message Weight- GRP’s & CPM 2. Choosing Media Channels & Vehicles

Established Channels & Methods

There’s an old adage … “Half of my $ spent on advertising is wasted- The only question is what half? ” l w/ U. S. advertisers spending $200+ billion each year & Worldwide spending exceeding $400+ billion…that’s a lot a $$$$$

And it could be getting a whole lot worse… The “old & established” methods of promotion ain’t what they used to be….

“Mass reach” is giving way to a world of niches… • Everybody has multi comm devices & consume what they want - when they want - where they want

Agents of Change are Everywhere: l l l l DVRs , PDA’s & Smartphones Wireless hot spots “Branded entertainment” Word-of-mouth, viral marketing Podcasts, online video Pervasive usage of GPS assisted content delivery Rapid deployment of

The media universe has shattered mfgrs. are losing their simple connection to the consumer. . . l l In 1995 it took 3 TV commercials to reach 80% of 18 - to 49 -year-old women. Today- takes > 10 times # Ads to reach the same group.

Even if could reach w/ 1 ad…. …effectiveness is questionable Given increased consumer resistance to and skepticism of advertising

Ads no longer secure customer attention Adult evening TV viewers able to name, without prompting, a brand or product advertised in show just seen Source: Newspaper Association of America, Cabletelevision Advertising Bureau, and Nielsen Media Research

Beware of 76% don’t TRUST! eroding believe that companies tell the truth in advertisements --Yankelovich, 2005 Consumer trust in advertising has plunged 41% over the past three years Only 10% of consumers say they “trust” ads today

20 th Cent. Media Business Model on Its Last Legs! “Emerging digital technologies are wresting power from the hands of the content provider and placing it with the consumer, forever changing the traditional paid-media advertising model” _______ “Madison Ave. melds pitches and

The DVR: consumers control programming, content & time • From 2000 – to date— The % of HH’s w/ DVR’s gone from 0% to 40% (projected -2008)

Marketing Professionals Vary in Awareness The Rush to Second Life 23% 39% 49% “SAW IT COMING” 50% 54% 58% 65% 77% 80% 86% The Rise of You. Tube 61% 51% Popularization of “Mash-ups” 50% Newspapers Moving to Tabloid Format 52% Issue-Specific Print Audience Measures 48% 53% 77% 47% TV Commercial Rating System 46% Growth of Free Daily Newspapers 42% Restructuring of Traditional Media Explosion of Consumer Content 35% Emergence of Podcasting 25% Social Media in Communication Plans Mass Adoption of Text Messaging TV Programs on the Internet Media Investment Survey 2007 23% 20% 14% “TOOK ME BY SURPRISE”

New Communication technology has & continues to alter Consumer preferences & patterns of media consumption And as a consequence- has & will continue to render long established business methods & models obsolete!

Mass Media Out - Mass Channel In It's the Mass Channel…Not the Mass Media that is attracting bulk of marketing dollars l 10 biggest Mega-Retailers: account for ~ 80% of mfgrs biz vs. ~ 30% decade ago l ~ 60% of mfgrs' marketing $$ go to retailers compared with 36% two decades ago

PUSH STRATEGY Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer Orders to manufacturer PULL STRATEGY Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Orders to manufacturer Wholesaler demands product from manufacturer

Thus Increased importance of Packaging v Protection Containment, storage, recycling v Information Ingredients, UPC, Instructions, Ø Promotion Readily noticed & recognized (Brand ID) Facilitate, use & convenience

Changing World of Marketing Communication Old World New World “Talking At” Consumers Two-way Dialogue With Two-way Dialogue W/ Consumers Focus on Winning New Customers Focus on Building Long Focus - Building Long Term Relationships With Term Relationships W/ Consumers Marketers Relied Primarily on Advertising and Promotions Marketers Use & Coordinate Many Different Forms of Communication

Mass Marketing One-to-Many-to-Many Social Network Marketing My ne friend twork of s/asso ciates Your network of friends/associates One-to-One W 3 Marketing Their network of friends/associates

IMC- Integrating the Buzz w/ other Marketing Comm. Vehicles

The New (and not so new) WOM Marketing Techniques • Buzz Marketing • Brand Blogging • CGM- Consumer Generated Media • Product Placement • Viral Marketing • Stealth Marketing • Guerilla Marketing • Conversation Marketing • Grassroots Marketing • Evangelist Marketing • Referral Marketing • Influencer Marketing • 2 Step Flow Marketing

Viral Marketing Creating entertaining / infotaining messages designed to be passed along … Example: Go Elf Yourself- Stats

Radian 6

http: //www. tremor. com/ • 250, 000+ teen Connectors screened & opted in http: //www. bzzagent. c om/ 80, 000 members Cost: 1, 000 agents -12 weeks ~$100 K

BUZZ Marketing: Using high Profile entertainme nt or news to get people talking about your

Halo : WOM Campaign Buzz Generator= On-line- l l Community interactive-immersive mystery story that allowed advance play of Halo 2 600, 000 full-time players 2. 3 million participants 1 million+ blog posts Media coverage w/ CNN, USA Today, NYT, etc. = $125 million opening day sales- biggest opening day revenue in entertainment history

Evangelist Marketing Cultivating advocates volunteers who will take a leadership role in actively spreading the good word about your product/service

Video - Clip. List l V-8 Communication Test l Top Ten Super Bowl Ads 2009 – Best SB ad all time- Herding cats l