Chapter 14: Engaging and communicating customer value

*Building Good Customer Relationships:

- Develop a good product (Good quality).
- Pricing the product attractively (affordable price).
-Make the product available to target customers (Effective & Efficient distribution)
- Companies must engage consumers and communicate their value propositions to customers, and what they
communicate should not be left to chance. All communications must be planned and blended into carefully
integrated programs. Communication is a crucial element in a company’s efforts to engage customers and
build profitable customer relationships.
*The Promotion Mix called known also Marketing Communication Mix:
A company’s total promotion mix also called its marketing communication mix consists of the specific
blend of advertising, public relations, personal selling, sales promotion, and direct marketing tools that the
company uses to engage consumers, communicate customer value, and build profitable customer
relationships. The five major promotion tools are defined as follows:
• Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an
identified sponsor.(Pay for a sponsor to promote an idea, Good or service for a company).
• Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
• Personal selling: Personal customer interactions by the firm’s sales force for the purpose of engaging
customers, making sales, and building customer relationships. (Direct and personal interaction between the
sales representative of a company and its customers for three main reasons: engage customers, encourage the
customers to buy a product and to build customer relationships)
• Public relations (PR): Building good relations with the company’s various publics by obtaining favorable
publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories,
and events.
• Direct and digital marketing: Engaging directly with carefully targeted individual consumers and
customer communities to both obtain an immediate response and build lasting customer relationships.
Each category involves specific promotional tools that are used to communicate with customers.
advertising includes broadcast, print, online, mobile, outdoor.
Sales promotion includes discounts, coupons, displays, demonstrations, and events.
Personal selling includes sales presentations, trade shows, and incentive programs.
Public relations include press releases, sponsorships, events, and webpages.
Direct and digital marketing includes direct mail, email, catalogues, online and social media, mobile
marketing.
The marketing communication goes beyond the specific promotions tools to include: product’s design, its
price, the shape and color of its package, and the stores that sell it all should be coordinated for greatest
impact (impact received by the buyer). All of these in addition to the promotion mix used by the company
are critical to engage customer and build profitable customer relationships.
Integrated Marketing Communications (IMC):
In past decades, marketers perfected the art of mass marketing: selling highly standardized products to
masses of customers. In the process, they developed effective mass-media communication techniques to
support these strategies. Example: companies spend a million of dollar in television, Magazine or other
mass- media advertising reaching tens of millions of customers in a single ad. Today, marketing managers
face some new marketing communications changes which necessitate a challenge in the marketing
communication strategy.
The New Marketing Communications Model:
Several major factors are changing the face of today’s marketing communications.
First, consumers are changing. In this digital, consumers are better informed, and more communicated
Rather than relying on marketer-supplied information, they can use the internet, social media, and other
technologies to find information on their own. They can connect easily with other consumers to exchange
brand-related information or to share brand experiences.
Second, marketing strategies are changing. As mass markets have fragmented, marketers are shifting away
from mass marketing to micro markets. they are developing focused marketing programs designed to engage
customers and build customer relationships in more narrowly defined micro markets.
Finally, sweeping advances in digital technology are causing remarkable changes in the ways companies
and customers communicate with each other. The new techniques of information and communication tools
from satellite and cable television systems to smartphones and tablets to the many faces of the internet
(brand websites, email, blogs, social media and online communities, the mobile web)give birth to a more
targeted, social and media engaging marketing communications model.
Television, magazines, newspapers, and other traditional mass media remain very important, but their
dominance is declining. In their place, advertisers are now adding a broad selection of more-specialized and
highly targeted media to engage smaller customer communities with more personalized, interactive content.
The new media range from specialty cable television channels and made-for-the-web videos to online ads,
email and texting, blogs, mobile catalogues and coupons, and a burgeoning list of social media. Such new
media are dominating now and used by the today’s marketers as part of the integrated marketing plan.
marketers are shifting from old-media mainstays and moving them to online, social, mobile, and other new-
age media. large advertisers are moving toward a “digital-first” approach to building their brands. For
example, Unilever, one of the world’s largest advertisers, now spends as much as one-quarter of its $8
billion global marketing budget on digital media. In countries such as the United States and China, digital
media account for closer to 50 percent of its marketing budget. Some marketers now rely almost entirely on
digital and social media. For example, eco-friendly household products maker employs a full but mostly
digital promotional campaign themed “Clean happy”.
In the new marketing communications world, rather than using old approaches that interrupt customers and
force-feed them mass messages, new media formats let marketers reach smaller communities of consumers
in more engaging ways. For example, think about television viewing these days. Consumers can now watch
their favourite programs on just about anything with a screen—on televisions but also laptops, smartphones,
or tablets. they can choose to watch programs whenever and wherever they wish, often without
commercials. Increasingly, some programs, ads, and videos are being produced only for online viewing.
Most Marketers use a mix of both traditional mass media & the new digital online tools to reach a target
customer in a more personalized way. regardless of the communications channel, the key is to integrate all
of these media in a way that best engages customers, communicates the brand message, and enhances the
customer’s brand experiences.
many marketers now view themselves more broadly as content marketing managers. As such, they create,
inspire, and share brand messages and conversations with and among customers across a fluid mix of paid,
owned, earned, and shared communication channels. These channels include media that are both traditional
and new as well as controlled and not controlled. It’s not just advertising it’s about the context and channels
now. It’s about mapping the customer journey to start a conversation with consumers, one that leads to
engagement, purchase, loyalty at different touchpoints against this integrated journey.
The Need for Integrated Marketing Communications:
The challenges in the marketing communication tools poses a problem for marketers. One problem is that
marketing content comes from different parts of the company. Advertising messages are prepared by the
advertising department or an ad agency. Other company departments or agencies prepare public relations
messages, sales promotion events, and online or social media content. However, consumers don’t
distinguish between content sources the way marketers do. In the consumer’s mind, brand-related content
from different sources all merge into a single message about the brand or company. Conflicting content from
these different sources can result in confused company images, brand positions, and customer relationships.
online, mobile, and social media marketing presents tremendous opportunities but also big challenges. It
gives marketers rich new tools for understanding and engaging customers. At the same time, it complicates
and fragments overall marketing communications. The challenge is to bring it all together in an organized
way. Most companies practice the concept of integrated marketing communications (IMC).
Under this concept, the company carefully integrates its many communication channels to deliver a clear,
consistent, and compelling message about the organization and its brands. different media play unique roles
in engaging, informing, and persuading consumers. For example: video convergence which means using
Video ad campaigns that will be played over different platforms: TV, Mobile and social media for fast, clear
and better targeting, Interaction and engagement. These varied media and roles must be carefully
coordinated under the overall integrated marketing communications plan. A good example of IMC is Home
Improvement Retailer’s Lowe’s “Never stop Improving” campaign which integrates the traditional media
with the power of social media to create personalized , real time customer engagement.
To help implement integrated marketing communications, some companies have appointed a marketing
communications director who has overall responsibility for the company’s communications efforts. This
helps to produce better communications consistency and greater sales impact. It places the responsibility in
someone’s hands where none existed before to unify the company’s image as it is shaped by thousands of
company activities.
Developing Effective Marketing Communication
the Communication Process:
Integrated marketing communications involves identifying the target audience and a well-coordinated
promotional program to obtain the desired audience response. marketers are moving toward viewing
communications as managing ongoing customer engagement and relationships with the company and its
brands. Because customers differ, communications programs need to be developed for specific
segments, and even individuals. Companies must ask not only “How can we engage our customers?” but
also “How can we let our customers engage us?” the communications process should start with an audit of
all the potential touch points that target customers may have with the company and its brands. For example,
someone purchasing a new wireless phone plan may talk to others, see television or magazine ads, visit
various online sites for prices and reviews, and check out plans at Walmart store. The marketer needs to
assess what influence each communication experience will have at different stages of the buying process.
To communicate effectively, marketers need to understand how communication works. Communication
involves the nine elements Two of these elements are the major parties in a communication; the sender and
the receiver. Another two are the major communication tools: the message and the media. Four more are
major communication functions: encoding, decoding, response, and feedback. The last element is noise in
the system. Definitions of these elements follow and are applied to a McDonald’s “I’m lovin’ it” television
commercial.
• Sender: The party sending the message to another party here, McDonald’s.
• Encoding: The process of putting thought into symbolic form for example, McDonald’s ad agency
assembles words, sounds, and illustrations into a TV advertisement that will convey the intended message.
• Message: The set of symbols that the sender transmits the actual McDonald’s ad.
• Media: The communication channels through which the message moves from the sender to the receiver in
this case, television and the specific television programs that McDonald’s selects.
• Decoding: The process by which the receiver assigns meaning to the symbols encoded by the sender. A
consumer watches the McDonald’s commercial and interprets the words and images it contains.
• Receiver: The party receiving the message sent by another party. the customer who watches the
McDonald’s ad.
• Response: The reactions of the receiver after being exposed to the message. any of hundreds of possible
responses, such as the consumer likes McDonald’s better, is more likely to eat at McDonald’s next time,
hums the “I’m lovin’ it” jingle, or does nothing.
• Feedback: The part of the receiver’s response communicated back to the sender McDonald’s
research shows that consumers are either struck by and remember the ad or they email or call McDonald’s,
praising or criticizing the ad or its products.
• Noise: The unplanned static or distortion during the communication process, which results in the receiver
getting a different message than the one the sender sent the consumer is distracted while watching the
commercial and misses its key points.
For a message to be effective, the sender’s encoding process must match with the receiver’s decoding
process. The best messages consist of words and other symbols that are familiar to the receiver. The more
the sender’s field of experience overlaps with that of the receiver, the more effective the message is likely to
be. Marketing communicators may not always share the customer’s field of experience. Example: A
copywriter from high socioeconomic level can create an ad for customers from another socioeconomic level
but he should first understand the customer’s field of experience to be able to transmit his message
effectively. This model points out several key factors in good communication:
- Senders need to know what audiences they wish to reach and what responses they want.
- Senders must be good at encoding messages and taking into consideration how the target audience
decodes them.
- Senders must send messages through media that reach target audiences.
- Senders must develop feedback channels so that they can assess an audience’s response to the message.
- in today’s interactive media environment, companies must be prepared to “flip” the communications
process to become good receivers of and responders to messages sent by consumers.

Steps in Developing Effective Marketing Communication:

Marketers must do the following:
1- Identify the target audience
2- Determine the communication objectives
3- Design a message (Structure, Content, Format)
4- Choose the media through which to send the message
5- Select the message source
6- Collect feedback.
Identifying the Target Audience
A marketing communicator starts with a clear target audience in mind. The audience may be current users or
potential buyers, those who make the buying decision or those who influence it. The audience may be
individuals, groups, special publics, or the general public. The target audience will heavily affect the
communicator’s decisions. The communicator should pay attention to every detail in the message regarding:
what will be said, how it will be said, when it will be said, where it will be said, and who will say it.
Determining the Communication Objectives
Once the target audience has been defined, marketers must determine the desired response. in many cases,
they will seek a purchase response. The marketing communicator needs to know where the target audience
now stands in the “ Buyer reading stage” and to what stage it needs to be moved. The target audience may
be in any of six buyer-reading stages. The stages consumers normally pass through on their way to making a
purchase are: awareness, knowledge, liking, preference, conviction, and purchase
The marketing communicator’s target market may be totally unaware of the product, know only its name, or
know only a few things about it. Thus, the marketer must first build awareness and knowledge about the
product. For example, Nestle Fitness cereal company announced that they adjusted their cereals bars and
make them Organic & Healthy by removing artificial flavors and colors from it. To raise the Awarness of
the target customers about these changes. They initiate a campaign under the title of “Love Cereal Again”
The “Love Cereal Again” campaign reintroduces the reformulated organic healthy fitness cereals bars as
something that parents can once again love.
Assuming that target consumers know about a product, how do they feel about it? Almost all
Lebanese consumers know about Nestle Fitness cereals bars. The company wants to move buyers through
successively stronger stages of feelings toward the adjusted cereals bars. These stages include liking (feeling
favorable about nestle fitness cereals bars), preference (preferring the nestle cereals bars to competing
brands), and conviction (believing that nestle fitness cereals bars are the best cereals for them). Marketers
use a combination of promotion mix tools to create positive feelings and conviction. Initial TV commercials
help build anticipation and an emotional brand connection. Images, text, and videos on social media sites
engage, entertain, and educate potential buyers on the reformulation of the cereal products. Press releases
and other PR activities help keep the buzz going about the products. A packed microsite
(www.nestlefitnesscerealbars.com) provides additional information and buying opportunities. Finally, some
members of the target market might be convinced about the product but didn’t make the purchase. The
communicator must lead these consumers to take the final step of buying the product. To help reluctant
consumers over such hurdles, the company might offer buyers special promotional prices (coupons, in-store
discounts, and special offers) and support the product with comments and reviews from customers at its web
and social media sites and elsewhere. Of course, marketing communications alone cannot create positive
feelings and purchases for nestle fitness cereal bars. Tasting samples can be distributed to consumers in the
branches in which the product is available to let the customer feel the change and to make the decision of
purchase quick.
Designing a Message:
Having defined the desired audience response, the communicator then turns to developing an effective
message. Ideally, the message should get attention, hold interest, arouse desire, and obtain action (a
framework known as the AIDA model). In practice, few messages take the consumer all the way from
awareness to purchase, but the AIDA framework suggests the desirable qualities of a good message. When
putting a message together, the marketing communicator must decide what to say (message content) and
how to say it (message structure and format).
1-Message Content:
The marketer has to figure out an appeal or theme that will produce the desired response. There are three
types of appeals: rational, emotional, and moral. Rational appeals relate to the audience’s self-interest. They
show that the product will produce the desired benefits. Emotional appeals attempt to stir up either negative
or positive emotions that can motivate purchase. Moral appeals are directed to an audience’s sense of what
is “right” and “proper.” They are often used to urge people to support social causes, such as a cleaner
environment. For example: Colgate Ad urged people to close the tap while brushing to conserve water.
2-Message Structure:
Marketers must also decide how to handle three message structure issues. The first is whether to draw a
conclusion or leave it to the audience. The second message structure issue is whether to present the strongest
arguments first or last. The third message structure issue is whether to present a one-sided argument
(mentioning only the product’s strengths) or a two-sided argument (touting the product’s strengths while
also admitting its shortcomings). Usually, a one-sided argument is more effective in sales presentation
except when audiences are highly educated or likely to hear opposing claims or when the communicator has
a negative association to overcome.
3-Message Format. The marketing communicator also needs a strong format for the message. In a print ad,
the communicator has to decide on the headline, copy, illustration, and colors. To attract attention, advertiser
can use novelty and contrast; eye-catching pictures and headlines; distinctive formats; message size and
position; and color, shape, and movement. Presenters plan every detail carefully, from start to finish. If the
message is to be communicated by television or video, the communicator must incorporate motion, pace,
and sound. If the message is carried on the product or its package, the communicator must watch texture,
scent, color, size, and shape in designing effective marketing communications, marketers must consider
color and other seemingly unimportant details carefully.
Choosing Communication Channels and Media
The communicator must now select the channels of communication. There are two broad types of
communication channels: personal and nonpersonal.
Personal Communication Channels. In personal communication channels, two or more people
communicate directly with each other. They might communicate face-to face, on the phone, via email, or
even through texting or an internet chat. Personal communication channels are effective because they allow
for personal addressing and feedback. Some personal communication channels are controlled directly by the
company. For example: company salespeople contact business buyers. But other personal communications
about the product may reach buyers through channels not directly controlled by the company. These
channels might include independent expert: consumer advocates, bloggers, or via social media or other
interactive media. This last channel, word-of-mouth influence, has considerable effect in many product
areas. Companies can take steps to put personal communication channels to work for them: Create opinion
leaders for their brands: people whose opinions are sought by others. The influence and educate customers
about brand, product of the company so they can inform others. This will raise awareness about the brands
of a company. This concept is known as Buzz marketing which involves cultivating opinion leaders and
getting them to spread information about a product or a service to others in their communities. This strategy
not only creates client brand but also turns them into influential brand advocates.
Nonpersonal Communication Channels. nonpersonal communication channels are media that carry
messages without personal contact or feedback. They include major media, atmospheres, and events. Major
media include print media (newspapers, magazines, direct mail), broadcast media (television, radio), display
media (billboards, signs, posters), and online media (email, company websites, and brand mobile and social
media sites). Atmospheres are designed environments that create or reinforce the buyer’s leanings toward
buying a product. Examples: lawyers offices and banks are designed to communicate confidence and other
qualities that might be valued by clients. Events are staged occurrences that communicate messages to target
audiences. For example, public relations departments arrange grand openings, shows and exhibits, public
tours, and other events. Nonpersonal communication affects buyers directly. In addition, using mass media
often affects buyers indirectly by causing more personal communication. For example, communications
might first flow from mass media: television, magazines, and other mass media to opinion leaders and then
from these opinion leaders to others. Thus, opinion leaders’ step between the mass media and their
audiences and carry messages to people who are less exposed to media. Interestingly, marketers often use
nonpersonal communication channels to replace or stimulate personal communications by embedding
consumer endorsements or word-of-mouth testimonials in their ads and other promotions.
Selecting the Message Source
Messages delivered by highly credible or popular sources are more persuasive. Thus, many food companies
promote to doctors, dentists, and other health-care providers to motivate these professionals to recommend
specific food products to their patients. marketers hire celebrity: well-known athletes, actors, musicians, and
even cartoon characters to deliver their messages. But companies must be careful when selecting celebrities
to represent their brands. Picking the wrong spokesperson can result in embarrassment(financial problems)
and a tarnished image.
Collecting Feedback
After sending the message the communicator must research its effect on the target audience. This involves
asking target audience members whether they remember the content, how many times they saw it, what
points they recall, how they felt about the content, and their past and present attitudes toward the brand and
company. The communicator would also like to measure behavior resulting from the content. how many
people bought the product, talked to others about it, or visited the store. Feedback on marketing
communications may suggest changes in the promotion program or in the product offer itself.
Setting the Total Promotion Budget
One of the hardest marketing decisions facing a company is how much to spend on promotion.
four common methods used to set the total budget for advertising: the affordable method, the percentage-of
sales method, the competitive-parity method, and the objective-and-task method.
Affordable Method
Some companies use the affordable method: They set the promotion budget at the level they think the
company can afford. Small businesses often use this method, reasoning that the company cannot spend more
on advertising than it has. They start with total revenues, deduct operating expenses and capital outlays, and
then devote some portion of the remaining funds to advertising. Unfortunately, this method of setting
budgets completely ignores the effects of promotion on sales. It tends to place promotion last among
spending priorities, even in situations in which advertising is critical to the firm’s success. It leads to an
uncertain annual promotion budget, which makes long-range market planning difficult. Although the
affordable method can result in overspending on advertising, it more often results in underspending.
Percentage-of-Sales Method:
Other companies use the percentage-of-sales method: setting their promotion budget at a certain percentage
of current or forecasted sales. Or they budget a percentage of the unit sales price. The percentage-of-sales
method is simple to use and helps management think about the relationships between promotion spending,
selling price, and profit per unit. It wrongly views sales as the cause of promotion rather than as the result.
Stronger brands with higher sales can afford the biggest ad budgets. Thus, the percentage-of-sales budget is
based on the availability of funds rather than on opportunities. It may prevent the increased spending
sometimes needed to turn around falling sales. Because the budget varies with year-to-year sales, long-range
planning is difficult. Finally, the method does not provide any basis for choosing a specific percentage.
Competitive-Parity Method:
Still other companies use the competitive-parity method: setting their promotion budgets to match
competitors’ outlays. They monitor competitors’ advertising or get industry promotion spending estimates
from publications or trade associations and then set their budgets based on the industry average. Two
arguments support this method. The first one believes that competitor has a better idea of what the company
should be spending. Second, spending what competitors spend helps prevent promotion wars. Both
arguments are wrong.
Objective-and-Task Method:
The most logical budget-setting method is the objective-and-task method, whereby the company sets its
promotion budget based on what it wants to accomplish with promotion. This budgeting method includes the
below:
(1) defining specific promotion objectives.
(2) determining the tasks needed to achieve these objectives
(3) estimating the costs of performing these tasks.
The advantage of the objective-and-task method is that it forces management to spell out its assumptions
about the relationship between dollars spent and promotion results. But it is also the most difficult method to
use. Because it is hard to figure out which specific tasks will achieve the stated objectives. For example:
suppose Samsung introduced a new electronic item and wants to test the awareness of the customers about
it. She also set a 95% of awareness regarding this item. What specific advertising messages, marketing
content, and media schedules should use to attain this objective? How much would this content and media
cost? Samsung management must consider such questions, even though they are hard to answer.
Shaping the overall promotion Mix:
the concept of integrated marketing communications suggests that the company must blend the promotion
tools carefully into a coordinated promotion mix. Marketers must understand these characteristics in shaping
the promotion mix.
1-Advertising:
-can reach masses of geographically disperses buyers of a low cost per exposure, and it enables the seller to
repeat a message many times Examples: Television, Radio.
-Advertising says something positive about the seller’s size, popularity and success so the customer tends to
view the advertised products as more legitimate.
Advertising can be used to build up long term image for a product and can trigger quick sales.
2-Personal Selling:
Is the most effective tool at certain stages of the buying process, particularly in building preferences,
convictions and actions and build long lasting customer relationships.
3-Sales Promotion:
It includes a wide assortment of tools: coupons, discounts which can be used to attract customers, engage
them , encourage the consumer to buy the product.
4-Public Relations:
-Building good relations with the company’s various publics.
- Building up good corporate image.
-Handle unfavourable rumors, stories , and events of the company.
- Assist in the transmission of the message to public in a very professional way.
- Engage customers, Build customer relationships.
5- Direct and Digital Marketing:
The many forms of direct and digital marketing forms: Direct email, Catalogs, Telephone marketing to
online mobile and social media. All share distinctive characteristics.
- More targeted marketing that reach specific customers.
- Immediate, personalized, messages can be prepared easily and tailored to appeal to individual
consumers or brand groups.
- Create customer engagement, build one to one customer relationships.