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Chapter 2

Chapter 2. IMC Role in Marketing. Chapter Objectives. Understand the marketing process and the role of advertising and promotion in an organization’s integrated marketing program.

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Chapter 2

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  1. Chapter 2 IMC Role in Marketing

  2. Chapter Objectives • Understand the marketing process and the role of advertising and promotion in an organization’s integrated marketing program. • Know how the various decisions of the marketing mix influence and interact with advertising and promotional strategy. Chapter 2 : IMC Role in Marketing

  3. Chapter Objectives • Understand the target market process in an integrated marketing communications program. • Recognize the role of market segmentation and its use in an integrated marketing communications program. • Understand the concepts of market positioning and brand positioning. Chapter 2 : IMC Role in Marketing

  4. Marketing and Promotions Process Model Chapter 2 : IMC Role in Marketing

  5. Market Analysis • Market opportunity analysis • Favourable demand trends • Unsatisfied customer needs and opportunities • Companies compete effectively • Competitive analysis • Direct and indirect competition • Competitive advantage Chapter 2 : IMC Role in Marketing

  6. The Target Market Process Segment the market Select a target market Determine the market positioning strategy Chapter 2 : IMC Role in Marketing

  7. Segment the Market - Bases for Segmentation • Geographic segmentation. • Province - region - country - climate. • Demographic segmentation. • Age - sex - family status - education - occupation - income - social class. • Psychographic segmentation. • Values - personality traits - lifestyles. Chapter 2 : IMC Role in Marketing

  8. Segment the Market - Bases for Segmentation • Behaviouristic segmentation. • Divide groups based on their usage, loyalties, buying responses. • Usually combined with another segment profile • Benefit segmentation. • Types of specific needs or wants to be satisfied. • A variety of benefits can be derived from the same product but for different groups. What benefits can be derived from the purchase of a watch? Chapter 2 : IMC Role in Marketing

  9. Select a Target Market • Two steps: • Determine how many segments to enter • Determine which segments offer the most potential Three potential market coverage alternatives: 1. Undifferentiated marketing – one product for entire market 2. Differentiated marketing – compete in segments, different strategies for each 3. Concentrated marketing – efforts on one specific segment in order to gain market share, Chapter 2 : IMC Role in Marketing

  10. Determine the Market Positioning Strategy • The final decision of the market(s) in which firms wish to compete, combined with the specific elements of the marketing mix designed to fulfill the respective needs of the market(s). Determine the Market positioning strategy Segment the Market Select a Target Market The target market process Chapter 2 : IMC Role in Marketing

  11. Marketing Program Interaction • Product decisions and IMC • Price decisions and IMC • Distribution decisions and IMC • IMC decisions relating to marketing strategy The notion of positioning with IMC Chapter 2 : IMC Role in Marketing

  12. Product Decisions A productis a bundle of benefits or values Product symbolism refers to what a product or brand means to customers • Product quality, branding, packaging, service, warranties and company name contribute to consumers’ perceptions Chapter 2 : IMC Role in Marketing

  13. Product Decisions Branding: Positions the product in the consumers mind. • Brand name communicates attributes and meaning • Advertising creates, reinforces and maintains brand equity • Added value and goodwill Chapter 2 : IMC Role in Marketing

  14. Product Decisions Packaging: • Packaging has become increasingly important • It is often the customer’s first exposure to product • Creates an impression of the brand • Shape, size, colour, lettering can create a distinct brand image and identity for a product. • Functional aspects (Tylenol’s Safe Ty-Lock) • Absolute Vodka – Distinct package • Duracell package – battery tester Chapter 2 : IMC Role in Marketing

  15. Pricing Decisions Price Decisions for IMC What the consumer must give up to purchase a product • Cost include: • Time • Mental activity • behavioural effort Chapter 2 : IMC Role in Marketing

  16. Pricing Decisions • The communications strategy must be consistent with the price of the product • Product quality, competition, and advertising all interact in determining what price a firm can and should charge • Walmart $$$ Holt Renfrew$$$$ Chapter 2 : IMC Role in Marketing

  17. Pricing Decisions Pricing and Advertising Strategies go together PREMIUM PRICE = HIGH EXPECTATIONS HIGHER AD EXPENDITURES LOW PRICE = LOWER EXPECTATION LOWER AD EXPENDITURES Chapter 2 : IMC Role in Marketing

  18. Distribution Decisions Marketing channel decisions involve: Making the product or service available for use or consumption. • Are consistent with product and pricing strategies. What message/image does a product that is sold at Holt Renfrew convey? What message image does a product that is sold at Walmart covey? Chapter 2 : IMC Role in Marketing

  19. Distribution Decisions • Marketing channel decisions involve: • Selecting • Managing • Motivating • Intermediaries (resellers): are…… • Wholesalers • Distributors • Brokers • Retailers • Intermediaries/resellers Chapter 2 : IMC Role in Marketing

  20. Promotional Push Strategy • Programs designed to persuade the trade to stock, merchandise, and promote a manufacturer’s products • The goal is to push the product through the channels of distribution by aggressively selling and promoting the item to the resellers, or trade Chapter 2 : IMC Role in Marketing

  21. Promotional Pull Strategy • Spending money on advertising and sales promotion efforts directed toward the ultimate consumer. • The goal is to create demand among consumers and encourage them to request the product from the retailer. Chapter 2 : IMC Role in Marketing

  22. Producer Producer Push Policy Pull Policy Wholesaler Wholesaler Retailer Retailer Consumer Consumer Information Flow Push Versus Pull Chapter 2 : IMC Role in Marketing

  23. Positioning 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. How is the product positioned in the consumers mind? Chapter 2 : IMC Role in Marketing

  24. Positioning • Brand positioning strategy. • Relates to the image of the product or brand relative to a competing brand for a given competitive space as defined by certain product market or category characteristics. • Brand position. • The opinion a consumer has of a brand. Chapter 2 : IMC Role in Marketing

  25. Brand Positioning Strategy Options • Attributes and benefits • Price/quality • Use or application • Product user • Competitor • Repositioning • Product class Chapter 2 : IMC Role in Marketing

  26. Determine the Market Positioning Strategy Full Service Air Canada Low Price High Price West Jet Limited Service Chapter 2 : IMC Role in Marketing

  27. Brand Positioning Strategy Process Positioning Strategy Process • Identify competitors. 2. Assess consumers’ perceptions of competitors. 3. Determine competitors’ positions in relation to each other. 4. Analyze the consumers’ preferences. Chapter 2 : IMC Role in Marketing

  28. Brand Positioning Strategy Process 5. Make the brand positioning strategy decision. • Is the segmentation approach appropriate? • Are there sufficient resources available? • How strong is the competition? • Is the current brand positioning strategy working? 6. Monitor the position. Track changes in consumer perception. Chapter 2 : IMC Role in Marketing

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