chapter 17

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

Consumer Behavior and Promotion Strategy

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

Chapter 17

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Types of Affective Response

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• Marketers develop promotions to communicate information about their products and to persuade consumers to buy them– Advertising– Sales promotions– Personal selling– Publicity

• Successful products and brands require promotions to create and maintain a differential advantage over their competitors

Types of Promotion

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Advertising• Any paid, nonpersonal presentation of

information about a product, brand, company, or store– Usually has an identified sponsor– Characterized as image management

• Creating and maintaining images and meanings in consumers’ minds

– Ultimate goal is to influence consumer’s purchase behavior

– May be conveyed via a variety of media

17-6

• Direct inducements to the consumer to make a purchase– Difficult to define sales promotions due to many

types– Key aspect of sales promotions is to “move the

product today, not tomorrow”– Most sales promotions are oriented at changing

consumers’ immediate purchase behaviors– Coupons remain the most popular form of sales

promotions

Sales Promotion

17-7

Personal Selling• Direct interactions between a potential

buyer and a salesperson– What makes it a powerful promotion method?

• May increase consumers’ involvement with the product and/or decision process

• Interactive communication allows salespeople to adapt their sales presentation to individual customer needs

17-8

Personal Selling cont.– Certain consumer products are traditionally

promoted through personal selling– For other businesses, a form of personal selling

by telephone, called telemarketing, has become popular

– Direct mail has increased in popularity to counteract increasing restrictions on telemarketing

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• Any unpaid form of communication about the marketer’s company, products, or brands– Can either be positive or negative– Can sometimes be more effective than

advertising because consumers may not screen out the messages so readily

– Publicity can be considered more credible than advertising as it is not represented by the marketing organization

Publicity

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• Ideally, marketing managers should develop a coherent overall promotion strategy that integrates the four types of promotions into an effective promotion mix– A controversy continues in marketing about the

relative importance of advertising vs. sales promotions

– The promotion mix of the future is likely to be more eclectic with many more options

– Advertising seems to be having a declining influence on consumers’ behavior due to various factors

The Promotion Mix

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A Communication Perspective• The cognitive processing model of decision

making is relevant to an understanding of the effects of promotions on consumers– Consumer’s must be exposed to the promotion

information– Attend to the promotion communication and

comprehend its meanings– The resulting knowledge, meaning, and beliefs

must be integrated with other knowledge to create

• brand attitudes• make purchase decisions

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A Communication Perspective cont.

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The Communication Process• Developing successful promotion strategies

is mainly a communication problem– Key factors

• Source• Encode• Transmit• Receiver• Decode• Action

– Particularly important stages for success• Encoding• Decoding

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Goals of Promotion Communications

• Goals of promotion communications– Effects can be ordered in hierarchical sequence

of events or actions that are necessary before consumers can or will purchase a brand

• Consumers must have a recognized need for the product category or product form

• Consumers must be aware of the brand

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Goals of Promotion Communications cont.

• Consumers must have a favorable brand attitude• Consumers must have an intention to purchase the

brand• Consumers must perform various behaviors to

purchase the brand

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Stimulate Category Need• Need to create beliefs about the positive

consequences of buying and using the product category or form– Marketers need to create beliefs about the

positive consequences of buying and using the product category or form

– Typically use advertising to stimulate category need

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Brand Awareness• A general communication goal for all

promotion strategies– Level of brand awareness necessary for

purchase varies depending on how and where consumers make their purchase decisions

– Ask consumers to state the brand names they can remember or recognize as familiar

– A company’s brand awareness strategy depends on how well known the brand is

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Brand Attitude• Create a brand attitude

• Maintain existing favorable brand attitudes

• Increase the existing brand attitude

• Cannot analyze consumers’ brand attitudes in an absolute or very general sense without specifying the situational context

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Brand Purchase Intention• Most promotion strategies are intended by

marketers to increase or maintain the probability that consumers will buy the brand– To develop effective promotion strategies

directed at brand purchase intention, marketers must know when BI are formed by most of the target customers

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Brand Purchase Intention cont.– More typically, formation of a brand BI is

delayed until well after exposure to advertising, when the consumer is in a purchase context

– Personal selling and sales promotion are usually designed to influence purchase intentions at the time of exposure to the promotion information

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Facilitate Other Behaviors• Some promotion strategies are designed to

facilitate behaviors other than purchase– Sales promotions and publicity are likely to have

little influence on these other behaviors, but advertising and personal selling strategies may increase their probability

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The Promotion Environment• Includes all stimuli associated with the

physical and social environment in which consumers experience promotion strategies

• Two environmental factors can influence advertising and sales promotion strategies– Promotion clutter– Level of competition

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Promotion Clutter• The growing number of competitive

strategies in the environment– Possible that clutter created by multiple ads

during commercial breaks and between TV programs will reduce the communication effectiveness of each ad

– Also affects other types of promotion strategies, especially sales promotions

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Level of Competition• A key aspect of the promotion environment

– Comparative advertising, featuring direct comparisons with competitive brands, has become more common

– Promotion often becomes the key element in the marketers’ competitive arsenal in fiercely competitive environments

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Promotion Affect and Cognition• Interpretation of promotion communications

and integration processes are extremely important

• Consumers’ comprehension processes vary in depth and elaboration, depending on their levels of knowledge and involvement– Concepts relevant to understanding the effects

of advertising• Consumers’ attitudes toward ads• Persuasion processes

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Attitude toward the Ad• The affective evaluations of the ad itself can

influence the attitudes toward the advertised product or brand

• Ads that consumers like seem to create more positive brand attitudes and purchase intentions than ads they don’t like

• A positive attitude toward an ad may not always lead to increased purchase of the brand

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The Persuasion Process• Changes in beliefs, attitudes, and behavioral

intentions caused by a promotion communication– The Elaboration Likelihood Model (ELM)

• Identifies two cognitive processes by which promotion and communication can persuade consumers

• Also distinguishes between two types of information in the promotion communication

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Two Routes to Persuasion in the ELM

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Promotion Behaviors• Different types of promotions can be used to

influence the various behaviors in the purchase–consumption sequence– Information contact – Word-of-mouth communication with other

consumers

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Information contact• Consumers must come into contact with

promotion information for it to be successful– Information contact with promotions may be

• intentional• most often incidental

– Placing information in consumers’ environments may be easy when target consumers can be identified accurately

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Promotion Behavior cont.– Cold calls vs. referrals and leads– Use of telemarketing– Consumers must also attend to the promotion

messages– Level of attention also depends on how well

promotion interacts with consumer characteristics such as intrinsic self-relevance and exiting knowledge

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Word-of-Mouth Communication• Helps spread awareness beyond those

consumers who come into direct contact with the promotion– Placing promotion information in consumers’

environments, increases the probability that the information will be communicated to other consumers

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Managing Promotion Strategies• Four key activities

– Analyze consumer–product relationships– Determine the promotion objectives and budget– Design and implement a promotion strategy– Evaluate the effects of the promotion strategy

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Analyze Consumer-product Relationships

• Requires identifying the appropriate target markets for the product– Marketers should also understand the deeper

symbolic meaning of their brand– The FCB grid

• Based on consumers’ involvement and their salient knowledge, meanings, and beliefs about the product

• Think products• Feel products• The appropriate promotion strategy depends on the

product’s position in the grid

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Analyze Consumer-Product Relationships cont.

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Determine Promotion Objectives and Budget

• Promotion strategies may be designed to meet one or more of the following objectives– To influence behaviors– To inform– To transform affective responses– To remind

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Managing Promotion Strategies cont.

• Marketers should determine their specific promotion objectives and the budget available to support them before designing a promotion strategy

• Some promotions have multiple objectives

• Some promotions are designed to first influence consumers’ cognitions in anticipation of a later influence on their overt behaviors

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Design and Implement a Promotion Strategy

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Designing Promotion Strategies• Must be sensitive to the consumer-product

relationships represented in different market segments– Various consumer segments to be considered– Appropriate promotions depend on the type of

relationship consumers have with the product or brand, especially their intrinsic self-relevance

– Promotion methods vary in their effectiveness for achieving certain objectives

– Promotion objectives will change over a product’s life cycle

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Developing Advertising Strategy• Specify advertising strategy in terms of the

type of relationship the consumer will have with the product or brand– MECCAS model, based on consumers’ means-

end chains, helps marketers understand the key aspects of ad strategy and make better strategic decisions

• Driving force• Leverage point• Consumer benefits• Message elements• The executional framework part of the creative

strategy

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The MECCAS Model

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Developing Advertising Strategy cont.

– Steps in creating an advertising strategy• Consumer-product relationship

– Message elements– Consumer benefits– The driving force– Leverage point

• An advertising strategy should specify how a brand will be connected to the important ends the consumer wants

– Executional framework: the various details of the creative strategy

– Marketers still must carefully analyze consumers and use their creative imaginations

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Developing Personal Selling Strategies

• ISTEA model ( impression, strategy, transmission, evaluation, and adjustment )– Suggests salespeople’s influences depend on

their skills at performing five basic activities• Developing useful impressions of the customer• Formulating selling strategies based on these

impressions• Transmitting appropriate messages

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Developing Personal Selling Strategies cont.

• Evaluating customer reactions to the messages• Making appropriate adjustments in presentation

should the initial approach fail

– ISTEA model is consistent with the communication approach to consumer promotions

– Model emphasizes analysis of the customer as the starting point

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A Model of the Personal Selling Process

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Evaluate Effects of the Promotion Strategy

• Involves comparing its results with the objectives– Determining promotion effects can be difficult– Promotion objectives stated in behavior terms

can be hard to evaluate– In some cases, evaluation of promotion effects

can be relatively straight-forward

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Measuring Advertising Effects• Wide variety of approaches have been

taken to measuring advertising effects– Pretesting– Copy testing

• Three broad criteria used as indicators of advertising effectiveness:– Sales– Recall– Persuasion

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Summary• Discussed how knowledge about

consumers’ affect and cognitions, behaviors, and environments can be used by marketers in developing more effective promotion strategies

• Described four types of promotions

• Detailed how the basic communication model can be used

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Summary cont.• Discussed important aspects of the

promotion environment, affective and cognitive responses to promotions, and promotion-related behaviors

• Examined a managerial model for designing and executing promotion strategies

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Summary cont.• Described the various goals and objectives

marketers may have for promotion strategies

• Looked at two special models for developing advertising strategies and personal selling strategies

• Discussed how to evaluate the effectiveness of promotion strategies