S CIENCE E CONOMY C OHESION

EUROPEAN UNION

Creating the Future of Lithuania

UNIVERSITY OF APPLIED SOCIAL SCIENCES

SMK University of Applied Social Sciences

Indre Radaviciene

EVENT MARKETING PLANNING Course handbook

Klaipeda, 2015

Indre Radaviciene Event marketing planning Course handbook Approved by the decision of the Academic Board of SMK University of Applied Social Sciences, 15th April 2014, No. 4. The publication is financed within project „Joint Degree Study programme “International Marketing and Branding “ preparation and implementation“ No. VP1-2.2-ŠMM-07-K-02-086 funded in accordance with the means VP1-2.2-SMM-07-K “Improvement of study quality, development of Internationalization” of priority 2 “Lifelong Learning” of the Action Programme of Human Relations Development 2007 – 2013.

© Indre Radaviciene, 2015 © SMK University of Applied Social Sciences, 2015 ISBN 978-9955-648-71-0

CONTENTS INTRODUCTION ..................................................................................... 7 Part 1: Environment of event marketing ................................................ 8 Part 2: Strategy of event marketing. Market researching ...................... 25 Part 3: Segmentation of event marketing and selections of target markets ................................................ 35 Part 4: Strategies of event marketing positioning ................................. 45 Part 5: Event marketing sponsorship .................................................... 54 Part 6: Marketing elements in event marketing .................................... 66 Part 7: Promotion mix in event marketing ............................................ 89 Part 8: Efficiency of event planning ..................................................... 118 TASKS FOR INDIVIDUAL/GROUP WORKS ........................................... 136 REFERENCE OUTLINE .......................................................................... 144 LITERATURE ........................................................................................ 174

INTRODUCTION This course unit aims at expanding and deepening the knowledge on the theory of sales promotion and event marketing as well as the knowledge on methods, also developing their skills of a problem based perception and thinking. Students will get acquainted with the environment of an event marketing, the types of the environment, and strategy of event marketing when choosing the right target segment, an effective strategy of positioning. Students will have an opportunity to get acquainted with the efficiency of the processes of event planning, the main methods of event support. The aim of course is to provide students with knowledge on marketing while distinguishing the factors determining its specifics, the significance of conception to the success of the entities of business system, to develop abilities to make strategic and tactical decisions in the context of the EU market and global processes; to develop skills and abilities to do significant marketing research; assess the results of expression of marketing communication, image and organizational culture, and the risk of strategic management of marketing; to make decisions on the funding of marketing activity when implementing business development in both international and local markets; to provide knowledge on sales promotion distinguishing the factors determining the specifics of their selection. Learning outcomes of a Course Event marketing planning: 1. To be able to identify the functions, conceptions, strategies of event marketing, the created types of benefits and assess the validity of certain decisions. 2. To be able to correctly select target markets and ways of product positioning for market or advertising research, to make maps of competitiveness. 3. To be able to assess decisions on the necessity, methods and means of support of event support and assess their efficiency. 4. To be able to appropriately prepare advertising project on the needs of a customer. 5. To be able to plan independently decisions on the management of the marketing complex of events and other occurrences and its elements. 6. To be able to correctly choose a suitable set of the means of sales promotion. 7

Part 1 ENVIRONMENT OF EVENT MARKETING Objective outline: 1. To introduce students to the elements of marketing analysis: marketing environment analysis, customer analysis, competitor analysis, and company analysis; 2. To familiarize students to the generic event marketing strategies and strategic marketing decisions for profitable delivery of superior value to the customers. 3. To enhance their problem-solving and decision-making abilities in strategic areas of marketing. Chapter Key Terms: Marketing Upstream marketing activities Downstream marketing activities Customer Marketing concept Without a research orientation, communication practitioners cannot play a part in Issues or Risk Management and therefore in the formulation of emergent strategy. There are two types of research in communication: environmental scanning, which provides information needed for strategy formulation; and evaluation research, which assesses the achievement of communication objectives. In practice, the focus is on the latter. However, it is by conducting environmental scanning and analysis that the Communication function will make its biggest contribution to strategy formulation at the Board and top management level.1 The credibility and impact of the Communication function in the strategic management process is increased by continuous scanning of the internal and external environment. This may entail the following: • Conducting advanced media analysis at regular intervals, to understand the agenda and behavioural patterns of key decisionmakers (editors and journalists) and publications (electronic and print) in the mass media. 8

•

Engaging in rigorous monitoring of relevant government decisionmakers on all identified issues.

•

Conducting opinion audits (formal or informal surveys) amongst strategic stakeholders, influencers and opinion leaders to determine their opinions on identified issues. Creating channels to track the opinions of stakeholders on these issues over time.

•

Identifying any (all) interest groups or activists that campaign for, or against, or have a vested interest in any of the identified issues.1 Issue analysis Resulting from environmental scanning, analysis of an issue consists of:

•

Showing insight into the main problem and/or opportunity inherent to the issue (e.g. How does this issue affect the organisation now, or will it impact on the organization in future?).

•

Understanding the issue in the context of its life cycle development in order to indicate its status (the Traffic Light Status tool may be used to indicate status).

•

An honest assessment of the type of issue/ risk we’re dealing with, as not all identified issues can be solved solely through communication interventions (the Issue Typology tool of Steyn & Puth, 2000 is often used to manage expectations upfront and lay the foundation for realistic goals and objectives to follow).2 View an example of Issues Analysis. Stakeholder assessment

If environmental scanning is a starting point for the formulation of emergent strategy, then stakeholder assessment is its control focus. The first step in setting communication goals and themes is to identify the relevant stakeholders to an issue. Any issue without an affected stakeholder group is really not an issue at all. The motivation to constantly analyse the internal and external environments of an organization lies in tracking stakeholder reactions to current issues and detecting new issues.2

9

Intelligence gained from environmental scanning may entail: • The opinions, knowledge and expectations of both internal and

external stakeholders such as employees, communities, and customers.

• The agenda of the media as gatekeepers and advocates of particular

viewpoints.

• The agendas of interest groups and activists, who directly seek to

influence public policy.

• The government’s position.2

In linking issues to stakeholders, there are four important elements to consider: • The implications of an issue on a stakeholder group and the likely

behaviour of the stakeholder group as a result. (What are the implications on stakeholder X? What is the likely behaviour of stakeholder X? Possible actions they may take?).

• The degree to which a stakeholder is already aware of the existence

of an issue (usually rated on a 5-point Likert scale).

• The extent to which the organisation is vulnerable to the likely

stakeholder reaction (usually rated on a 5-point Likert scale). It is important to determine the amount of power a stakeholder group has in relation to a specific issue. The amount of power depends on the organisation’s dependency on that stakeholder group as well as the access that the group has to political processes and to the mass media.

• The relative strategic importance of the stakeholder to the

organisation. (Is the stakeholder labelled as a primary or secondary stakeholder?).2

View an example of Stakeholder Interpretation. Stakeholder relationships There are four approaches in dealing with stakeholders: Approach 1 - Inactivity: The first approach, inactivity, involves ignoring the opinions and values of stakeholder groups and continuing “business as usual”. For instance, this would be the case when a company starts receiving complaints from customers about defective tyres that they are 10

manufacturing. The company however decides to ignore the complaints and continues selling the tyres.2 Approach 2 - Reactivity: The second approach, reactivity, involves waiting for something to occur (usually stimulated by a stakeholder group) and responding to that. Continuing the example: After a series of accidents and the loss of lives the Government (Dept. of Transport) commissions an inquiry. Only now does the organisation withdraw its tyres from the market.2 Approach 3 – Pro-activity: The third approach, pro-activity, is anticipatory. It involves trying to predict the behaviour of stakeholder groups, the external changes that may occur and positioning the organisation appropriately. In the above example, if the organisation had been in touch with its customers or dealers through research, they could have investigated the matter before it became public knowledge. This could have resulted in fixing the problem or recalling the tyres. However, government intervention led to a loss of credibility and reputation.2 Approach 4 – Interactivity: The fourth approach in dealing with stakeholders is the interactive mode that entails active involvement with the stakeholder groups that can influence the future of the organization. If the organization had good two-way communication with their stakeholders, they would have identified the problem in its early stages. Even more effective would have been to follow a partnership approach with stakeholders. Partnering would have involved the affected customers, dealers or government in the problem-solving and decision-making processes of the company with regards to the defective tyres. A partnering approach could have strengthened relationships with stakeholders, rather than antagonising them.2 And as if this is not enough for marketers to deal with, consumers have changed their ways in recent years as well by becoming more and more fickle, unpredictable and increasingly “immune” to common marketing practices (Brown 1995).3 Indeed, the growing affluence in industrialised societies is having profound residual effects on the societal value system and its dominant consumption ethic. In particular, the shift from maintenance consumption (the compulsory shopping for necessities) towards experiential consumption (shopping as a pleasurable end in itself) is exemplifying the current drift towards a romantic consumption 11

in Western societies, where the emphasis on living your life right here and now (Campbell 1987).4 Social trends, such as increasing orientation towards leisure and recreation as well as a desire for individualism, are leading to significant changes in consumer behaviour (Opaschowski 2000; Schulze 2000; Firat and Shultz 1997; Cova 1997).5;6;7;8 Whether one agrees or disagrees with the philosophical idea of postmodernism or its value and implications for marketing practice (Brown 1999, 1994),9;10 there is no denying that a number of the conditions proposed by Firat (1991)11 determine consumer behaviour and the way of doing business in today’s affluent societies (Brown 2002; Cova and Cova 2002; Patterson 1998).12;13;14 Those conditions, which are briefly discussed in this paper, include among others the fragmentation of mass-markets, the age of the (self-)image by mixing playfully elements of existing styles and blurring distinctions between high and low culture (Cova 1996),15 the nostalgic preoccupation with the past (Brown 2001; Holbrook 1995)16;17 or the search for hyperreal experiences (Opaschowski 2000; Schulze 2000).18;19 Therefore, as (in the spirit of management guru Tom Peters) crazy times call for crazy and creative measures, marketers need to consider the design of marketing strategies that provide consumers with a platform where they can experience brands in a way that contributes to their subjectively perceived quality of life. In other words, the emphasis of branding should be placed on stimulating hyperreal experiences for consumers to meet the changing needs in affluent (postmodern) societies (Whelan and Wohlfeil 2005).20 In light of these demands, event-marketing has already become an increasingly popular alternative for marketers in Continental Europe. Event-marketing is defined in the context of this paper as the staging of interactive marketing-events as 3-dimensional hyperreal brand experiences for consumers, which would result in an emotional attachment to the brand. Thus, consumers are actively involved on a behavioural level as participants and encouraged to experience the brand values multi-sensually in a 3-dimensional hyper reality. Furthermore, as a pull strategy within marketing communications, the participation of consumers is voluntarily and subsequently not perceived as an invasion of privacy as it is the case with classic marketing communications. In fact, the irony is that consumers participate on their own free will in those brand hyper realities, even though they are specifically designed to communicate the same commercial messages they usually tend to avoid (Whelan and Wohlfeil 2005).20

12

This, however, leads inevitably to the question: Is event-marketing just another postmodern craze or is it an exciting new way for marketers to reach their target audiences in the changing marketing communication landscape of affluent societies? Why should marketing managers should stretch their creative imagination to the limits to create and stage unique brand hyper realities for consumers, when it would be much easier, convenient and “less risky” to exploit the commercial propriety of an existing external event (event sponsorship)? And, anyway, why should marketers care about making a contribution to consumers subjectively experienced quality of life, when their primary concern and sole purpose should be to sell products and to make profits for their shareholders (Friedman 1970/2001).21 Thus, the objective of this paper is to introduce the concept of event-marketing first to a broader audience and then to discuss its role within marketing communications as well as its impact on consumers in the changing (postmodern) marketing communications landscape. As a consequence, the research obviously raises some key academic and managerial implications. By presenting empirical evidence from a qualitative field experiment conducted at the Guinness Storehouse in Dublin, the paper will outline how brands can be communicated to both external and internal target audiences as 3-dimensional real-lived experiences, which would strengthen the emotional attachment to the brand, and how marketers can build mutually beneficial customerbrand relationships by using their imagination in the development and implementation of creative event-marketing strategies. The findings will not only narrow the identified information gap, but also demonstrate how the staged brand hyper reality could contribute to consumers’ subjective quality of life as an enchantment of experiential consumption. When explaining the concept of event-marketing as an innovative marketing communication strategy, the authors always encounter immediately a variety of disbelief and confusion. One of most uttered arguments, the authors are on a regular basis confronted with, is the idea that event-marketing is not new and the marketers have always managed a seminar, a sales stand in the shopping mall, a competition or a product testing of some kind. These points are then either complemented or contradicted by the argument that event-marketing de facto is the sponsorship of a concert, the World Cup or a street festival. Given the general generosity and liberty by which the term event marketing has been used to describe all kinds of phenomena in marketing practice and literature (Cornwell and Maignan 1998)22 ranging from the marketing of 13

events within the framework of event management (Goldblatt 1997)23 to event sponsorships (Cunningham et al. 1993)24 and even sales promotions (Andersson and Weslau 2000)25, those responses should come as no surprise. However, to make it quite clear from the start, the concept of event-marketing that is discussed by the authors in this paper has nothing to do with the sponsorship of any events nor with running sales promotions in the shopping mall or the professional marketing of an event – although to be fair, the management of the marketingevent obviously plays a certain role in the operational implementation of the event-marketing strategy. Instead, event-marketing is defined as the staging of interactive marketing-events as 3-dimensional hyper real brand experiences for consumers, which would result in an emotional attachment to the brand.3 As an experiential marketing communication strategy in the context of this definition, event-marketing first emerged in the late 1980s in response to the significant changes in both the marketing environment and consumer behaviour in Germany (Wohlfeil and Whelan 2005a).26 By communicating brand values as “real-lived” experiences, eventmarketing strategies are designed to take in particular advantage of the shift from maintenance to experiential consumption in the societal value system of affluent societies (Weinberg and Gröppel 1989)27 and the consumers’ desire for idealised simulations of reality (Firat 1991).28 Experiential consumption refers to obtaining enriching experiences through emotional benefits, by which consumers attempt to improve the subjectively experienced quality of their lives right here and now (Wohlfeil 2005; Weinberg and Gröppel 1989).29;27 This romantic consumption ethic has not only led to an increasing orientation towards and active participation in leisure, recreation, entertainment and subcultural neotribes (Cova and Cova 2002; Opaschowski 2000; Campbell 1987),13;5;4 but has also demonstrated the urgent need for experiential brand communications to gain consumers’ attention. To achieve this objective, the communicative innovation of eventmarketing derives from its four constitutive features: • Experience-orientation: As personal lived experiences tend to be stronger than “secondhand” media experiences in determining consumers’ notion of reality, consumers are encouraged to experience the brand reality as active participants rather than being passive recipients and, subsequently, are offered a contribution to their subjective quality of life (Weinberg and Nickel 1998).30 14

• Interactivity: In difference to the monological provision of information in classic marketing communications, event-marketing offers a platform for interactive and personal dialogues between participants, spectators and brand representatives (Zanger and Sistenich 1996).31 • Self-initiation: Because event-marketing is aimed at influencing consumers emotionally by staging self-initiated marketing-events, the marketer is in full control of the way in which sensual brand experiences are anchored in the world of consumer feelings and experiences (Wohlfeil and Whelan 2005b; Weinberg and Nickel 1998).32;33 • Dramaturgy: In order for consumers to emotionally experience the lived brandreality, it requires a unique and creative dramaturgy that, similar to a theatre play, brings the brand image to life and captures the imagination of the target audience. Therefore, the more the event-marketing strategy differs from consumers’ everyday life experiences, the higher is the degree of activation among consumers (Sistenich 1999; Zanger and Sistenich 1996).34;35 Thus, in contrast to event sponsorship, event-marketing is aimed at positively influencing customers’ familiarity, image, attitude and emotional attachment to the brand by staging self-initiated marketingevents as a 3-dimensional, interactive brand-related hyper reality for consumers. Because personally “lived” experiences tend to be stronger in determining people’s notion of reality than the “second-hand” experiences as traditionally communicated by advertising (Weinberg and Nickel 1998)33, marketing-events are better equipped to anchor multi-sensual brand experiences in the world of customer feelings and experiences (Weinberg and Gröppel 1989)27. Furthermore, in comparison to classic marketing communication strategies, where customers generally remain passive and distant recipients of brand messages, the major peculiarity of event-marketing is the fact that target audiences are encouraged to experience the brand values actively by becoming part of its hyper reality (Wohlfeil and Whelan 2004)36. For instance, at the Red Bull Flugtag consumers are invited to “stimulate their body and mind” and “give themselves wings” by building their own home-made flying machines and then leaping off a 6-metre high ramp to get as far as possible over a river. And while in advertising or sales promotions a contact remains rather accidental, consumers actively seek to engage with various event-marketing strategy. However, in order to utilise its full potential, any event-marketing strategy must be designed in a way 15

that consumers do not want to miss taking part in a brand’s experiential hyper reality. Thus, marketers must have a thorough understanding of what needs consumers seek to satisfy by participating in marketingevents. By meeting the growing need for romantic simulations of reality and experiential consumption, marketing managers not only make a contribution to consumers’ subjectively perceived quality of life, but also succeed in establishing brand values through a unique communication proposition and building mutually beneficial customerbrand relationships, as outlined in the following example of the Guinness Storehouse in Dublin.

DISCUSSION Study case: Guinness storehouse, Dublin Guinness is probably the most famous Irish brand in the world. In fact, such is the global fame of the Guinness brand that it is already recognised as an essential element of the Irish heritage and culture. In particular, the infamous Irish pub culture is unimaginable without a pint of Guinness. At least, that is the image the many tourists have in their mind and that is displayed in nearly every available tourist guidebook. Unfortunately, people at Diageo, the parent company that owns the Guinness brand, had to learn the hard way that having one of the best-known brands in the world does not necessarily translate in people’s consumption of that brand. Although the Guinness brand has historically always been all about community, where people come together and share their stories, it was increasingly perceived in Ireland as a brand choice of the older, rural generations. In fact, the younger generations in Ireland and abroad increasingly opted increasingly for the more fashionable lagers or alcopops rather than the traditional Irish stouts and ales. Therefore, in order to reconnect Guinness with younger Irish drinkers, who were switching more often to lagers and alcopops, the Guinness Storehouse in Dublin was opened to the public as a brand land in December 2000. Within the concept of event-marketing, brand lands are immobile corporate theme parks that provide an interactive mixture of entertainment and information around brand-related themes to consumers (Wohlfeil and Whelan 2005a; 2004). Located in a former fermentation building, the dull industrial brick exterior leads into a foyer with a modern glass-and-steel interior symbolising a bridge between the heritage of the past and the demands of the future. 16

The 30 metres high glass atrium in the core of the building is shaped as a giant pint glass rising from the foyer up to the roof. Similar to the pouring of a Guinness pint, visitors now play the role of the settling Guinness drop, which they receive as an entry ticket. In other words, they experience the Guinness Storehouse by slowly working their way over seven floors, incorporating ten different areas, up to the Gravity Bar at the top. Each of the ten areas contains a range of displayed artefacts, graphic designs and interactive multimedia-shows that engage all the visitors’ senses from visuals and sounds to smell, taste and touch. After a big screen welcomed the visitors to the world of Guinness with video clips, the first area at the ground floor interactively introduces visitors to the four raw ingredients barley, water, hops and yeasts and their special qualities as the basics on which Guinness is made. The next level contains a graphically designed multimedia-show that is designated to Arthur Guinness, the foundation of Guinness and the Guinness family’s contributions to the people of Dublin. This is followed by interactive areas covering the brewing process, life as an interpretation of what happens when Guinness and people are mixed together, the art of cooperage, transportation, Guinness’s global success, its popular world of advertising and Diageo’s drink-sensibly campaign by engaging visitors interactively in middle of the processes. Finally, like a Guinness drop, they settle at the top to enjoy their personal pint of Guinness in the Gravity bar with a view over Dublin City. For internal marketing purposes, the Guinness Storehouse is not only home to the visitor experience, but houses a number of other facilities as well. One of the key areas is the Learning Centre, which features state-ofthe-art training (How to pour the perfect pint...) and conference facilities for holding motivation and training seminars. An events centre provides a number of first class venues catering for 20 to 1000 people for concerts, fashion shows, product launches or lectures. The Guinness Achieve, where records and artefacts dating back to 1759 are collected, preserved and stored, is also located in the Guinness Storehouse to document the history of Guinness. Finally, in the spirit of the experience economy (Pine and Gilmore 1998), a retail store is located at the exit offering a wide range of Guinness branded merchandise to “brand tourists”. Despite not being the primary business, the success speaks for itself. Since December 2001, the Guinness Storehouse has already become the Number One tourist attraction in Dublin with more than 700,000 visitors per year. Furthermore, it has won several awards worldwide for “best brand experience” and “corporate themed entertainment”. 17

QUESTIONS 1. Write a one-page essay on your thoughts about how you would classify your behaviour and orientation to products you buy? 2. Use the consumer decision-making process to describe a recent purchase you made. Make comments on each stage of the process. 3. Can you think of situational effects that would make the purchase of a new sports-coat a high involvement purchase? Explain. 4. Identify and fully describe one of each of the types of reference groups discussed in this chapter. 5. Give an example of a low involvement, a medium involvement, and a high involvement purchase you have made recently. Describe how your decision-making behaviour was different for each purchase. 6. Explain how situational effects might impact a person’s decisionmaking in each of the following examples: a) Mark has a job interview on Friday and is wondering what to wear b) Janie is driving across Utah to visit her parents and, due to a broken radiator hose, her car overheats on the interstate. c) The Marvin family is headed to Texas to visit relatives and wants to stop at a restaurant for lunch. d) You have a first date tonight with a person to whom you are very attracted and are thinking about where to buy dinner. 7. “Learning always changes behaviour. Otherwise, it is not learning and not important to marketers.” Agree or disagree and explain. 8. Compare and contrast consumer-buying behaviour and organizational behaviour. 9. Identify the principal type of risk involved in each of the following: a) Janet undergoes a lab test for a health problem. b) Adam buys a new mini-compact car and is not sure about what his friends will say. c) Glenn misses a marketing exam and fails to contact anyone beforehand. d) Jerri decides to take a vacation and plans a trip to Africa. e) Jamie invests her tip income every week in a local ‘.com’ company.

18

REFERENCES The context of this part has been adapted from the following product(s): 1. Nag, R.; Hambrick, D. C.; Chen, M.-J (2007). “What is strategic management, really? Inductive derivation of a consensus definition of the field” (PDF). Strategic Management Journal 28 (9): 935–955. doi:10.1002/smj.615. Retrieved October 22, 2012. 2. Access via Internet: http://expertresearchers.blogspot. com/2014_02_01_archive.html 3. Brown, Stephen (1995), Postmodern Marketing, London: Routledge. 4. Campbell, Colin (1987), The Romantic Ethic and the Spirit of Modern Consumerism, Oxford: Basil Blackwell. 5. Opaschowski, Horst W. (2000), Kathedralen des 21. Jahrhunderts: Erlebniswelten im Zeitalter der Eventkultur, Hamburg: B.A.T. Freizeitforschungsinstitut. 6. Schulze, Gerhard (2000), Die Erlebnisgesellschaft: Kultursoziologie der Gegenwart, 8. Auflage, Frankfurt/Main: Campus. 7. Firat, A. Fuat and Alladi Venkatesh (1995), “Liberatory Postmodernism and the Reenchantment of Consumption”, Journal of Consumer Research, Vol. 22, No. 3, pp. 239-267. 8. Cova, Bernard (1997), “Community and Consumption: Towards a Definition of the “Linking Value” of Product or Services”, European Journal of Marketing, Vol. 31, No. 3-4, pp. 297-316. 9. Brown, Stephen (1999), “Postmodernism: The End of Marketing?” In: Rethinking Marketing: Towards Critical Marketing Accountings. (Eds.) Brownlie, Douglas, Michael Saren, Robin Wensley and Richard Whittington (London), SAGE, pp. 2757. 10. Brown, Stephen (1994), “Marketing as Multiplex: Screening Postmodernism”, European Journal of Marketing, Vol. 28, No. 8-9, pp. 27-51. 19

11. Firat, A. Fuat (1991), “The Consumer in Postmodernity”, Advances in Consumer Research, Vol. 18, pp. 70-76. 12. Brown, Stephen (2002), “Who Moved My Muggle? Harry Potter and the Marketing Imaginarium”, Marketing Intelligence & Planning, Vol. 20, No. 3, pp. 134-148. 13. Cova, Bernard and Veronique Cova (2002), “Tribal Marketing: The Tribalisation of Society and Its Impact on the Conduct of Marketing”, European Journal of Marketing, Vol. 36, No. 5-6, pp. 595-620. 14. Patterson, Maurice (1998), “Direct Marketing in Postmodernity: Neo-Tribes and Direct Communications”, Marketing Intelligence & Planning, Vol. 16, No. 1, pp. 68-74. 15. Cova, Bernard (1996), “The Postmodern Explained to Managers: Implications for Marketing”, Business Horizons, Vol. 39, No. 6, pp. 15-23. 16. Brown, Stephen (2001), “Marketing for Muggles: Harry Potter and the Retro-Revolution”, Journal of Marketing Management, Vol. 17, No. 5-6, pp. 463-479. 17. Holbrook, Morris B. (1995), Consumer Research: Introspective Essays on the Study of Consumption, Thousand Oaks: SAGE. 18. Opaschowski, Horst W. (2000), Kathedralen des 21. Jahrhunderts: Erlebniswelten im Zeitalter der Eventkultur, Hamburg: B.A.T. Freizeitforschungsinstitut. 19. Schulze, Gerhard (2000), Die Erlebnisgesellschaft: Kultursoziologie der Gegenwart, 8. Auflage, Frankfurt/Main: Campus. 20. Whelan and Wohlfeil (2005), “Communicating Brands as “Lived” Experiences”, in Proceedings of the 1st International Colloquium on Critical Issues in Brand Management, University of Birmingham, Birmingham: Academy of Marketing-Brand SIG. 21. Friedman, Milton (2001), “The Social Responsibility of Business is to Increase its Profits”. In: Business Ethics: Readings and Cases in Corporate Morality, 4th Edition. (Eds.) Hoffman, W. Michael, Robert E. Frederick and Mark S. Schwartz (New York), McGrawHill, pp. 156-160. (Original published in The New York Times Magazine, September 13, 1970) 20

22. Cornwell, T. Bettina and Isabelle Maignan (1998), “An International Review of Sponsorship Research”, Journal of Advertising, Vol. 27, No. 1, pp. 1-21. 23. Goldblatt, Joe Jeff (1997), Special Events: Best Practices in Modern Event Management, New York: John Wiley & Sons. 24. Cunningham, Peggy, Shirley Taylor and Carolyn Reeder (1993), “Event Marketing: The Evolution of Sponsorship From Philanthropy to Strategic Promotion”, in Proceedings of the 6th Conference on Historical Research in Marketing and Marketing Thought, East Lansing, MI: Michigan State University, pp. 407425. 25. Andersson, Malin and Anders Weslau (2000), Organising for Event Marketing in Order to Change Brand Image and Increase Sales, International Management Master Thesis No. 2000:44, Graduate Business School, University of Götheborg, Sweden. 26. Wohlfeil, Markus and Susan Whelan (2005a), “Event-Marketing as Innovative Marketing Communications: Reviewing the German Experience”, Journal of Customer Behaviour, Vol. 4, (forthcoming). 27. Weinberg, Peter and Andrea Gröppel (1989), “Emotional Benefits in Marketing Communication”, Irish Marketing Review, Vol. 4, No. 1, pp. 21-31. 28. Firat, A. Fuat (1991), “The Consumer in Postmodernity”, Advances in Consumer Research, Vol. 18, pp. 70-76. 29. Wohlfeil, Markus (2005), When Brands Become “Real-Lived” Experiences: Consumer Motivations to Participate in MarketingEvents, Unpublished Master-Thesis at the Waterford Institute of Technology. 30. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermittlungen von Marketing-Events”. In: Eventmarketing: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 31. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketing: Bestandsaufnahme, Standortbestimmung und ausgewählte theoretische Ansätze zur Erklärung eines innovativen 21

Kommunikationsinstruments”, Marketing – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 32. Wohlfeil, Markus and Susan Whelan (2005b), “Consumer Motivations to Participate in Marketing-Events: The Role of Predispositional Involvement”, European Advances in Consumer Research, Vol. 7, (forthcoming). 33. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermittlungen von Marketing-Events”. In: Eventmarketing: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 34. Sistenich, Frank (1999), Eventmarketing: Ein innovatives Instrument zur Metakommunikation in Unternehmen, Doctoral Thesis at Technische Universität Chemnitz, Wiesbaden: DUV. 35. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketing: Bestandsaufnahme, Standortbestimmung und ausgewählte theoretische Ansätze zur Erklärung eines innovativen Kommunikationsinstruments”, Marketing – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 36. Wohlfeil, Markus and Susan Whelan (2004), “Investigating Consumers’ Motivations to Participate in Marketing-Events”, in Proceedings of the Irish Academy of Management 2004, Trinity College Dublin, on CD-Rom.

FURTHER READING 1. Ghemawat, Pankaj (Spring 2002). “Competition and Business Strategy in Historical Perspective”. Business History Review (Harvard Business Review). 2. Hill, Charles W.L., Gareth R. Jones, Strategic Management Theory: An Integrated Approach, Cengage Learning, 10th edition 2012 3. Lamb, Robert, Boyden Competitive strategic management, Englewood Cliffs, NJ: Prentice-Hall, 1984 4. Porter, Michael E. (1996). “What is Strategy?”. Harvard Business Review(November–December 1996). 22

5. Kvint, Vladimir (2009). The Global Emerging Market: Strategic Management and Economics. Routeledge. 6. Chaffee, E. “Three models of strategy”, Academy of Management Review, vol 10, no. 1, 1985. 7. Chandler, Alfred Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York, 1962. 8. Mintzberg, Henry (1987). “Why Organizations Strategy”. California Management Review (Fall 1987).

Need

9. Mintzberg, Henry and, Quinn, James Brian (1996). The Strategy Process: Concepts, Contexts, Cases. Prentice Hall. ISBN 978-013-234030-4. 10. Drucker, Peter (1954). The Practice of Management. Harper & Row. ISBN 0-06-091316-9. 11. Henderson, Bruce (January 1, 1981). “The Concept of Strategy”. Boston Consulting Group. Retrieved April 18, 2014. 12. Mintzberg, Henry “Crafting Strategy”, Harvard Business Review, July/August 1987. 13. Mintzberg, Henry and Quinn, J.B. The Strategy Process, PrenticeHall, Harlow, 1988. 14. Mintzberg, H. Ahlstrand, B. and Lampel, J. Strategy Safari : A Guided Tour Through the Wilds of Strategic Management, The Free Press, New York, 1998. 15. Porter, Michael E. (1980). Competitive Strategy. Free Press. ISBN 0-684-84148-7. 16. Kiechel, Walter (2010). The Lords of Strategy. Harvard Business Press.ISBN 978-1-59139-782-3. 17. Drucker, Peter The Practice of Management, Harper and Row, New York, 1954. 18. Selznick, Philip Leadership in Administration: A Sociological Interpretation, Row, Peterson, Evanston Il. 1957. 19. Ansoff, Igor Corporate Strategy McGraw Hill, New York, 1965. 20. Henderson, Bruce (1970). Perspectives on Experience. Boston Consulting Group.ISBN 0-684-84148-7. 23

21. Porter, Michael E. (1985). Competitive Advantage. Free Press. ISBN 0-684-84146-0. 22. Michael Porter-What is Strategy?-Harvard Business ReviewNovember 1996 23. Hamel, G. & Prahalad, C.K. “The Core Competence of the Corporation”, Harvard Business Review, May–June 1990. 24. Drucker, Peter F. (1994). “The Theory of the Business”. Harvard Business Review(September–October 1994). 25. Henry Mintzberg-The Fall and Rise of Strategic Planning-Harvard Business Review-January 1994 26. Beaufre, Andre (1965). An Introduction to Strategy. Translated by R.H. Barry. With a pref, by B.H. Liddell Hart. Frederick A. Prager. OCLC 537817. Unknown ID 65-14177. 27. Mulcaster, W.R. “Three Strategic Frameworks,” Business Strategy Series, Vol 10, No1, pp68 – 75, 2009. 28. Scwhartz, Peter The Art of the Long View, Doubleday, New York, 1991. 29. Wack, Pierre “Scenarios: Uncharted Waters Ahead”, Harvard Business review, September October 1985. 30. Cameron, Bobby Thomas. Using responsive evaluation in strategic management. Strategic Leadership Review 4 (2), 22-27 31. Woodhouse, Edward J. and David Collingridge, “Incrementalism, Intelligent Trial-and-Error, and the Future of Political Decision Theory,” in Redner, Harry, ed., An Heretical Heir of the Enlightenment: Politics, Policy and Science in the Work of Charles E. Limdblom, Boulder, C.: Westview Press, 1993, p. 139 32. Elcock, Howard, “Strategic Management,” in Farnham, D. and S. Horton (eds.), Managing the New Public Services, 2nd Edition, New York: Macmillan, 1996, p. 56. 33. Hamel, Gary Leading the Revolution, Plume (Penguin Books), New York, 2002. 34. Moore, Mark H., Creating Public Value: Strategic Management in Government, Cambridge: Harvard University Press, 1995. 35. Lindblom, Charles E., “The Science of Muddling Through,” Public Administration Review, Vol. 19 (1959), No. 2 36. Tichy, Noel Managing Strategic Change: Technical, political, and cultural dynamics, John Wiley & Sons, New York, 1983. 24

Part 2 STRATEGY OF EVENT MARKETING. MARKET RESEARCHING Objective outline: 1. Explain the importance of understanding customers and marketplace. 2. Discuss customer relationship management. 3. Identify event marketing strategies for creating value for customers and capturing value from customers in return. Chapter Key Terms: Strategy Customer Communication Targets Targeting Event management is the application of project management to the creation and development of large scale events such as festivals, conferences, ceremonies, formal parties, concerts, or conventions. It involves studying the brand, identifying the target audience, devising the event concept, planning the logistics and coordinating the technical aspects before actually launching the event.1 The process of planning and co-ordinating the event is usually referred to as event planning and can include budgeting, scheduling, site selection, acquiring necessary permits, coordinating transportation and parking, arranging for speakers or entertainers, arranging decor, event security, catering and emergency plans. The events industry now includes events of all sizes from the Olympics down to business breakfast meetings. Many industries, charitable organizations, and interest groups hold events in order to market themselves, build business relationships, raise money or celebrate achievement.1 What is event planning?3 This question actually breaks down into two questions: What kinds of events are we talking about? What is event planning? First, what kinds of events are we talking about? They include: 25

•

Celebrations (fairs, parades, weddings, reunions, birthdays, anniversaries, bar and bat mitzvahs, first communions, sweet 16s) • Education (conferences, conventions, meetings, graduations) • Promotions (product launches, political rallies, fashion shows, conventions) • Commemorations (memorials, civic events) The above list is not an exhaustive one, but as the examples illustrate, special events may be business related, purely social, or somewhere in between. The advice in this book is relevant to the planning of both business and social events. Now we move to the second What question: What is event planning? Planners of an event may handle any or all of the following tasks related to that event: • Conduct research • Create an event design • Find a site • Arrange for food, decor, and entertainment • Plan transportation to and from the event • Send invitations to attendees • Arrange any necessary accommodations for attendees • Coordinate the activities of event personnel • Hire employees to work the event • Supervise at the site • Conduct evaluations of the event How many of these activities your business engages in will depend on the size and type of a particular event, which will, in turn, depend on the specialization you choose. Your specialization will, of course, depend on your areas of expertise, but also will depend on your location. If you live in rural Iowa, for instance, you may be planning to develop a social event planning business since you may not have a strong corporate presence in your town. The new rules for event management2 As much as stunt can seem like a dirty word, marketing through stand-out events has never been so maverick. Whether you call it event marketing, experiential marketing, live marketing, participatory advertising, or any other moniker, this is a brave new world of blowing things up, building in a technological overlay to real-world places, and convincing otherwise sane passes-by to dance or change clothes in the street—all with the motive of engaging consumers. We talked with some 26

of the smartest minds in experiential marketing to find out how they pull off memorable events—and make sure there’s significant consumer engagement long after the event is over. Here’s what they told us. 1. Create an event within an event. “We try to create an event within an event where we can touch a consumer one-on-one, where you can engage directly, and teach them about your product, and do so by interacting in a quality way. I just got back from Sundance, and we were doing VIP and celebrity shuttling to events in our vehicles, and the goal for us is to create an event within the vehicle. For Ray Ban we did a truth-or-dare themed campaign. We have video within the shuttles, and asked the passengers truth-or-dare questions, and were giving away free sunglasses. We had people dancing in the middle of the street, we had people telling us their biggest secrets. And that was not only fun for participants, but became a huge hit online after the event. We try to make it almost mass media, where they’re telling their friends to go here, or watch this video, and we create a whole social-media event around it. Why does it work? People go to these things to experience new things, and we’re giving them that. They want to share it with their friends naturally when they see something cool.” —Ian Greenberg, senior vice president of Show Media, an advertising agency based in New York City, which ranked No. 236 on the 2010 Inc. 500 | 5000 2. Employ GPS and real-time event tracking. “I think one of the things that we’ve been playing around with Real Good Chair [a documentary in which 25 chairs by Blu Dot were placed around New York City and tracked by GPS and film crews] is location and GPS. It’s something that someone can participate in and watch and see in real-time. You don’t have to be there in the streets of New York to see it—you have a whole other community that can go along with that experience. That connection with another event, is really new and the power of new is huge. If it feels like a different experience— if it captures your fascination, that’s what really gets passed along, and builds the press and community around it. It’s what flash parades were two years ago—that’s the scramble in many ways. Has anyone done this before? Will this be felt like a copycat? It’s all about staying new.”—Michael Hart, founder of Mono, an agency based in Minneapolis 3. Add another dimension. “A lot of the technologies that are potentially transformative to events today are essentially invisible. People have gotten used to 3-D technology, projections, and augmented reality that to have them at events feels a lot more natural today. I’d say augmented reality is a 27

great technology you can use in the live space for project demonstrations. A couple of years ago it would have felt a lot more awkward, forced, and generally very Minority Report. QR codes are pretty invisible at this point, too, becoming much less awkward, more natural, and that lets them become sparks for natural interactivity. H&M and Samsung have done very beautiful projection mapping on buildings in Europe. It’s the kind of thing that’s not what people think of as traditional event, but it’s experience in the public domain that gets attention, and really can have the potential to get the attention online just because it’s cool to watch.” —Liz Bigham, senior vice president and director of marketing for Jack Morton Worldwide 4. Use ubiquitous social networking as a conduit for exclusivity. “The giant gorilla in the room is how do you use Facebook through your event and on-site activity? The first thing that’s happening is that I’m seeing a lot of brands encouraging people to become fans right there on site. It used to be that you’d have to have a computer there and encourage people to sign directly on your machine. Now, you can offer a direct reward, a prize, a premium, for fanning the product right then and there on their smartphone or mobile device. It’s giving them some real immediate value. Immediate liking and friending is becoming more popular. I’ve also seen a lot of exclusive access to existing fans. You promote the event you’re going to be at on Facebook—and you say, ‘hey, if you’re going to be there, here’s an exclusive thing for our fans,’ whether it’s parking, a free T-shirt, meeting a musician or DJ. We’re beginning to see, taking whatever’s happening at your event, a video game event, a concert, a snowboarding contest, you’re seeing not only being able to have physical access to it, but there would be content exclusive to Facebook. You can pick up about a million new brand fans by a good strategy of creating exclusive Facebook content. Do you want to see an interview with Sean White, or some neat snowboard footage? You can only see that on Facebook.” —Issa Sawabini, a partner and owner at Fuse, a youth-marketing agency based in Burlington, Vermont 5. Hire outside experts. Lots of them. When working on a campaign for Mafia Wars, in which an explosion of an armoured truck would be staged in the Nevada desert, David Moranville, creative director and executive vice president of Davis Elen Advertising, said: “We were hoping to get MythBusters involved with us so they’d do a show. In the meantime, we started looking into different detonations and different companies that obliterate things.” Turns out, Los Angeles has quite a variety of 28

companies that detonate blasts for hire. Moranville picked a company in Burbank called WESTefx, which had worked with special effects and blast technology in Apollo 13, Transformers, and Batman. The first thing Davis Elen learned was their armoured truck … didn’t actually need to be armoured. It was stripped of a lot of the interior weight, including armour, engine, and interior detailing. Blasting caps were added to the interior of all the doors, so at detonation each flies 20 or 30 feet. The truck was filled with artificial money, also rigged to blast away at the first explosion. Also, he knew that when there’s fire, there should be fire officials. And an EMT. And some hired police. The number of officials you’ll need to hire depends on geography and how many civilians will be nearby the stunt. In this case, where about 75 people would be present, Moranville needed between two and four Fire Marshalls, between four and six hired law enforcement agents, and an EMT. The total cost was less than $10,000. 6. Don’t fear consumers’ brutal honesty. “We did a ride and drive campaign for Hundai Sonata this part year, which was part of a bigger campaign called Sonata Uncensored. The cars had cameras in them, and we invited people to give the cars test drives. So the drivers and passengers, once inside, could record themselves giving uncensored feedback on the car. It was used as part of a Facebook campaign, and a lot of that content—and content like it—was used for TV ads. The insight: Events are not just a moment in time, they are content that can be used in lots of ways, whether that’s online, or on TV.” —Liz Bigham, senior vice president and director of marketing for Jack Morton Worldwide 7. Mash-up your technology. “You have to be in tune to what has been done before. It’s trying to mash up things that haven’t been mashed up before. Bringing a couple of technologies and mediums together that haven’t been brought together before is the key. Old media with new media, or new tech with more comfortable older tech. And with that, you build a fascination with a new way the world can work. It’s increasingly true that tech and creativity are becoming one in the same. I think they was a period of time where technology was a platform, and it was a group of people who solved problems for systems and machinery. There was a creative group, separately. They didn’t get together. Now there are minds that come from a technology background and have creativity. The great melding of those worlds is right now. Geek has been cool for a while, and is only getting cooler.”—Michael Hart, founder of Mono, an agency based in Minneapolis 29

8. Tweeting the deal. “Almost every brand that has an audience in the Twitter age group—young adults who aren’t too young—and is becoming used to making constant updates from the on-site/booth/ whatever it is. It used to be you put up a sign up outside your booth when something was happening. Now you post updates online. Brands are also getting good at creating on-site experiences over Twitter. It could be an on-site scavenger hunt. It could be taking a photo—something fun and challenging, and if they bring that back they win a prize.”—Issa Sawabini, a partner and owner at Fuse, a youth-marketing agency based in Burlington, Vermont Conducting market research3 Many interviewees told us that their market research was very informal in nature, consisting of knowledge gained through years of involvement in the industry. Deborah Williams, Kim Quigley, and David Granger all have years of experience in the event planning or supply industry. Their target market is the Dallas-Ft. Worth area. However, they also operate nationally, producing corporate events in Florida, Oklahoma, and Ohio. Most of their clients come to them through organizations they belong to or because they have been involved in the industry for many years. “So you know the resources and the people,” Quigley says. If you already have experience in event planning or a related industry, you may be starting your own business partly because discussions with colleagues make you aware that a need exists. This kind of knowledge is valuable, but Goldblatt points out that competition is now global as well as local, and all event planners should do market research. With this idea in mind, we now offer some suggestions on how to conduct this type of research. The market analysis3 One of your first tasks is to determine the market limits or trading area of your business. These limits will vary depending upon the type of event planning service you offer. For example, if you plan parties, you may limit your market to your county. If you plan corporate meetings, however, you may have a national client base. Studies show that a population base of at least 50,000 is needed to support an event planning service. Keep in mind that the higher the income level of that population, the more potential clients there will be for your business. If you live in an area with a population base of less than 50,000, consider your goals. Perhaps you are a mother of young children and are hoping to earn $5,000 a year, keeping your business small while 30

rearing your children. Then a smaller population base may work for you. Many event planners put their hats into this business, planning to earn only a part-time salary to supplement other family income. This is one of the real strengths of this field. You can choose to create a successful part-time or full-time business in event planning. To conduct a market analysis you need to ask and answer the following questions: • Is the population base large enough to support your event planning service? • Does the community have a stable economic base that will provide a healthy environment for your business? • Are the area’s demographic characteristics compatible with the market you wish to serve? Many chambers of commerce have offices that track their area’s economic development. These offices are usually called either Office of Economic Development or Economic Development Council. Find an office in your area, and look for the above information. In addition, look at reports and studies conducted by trade associations. You can also contact the Census Bureau at www.census.gov. You can also access www.bls.gov/ cex/ to read the Bureau of Labor’s Consumer Expenditure Survey. This survey includes information about how individuals and families spend their money. If you’ll be planning corporate events, you also need to know the number of corporations in your service area that hold regular conventions and meetings, the size of these companies, their budgets for these events, and if they are using outside services. You will be able to find answers to many of these questions on a company’s website. As you conduct your market research, memberships in industry-related associations can be well worth the investment. Associations usually offer networking opportunities and a wealth of industry-specific information, such as market statistics, member lists, books, and reference materials. They may also offer discounts on purchases from certain suppliers. There are several associations specific to the event planning industry, including the International Special Events Society and Meeting Professionals International. For information on contacting an industry association, please see the Appendix at the end of this guide. Interview Prospective Clients3 The next step is to interview prospective clients. What are their needs? How likely are they to use a service like yours? If you are planning corporate events, interview meeting planners and directors of marketing 31

and public relations, as well as event directors at convention halls and hotels. If your business will focus on social events, interview women in affluent households (studies show women do most social planning). Whatever your specialization, also consider interviewing professionals in related fields. Photographers and caterers know a lot about the nature of the special events occurring in the area. You can survey your targeted market by direct mail, by telephone, by e-mail, or in person. Next, Goldblatt suggests, try to get a few clients. “If people are not willing to pay you, they’re not fully committed,” he says. Analyse The Competition3 Competition in the event planning market is fierce, but it is not insurmountable. If you are targeting the corporate market, your competition will consist not only of other event planning entrepreneurs, but also of in-house meeting planners hired by corporations. Many corporations choose to outsource event planning responsibilities to keep costs low. You may be able to assess the competition by asking corporations about the planners they work with. Trade associations such as ISES or MPI may not be able to disclose members’ names, but they might be willing to tell you how many of their members are located in your area. In the social arena, your main competition will be other event planning entrepreneurs, as well as some caterers, florists, etc., who have taken on the responsibilities of planning events as a side-line function. Most of the competition you’ll face will be local; try checking in your phone book under Event Planners or Party Planners to see how many others there are. Be aware, however, that many event planners do not buy advertising, preferring to rely solely on word-of mouth to do their advertising for them. This means you may have to get creative to figure out how much local competition you face. Ask vendors which planners they work with. Go to party supply stores and see if you can find out who their major customers are. Ask all your questions face-to-face, rather than by phone. If you are friendly and explain that you are trying to figure out if there is enough demand for another planning business, most people will cooperate. If you find a large amount of competition in your area, don’t be discouraged. Instead, look for a niche you can fill and think about what will make your event planning company stand out in the crowd. Social event planning is the ideal place from which to launch your career. Social planning is a growth industry—there are more opportunities out there than those planners in the marketplace can handle. Social event planners also will be able to find plenty of work 32

in areas with a smaller population base. Remember that if you strive to be the best, research your market, promote yourself, and develop a good business plan, you will find your spot in the marketplace.

DISCUSSIONS View an example of key priorities. Close the vision-culture gap In order to develop strategies to close this gap, the Corporate Communication strategist, as a starting point, has to have a clear understanding of the organisation’s strategic intent and priorities. Merely repeating to employees the words used to capture the leadership’s thinking in the corporate strategy document is not enough. The idea is to delve deeper and to unpack the underlying intent of the vision and each of the strategic goals (sometimes called business plan objectives or a variety of other terms) so that employees can truly understand and therefore support it. Another step towards closing this gap is to define enterprise values that are in support of the vision and strategic goals and to develop a Code of Conduct that captures the desired behaviours for living those values. The communication strategy will seek to create maximum understanding and enterprise-wide buy-in for the values and behaviours. Close the vision-reputation gap The primary focus of the communication strategy in closing this gap is effective stakeholder relationship management. To perform this function effectively, the Communication strategist needs to be involved in the formulation of the vision (organisation’s strategic intent) and strategic priorities as these have to be informed by insights on stakeholder needs, expectations and perceptions. Once the organisation’s strategy is developed and the vision and strategic goals are clearly articulated (or implicitly understood), it becomes a function of the communication strategy to identify the most relevant stakeholders, not only for the organisation as a whole, but more importantly for each of the strategic goals. The communication strategy then has to specify the ways in which the relationship with each of those stakeholders will be managed to ensure common understanding among stakeholders and the organisation of where it is heading and what it will focus on to get there. It is part of the communication strategy development phase to specify the measurement tools that will 33

be employed to determine and track stakeholder perceptions, thereby determining the size and nature of the gap that still needs to be closed. Close the reputation-culture gap This becomes almost a natural consequence of the success achieved in closing the other two gaps. When employees behave in a way that is congruent with the organisation’s vision and strategic goals (closing the vision-culture gap) and the organisation and its key stakeholders have a commonly shared view and understanding of the vision and strategic goals (closing the vision-reputation gap), there should be no gap between what the stakeholders expect of the organisation and how they experience the behaviour of its employees.

REFERENCES

The context of this part has been adapted from the following product(s): 1. Ramsborg, G.C.; B Miller, D Breiter, BJ Reed & A Rushing (eds.), Professional meeting management: Comprehensive strategies for meetings, conventions and events, 2008, 5th ed, Kendall/Hunt Publishing, Dubuque, Iowa. ISBN 0-7575-5212-9 2. The new rules for event management. Access via Internet: http:// www.inc.com/guides/201102/new-rules-of-event-marketing. html 3. The Event Planning Industry. Access via Internet: http://www. entrepreneur.com/downloads/guides/1313_Event_Planning_ ch1.pdf

FURTHER READING 1. Ayuba B. (2005), Marketing: Principles and Management, Kaduna:Shukrah Printing 2. David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill. 3. Del I.H. Roger J.B. and Kenneth A.C. (2001), Consumer Behaviour; Building Marketing Strategy, New York: McGraw-Hill Irwin. 4. Edward, J. and William J. (1963): of Marketing; NewYork, Mc Graw- Hill, Inc. 34

Fundamentals

Part 3 SEGMENTATION OF EVENT MARKETING AND SELECTIONS OF TARGET MARKETS Objective outline: 1. Define the major steps in designing a customer – driven marketing strategy: market segmentation, targeting, differentiation and positioning. 2. List and discuss the major bases for segmenting consumer and business markets. 3. Explain how companies identify attractive market segments and choose a market – targeting strategy. 4. Describe the environmental forces that affect the company’s ability to serve its customers. Chapter Key Terms: Target Segmentation Position Why audience segmentation is important1 For many in the artistic community, marketing is a nine-letter dirty word. To some artists, marketing seems to represent the ultimate compromise of their creative principles. Marketing, they believe, means pandering to the tastes of the audience, rather than expressing their own artistic vision. Experienced marketers, in and outside of the arts, recognize this fear as a narrow and incorrect interpretation of marketing principles. In fact, appropriate and insightful market segmentation analysis can help artists thrive. When arts organizations find and attract the right audience for each artistic effort, more artists can connect with audiences that appreciate and value their individual talents and ideas. Market segmentation analysis and the selection of the particular audience segments you will target are essential parts of a strong marketing plan. When you analyse your potential audience to identify key segments, you consciously select groups of people you will try to attract to your organization. Your marketing goal is no longer just filling 35

seats or getting people to walk in the door, but attracting the right people with the right message through the right media at the right time with the right product at the right price. When you commit to target marketing, you tell yourself, your artists, your management and your board that some potential audience members are more important than others. Excluding anyone may strike some as a risky and controversial strategy. However, when target marketing succeeds, you don’t just sell tickets. You build a strong and satisfied audience that values the artistic product you provide, and keeps coming back for more. In the arts, successful market segmentation is based on the premise of “different strokes for different folks.” It begins by recognizing that every person is not equally drawn to every work of art. The purpose of audience segmentation analysis is to identify those in the over-all population who will be most likely to appreciate and value the particular art in question so you can promote the work directly to them. In other words, in arts marketing, the goal of segmentation is to find audience members who will be most satisfied by the artistic product you have to offer. Market segmentation protects artists from pressures to shape works to fit the needs and tastes of an undefined mass of potential audience members. Another word for segmentation is grouping. When you look for segments of your overall audience, or your potential audience, you are searching for groups of people who are similar in some way to each other, and different from everybody else. For a segment to be meaningful for your marketing strategy, the ways the individuals are similar should relate to your organization or artistic product. Your goal in market segmentation is to appeal to each group’s particular needs and interests in much the same way you would if you were meeting and talking to one person at a time. As soon as marketers began to use television as a major advertising medium, they realized that “mass” communication must direct itself to a particular target consumer or it is lost in the clutter. In today’s world, potential audiences are besieged with information everywhere they go. They see flyers on their doorsteps, brochures in their mail boxes, ads on their grocery carts, e-mail at their jobs, TV channels at airports when they travel, as well as the television, radio, newspapers and magazines they invite into their homes. We’ve all developed an ability to “tune out” most marketing, and devote our energy and attention to the things we find interesting, intriguing or otherwise worth our time. 36

Market segmentation lets you see and know your audience members as individuals, so you can identify their needs and more effectively communicate the ways they can benefit from what you have to offer. Armed with this knowledge, you’ll find it easier to develop creative marketing strategies that reach and motivate your target, making the most of your always too-scarce promotional resources. How to find important new audience segments1 Before you begin your search for new audience segments, make sure you understand the characteristics of your current audience and any segments it may already include. Then, you can look beyond your present audience to find new people to target with special marketing efforts. How would you characterize the people who now support your organization? Who comes to your performances? Who are your donors? Your volunteers? Think about these groups, refer to any research you may have done in the past, consult with others in your organization, and try to formulate a current audience profile, using the checklist of IDENTIFYING CHARACTERISTICS as a guide. Demographics are a good place to start1 One of the easiest and most obvious ways to describe an audience is in terms of demographic characteristics. How old are your typical audience members? Are they mostly female, mostly male or an even mix? Are they married or single? Do they have children? Where do they live? Where do they work? What races or ethnic groups predominate? What is the typical occupation? The typical level of income? The level of education? You probably have a general idea of the demographic characteristics of your audience. Some demographic traits are easy to observe just by looking at your audiences or the people who visit your facility. You may even have a written profile that describes your audience members demographically. But, demographics are only a start. They can provide a broad general outline, but don’t really help you pinpoint the qualities that turn undifferentiated people into individual persons. Get the picture? The point is, you only get part of the picture. While Steve Jobs and Arnold Schwarzenegger are alike in some ways, they are 37

different in many other ways. Demographic profiles are so broadly drawn, that they describe many people -including people who don’t fit into your customer segments. Demographics are only a starting point. They can provide a broad general outline, but don’t really help you pinpoint the qualities that make people into individuals. Demographics can sketch the outlines of an audience, but if demographics are your only tool, you won’t be able to fill in the finer details. For real insight, reach inside to identify needs1 To get beyond demographics, you need to think about what makes one person different from another. For the most part, the demographic facts are not what really distinguish us. What makes each of us an individual is what goes on below the surface in our hearts and in our heads. That’s where you’ll find the most powerful information about your present audience and the groups you can target to develop new audiences. In defining audience segments, your primary goal should be to identify a group of people who share a common need that your organization or your programming can satisfy. The need might be expressed in terms of the artistic product you deliver, i.e. you might be looking for people who seek out “innovative presentations of classic dramas” or “modern music from around the world.” The need can also be expressed in non-artistic terms, such as opportunities for socializing with friends, family entertainment, relaxation or other end benefits. When you define segments based on their needs, you remain focused on how your artistic product can find the audience most likely to appreciate and value it. Mining for underlying needs1 To begin your journey below the demographic surface, think about other “facts” you know or can find out about your audience or your prospects. What are their behaviour patterns relative to your organization, or relative to the arts overall? Are they frequent arts participants, or do you attract people who are not very involved in the arts? Do you get repeat attendance, or is most of your audience attending only once? Do different programs or performances attract different types of people? Do you have a core of subscribers or members? Are your audience members the subscribers or members of other arts organizations? Which ones? 38

What Are They After? Then ask yourself what underlying needs may be motivating these behavioural patterns. Is your audience seeking variety? New experiences? Reliable entertainment? Exposure to the classics? Opportunities to learn? By trying to understand why people behave as they do, you may be able to identify the important needs your marketing program should address. What Will They Do Next? Consider, too, what audience members or prospects are likely to do in the future. Analyse your historical records, or ask directly. Do they intend to come again, or do they plan to move on to something new? Are they willing to consider a membership or subscription? If not, what other kind of commitment are they willing to make? What Are Their Beliefs? Another way to understand prospect needs is to look for the attitudes, opinions and beliefs that motivate what people do. Ask yourself what your existing audience members or your prospects like about the arts. What do they expect from their arts activities? Are they looking for education? Inspiration? Social status? Could their expectations provide a basis for meaningful segmentation? What Are Their Priorities? Think about what role the arts play in your prospects’ lives. How much do they know about the arts? Is art a high priority, or are other things more important? Where do the arts “fit” into their leisure time and other life responsibilities? What Do They Think of You? What do your audience members or prospects know or believe about your organization? What do they like about what you do? What do they believe you do best? What don’t they like? Are the differences in what people know or believe about you enough to create genuinely different audience segments?

QUESTIONS AND DISCUSSION EXAMPLE: Identify specific individuals based on records kept of their behaviour. Dance Company Y’s primary targets for a special Subscription renewal effort are first-year subscribers. The Company refers to its Database to provide the information needed to identify the people who fit the definition of the targeted customers (i.e. all the people who are listed in the Database as first-year subscribers). Note: Your Database records must be clean and up-to-date for the customer information 39

to be accurate. In other situations you won’t be able to identify Target Prospects on an individual name-and-address basis. That’s when you’ll need to learn more about the characteristics that prospective customers have in common. These details will help you single out these prospective customers with advertising or other marketing efforts, by “talking” to them as if you were talking one-on-one to each person individually. PSYCHOGRAPHIC EXERCISE: A good way to pull segmentation information together is to create “stories” about hypothetical customers who fit into each customer segment you have identified. The purpose of the exercise is to get your creative juices flowing toward understanding your customers’ perspectives. This is an example of what a Chicago-based chamber ensemble came up with: “Drs. Wayne and Jean Smith are an affluent professional couple who have lived in the Hyde Park neighbourhood since 1966. Their only child, Samuel, has long since moved away. Wayne and Jean love their community and plan to continue living there after they retire from their jobs at the University of Chicago. They are also classical music fans and began subscribing to Music of the Baroque concerts when the organization first started in Hyde Park in 1972. Wayne and Jean know quality when they hear it, and they were thrilled to have such fine performances in close proximity to their home (within 1 mile). When the organization made the decision to leave Hyde Park in 1999, Wayne and Jean felt betrayed, and they decided not to subscribe to the downtown Chicago series that was offered in exchange. Maybe Hyde Park wasn’t good enough for Music of the Baroque, but it’s good enough for Wayne and Jean. Two years later, they’re starting to miss the concerts a little, and their friends who still attend say that the series at Old St. Patrick’s Church in the Loop is convenient.” EXAMPLE: Using psychographic research in a practical way. Based on a combination of research and insight your organization decides that people who have attended your organization’s performances at least three times in the past two years are likely to value your organization as an important presenter of new works by established dramatists. You can reasonably assume that these people would consider subscribing to your season program to support your efforts. 40

Now match demographic information to the needs of each group you are targeting. Attendance, in this case, is the demographic behaviour of this particular segment. Your organization’s brand new season is the benefit provided by your organization that fills that segment’s need. First-time attendees and first-time repeaters are excluded from the customer segment targeted for subscriptions. Hold on to these segments–they may represent good targets for other Marketing efforts. Since your organization knows what motivates its returning customers, it focuses its Subscription Marketing effort on customers who have attended its performances at least three times in the past two years. To further entice this segment your organization emphasizes the “world premiere” performances that will be included in its season. Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them. Market segmentation strategies are generally used to identify and further define the target customers, and provide supporting data for marketing plan elements such as positioning to achieve certain marketing plan objectives. Businesses may develop product differentiation strategies, or an undifferentiated approach, involving specific products or product lines depending on the specific demand and attributes of the target segment. Marketers can segment according to geographic criteria—nations, states, regions, countries, cities, neighbourhoods, or postal codes. The geo-cluster approach combines demographic data with geographic data to create a more accurate or specific profile.2 With respect to region, in rainy regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can sell summer clothing. A small business commodity store may target only customers from the local neighbourhood, while a larger department store can target its marketing towards several neighbourhoods in a larger city or area, while ignoring customers in other continents. Geographic Segmentation is important and may be considered the first step to international marketing, followed by demographic and psychographic segmentation.2 Segmentation according to demography is based on variables such as age, gender, occupation and education level or according to perceived benefits which a product/service may provide. Benefits may be perceived differently depending on a consumer’s stage in the life cycle. 41

Demographic segmentation divides markets into different life stage groups and allows for messages to be tailored accordingly.3 A variant of this approach known as ‘firmographic’ or ‘feature based’ segmentation is commonly used in business-to-business markets (it’s estimated that 81% of B2B marketers use this technique). Under this approach the target market is segmented based on features such as company size (either in terms of revenue or number of employees), industry sector or location (country and/or region).4 Psychographic segmentation, which is sometimes called Lifestyle. This is measured by studying the activities, interests, and opinions (AIOs) of customers. It considers how people spend their leisure, and which external influences they are most responsive to and influenced by. Psychographic is highly important to segmentation, because it identifies the personal activities and targeted lifestyle the target subject endures, or the image they are attempting to project. Mass Media has a predominant influence and effect on Psychographic segmentation. Lifestyle products may pertain to high involvement products and purchase decisions, to speciality or luxury products and purchase decisions.5 Occasion segmentation focuses on analysing occasions, independent of the customers, such as considering Coke for occasions of being thirsty, having dinner or going out, without taking into consideration the differences an affluent and middle-class customer would have during these occasions. ‘Occasional customer segmentation’ merges customer-level and occasion-level segmentation models and provides an understanding of the individual customers’ needs, behaviour and value under different occasions of usage and time. Unlike traditional segmentation models, this approach assigns more than one segment to each unique customer, depending on the current circumstances they are under.6 Cultural Segmentation7 is used to classify markets according to cultural origin. Culture is a strong dimension of consumer behaviour and is used to enhance customer insight and as a component of predictive models. Cultural segmentation enables appropriate communications to be crafted to particular cultural communities, which is important for message engagement in a wide range of organisations, including businesses, government and community groups. Cultural Segmentation can be applied to existing customer data to measure market penetration in key cultural segments by product, brand, channel as well as traditional measures of recency, frequency and monetary value. These benchmarks 42

form an important evidence-base to guide strategic direction and tactical campaign activity, allowing engagement trends to be monitored over time.7 Cultural Segmentation can also be mapped according to state, region, suburb and neighbourhood. This provides a geographical market view of population proportions and may be of benefit in selecting appropriately located premises, determining territory boundaries and local marketing activities. Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name analysis (onomastics) is the most reliable and efficient means of describing the cultural origin of individuals. The accuracy of using name analysis as a surrogate for cultural background in Australia is 80-85%,8 after allowing for female name changes due to marriage, social/political reasons or colonial influence. The extent of name data coverage means a user will code a minimum of 99 percent of individuals with their most likely ancestral origin.9

REFERENCES The context of this part has been adapted from the following product(s): 1. Finding your audience through market segmentation. Access via Internet: http://racc.org/sites/default/files/buildingblocks/ defining/Finding%20your%20Audience%20through%20 Market%20Segmentation.pdf 2. What is geographic segmentation’ Kotler, Philip, and Kevin Lane Keller. Marketing Management. Prentice Hall, 2006. ISBN 978-013-145757-7 3. Riley, Jim (2012-09-23). “Market Segmentation - Demographics”. Tutor2u.net. Retrieved 15 July 2014. 4.

Fripp, Geoff.“Market Segmentation Bases” Market Segmentation Study Guide

5. Marketing Padawan Designing Marketing Strategies With the Help of STP

43

6. Philip Kotler and Gary Armstrong : Principles of Marketing Pearson Education Limited 2014, 2012 7. “Market Segmentation and Targeting”. Academic.brooklyn.cuny. edu. 2011. Retrieved 15 July 2014. 8. “Occasional Customer Segmentation”. Forte Consultancy Group. 2010. Retrieved 8 May 2015. 9. Dove, Michael (2013-09-05). “Cultural Segmentation - Customer Segmentation”. OriginsInfo.com.au. Retrieved 6 October 2014. Cultural Segmentation

FURTHER READING 1. Ayuba B. (2005), Marketing: Principles and Management, Kaduna:Shukrah Printing 2. David L. and Albert J.D. (2002), Consumer Behaviour, New Delhi: Tata McGraw Hill. 3. Edward, J. and William J. (1963): Fundamentals of Marketing; NewYork, Mc Graw- Hill, Inc.

44

Part 4 STRATEGIES OF EVENT MARKETING POSITIONING Objective outline: 1. Explain the importance of information in gaining insights about the marketplace and customers. 2. Define the marketing information system and discuss its parts. 3. Outline the steps in the positioning process. 4. Explain how companies analyse using positioning map. Chapter Key Terms: Positioning Target Competitors Competitive advantage Market position Market change Value For almost two decades, managers have been learning to play by a new set of rules. Companies must be flexible to respond rapidly to competitive and market changes. They must benchmark continuously to achieve best practice. They must outsource aggressively to gain efficiencies. And they must nurture a few core competencies in the race to stay ahead of rivals.1 Positioning-once the heart of strategy-is rejected as too static for today’s dynamic markets and changing technologies. According to the new dogma, rivals can quickly copy any market position, and competitive advantage is, at best, temporary.1 But those beliefs are dangerous half-truths, and they are leading more and more companies down the path of mutually destructive competition. True, some barriers to competition are falling as regulation eases and markets become global. True, companies have properly invested energy in becoming leaner and more nimble. In many industries, however, what some call hyper competition is a self-inflicted wound, not the inevitable outcome of a changing paradigm of competition.1 45

The root of the problem is the failure to distinguish between operational effectiveness and start edgy. The quest for productivity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, `benchmarking, timebased competition, outsourcing, partnering, reengineering, change management. Although the resulting operational improvements have often been dramatic, many companies have been frustrated by their inability to translate those gains into sustainable profitability. And bit by bit, almost imperceptibly, management tools have taken the place of strategy. As managers push to improve on all fronts, they move farther away from viable competitive positions.1 Finding new positions: the entrepreneurial edge1 Strategic competition can be thought of as the process of perceiving new positions that woo customers from established positions or draw new customers into the market. For example, superstores offering depth of merchandise in a single product category take market share from broad-line department stores offering a more limited selection in many categories. Mail-order catalogues pick off customers who crave convenience. In principle, incumbents and entrepreneurs face the same challenges in finding new strategic positions. In practice, new entrants often have the edge. Strategic positioning are often not obvious, and finding them requires creativity and insight. New entrants often discover unique positions that have been available but simply overlooked by established competitors. Ikea, for example, recognized a customer group that had been ignored or served poorly. Circuit City Stores’ entry into used cars, CarMax, is based on a new way of performing activities - extensive refurbishing of cars, product guarantees, no-haggle pricing, sophisticated use of in-house customer financing that has long been open to incumbents. New entrants can prosper by occupying a position that a competitor once held but has ceded through years of imitation and straddling. And entrants coming from other industries can create new positions because of distinctive activities drawn from their other businesses. CarMax borrows heavily from Circuit City’s expertise in inventory management, credit, and other activities in consumer electronics retailing. Most commonly, however, new positions open up because of change. New customer groups or purchase occasions arise; new needs emerge 46

as societies evolve; new distribution channels appear; new technologies are developed; new machinery or information systems become available. When such changes happen, new entrants, unencumbered by a long history in the industry, can often more easily perceive the potential for a new way of competing. Unlike incumbents, newcomers can be more flexible because they face no trade-offs with their existing activities. Positioning is a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer. Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. It is also called product positioning.2 Positioning was first introduced by Jack Trout in 1969 (“Industrial Marketing” Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestselling book “Positioning - The Battle for Your Mind.” (McGraw-Hill 1981).3 This differs slightly from the context in which the term was first published in 1969 by Jack Trout in the paper “Positioning” is a game people play in today’s me-too market place” in the publication Industrial Marketing, in which the case is made that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumer’s mind. It was then expanded into their ground-breaking first book, “Positioning: The Battle for Your Mind,” in which they define Positioning as “an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances” (p. 19 of 2001 paperback edition).3 What most will agree on is that Positioning is something (perception) that happens in the minds of the target market. It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. An important concept in positioning is that it expects that consumers compare and analyse products in the marketplace, whether based on features of the product itself (quality, multiple uses, etc.), price, and/ or packaging and image.4 It will happen whether or not a company’s management is proactive, reactive or passive about the ongoing process 47

of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions.4 A company, a product or a brand must have positioning concept in order to survive in the competitive marketplace. Many individuals confuse a core idea concept with a positioning concept. A Core Idea Concept simply describes the product or service. Its purpose is merely to determine whether the idea has any interest to the end buyer. In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer. The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service. A successful positioning concept must be developed and qualified before a “positioning statement” can be created. The positioning concept is shared with the target audience for feedback and optimization; the Positioning Statement (as defined below) is a business person’s articulation of the target audience qualified idea that would be used to develop a creative brief for an agency to develop advertising or a communications strategy.5 Positioning Statement As written in the book Crossing the Chasm (Copyright 1991, by Geoffrey Moore, HarperCollins Publishers), the position statement is a phrase so formulated: For (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (statement of key benefit – that is, compelling reason to buy). Unlike (primary competitive alternative), our product (statement of primary differentiation).5 Differentiation in the context of business is what a company can hang its hat on that no other business can. For example, for some companies this is being the least expensive. Other companies credit themselves with being the first or the fastest. Whatever it is a business can use to stand out from the rest is called differentiation. Differentiation in today’s over-crowded marketplace is a business imperative, not only in terms of a company’s success, but also for its continuing survival.5 More generally, there are three types of positioning concepts: 1. Functional positions

48

•

Solve problems

•

Provide benefits to customers

•

Get favourable perception by investors (stock profile) and lenders

2. Symbolic positions •

Self-image enhancement

•

Ego identification

•

Belongingness and social meaningfulness

•

Affective fulfilment

3. Experiential positions •

Provide sensory stimulation

•

Provide cognitive stimulation6

In volatile markets, it can be necessary - even urgent - to reposition an entire company, rather than just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shifted from investment to commercial banks, for example, the expectations of investors, employees, clients and regulators all needed to shift, and each company needed to influence how these perceptions changed. Doing so involves repositioning the entire firm.6 This is especially true of small and medium-sized firms, many of which often lack strong brands for individual product lines. In a prolonged recession, business approaches that were effective during healthy economies often become ineffective and it becomes necessary to change a firm’s positioning. Upscale restaurants, for example, which previously flourished on expense account dinners and corporate events, may for the first time need to stress value as a sale tool.6 Repositioning a company involves more than a marketing challenge. It involves making hard decisions about how a market is shifting and how a firm’s competitors will react. Often these decisions must be made without the benefit of sufficient information, simply because the definition of “volatility” is that change becomes difficult or impossible to predict.7 Positioning is however difficult to measure, in the sense that customer perception of a product may not have been tested on quantitative measures.8

49

DISCUSSION Case study Brand Positioning and Market Segmentation Brand positioning is an important strategy for achieving differential advantage. Essentially, positioning reflects “the place” a product occupies in a market or segments. GAP has a wide range of products that are reflected in multi-segments. Initially, as a specialty clothing retailer, GAP segmented the market using price as the sole criterion. GAP strategically decided to serve three major segments, which can be seen from price differences among GAP’s three brands: Old Navy (discount/ value), Gap (mid-price), and Banana Republic (high-end). In the past decades GAP’s differential strategy worked successfully, and this allowed GAP to enjoy phenomenon growth. Part of the success was clearly to due to GAP’s ability to play on its brand names. As stated by Grant, “brand names and the advertising that supports them are especially important as signals of quality and consistency”. GAP brand names provide a guarantee by GAP to customers of the quality of GAP products. Nevertheless, in the recent years competition intensified as new players also targets some of the same market segments aimed by GAP brands. GAP’s major competitors included vast array of companies from three market segments. In the discount/value market the main competitor is Wal-Mart, who is capturing shares in the apparel market as it is striving to target more fashion-conscious consumers. In the mid-priced market, the major players that Gap faces are Abercrombie & Fitch and American Eagles Outfitters. All three brands target the same age group. Thirdly, in the high-end apparel segments, J. Crew and Urban Outfitters are Banana Republic’s biggest opponents. Based on the information, a positioning map can be constructed to show GAP’s current position relative to its competitors. EXHIBT is a diagram that shows GAP’s three brands and its competitors in terms of the price and the targeted age group. Beside the three original market segments, GAP also explored a new segment: more mature group of customers, who were underserved before. The creation of Forth & Towne allows GAP to transfer brand equity from the three original brands to this new brand. In addition, GAP would also be able to relate its previous brands’ experiences to the new brand in order to increase the chances of success. However, the ability of Forth & Towne to contribute to the overall financial condition of GAP is still questionable. 50

Please find: Old Navy Target Segments Selling Points Opportunities Threats Answer - study case Gap Target Segments Although people of various ages shops at Gap, but Gap specifically targets 18- to 30-year-old. The sub-brands of Gap also targets shoppers for shop for intimate apparels, babies, and kids. Selling Points Gap products include modern and stylish wardrobes for work or going and casual weekend wear. It appealed to people who want to have sense of modern fashion. Opportunities Gap has competent people in both of its management and design team. They all have strong business experience prior to joining Gap. This increases the likelihood that the two teams would lead Gap into the right direction. The redesigning of stores has a favourable impact on customers’ shopping experience, which can ultimately maximize sales. China served as a both demand of supply market for Gap, which also true for the other two brands. The international market is risky as was shown in Gap’s exit of the German market, but at the same time it is rewarding. If Gap is able to capture the opportunities in China, it just opened the door for huge growth. Threats Continuous research and customer surveys are needed in order to keep pace with the apparel industry. Customers feedback to Gap’s offering are really important. Gap is risking losing businesses to competitors if it ignores customer feedbacks and insights. Also, maintaining Gap’s identity can also be an issue as some people believed that Old Navy was 51

cannibalizing Gap. If customers see no difference between Gap and Old Navy, they would be indifferent between two brands and simply buy the cheaper one. In that case maintaining separate brand would be a complete waste.

REFERENCES The context of this part has been adapted from the following product(s): 1. What is strategy? Access via Internet: https://hbr.org/1996/11/ what-is-strategy 2. Business Dictionary. (n.d.) Definition of Positioning. Retrieved from http://www.businessdictionary.com 3. Lamb, C. (2013). e-Study Guide for MKTG 7. Retrieved from https://books.google.com/books 4. Trout, J., (1969) “”Positioning” is a game people play in today’s me-too market place”, Industrial Marketing, Vol.54, No.6, (June 1969), pp. 51–55. 5. Ries, A. and Trout, J. (1981) Positioning, The battle for your mind, Warner Books - McGraw-Hill Inc., New York, 1981, ISBN 0-44634794-9 6. Trout, J. and Rivkin, S. (1996) The New Positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York, 1996, ISBN 0-07-065291-0 7. Moore, G. (1991) Crossing the Chasm, HarperCollins Publishers, 1991. 8. Levi, K. (2007) “Differentiate or Diminish: The Art and Necessity of Business Positioning”, (March 2007), p. 9

FURTHER READING 1. Dove, Michael (2013-09-05). I have census data. How does Origins add value? “Data Reliability”. OriginsInfo.com.au. Retrieved 8 October 2014. 2. Dove, Michael (2013-09-05). “Cultural Segmentation - How Does Origins Work”. OriginsInfo.com.au. Retrieved 6 October 2014. 52

3. “CHAPTER 14 - Time, Territory, and Self-Management: Keys to Success”. People.tamu.edu. Retrieved 15 July 2014. 4. Gupta, Sunil. Lehmann, Donald R. Managing Customers as Investments: The Strategic Value of Customers in the Long Run, pages 70-77 (“Customer Retention” section). Upper Saddle River, NJ: Pearson Education/Wharton School Publishing, 2005. ISBN 0-13-142895-0 5. Goldstein, Doug. “What is Customer Segmentation?” MindofMarketing.net, May 2007. New York, NY.

53

Part 5 EVENT MARKETING SPONSORSHIP Objective outline: 1. Understand sponsorships and how they relate to segmentation, target marketing and integrated marketing communication 2. Understand how to develop and sell sponsorships to organizations 3. Learn techniques for financial evaluation, quantifying impact and recommending decisions regarding sponsorship purchases based on marketing and financial targets. Chapter Five Glossary Sponsorship Event strategy Event bugged Financial evaluation Planning Over the years we have identified sponsorship assistance as a real need for athletes. Following the 2008 Olympics an athlete review was undertaken by SPARC, the review highlighted the need for athletes to secure increased funding to assist them achieve their goals. As a result, in partnership with SPARC and Academy South Island, we have been piloting sponsorship workshops for athletes including 1-1 sessions with identified 2012 athletes.1 We are working to help you improve your skills and your approach to sponsors and sponsorship. It is tough to get sponsorship especially when everyone is facing increasingly difficult economic times, it takes planning, effort and sometimes it isn’t enough to meet the growing cost of your budgets.1 In this article we share what athletes have said about their approach to sponsorship in the past, and provide you practical tips and advice: Here are some of the areas athletes have highlighted: • They have developed proposals that are poor; • They don’t realise they have skills to offer in conjunction with their sporting talents or how to demonstrate them in a proposal; 54

• • •

They are all very worried about $$ and it is effecting them; They are unsure what their brand is and how to promote themselves; Unaware of their wider support network and how they can leverage it.1

The matching process involves sorting and assessing the background work in order to find out who are the most suitable sponsors for your funding project. It involves putting together the following information. Seeking out companies whose project image can be associated with your project. It is helpful if the people who benefit from your project are also the same people who the businesses target their products to. This provides a common interest which increases your chances of being considered for sponsorship. The business can see it as a publicity benefit. An example of this would be Danyon Loader (Olympic Gold Medallist) and breakfast cereal.1 Suggested process for attracting sponsorship  Identify benefits to Sponsor  Value benefits to Sponsor  Identify suitable Sponsoring Companies  Tailor proposal to demonstrate benefits (To Sponsor!)  Identify decision makers and influencers  Lobby influencers  Present proposal  Negotiate proposal  Use altruistic benefits as “icing”  Leverage media coverage2 First of all Consider the sponsors perspective and the criteria they will use to judge your proposal:      

How will they see your group in comparison to others What do you want to achieve through your activities or events? Do your activities or events achieve the sponsor’s marketing objectives? Is it a good fit with their product image? What profile does it give their business? How reliable is your group? Your people. Your board. Will you deliver? 55



How does the sponsorship help their business? How does it help sell their product/service? Your proposal must address these concerns to have any chance of being taken seriously.2

You should also consider the brand platform of the sponsor: The Brand platform tells you what the company is trying to get across to the public and you should look at this before you decide whether this is a company you want to approach.2 When you are looking at a company as a possible sponsor ask:  Is there a natural association  Is there a strategic fit  Are your core values similar  What can you offer a company  What makes the partnership successful e.g. is it because you treat them with the respect and professionalism any business partner deserves.2 Don’t forget that you can approach small business as well as large corporates, and you may be able to do more for a local business than you can the Americas Cup, for instance.2 Timing is crucial - identify their timing criteria and make sure you meet it.2 Networks are invaluable, think about how to build them and work with them. How do you put a value on your skills? Knowing how to value yourself isn’t easy, but once you have a formula that works for you, the more confident you will feel marketing yourself. People in your network…

The Coffee Meeting/Networking at Functions2 Opportunities may happen by chance. Always have your campaign plan in your ‘back pocket’ i.e. know your brand and be able to verbalise it in brief, as you never know when you will have to step into ‘selling your brand.’ 56

Close the deal effectively2 Maintain the relationship and be realistic about your time frame. Don’t forget the contract and seek some legal advice. What is your time frame?

Manage the relationship and plan how you will do this • Keep in contact – remember to share all your experiences (the good and not so good) • Take the time to learn and understand their business What do you know about their business?

How will you manage the relationship?

Working with NSO/SPARC/NZOC Your NSO and SPARC may be your biggest sponsor- value and treat them as one. What can you do for them? National Sporting Organisation (NSO)

SPARC

NZOC

57

Ongoing activities and programmes. Who and how many people are involved? What opportunities exist for the sponsors’ involvement here? Special events. Shows, conferences, etc. Who and how many people are involved? Is the event successful and what opportunities exist for the sponsors’ involvement? Communications tools, newsletters, magazines, direct mail, etc. How and to whom do you communicate: members, the public etc.? What tools do you use and what are you planning? How many copies and readers? Who gets it, reads it etc. What are your Marketing assets? What do you own? What relationships, partnerships have you established and what influential members and unique appeal do you have?

Clearly define your needs

What is the money required for and how will it be spent?

58

The prospective sponsor needs to know (and may require evidence) that their money will be spent wisely in the area you claim your organisation is sound and reputable. Is your sponsorship request for cash only?2 Have you considered the use of other arrangements? For instance, requesting supplies products or services that your group would normally purchase or could on-sell.2 Develop a list of benefits2  Exposure and awareness: How can you expose the sponsor, their products, logos, e.g. signage, programmes, flyers, advertisements, vehicles, tickets, uniforms, bumper stickers, badges, posters, media kits, banners? Will they have access to your logo?  Product/Service Use: How can you sell or use the sponsor’s products or service?  What opportunities can you provide and what target markets can you access?  The Sponsor’s Marketing Objectives: What is their philosophy?  Does their Managing Director have a personal objective?  Can you provide the means to entertain or involve their customers or clients?  Can you involve their staff distributors or retailers? Using the above notes you can now develop a list of benefits you can offer in return for the sponsorship. Keep in mind that the more ways a sponsor can promote their firm, product or service, the more agreeable they will be to lending their support. Sponsor benefits: Sponsors need to benefit from being involved with you. Be as specific as possible. You should aim to give sponsors sufficient data so that they can evaluate the Cost effectiveness of your project alongside other promotional opportunities. As you proceed further in your approach to potential sponsors you will need to tailor the benefits you offer to match the company you are approaching and the nature and extent of your request. However, as part of developing your strategy you should think through all the types and possible packages of benefits.1 59

Ways to recognise sponsors are:  Sponsors name on all clothing  all stationery. Can be done simply with a self-inking stamp.  all promotional material e.g. entry or registration forms posters

tickets

 noticeboards at clubrooms or offices  cups, medals and ribbons  displays requesting members to give the sponsor their business

support.

 Club banner  advertising in programmes and newsletters  promote and foster sponsors name and produce on the PA system

during the event

 team or individual players to lend themselves to promotional

activities for the sponsor

 give the sponsor the opportunity to market products at the venue

or to the participants

 distribution of sponsors advertising material to all participants  venue advertising  use of photos of the event by the sponsor for own promotions.1

What can you offer: think outside the square Where can you transfer your skills? (e.g. coaching sessions) What can you offer?

60

This is often the sticking point for local clubs and events but there will be opportunities if you appoint a PR person who chases media coverage. Do not promise what you are not certain can be delivered. A few points to remember:  Do not use media material showing a participant, whether the

manager or a volunteer, using an oppositions logo brand or equipment

 Do not use a photograph of any one in any media unless wearing

something identifying sponsor or subject.

 All press releases to use full event or club title i.e. always include

the sponsors name if they have naming rights.

 Community newspaper and radio stations often welcome articles

or items on local clubs and events.

 Keep a record of all coverage received.1

Project sponsorship Project sponsorship is the ownership of projects on behalf of the client organization.[1] There are two main differences between project sponsorship and project management. Firstly project sponsorship includes the identification and definition of the project whereas project management is concerned with delivering a project that is already defined, if only quite loosely. Secondly the project sponsor is responsible for the project’s case and should not hesitate to recommend cancellation of the project if the business case no longer justifies the project. Project sponsors can encourage separation of decision making responsibilities between project manager and project sponsor, accountability for the realisation of project benefits, oversight of the project management function and can carry out senior stakeholder management.[2] The project sponsor or executive sponsor needs a range of skill sets, or at least access to skill sets which include appreciation of corporate strategy; ability to prepare a business case and profound knowledge of the organization’s operations. The project sponsor also needs to know 61

his or her way around the organization and command respect within it. The project sponsor and project manager should form an effective partnership with the project manager orchestrating all players involved in delivering the project e.g. designers, manufacturers and contractors, whilst the project sponsor coordinates all departments of the client organization and associated stakeholders so as to integrate the delivered project into the client organization and take full benefits from it such that the business case is fulfilled.[3] Because the project sponsor is the ‘owner’ of the project from conception to commissioning and operation it is particularly important to achieve continuity of sponsor throughout the project[4] yet correspondingly difficult to achieve because of the extended duration of sponsorship compared to project management.

PRACTICAL TASK Write your proposal using these folowing recommendations and structure •

An opening letter, clear and concise which summarises some key points:

•

Your introductory paragraph should state you are submitting the proposal to the company and that you would like to be ‘business partners’ (or other suitable words).

•

Provide a simple outline of your group, event or activity, what you can offer the sponsor and the ongoing benefit for the sponsor.

•

Conclude with a paragraph on some of the business benefits to them and close the letter with an indication of the next step (i.e. you will call for a meeting with them). Keep the whole thing to less than one page. .

A 3-4 page proposal. This document should capture their interest and be clear and concise. The proposal should include: Organisation history and future: Name, location, size, nature of client base nature of group, profile of executive, affiliations, special features of group, etc.

62

Sponsorship Outline: What activity is being proposed? What are the purposes and objectives? How many participants? What location? Is there a history of success? Features and Benefits of the Sponsorship: Summarise the features (signs, attendees, advertisements, coupons, flyers, etc.) and benefits to the sponsor based on your brainstorming notes. How will the features meet the sponsor’s need for sales, exposure etc. Link the benefits to the outlined features. Investment and Term List the price of the sponsorship (GST exclusive) and indicate any options you are offering (i.e. cash or kind). Suggest a term for the sponsorship (i.e. 1 to 3 years). A longer term may indicate you are committed to investing time and effort into building a relationship with the sponsor. Budgets/Timetable: How will you spend the money? Provide a realistic budget for your activity (GST excl.) Show you too are investing money in your activities. Include a timetable and schedule of critical dates. This demonstrates you are organised and professional. Appendices Including annual reports, media clippings, referral letters, etc. are useful once your sponsor becomes interested. Make your proposal simple in design and easy to read (i.e. bullet points, lists, etc.). Try to keep key aspects to one page or less. Make sure the proposal is proof-read, spelling mistakes and use of the wrong names or titles can be damaging. Do ask how many copies they want. Once you have a successful sponsorship, ensure you:  discuss and plan what you need to do to keep it  keep your strategic planning and your funding portfolio up to date 63

 treat your sponsor with the respect and professionalism any

business partner deserves

 have a clear understanding from the sponsor of a timeframe for

the partnership

 know what you will do/how you will cope if the sponsorship

finishes

REFERENCES The context of this part has been adapted from the following product(s): 1. Sponsorship ideas. Access via Internet: hpsnz.org.nz/sites/ all/.../files/...Athletes/Athlete.../Sponsorship_ideas.doc 2. Attracting funding and sponsorship. Access via Internet: http:// www.100ways.org.uk/attracting-funding-and-sponsorship-a. html 3. West, D. (2010) ‘Project Sponsorship: An Essential Guide for Those Sponsoring Projects Within Their Organizations’, Gower Publishing, Farnham, ISBN 978-0-566-08888-9 4. Sponsoring change - A guide to the governance aspects of project sponsorship, Association for Project Management, 2009. ISBN 978-1-903494-30-1 5. “What to expect from a Project Sponsor”. ProjectManager.com. Retrieved 24 May 2013. 6. Englund, R.L. and Bucero, A. (2006) Project Sponsorship: Achieving Management Commitment for Project Success, San Francisco, Jossey-Bass

FURTHER READING 1. Lovelock, Christopher; Reynoso, Javier; D’Andrea, Guillermo; Huete, Luis (2004). Lovelock, Christopher; Reynoso, Javier; D’Andrea, Guillermo et al., eds. Administración de Servicios[Service’s Administration] (in Spanish). Pearson Educación Times. p. 760. ISBN 978-0-273-68826-6. 64

2. Beech, John; Chadwick, Simon (2006). Beech, John; Chadwick, Simon, eds. The marketing of Sport. Prentice Hall and Financial Times. p. 592. ISBN 978-0-273-68826-6. 3. Lynn R. Kahle, Angeline G. Close (2011). Consumer Behavior Knowledge for Effective Sports and Event Marketing. New York: Routledge. ISBN 978-0-415-87358-1. 4. NSW Government. “ (2010) Marketing - Sports Clubs”. (of publish, if any). Retrieved (27, September 2011). Check date values in: |accessdate= (help) 5. Business dictionary.com (5 November 2010). “Event marketing” [Definicion de marketing de un evento]. Bisnessdictionary.com. Retrieved November 5, 2010. 6. Luis Maram”La NFL en Cinemex” [The NFL in Cinemex] (in Spanish). Luis Maram. Retrieved November 5, 2010. 7. Puromarketing (6 October 2010). “El BBVA amplia su acuerdo como patrocinador de la liga profesional de fútbol hasta el 2013” [BBVA expands the contract that it had with as a sponsor with the Spanish league until 2013] (in Spanish). Puromarketing. Retrieved October 17, 2010. 8. Orange.Online. (2010). “Adidas renueva con la selección Mexicana de futbol.” [Adidas renews its contract with the Mexico national football team] (in Spanish). Orange.Online. Retrieved October 17, 2010. 9. Luis Marentes (2010). “Representacion y derechos de imagen” [Rights of image and representations] (in Spanish). periodismo y marketing deportivo. Retrieved October 17,2010.

65

Part 6 MARKETING ELEMENTS IN EVENT MARKETING Objective outline: 1. Describe the decisions companies make regarding their individual products or service and services, product lines and product mixes. 2. Identify and define the other important external and internal factors affecting a firm’s pricing decisions 3. Explain why companies use marketing channels and discuss the functions these channels perform 4. Define the five promotion mix tools for communicating customer value Chapter Key Terms: Product/service Price Place Promotion Marketing elements in event marketing In this chapter we begin a series of chapters on the components of the marketing mix: Product, Price, Distribution, and Promotion. Our emphasis in this chapter will be the product or service that the organization markets and how products are envisioned, created and commercialized.1 We will define ‘product’ as all things the buyer receives in an exchange, bad and good, intended and unintended. Products include all things the buyer receives including the physical attributes (a new car) and the intangible attributes (a warranty and a financing contract). It is sometimes helpful to list the main (sometimes called ‘salient’) attributes for purposes of performing both upstream activities (for example, concept development) and downstream activities (for example, advertising and personal sales presentations).1 In this chapter we will discuss the following areas related to managing new product development (NPD): 66

-

the ideal climate for NPD the NPD process pitfalls in the NPD the role of product positioning in NPD1

Idea generation1 The idea generation stage is the first stage in the NPD. However, in an organization with a healthy environment for creative thinking, new ideas abound, and only rarely is it necessary to have a formal meeting to generate ideas. New ideas flow from every day activities within the organization. Ideally, idea generation should be fun and naturally occurring. This is why a ‘formal meeting for idea generation’ should be somewhat of an oxymoron in healthy, creative organizations. There are many creative problem-solving (CPS) techniques that provide extra stimulation for generating ideas for new products and services. The Couger Center for the Study of Creativity and Innovation has applied over thirty CPS techniques in organizations with success. CPS approaches fall along a continuum from intuitive to analytical. For example, a commonly used analytical CPS technique is the “5 W’s and H” technique. Rudyard Kipling even wrote a poem about this technique. The ‘wishful thinking’ technique is a more intuitive CPS approach. The appendix to this chapter describes how to use each of these two techniques. Idea assessment1 Most organizations have extensive guidelines concerning the criteria for new product ideas. Some typical criteria are: potential estimated demand for the product, cost/revenue expectations, fit with the organization’s business and marketing strategy (you may want to go back and review compatibility in the discussion of requirements for effective segmentation in Chapter Three.) Many product ideas may not match with the firm’s current product line and there should be guidance about what to do if this happens. Some organizations broker or sell new product ideas that don’t entail serving current or planned future customer segments. Creative ideas are judged on two criteria: Novelty and Value (or utility). We have found that business firms primarily put more importance on 67

the expected economic returns (value) of a new idea than whether the idea is particularly novel or new. However, in a context of the arts, this emphasis is usually reversed. That is, in the arts, judges often look to novelty first and value later. This point brings about an underlying problem in judging new ideas. Novelty can usually be judged fairly early on, whereas, value is sometimes difficult to assess for some time. In order to have a steady flow of new ideas, organizations must establish a clear understanding with personnel responsible for new product development how these two dimensions will be assessed. Concept testing1 In this stage, employees play with the idea and have fun considering its potential. The rationale underlying concept testing is that organizations are much wiser to explore the idea thoroughly before actually building a physical prototype. Often the ‘Five W’s and H’ technique, described in Chapter Eleven, can be helpful in fleshing out the new product idea. If customers are involved in this stage, ‘projective techniques’ can often be used to illicit the opinions of customers about new product ideas without asking the customers directly. We have mentioned two types of thinking: convergent and divergent. Convergent thinking is the type of thinking with which most people in the U.S. culture are most familiar. In this approach to thinking the mind or minds of those involved follows a linear process of reasoning ultimately arriving at a point of conclusion. Divergent thinking is quite different in that it requires the participant or participants to ‘play’ with ideas going off in unexpected directions. De Bono is well known for coining the term “lateral thinking” which is a type of divergent thinking (see: http://www. edwdebono.com/ and review De Bono’s “Six Hats Method”). Note that when involved in the ideal approach to creative thinking, people feel they have time to ‘play’ with ideas and forget about ‘hard work’ or “the expected conclusion.” This fact might trouble some managers, but the endeavour is usually well worth the time expended. Particularly, in the U.S. we constantly and incorrectly equate ‘hard work’ with ‘no fun’ and something to be feared or dreaded. The NPD process should begin with divergent thinking and then apply convergent thinking with a careful recording of all new ideas as the process proceeds. 68

Unfortunately, in the U.S. culture, people who are expert ‘idea destroyers’ are often rewarded informally and formally in many organizations. That is, in our culture there is often more reward for observing what is wrong with an idea, rather than stating what right about it. Many great ideas with considerable positive potential are rejected every day in organizations, not because the idea isn’t any good, but because people in the organization are more oriented to idea destruction than idea construction. Idea Choice1 During this stage, the organization decides where its resources are best invested. A multi attribute model similar to the one we discussed in chapter three is often used to make such decisions. The major criteria for choice are listed and an importance weight is assigned to each attribute. Then competing ideas are assessed on this basis. Obviously, this process requires a healthy climate for creativity and innovation within which employees can ‘let go’ of personal ownership of ideas and judge the ideas on an objective basis. Price conception1 How is the pricing decision made? The price variable in the marketing mix is a critical element. Price can, by itself, communicate much about a product or service. For example, what would you think of buying an engagement ring at Bob’s Really Good, But Cheap, Jewelry Store, or for that matter, at a yard sale? Most consumers link price with quality and there are many organizations that carefully reinforce the quality of their product, using price as a surrogate cue (or substitute indicator) for quality. For example, check out the websites of marketers of prestige items and observe how the price variable is used to indicate quality). When the pricing decision is made, the organization must consider several factors. These factors are as follows: a. Supply (or cost) b. Demand (or revenue) c. Perceptions in the marketplace 69

d. Competition and Competitors’ pricing strategies e. Government Regulation f. Company’s desired pricing position Supply (or cost) If there is an abundant supply of a product or service, it may not be a candidate for being approached as a product or service for sale. For example, we don’t consider air to breathe as being a commodity we must buy. Of course, that is only because there is a plentiful supply. Of course, in Colorado, many people find that the air supplied by the great outdoors is not sufficient in oxygen, thus, they must buy air that is rich in oxygen by renting oxygen tanks to enhance their respiratory systems. Native Americans had to locate close to a water supply, but didn’t worry about having to purify the water. Hence, time can change most everything, particularly how we perceive certain goods and services as candidates for commercial products. Just a few years ago, people consumed very little bottled water throughout most of the United States. Today, demand for bottled water is growing rapidly. So, think about the things you consume that you presently don’t pay for, and consider that commodity is a candidate for a product in the future (fresh air and open space, for example). Demand (or revenue) To justify commanding a positive price in the marketplace, there must be some demand for a product or service. We have seen above where many products traditionally considered as free, have given way to other identical or similar products for which there is now a strong consumer demand, and a price to pay. Thus, the nature of demand changes constantly for goods and services. Consider the amount of demand today for ‘ice boxes’ (products for keeping perishable food cool). These products were heavily demanded before the advent of the electric refrigerator. Thus, we often see that demand for a product can decrease or even disappear if substitute products are introduced that are perceived as being superior in their ability to provide the benefits being sought. For example, eight track audiotapes were popular for a few years in the late 1960’s and early 1970’s until a newer technology in the form of cassette tapes was introduced and vinyl records of recorded music have largely given way to the Compact Disk (CD) as the preferred 70

medium. Will the internet and MP3 technology eclipse CD technology eventually? Perceptions in the marketplace can set both a positive price and a normative price in the marketplace. A positive price simply describes how much something costs whereas a normative price describes what something ‘should cost’ based on an individual’s or a group’s opinion. For example, the positive price was so high for selected drugs used to treat AIDS that some groups protested that the normative price was simply too high gaining societal support and eventual price decreases from the manufacturers of these pharmaceuticals. Also, consider the recent higher prices for gasoline and the various protests put forth by individuals and groups that the gasoline prices were “too high” and “not right.” These protest essentially were observing that gasoline had reach a price that was above the normative price for most people. In the U.S., a branch of government often sets normative prices, particularly in the case where there is only one supplier (a monopoly). For example, most states have a public utilities commission or board that is responsible for overseeing the pricing practices of firms that provide the populace with utility service for natural gas, water, and electricity. However, there are notable exceptions to this rule. Normative prices do not have to be specific. Usually there are consumer expectations that help guide the normative price. For example, how many times have you heard that, ‘my water bill is too high!” This interaction between positive price and normative price is an ongoing phenomenon and of particular interest to marketers who attempt to create and sustain customer satisfaction. While the marketer does not usually have control over the normative price, s/he can usually control the positive price. Setting price can be a time-consuming process and we will discuss setting price later in this chapter. However, this discussion should have already made the reader aware of the importance of understanding whether by custom of the marketplace, there is already a normative price for a product or service above which a price may be considering ‘unfair’ or ‘price-gouging.’ Competition and Competitors’ pricing strategies First, if the firm is the only seller of a product considered essential to public welfare, the firm may have to function in a heavily regulated environment. 71

This type of environment is called a monopoly (one seller). Second, a firm may function in an industry in which there is an established price leader that perennially sets a price that other firms follow, although this may not always be the case. This type of competitive structure is called an oligopoly (few sellers). Third, if the firm functions in a market where there are many competitors offering similar products, the firm may not have a choice about what level price to seek. (pure competition). Fourth, the firm may compete in an industry or market in which although products are physically similar, sellers are able to draw differences in perception of such things as quality and prestige among products. This competitive model is called ‘monopolistic competition’ and is applicable for most everyday consumer purchases as well as business-to-business purchases in the U.S. The Pricing Decision As pointed out above, the pricing decision is impacted by many different factors. Thus, the initial pricing decision can be time-consuming although there are exceptions. In pricing livestock, for example, the pricing decision can be quite simple. A cattle rancher may take his or her cattle to the local auction house once a year to ‘thin his/her herd of older cows and young calves.” In this case, the rancher will be forced to accept whatever price his/her cattle bring at the auction. In this case, the pricing decision is reduced to answering the question: “Can I accept the price being offered at the local auction?” If the answer to this question is ‘no,’ the rancher then has to decide whether to seek another auction or liquidate his/her herd. However, usually the pricing decision is much more complicated and should involve a careful consideration of all five factors listed above. Cost and Demand Oriented Pricing Models We may use cost or demand as a basis for setting pricing. Traditionally, this orientation is applied in microeconomic theory by creating demand curves based a summation of individual utility functions for buyers in the marketplace. Thus, we first assess buyers’ perception of how much they would expect to pay for a product or service based on the utility (or usefulness) they would expect to derive from product or service and 72

combine these individual utility functions to create a demand curve for the product in question. While, this approach is straightforward theoretically, it often defies practical application. However, the general lesson we learn from the approach is an important one. That is, the price based on a demand-oriented model, can be based on the expected utility (benefits) that customers in the marketplace expect to receive from acquiring our product as compared to other available products. Pricing models based on cost Probably the oldest model used, this approach uses cost to the seller to determine a selling price. For example, for years a ‘keystone’ or ‘keystoning’ pricing policy has been used by many retailers to set price. This approach simply doubles the cost and arrives at the selling price. Many other models used cost as a pricing basis, for example, internal rate of return pricing usually begins with cost determination and then computes different projected levels of return on investment for future time periods. This pricing method was adopted by General Motors early in the company’s history and was applied for decades with their products. Why not just use cost-pricing always? While the approach is simple and has the advantage of ‘guaranteeing’ some profit margin, the approach ignores the most important factor in pricing; demand. Thus, by using solely a cost-based approach the seller my miss opportunities for additional profit or set a price too high to realize adequate sales to even cover cost. Pricing models based on demand Witness salaries paid to professional athletes. How are these ‘prices’ for athletic talent determined? Usually, based on demand and what others will similar skills can expect to receive in a free market. Prices can also set using demand for the product or service as a guide. For example, if an analysis of demand indicates that buyers, based on the benefits they would derive from it, would expect to pay $30,000 dollars for a new kind of testing device, this at least gives the seller some guidance in setting price. This approach is known as ‘the expected price approach’ and, theoretically, is the basis for setting price based on demand in Microeconomics. Of course, this approach requires a time consuming analysis and it not as simple as just setting the price based on 73

cost. However, if a seller focuses only on cost to set a price, s/he might be either setting price so high there will be no demand, or foregoing considerable profits. For example, if demand is very high there are times when we can virtually ignore cost structures. For example, if a professional athlete has a remarkable season of performance, s/he can sometimes demand an incredibly high salary based on his/her performance the previous season. In some cases, there may be ‘an expected price.’ The expected price is a price that consumers would anticipate being reasonable for the benefits derived from using the product. There may also be a ‘customary price’ for a product or service. The customary price is a price level that consumers are used to paying based history or normal expectations. For example, if consumer testers try out a new, revolutionary vacuum cleaner, when asked they indicate that they would pay normally anticipate paying $500 or less for the product, although the seller cost structure would mean losing money at a price of less than $500. Prestige pricing is often applied by organizations that attempt to create a sense of exclusivity for their product or service. This pricing approach assumes that the product or service faces a market structure characterized by ‘monopolistic competition.’ Thus, prospective buyers perceive a difference in products based on the distinction or reputation of particular brands. Many product categories this factor to set price. For example, wristwatches, liquor, and automobiles all have a ‘prestige’ segment created through the perception of exclusivity and distinction. Of course, in order to create and sustain such a market position, the organization must commit to a long-term strategy. Distribution channels, marketing logistics1 How do producers get their products and services to their target customers? This area of the marketing mix is usually called ‘distribution’ simply because its main concern is to distribute goods and services to the target customers. Organizations typically use a large number of strategies to get their goods and services to target customers rather than only one. Critical to understanding and managing distribution are the concepts of time and 74

place utility. Time utility can be defined as having the product available when the customer would prefer to acquire it and place utility is having the product available where the customer would prefer to acquire it. While the internet can provide the ultimate in time utility for some products or services (for example, e-mail), for many products, it does not provide sufficient time utility. Buying a book over the internet still requires that the book be delivered to the buyer before ‘consumption of the product’. Therefore, it is generally faster to buy a book from a local retailer than to obtain the same book through the internet. However, the development of the market for e-books may change this situation. For example, this e-book is delivered to the user instantly anytime the user desires to access it. A marketer may adopt a broadcast strategy in which products are sent out to customers in as wide a manner as possible. This strategy is usually not efficient or effective for most firms, particularly small firms due to the cost. The strategy is typically adopted by many organizations that have not done sufficient research to understand the specific characteristics their target customer and how the customer would generally prefer to obtain the product or service in question. For example, organizations that are production-oriented concentrate primarily on manufacturing their products efficiently (with the underlying assumption that there will be a demand for the product). Sales-oriented organizations focus on promotion and personal selling and are not typically concerned with the ideal product solution that the customer is seeking. Technology oriented firms assume that customers are seeking the most advanced technology, thus these firms focus on the most advanced way of doing things whether the customer is seeking this solution or not. All of the organizations above often adopt these respective orientations because they have insufficient knowledge of customers or concern for customers to engage in a focused distribution strategy. We use the terms goods to refer to tangible products (those that can be seen and touched, for example a new pair shoes) and the term services to refer to intangible products (for example a visit to the dentist), those that cannot be seen or touched during the process of providing the service. Although traditionally services have been delivered through a ‘direct’ marketing channel or directly from the seller to the buyer, as technology develops, many services are now be delivered directly to the customer. Previously, these services required personal contact between seller and buyer. For example, investment decisions (in stocks, bonds, 75

or other investment options) historically required a face-to-face meeting between the investor and his investment advisor. Today, many people manage their investments through the internet and never work face-toface with another human being. Financial services offered by banks are similar in that, since the introduction of the Automatic Teller Machine (ATM), it is not necessary for customers of banks to meet face-to-face with bank representatives. As the practice of “direct deposit” and other electronic forms of banking grow, there will less and less need for personal interactions between financial institutions and their customers. This is not to the say that there will no longer be a need for ‘bricks and mortar’ banks, because some segments of customers will still feel it necessary to visit personally with the bank’s representations. Event-driven marketing (EDM) Event-driven marketing (EDM) is a discipline within marketing, where commercial and communication activities are based upon the measurement of relevant and identifiable changes in a customer’s individual needs. It is a distinct and different approach to direct marketing and traditional Database marketing which typically use statistical methods.2 In this context, an “Event” is defined as a detectable change in an Individual’s circumstances, today, which is relevant and significant, either in fact or in their mind.3 A “Significant Event” is a major happening in a customer’s life. They can lead to a measurable change in a customer’s normal behaviour, state of mind, personal circumstance, or interaction pattern. It offers a reason to communicate with the customer, with a relevant proposal, at the right time. Events increase the knowledge, understanding and information about a customer that enables the marketer to make better, more informed decisions.3 Event-driven marketing is synonymous with and exactly the same as event-based marketing (EBM). In some cases it is also referred to as Trigger-based marketing. The definition above is consistent for all of these terms.3 The theory behind event-driven marketing is that the most productive message is one that is relevant to the Customer and based on what’s going on in their life at that moment in time.3 EDM expands the relationship with customers by monitoring them (and their personal or commercial situation) on a constant basis and 76

responding immediately to relevant changes in their circumstances. This includes monitoring both their transactional behaviour (as is done in direct marketing) as well as their life or business circumstances beyond your immediate transactional relationship. The results from implementing EDM are notably spectacular and have a positive effect on several common marketing KPIs and metrics. It is common to achieve average positive Customer response rates to communications of 34%.4 This compares to normal targeted direct marketing response rates of 1%-4%.4 Other metrics affected include Customer Satisfaction and Churn/ Retention Event-driven marketing was first implemented in Australia in 19951996 at National Australia Bank. This project was the brainchild of a Ray O’Brian (Teradata) and Fernando Riccardo (NAB). Their idea was based on the fact that the then current marketing approaches were using limited amounts of data of variable quality and that these returned pitiful results (1-4%). They postulated that, if only they could monitor a customer’s activities in a more timely and dynamic way, they could accurately determine any changes and hence customer needs. Two things enabled this approach to come to fruition, Teradata’s at that time unrivalled ability to load and process large volumes of data, and NAB providing the source of customer transactions. The results were so spectacular that NAB decided to maintain secrecy over this new approach, fearing replication and competition from their rivals. However in 1999-2000 the bank had a change of policy and decided to publicise their results. Since that time they have been a major presenter of EDM at marketing conferences around the world.5 By 2000 there were still only a very few exponents of EDM. This was due to the fact that large amounts of transactional data were required, which in turn demanded high end and specialised database machines. The other factor was that there were no EDM ‘products’ in the market and thus each project tended to be a consultative, bespoke implementation lasting years and costing millions. During this period all implementations tended to be in very large multi-national banks. By 2003 database and server technology had advanced to the level that EDM could be performed on more modest machines and this opened the market up to other implementations. At around the same time, three EDM products were launched: 77

•

eventricity’s Timeframe

•

SynapseEBM (now part of Conclusive Marketing)

•

Unica’s Detect (now called IBM Opportunity Detection).5

More recently Teradata, who employ a purely consultative approach, have released: Teradata’s Relationship Manager (now branded as Aprimo Relationship Manager). NB. Teradata’s own blurb on this product does NOT mention Events or event-driven marketing. It appears to be a perfectly good example of a campaign management tool and not an EDM product like those mentioned above. Until recently there has been no empirical research into EDM and all information has been derived from conference presentations. A synopsis of the different results presented can be found on eventricity’s site. 6 In 2009 a large CRM survey was conducted on behalf of EFMA[7] and Atos Origin.[8] The objective was to provide a clear, unbiased ‘state of the union’ on differing CRM approaches and techniques. It was conducted with 65 Banks from 29 different countries. Below is an excerpt of the research, covering the results obtained from the differing Database marketing techniques used to create targeted Customer leads / contact lists.7 These included: •

Ad-Hoc (lists generated spontaneously without in-depth analysis)

•

Data Mining

•

Segments

•

Models

•

Events

•

Inbound (selling to the Customer as part of an inbound call).

Event Attributes An Event was defined as a detectable change in an Individual’s circumstances, today, which is significant, either in fact or in their mind. The three key words in this definition are: individual, today and significant.

78

Individual: Events are assessed against individuals not groups of people or segments. Analysing a customer’s data individually, determines their individual levels and values which is used to determine significance (see below). This analysis shows historical levels, trends and patterns that are specific to each particular person. Significance: Significance is a test applied to an ‘Event’ to determine if the fact that it has happened to a customer is relevant and noteworthy. Significance in this context is therefore a measure of the variance from the norm for that particular individual. Today: Once a significant Event has been detected the timeliness of customer communication is crucial. In fact, if the company is not able to communicate with a customer within 48 hours of detecting an Event, they probably should not bother. Research has shown that the customer response rate decreases by about 66% for each 24-hour delay. An average response rate of 70% for contact within 24 hours is common. This drops to around 25% within 48 hours and less than 10% in 72 hours. Types of Event Events can be classified into several different types. These include: •

Triggers:

•

Simple (predicted) Events

•

Significant Events

•

Behavioural Events and Lifecycle Events

Triggers A Trigger is a circumstance that has happened to a Customer today but which is not necessarily significant. It is this lack of significance that differentiates a Trigger from a Significant Event. Triggers are not very accurate and as such their use is not generally advocated. However they can be extremely useful when considered in combination with other Triggers or Events. 79

Triggers can be very valuable for activation of straightforward business processes. Their best use is for actions that are completely automated and which require no human intervention. Thus they can be programmed to fire whenever a defined circumstance occurs, and provide a clear result. In such situations they are a very cheap and effective tool. Examples can include things such as: • Triggering the issue of a new cheque book when the penultimate one is issued •

Sending an SMS offering a new mobile top-up when the current one has 10 minutes left

•

Sending an SMS offering an overdraft facility when an ATM max payment is made, etc.

The key to using effective Triggers is that the resulting action is binary, i.e. Situation A results in Action B. They can be very effective for Service based offers. Thus a Trigger satisfies the standard Event criteria of Individual and Today but fails in terms of Significance. Numerous studies have shown that the trigger based emails can double the response rate of direct marketing communications.8 It should be noted that the timescale for communication of a Trigger can be anything from instantaneous to the maximum of a day or so. After this, it is not worthwhile. Simple (predicted) Events Most Events are reactive, i.e. based on what has previously happened. But with some Events we can predict situations that will occur in the future. For example, a customer will finish his loan in 30 days. Undoubtedly, this is important to the customer and a good reason for communication. It is hardly a surprise and there is no urgent need to communicate today. In fact we can schedule a call anytime over a twoweek period and get the same result.9 Thus the event satisfies the standard Event criteria of Individual and Significant but fails on Today. We call this type of Event a Predicted or Scheduled Event. Examples include • End of contract, • 80

End of loan

•

Significant Birthday and

•

any kind of Customer activity for which there is a known, scheduled date.

The timescale for communication of a scheduled Event can be a window anything from 5 to 30 days or even more. Significant Events A single, significant event tells us something about the Customer. It is an excellent indicator of real / potential change. Customers are very responsive and accepting of communication at this time. Examples include. • Large Deposit, • Salary start / stop, etc. The timescale for communication of a Significant Event is usually quite short – usually only 1 to 2 days. After this, the effectiveness drops rapidly (typically response rates drop at 60% per day). Behavioural (Super) Events A single, significant event may tell us something about a customer, but sometimes Events happen in groups and the sequence and combination of these events can tell us a lot about the behaviour and circumstances of the Customer. For example, a Customer may have a Large Deposit and this would be of interest, but a Large Deposit followed by a Large Withdrawal and then a Salary Stop (within a short period of time) may signify something much more important such as ‘Redundancy’. A Super (or behavioural) Event is a situation where a series of circumstances happen to a customer within a specific period of time and possibly in a certain sequence. These circumstances can be combinations of such things as Events, Scheduled Events, Triggers (see above) and even other Super Events. Examples of circumstances that Super Events can potentially detect include: • Redundancy, • Churn, • Moving house / job • Marriage, etc.10 81

Lifecycle Events Lifecycle Events are very similar to behavioural Events and can sometimes be detected in the same way. Their value is undoubted, with one Dutch bank claiming that 55% of ALL product sales they made were from customer Events based on Lifecycle changes. Examples include: • First job • First apartment • Getting married • First child, etc.10

EXERCISES 1. Visit a Saturn dealership and another new car dealership and write a one-page summary of your experiences paying particular attention to sales-driven versus customer-driven behaviour on the part of the salesperson or salespersons you met. 2. Obtain a magazine advertisement for which you think the target market is clearly defined and comment on what you believe are the characteristics of that target market. 3. Obtain three magazine ads, one that primarily is designed to ‘inform,’ one that tries to ‘persuade,’ and one that ‘reminds.’ 4. Visit the Nick at Night website described in your chapter and view two ‘retromercials’ on that site. Write a one-page essay on how you believe advertising has changed since your chosen retromercial aired. 5. Go to a grocery store and interview the manager there. Ask the manager about his/her promotion mix and what components are in it and how they are managed. Write a one-page essay describing the results of your interview. 6. Use the keyword ‘Professional selling’ to search the internet. Write a one-page essay on your findings. 7. Agree or disagree with the following statement and explain your answer using materials found in Chapter Ten. “If everyone is your customer, then no one is your customer.”

82

Case study An easy guide to audience measurement Overview of basic terms used in audience measurement Radio and TV audience measurement Situation description: – A consumer packaged goods company runs a campaign on television for a new soap product – “Germ Buster Hand SoapÒ.” The market for this product is estimated to be around 20 million people who are particularly concerned about the presence of germs on their hands during food preparation. The campaign will be targeted to this market throughout the holiday season of 2000. The product is to be introduced through a television ad campaign beginning October 2000 and running through December 2000. 1. Reach – “the percentage of target prospects exposed to one or more ads for a brand during some stated period.” During the company’s initial advertising campaign, half of the people (10 million people) in this target market will be exposed to the ad during the three-month life of the campaign. Thus the Reach is 50 (that is 50% of the target market will see the ad. That is, fifty percent of the people in the target market will be exposed to the ad at least one or more times.) Concerning reach, some people subscribe to the ‘three-hit theory.” That is, it takes three effective exposures to move the prospect through the hierarchy of effects. (Attention, Interest, Desire, and Action). Three effective exposures usually requires much greater than three total exposures. Why? 2. Frequency –“the average number of exposures to advertisements received by all prospects who were reached during the given time period.” In the preceding example, your campaign reached 10 million prospects or half the target market. Suppose that media research indicates that the 5 million people in the target market will be exposed to this ad six times while 5 million people will be exposed four times during the campaign. Thus, the frequency or average number of exposures for the target market will be five. GRP’s or gross rating points-the GRP level is a rule of thumb used by media personnel to assess the relative strength of the campaign. 83

In our example, the GRP’s would be 250. GRP’s yield a comparison of different options for reach and frequency through examining the relative exposure schedule of different campaign options (their relative ‘bang for the buck.’) While this measure has obvious shortcomings (that is, is an exposure more powerful if it occurs previous to the food preparation period versus after the food preparation period) it has been applied traditionally in TV and radio advertising. There is the growing question of effectiveness. For example, we can run ten second spots or sixty second spots and end up with the same “GRP’s” (an exposure is an exposure) but do they have the same ‘selling power.” I think not. That is, while your GRP’s have increased with ten second spots, does that mean have you necessarily increased the communication and learning that has taken place with the target market? However, the measure is helpful for comparing competing media schedules. In our example above, need to decide which is more important for our situation, reach or frequency. That is, is it more important for a larger proportion of the target market to be exposed at least once, or is it more important for prospects to be exposed to our message several times. This debate finds little agreement, except to say the ‘more is better.’ Of course, ad agencies and media representatives are glad to have you spend more money always. However, you need to analyse and think about what is needed to convey your message. That is, are the benefits the product delivers relatively easy to understand? If so, which would you prefer to emphasize in a campaign: reach or frequency? On the other hand, if product benefits are difficult to convey would your answer be different? Think about different schedules and how they impact your communication potential. Remember that you are spreading the amount of dollars over different communication objectives. Can’t do it all! For example, if you emphasize reach over frequency that means that “more people will receive fewer exposures.” Compare this to emphasizing frequency over reach so that “fewer people will receive more exposures.” Funds are always limited and you will asked to make decisions of this sort that trade off resources and people in your organization expect to be able to trust your answers. After all, you are the marketer with the MASTER OF BUSINESS ADMINISTRATION DEGREE!

84

Measures of television audiences and their relationships to each other Coverage (number of TV households in signal range of TV station or network) □ □ □ □ □ □ □ □ □ □ HUT (homes using TV) Percentage of coverage with sets turned on

Rating Percentage of coverage tuned to a particular program, station, or network

Audience Share (percentage of HUT tuned to a particular program, station or network) HUT X Audience share = Rating Brief example A recent infomercial for Suzanne Somers’ Depression Cure aired on the local cable TV station in Out There, Kansas, had the following viewership: Coverage – this local cable channel can provide a coverage of 2 million households HUT – for the 12 midnight to 1 a.m. time slot, the percentage of coverage with TV sets turned on is one out of twenty or five percent or .05 Audience Share – during that time slot the percentage of homes using TV that is tuned to this cable channel is sixty percent Rating – the rating for this infomercial would be .05 X .60 = .03 Thus the percentage of total coverage tuned to this particular program was .03 or said another way, the program reached 60,000 households or three percent of the total coverage.

85

There are many other resources for assessing markets and audience measurement that are easily accessed on the internet and you might want to see what you can find in your own search. Newspaper and magazine audience measurement The Basic CPM formula is used to compare different media options. That is, we compare the cost of reaching one thousand viewers across different stations. For example, if we used the basic CPM formula (cost of one unit of time)/number of households reached).

REFERENCES The context of this part has been adapted from the following product(s): 1. Principles of marketing. Access via Internet: www. principlesofmarketing.com/htm/Chapter-Six.htm 2. van Bel, Sander, Weber. “Follow that Customer”. Racom Communications; http://www.failsafe.nl/followthatcustomercom/ 3. Holtom, Mark. “What is an Event”. http://www.eventricity.biz/ What_is_an_Event.php 4. Holtom, Mark. “EDM KPIs”. http://www.eventricity.biz/Marketing_ KPIs_for_Event_Driven_Marketing.php 5. Ricardo, Fernando. “NAB National Leads”. http://www.nab.com. au/ 6. Holtom, Mark. “EDM Infographic”. http://www.eventricity.biz/ EDM_Infographic.php 7. Holtom, Mark. “EDM Research”. http://www.eventricity.biz/ Research.php 8. EFMA. “EFMA CRM Research”. http://www.efma.com/index.php/ init/home/index/EN/0/0 9. Atos Origin. “EFMA EDM research”. http://www.efma.com/index. php/init/home/index/EN/0/0 10. Ingalls, Neil. “Triggered Email Marketing – The Stats Speak for Themselves”. http://www.sproutloud.com. Retrieved 2014-03-18. 86

FURTHER READING 1. Kotler, Philip; Kevin Lane Keller (2009). “1”. A Framework for Marketing Management (4th ed.). Pearson Prentice Hall. ISBN 0-13-602660-5. 2. Adcock, Dennis; Al Halborg; Caroline Ross (2001). “Introduction”. Marketing: principles and practice (4th ed.). Xavier Thomas. p. 15. ISBN 9780273646778. Retrieved2009-10-23. 3. Kotler, Philip & Keller, L. Kevin (2012). Marketing Management 14e. Pearson Education Limited 2012 4. Adcock, Dennis; Al Halborg; Caroline Ross (2001). “Introduction”. Marketing: principles and practice. p. 16. ISBN 9780273646778. Retrieved 2009-10-23. 5. Strategic Marketing by David W. Cravens and Nigel F. Piercy 6. “Marketing Management: Strategies and Programs”, Guiltinan et al., McGraw Hill/Irwin, 1996 7. Dev, Chekitan S.; Don E. Schultz (January–February 2005). “In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century”. Marketing Management 14 (1). 8. “Swarming the shelves: How shops can exploit people’s herd mentality to increase sales”. The Economist. 2006-11-11. p. 90. 9. Kerin, Roger A. (2012). Marketing: The Core. McGaw-Hill Ryerson. p. 31. 10. Kotler, Armstrong, Philip, Gary. Principles of Marketing. Pearson education. 11. Hochbaum, Dorit S. (2011). “Rating Customers According to Their Promptness to Adopt New Products”. Operations Research 59 (5): 1171–1183. doi:10.1287/opre.1110.0963.edit 12. “Segmentation, Targeting, and Positioning”. University of Southern California. Retrieved 21 May 2013. 13. Stolley, Karl. “Primary Research”. Purdue Online Writing Lab. Retrieved 21 May 2013. 87

14. Kardes et al.; 2015; Consumer Behavior; 2nd edition; Cengage Learning, Stamford 15. Developing Business Strategies, David A. Acker, John Wiley and Sons, 1988 16. Mittal, Vikas and Frennea, Carly, Customer Satisfaction: A Strategic Review and Guidelines for Managers (2010). MSI Fast Forward Series, Marketing Science Institute, Cambridge, MA, 2010. Available at SSRN: http://ssrn.com/abstract=2345469 17. “Chapter 6: Organizational markets and buyer behaviour”. Rohan.sdsu.edu. Retrieved2010-03-06. 18. Goldstein, D.; Lee, Y. (2005). “The rise of right-time marketing”. The Journal of Database Marketing & Customer Strategy Management 12 (3): 212–225.doi:10.1057/palgrave dbm.3240258. 19. Dacko, Scott G. (2008). The advanced dictionary of marketing. pp. 377–378. ISBN 0-19-928600-0.

88

Part 7 PROMOTION MIX IN EVENT MARKETING Objective outline: 1. Define the five promotion mix tools for communicating customer value. 2. Discuss the changing communications landscape. 3. Outline the communication process and the steps in developing effective marketing communications. 4. Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. Chapter Key Terms: Advertising Personal selling Sales promotion Merchandising Public relations (PR) The promotion mix or the marketing communications mix Promotion refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty. It is one of the four basic elements of the market mix, which includes the four P’s: price, product, promotion, and place.1 Promotion is also defined as one of five pieces in the promotional mix or promotional plan. These are personal selling, advertising, sales, direct marketing, and publicity. A promotional mix specifies how much attention to pay to each of the five factors, and how much money to budget for each.2 Fundamentally, there are three basic objectives of promotion. These are:3 1. To present information to consumers and others. 2. To increase demand. 3. To differentiate a product. The purpose of a promotion and thus its promotional plan can have a 89

wide range, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.2 Promoters have used newspapers, special events, endorsements, Promotions can be held in physical environments at special events such as concerts, festivals, trade shows, and in the field, such as in grocery or department stores. Interactions in the field allow immediate purchases. The purchase of a product can be incentive with discounts (i.e., coupons), free items, or a contest. This method is used to increase the sales of a given product. Interactions between the brand and the customer are performed by a brand ambassador or promotional model who represents the product in physical environments. Brand ambassadors or promotional models are hired by a marketing company, which in turn is booked by the brand to represent the product or service. Person-to-person interaction, as opposed to media-to-person involvement, establishes connections that add another dimension to promotion. Building a community through promoting goods and services can lead to brand loyalty. Promotion can be done by different media, namely print media which includes newspaper and magazines, electronic media which includes radio and television, digital media which includes internet, social networking and social media sites and lastly outdoor media which includes banner ads, OOH (out of home). Digital media is a modern way of brands interacting with consumers as it releases news, information and advertising from the technological limits of print and broadcast infrastructures.4 Mass communication has led to modern marketing strategies to continue focusing on brand awareness, large distributions and heavy promotions.5 The fast-paced environment of digital media presents new methods for promotion to utilize new tools now available through technology. With the rise of technological advances, promotions can be done outside of local contexts and cross geographic borders to reach a greater number of potential consumers. The goal of a promotion is then to reach the most people possible in a time efficient and a cost efficient manner.5 Promotional activities to push a brand enabling social media channels to spread content making something viral, such as the advertising by Coke. Using the release of a new Bond film creating attention which then gets promoted across all social channels by people spreading the information due to excitement. Social media, as a modern marketing tool, offers opportunities to reach larger audiences in an interactive way. 90

These interactions allow for conversation rather than simply educating the customer. Facebook, Twitter, LinkedIn, Pinterest, Google Plus, Tumblr and Instagram are rated as some of the most popular social networking sites.6 As a participatory media cultures, social media platforms or social networking sites are forms of mass communication that through media technologies allow large amounts of product and distribution of content to reach the largest audience possible.7 However, there are downsides to virtual promotions as servers, systems, and websites may crash, fail, or become overloaded.8 With promotion through participatory media, there is an opportunity to gain Social capital. Promotion, has its own mix of communication tools which are sometimes called the promotion mix or the marketing communications mix. A company’s total promotion mix consist of specific blend of five (5) major promotion tools as follows: -

Advertising

-

Sales promotion

-

Personal selling

-

Public relations and

-

Direct – marketing tools

The company uses these tools to persuasively communicate customer value and build customer relations. Traditionally, we employ a promotion mix to effectively budget and distribute funds for promotion. The promotion mix includes the following components: a) Advertising – paying for space in a medium such as a newspaper or trade journal b) Personal Selling – a face to face contact with a customer c) Sales Promotion – any program that provides additional incentive for the customer to make a purchase d) Publicity – obtaining space in a medium such as a newspaper in which we do not have to pay for the space based on the newsworthiness, or other characteristic of the article printed. 91

When creating a promotion program we attempt to meld the four elements together in a cogent way so that each element supports the other and provides the target audience with a consistent message over time. This practice is call ‘integrated promotion management’ or ‘integrated marketing communications.’ For organizations marketing convenience goods in consumer markets, advertising usually accounts for the largest proportion of the promotion mix, whereas, personal selling traditionally comprises the largest expenditure for organizational markets. Let us look at the definition of these 5 major promotion tools as follows; Advertising: Advertising in a nutshell is any paid form of non – personal presentation of ideas, goods and services by an identified sponsor. Its functions are to attract attention, inform, motivate or persuade, inspire convictions and provoke action and satisfaction. Sales promotion Sales promotion is defined as the short term incentives to encourage the purchase or sales of a product or service. For example, buy one at a regular price and get the next one free of charge, special offer deals. Personal selling: Personal selling is defined as personal presentation by the firm’s sales force for the purpose of selling and making customer relations. It is one of the means through which marketing programmes are implemented. The purpose of personal selling is to bring the right product into contact with the right customer and make sure that ownership transfer takes place. It is a means which sellers use in their attempts to create awareness, motivate or persuade the prospective buyer to buy. Both advertising and personal selling makes use of the salesmanship skills.

92

Public relations: Public relation here is defined as building and maintaining good relationships with different company public’s through obtaining favourable publicity, building up a good “corporate image (corporate PR), product/brand publicity (product PR) and handling unfavourable rumours, stories and events. Direct marketing: Direct marketing is defined as having direct connections with carefully targeted individual consumers to obtain an immediate response as well as cultivate lasting customer relationships. Tools of direct marketing includes; telemarketing, direct mail, online marketing. Direct marketing share some characteristics in common; - it is non – public, the message is directed to a specific person -

it is immediate and customized

-

it is interactive, it allows dialogue between the team and the customer.

Publicity means positive editorial coverage in the media. It does not include “bad press”. We have already discussed the importance of performing upstream marketing activities prior to performing downstream marketing activities. Promotion takes place in the intermediate and later stages of marketing planning because promotion requires: 1. first a definition of the target audience 2. second, a description of the benefits to be delivered to that target audience 3. third, clear objectives about what the program aims to accomplish, and 4. fourth, a strategy to be employed to communicate with that target audience and accomplish the objectives. This process may seem backwards to some who would expect to make the media decision first. That is, if an organization is sales-driven, it would first attempt to perform number four above. However, a marketdriven firm realizes that is must perform the first three steps prior to media choice. 93

Definition of the target audience9 Traditionally, the role of promotion has been identified as to ‘inform, persuade, and remind.’ While these stages are always necessary, often one or the other has taken place prior to the creation of a promotion program. For example, most consumers in the U.S. culture are aware of and understand the benefits of Coca-Cola and where to find the product, so informational advertising may not be necessary (http:// www.cocacola.com/). However, Coca-Cola must continually work hard to keep its name in front of consumers and remind them that the product is available and that it will provide the consumer with certain benefits. “Reminder advertising” is often placed by market leaders to support other promotional campaigns that are in progress. Thus, CocaCola is committed to constant advertising, although most consumers are aware of the product in over two hundred countries (see http://www. cocacola.com/). When you think of target markets, realize that they are always changing. People age and change over time, therefore, target markets do the same thing. So, new Coca-Cola ads while persuading and reminding a portion of the target market, also continually inform a certain part of the target market who due to age or culture are not aware of the product yet. History shows that market leaders can quickly lose their competitive position if they don’t constantly keep their name in front of their target market. This is particularly true with today’s media saturation and intense competition. As we discussed in Chapter Three, the target audience for consumer products is usually defined in terms of demographic, psychographic, geographic, and behaviouristic attributes. Once we have clearly defined the target market, we create marketing programs to communication with members of the target market. Description of benefits to be delivered to the target market It is imperative to understand what benefits (not product features) the target market will receive by buying our product or service and this description should be crafted in words that communicate these benefits to members of the target market. Thus, the notion of “empathy” with the target market becomes critical. If we don’t really understand our customers well, it will show in our attempts to communicate with them. For example, if our target market first seeks the minimization of financial 94

risk in their purchase, we might choose to provide a thirty-day money back guarantee. Whereas, if our target market is more interested in minimizing technological risk in their purchase, we might choose to decrease this perceived risk by providing a twelve-month ‘technology trade-up program’ or adopting promotion comprised of user testimonials dealing with the product. Clear objectives about what the program aims to accomplish9 Setting objectives for promotion programs is a critical part of achieving success. However, in practice, setting objectives sometimes destroys creativity associated with the promotion program. Thus, while we strongly recommend formulating objectives that will guide the promotion program, we caution promotion managers to avoid an approach that is too rigid and quells the creative process. Objectives for promotion programs can be either sales-oriented objectives or communication-oriented objectives. That is, we can either identify specific targets we wish to meet in terms of increased sales or specific targets we want to attain in terms of communicating with the target audience for the program. Strategy to be employed to communicate with the target audience9 Just as in planning, the word ‘strategy’ is used in several different ways in promotion management. First, strategy can refer to an overall game plan or orientation to the promotion program. For example, a company might discover through research that their target customers seek reliability above all other attributes thus the organization might adopt a strategy of ‘emphasis on reliability.’ On the other hand, an organization might adopt a ‘direct mail strategy’ if it finds that direct mail would be the best way to reach its customers. Hence, use of the word ‘strategy’ has no guidelines and can confuse the issue. We recommend that when the reader uses the word strategy, the reader provide an explanation regarding how the strategy would be implemented. This leaves no doubt regarding the word’s meaning. Communication objectives can be driven by measures such as product awareness, knowledge (of certain attributes or benefits) or preference. Each of these measures can be used to assess how effective promotional efforts have been in attaining their objectives. 95

Creating Successful Promotion Programs9 As discussed above, there are four steps to creating successful promotion programs: 1) a definition of the target audience 2) a description of the benefits to be delivered to that target audience 3) clear objectives about what the program aims to accomplish, 4) a strategy to be employed to communicate with that target audience For example, Marie’s Gift Shop is a small store in downtown Manitou Springs, Colorado. Marie’s parents opened the shop and named it for their new-born daughter in 1968 and the shop has operated continuously since then. Marie, after earning a college degree with a major in marketing, was asked by her parents to manage the gift shop so that her parents could retire. Marie accepted this challenge although she had two small children and was a single mother. Marie realized any funds spent for promotion must yield results in the form of increased sales. The first step for Marie was to determine who the target audience for any promotion would be. Having worked in the shop part-time for many years, Marie believed that most her customers were from the local Manitou Springs area although a significant proportion of customers in the summer were tourists. She commissioned a small marketing research study with her former university to explore her customer base. Two of the research questions for this study were “(1) Who are our present customers and (2) why do they buy from us?” The marketing research study found the answers to these questions were that over seventy percent of the current customers were from the Manitou Springs area and had been customers of Marie’s Gift Shop for over two years. The study also indicated that most of the customers purchased gifts for immediate family and friends for traditional gift-giving occasions including birthdays, weddings, and Christmas. Thus, after the marketing research study, Marie defined her target audience as ‘Present customers with a ZIP code in the Manitou Springs city limits and ZIP codes contiguous to the Manitou Springs ZIP codes. Marie also realized that she should begin to keep a Customer Information System that would enable her to communicate regularly with her present customer. 96

Another of the questions in Marie’s study was ‘Why do you make purchases from Marie’s Gift Shop?’ One of the responses to this question on the survey was “I am familiar with the Ruohonen family.” Over sixty percent responded affirmatively to this question indicating that one of their main buying motives was to ‘support local businesses’ and that the customer ‘enjoyed visiting with members of the Ruohonen family.’ Thus, most customers were already familiar with Marie’s Gift Shop before buying from the shop. Therefore, the three primary benefits customers were seeking were determined to be: a. experience personalized service from a familiar source b. support local merchants like the Ruohonen family c. obtain a unique gift After a meeting with a local marketing communications firm, these benefits were used as a guide for creating a promotion strategy for Marie’s Gift Shop. Marie’s decided to adopt this approach as a longterm strategy and committed to this strategy for a three year period, thus, adoption of a promotion strategy should not usually be seen as short-term. We will discuss this promotion program in more detail in a later chapter. Overview of Advertising9 As indicated above, advertising can be defined as communicating with target audiences through paid, non-personal messages, usually placed in a mass medium. Advertising is the easiest but absolutely, more expensive alternative for marketing communications. That is, the initial outlay for an advertising campaign may be the most expensive option for promotion. However, advertising may possibly provide the lowest ‘cost per contact.’ For example, usually audiences are measured by using a figure known at CPM or cost per thousand (the ‘M’ denotes use of the Roman numeral designation for one thousand.) See the appendix to this chapter: An easy guide to audience measurement. If you do an internet search on the word, ‘advertising’, you will find many different references and categories presented there. Some researchers estimate that by the age of eighteen the average person in 97

the U.S. was viewed well over one million advertisements and that figure is probably very low if we consider all commercial messages to which we are exposed in the U.S. What are the implications of this staggering statistic? First, most of us consider ourselves ‘experts’ in advertising because we have seen so many ads. However, to be truly expert, one must understand and develop the attribute of ‘empathy.’ Empathy is simply being able to understand another person’s feelings are reactions to events in his or her environment. It is easy to feel sympathy for someone who is only twenty-one years old but dying of cancer. However, it is much more challenging to understand how that person must feel. This example demonstrates how fundamentally unimportant most advertising is to the average person. However, advertising is sometimes very important to us as individuals. Why? First, we often use advertising as a way to identify right and wrong behaviours: both fundamental and minor behaviours in society. For example, some ads give us cues about ‘what is cool’ and what is ‘not cool’ in everyday behaviours. Can you identify how ‘cool behaviour’ and ‘uncool behaviour’ have changed in the last few decades? The tobacco industry continues to advertise heavily through alternative means that avoid regulations of the Federal Trade Commission (FTC), thus easily avoiding the law, while continuing to advertise a product proven hazardous the health of its users. For example, note how the motion picture industry continues to accept money to feature its products in films. Also, the reader might want to review the website of a company that has as its core business the ‘placement’ of products in various media vehicles. Overview of Personal Selling9 Personal selling is the worst nightmare most of my marketing students have about a career in marketing. Why? I think they see personal selling as a low status, low paid career full of disappointments and lack of personal freedom. In one way the students are correct, almost any career in personal selling is going have many disappointments if one defines a customer not saying ‘yes’ instantly as a disappointment. However, a career in personal selling can yield a most rewarding professional life if a person can develop a strong self-esteem and truly believes in what s/he is selling. As Peter Drucker, a leading writer in marketing and management, 98

has said: “(true)…. marketing involves almost no selling.” Mr. Drucker refers to the fact that if a marketer does his or her job and understands and delivers a product or service solution that the customer is truly seeking, it only remains for the marketer to explain how this solution will provide the benefits sought, and the customer is then willing and eager to buy. Why does this sound so unrealistic to many of us? Because, as consumers, we rarely experience a solution that is so well researched or a seller who values the customer this much. As mentioned earlier in the text, most companies in the U.S. are sales driven and not market driven, so that their primary concern is not customer satisfaction but selling the customer what the company has available to sell. Therefore, it is no surprise that many consumers are dissatisfied with the product and services they buy. However, as competition forces organizations to be more customer-oriented, the remaining firms that are solely salesdriven will eventually disappear from the economic landscape. Traditionally in personal selling, organizations follow a process from the time preceding customer contact to the time following the sale, including some follow-up activity. In many organizational markets, this follow-up stage is called ‘post-sales support’ and is one of the most effective methods for keeping customers. Investing in retaining current customers is much more cost-efficient than ignoring current customers in search of new customers. This approach, used historically with many consumer products is called ‘churning’ and is adopted by sales driven firms. New and used car sales are examples of product categories that used the churning method for decades, although, due in some cases to the efforts of new car manufacturers, this practice is becoming less popular. New car manufacturers are recognizing that their long-term success depends on building and nurturing a diverse customer base. This requires on-going customer research and an honest commitment to customers in all production and services systems that are responsible for delivering customer satisfaction. Today this commitment is still rare, but in the future it will be essential. Many firms view the personal selling process as a ‘sales funnel,’ that is, the process begins with many different possible customers, and narrows over time to more specific customers who are first identified as ‘qualified prospects.’ A qualified prospect can be defined as an individual, family, or organization that is likely to be seeking the benefits we seek to provide and has the ability to obtain those benefits by entering into a relationship with our organization. Thus, locating and identifying qualified prospects 99

becomes a primary function of the marketing or sales effort. However, we must remember that if an organization is truly marketing oriented, this process is made much easier because the customer profile created early on in product or service development has already given clear definition to our target customers. After identifying qualified prospects, it remains to contact these prospects and consult with them about our chosen solution to their product needs in terms of the benefits they are seeking which we aspire to provide. Thus, while the ‘sales funnel’ begins with a profile of our target customer and the benefits that s/he wants, the number of prospects decreases as we proceed through the sales process. As we gather more information about what customers we can better satisfy, we continually use this information as feedback to more precisely align our solution with the benefits sought by our target market. The ‘delivery system’ of the organization must strive to maintain flexibility throughout the personal selling process and be capable of adjusting the product solution to meet needs of customers as the organization gains better resolution about what those needs are exactly. Most traditional models of the selling process have the process culminate in a ‘presentation’ and then proceed to a ‘feedback’ stage that occurs after a presentation and purchase. While this approach to modelling the process if helpful, it denies the required dynamic nature of customer relationships and often is too inflexible to be of maximum use. That is, as we learn more about exactly what benefits our customers are seeking, we must continually adjust our product or service offering to better provide those benefits. For example, a response to feedback from customers in a restaurant that ‘this place it too smoky,’ must be forthcoming very quickly if the restaurant is to be successful. While this response is not as easy with tangible products, especially high technology products, organizations marketing such goods must always aspire to solicit this kind of feedback and respond to it as quickly as possible. For more information on personal selling and sales management consult the two topics at the following website: Overview of Sales Promotion9 Because we define sales promotion as “any added incentive designed to inform, persuade or remind a certain portion of the target market,” sales promotion ends up being a large, catch-all category including 100

coupons, special offers, customer sweepstakes, and many other promotional activities. These activities are used both in consumer markets and organizational markets although the methods often differ. For example, if one reviews the local Sunday paper, one will find almost countless coupons included by advertisers to encourage customers to buy. However, only a very small percentage of these coupons are ever even seen let alone exchanged by consumers. In organizational markets, companies often spend large amounts of money on trade shows which are regional, national, and international expositions that usually share a common theme such as an industry. Overview of Publicity9 Publicity differs from advertising in that the advertiser does not pay for the space in the medium or publication with publicity. That is, a new feature is placed because it ostensibly will be of interest to the readers of the publication. There are also public service announcements that often attain similar objectives. The challenge with publicity is preparing an article that is newsworthy and of interest to the readers of a publication. Obtain a copy of a local newspaper, and see if you can find an article included in the newspaper that you believe was published without a charge to the advertiser based on its interest to readers. The main requirement of obtaining publicity in most media is that the article placed should be newsworthy and credible and of special interest to viewers or readers. Formulating an Integrated Marketing Communications Plan9 The primary challenge in promotion management is the integration of all activities directed at communicating with one’s various audiences so that the organization presents a consistent understandable image to those groups. We say ‘audiences’ because at any given time, the organization may be communicating with its customers, suppliers, employees, competitors, and the general public in several different contexts. It is imperative that the organization create and reinforce a clear image in the marketplace. Thus, all communications should be centrally produced and managed. This is not to say that there will be no creativity in individual marketing communications efforts, only that 101

these efforts will have agreed upon guidelines so that all of the different groups with which the organization communicates are given a consistent image of the organization. After different parts of the organization agree upon what image the organization seeks to attain, an integrated marketing communications (MARCOM) program can be established and implemented. All components of the promotion mix then have some underlying concept to reinforce. For example, in the example of Marie’s Gift Shop described above, Marie wanted to make sure that all communications with customers, employees, and suppliers used the same logo and letterhead. Marie also realized that an emphasis on personal service, the availability of unique products, and the consistency of local ownership would be critical to maintain her chosen organizational image. We will describe Marie’s chosen MARCOM program at length later on. A Note on Positioning9 As we have indicated, it is essential to know who the target customer is and what benefits s/he is seeking. For example, there is usually a temptation to ignore this requirement and attempt to ‘be all things to all people.’ For example, recently a group of MBA students at a university decided to enter into a business venture together. Several students in the group had managed to save some funds through various means. Two students had recently left military service and two others had received a ‘departure bonus’ from a high technology firm. The students agreed that they wanted to open a restaurant together. When asked who their target market would be the students responded “Well, everyone who eats.” Obviously, this definition of a target market is too broad and provides insufficient guidance about the “Five W’s and H” (who, what, when, where, why, and how) of the whole concept of the business. The students needed to more clearly define the concept of the restaurant and precisely who they were expecting to serve in the business. For example, the needs of those who are searching for ‘a fast lunch’ will differ significantly from those who aspire to ‘relax and talk’ over their lunch. It would be difficult to position a restaurant to simultaneously meet all of these needs well. Promotion is the communications part of marketing. It is the way we tell the world our product. Promotion provides consumers with information and knowledge in an informative and persuasive manner. 102

This, we hope, will sooner or later result in sales of our services or products. The information and knowledge can be communicated using one or more of the five promotional techniques - advertising, personal selling, sales promotion, merchandising, and public relations. Taken together, these techniques are referred to as the promotional mix. Goals of Promotion9 The ultimate purpose of promotion is to modify behaviour through communication. This requires helping customers at the various buying process stages so they eventually purchase or repurchase a particular service. Promotion achieves this by informing, persuading, and reminding - the three principal goals of promotion. Promotions usually fit into one of these categories; they are either informative, persuasive, or reminders. Informative promotions work best with new services or products (early product-life-cycle stages) and with customers in early buying process stages (need awareness and information search). These types of promotions tend to communicate data or ideas about the key features of services. Persuasive promotions are harder. They are aimed at getting customers to select one particular company or “brand” over those of competitors, and to actually make the purchase. Advertisements that compare one company’s services to another, and most sales promotions, fit into this category. Persuasive promotions work best in intermediate/ late stages of product life cycle (growth and maturity) and the buying process (evaluation of alternatives and purchase). Reminder promotions are used to push customers’ memories about advertising they may have seen, and to stimulate repurchases. They are most effective in the late product-life-cycle (maturity and decline) and buying process stages (post purchase evaluation). The five communications mix elements are; 1. Advertising 2. Personal selling 3. Sales promotion 4. Merchandising 5. Public relations (PR)

103

Advertising in event marketing Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. The three key words in this definition are “paid”, “nonpersonal” and “identified sponsor.” Paid - hospitality and travel organizations always have to pay for advertising, either in money or in some form of barter (e.g., free meals from a restaurant in exchange for a radio ad). Nonpersonal - neither the sponsors nor their representatives are physically present to give the message to customers. Identified sponsor - the paying organization is clearly identified in the advertisement. The media advertising is mainly two types as printed media advertising (newspapers, magazines, brochures, direct mail and billboards), and broadcast media advertising (radio and television). Direct mail which is used extensively by tour operators, is postal communication by an identified sponsor. And this promotional tool is classified as direct marketing. Because event is an intangible service, a great deal of promotion includes the production of printed communications such as brochures or sales leaflets. The design, organization and printing of tourism brochures is one of the most important promotion functions. Printed communications are often costly. In fact, the printing and distribution costs of brochures comprise the largest part of most marketing budgets within the tourism industry. Advertising is used to achieve a whole range of objectives which may include changing attitudes or building image as well as achieving sales. However, advertising messages do not always have to be aimed directly at creating a sale. Sometimes it’s the sponsor’s goal simply to convey a positive idea or a favourable image of the organization (often called “institutional” advertising). (Sponsorship is the material or financial support of a specific activity which does not form part of the sponsor company’s normal business) For example, IBM has sponsored ads during the Atlanta 96 Olympics. Advertising is often described as above-the-line promotion (where the media space is paid by the company) with all other forms of promotion (where space is not paid) being termed below-the-line. Personal Selling in event marketing Personal selling involves oral conversations. These are, either by telephone or face-to-face, between salespersons and prospective customers. This sort selling may be used by a non-profit-making museum 104

as well as by a conference manager of a large hotel. Personal selling is very important in the sense that it has the ability to close a sale. Sales Promotion in event marketing Sales promotions are approaches where customers are given a short term incentive (encouragement) to make an immediate purchase. Sales promotion campaigns add value to the product because the incentives does not normally accompany the product. Like advertising, the sponsor is clearly identified and the communication is nonpersonal. Examples include discount coupons, contests (trial), samples and premiums (prize, bonus). Free wine or free accommodation offers are frequently used in sales promotion campaigns for hotel restaurants which need to increase demand at certain periods. Merchandising (point-of-purchase advertising) Merchandising, or point-of-purchase “advertising” includes materials used in-house to stimulate sales. These include menus, wine lists, signs, posters, displays, and other point-of-sale promotional items (in-room materials). It is a common practice to categorize merchandising as a sales promotion technique, because it does not include media advertising, personal selling, or public relations. In this course, merchandising is separated from other sales promotion techniques because of its uniqueness and its importance to the industry. Merchandising is important as a means of creating impulse purchase or remind the consumer of what is on offer. Public Relations (PR) in event marketing Public relations includes all the activities that an event management organization engages in to maintain or improve its relationship with other organizations and individuals. In other words, public relations try to provide commercially significant news about the product or service in a published medium, or obtaining favourable presentation in a medium that is not paid by the sponsor. Publicity is one public relations technique that involves nonpaid communication of information about an organization’s services. Characteristics of each promotion Each of the above promotional elements has capacity to achieve a different promotional objective. Personal selling has high potential for 105

achieving communication objectives, however, only a small number of people can be contacted. Therefore advertising is a better method of reaching a high number of people at low cost. Public relations is more credible than advertising, but there is more control over advertising messages and they can be repeated on a regular basis. When it is difficult to raise advertising budgets, public relations is a lower cost alternative, but it is difficult to control the timing and consistency of PR coverage. Sales promotion may produce an initial trial for a product, but this type of promotion can only be used over a short period. Each part of the promotion mix has its own strengths and weaknesses. While these may include the factors of cost, ability to target different groups, and control, there are other important considerations. On the following figure, they are compared on the basis of the level of awareness of the communication, and its comprehension (understanding, realization), as well as on whether it can build conviction (confidence, certainty) and succeed in creating action. Factors affecting the promotional mix Choosing a promotional program for a coming period requires very careful research and planning. The stage of customers’ decision processes and product life cycle stages affect the promotional campaign decisions. However, there are some other factors that also affect promotional mix decisions. The effectiveness of the five promotional mix elements varies according to the target market. For example, in promoting its convention/ meeting facilities, a lodging property might find that personal selling to key meeting planners is much more effective than advertising. On the other hand, using personal selling to attract individual pleasure travellers would not be feasible. The geographic location of potential customers also has an impact. Where they are widely dispersed, advertising may be the most efficient and effective way to reach them. The promotional mix selected should flow directly from the objectives for each target market. For example, if the objective is to build awareness by a certain percentage, the emphasis may be placed on media advertising. If, on the other hand, it is to build sales significantly in a short time period, the focus may be put on sales promotion. There is a distinct tendency in certain parts of the hospitality and travel industry for most competitive organizations to use the same “lead element” in promotional mixes. Fast-food chains focus on heavy 106

television advertising, hotels and airlines focus on frequent-traveller award programs, and cruise lines put a heavy emphasis on personal selling to travel agents. It is difficult and extremely risky for one competitor to “break from the pack” in this respect. Obviously the funds available for promotion have a direct impact on choosing promotional mix elements. Smaller organizations with more limited budgets usually have to place greater emphasis on lowercost promotions, including publicity and sales promotions. Larger organizations can better afford to use media advertising and personal selling. Creating specific promotional messages10 When the objectives which promotion is to fulfil have been decided in relation to an identified segment of buyers, the crucial step in the advertising process is to create memorable pictures and words. Creative execution captures attention, expresses the essence of a product in a few words that say it all, and provides key information. In travel and tourism good examples of creative executions are: “We try harder” (Avis) “We speak your language” (British Tourist Authority in the USA market) “I love New York” (New York State) “The World’s favourite airline” (British Airways) “Only one hotel chain guarantees your room will be right” – “Everything in your Holiday Inn room will be right. Or we will make it right. Or we will refund the cost of your room for that night” One of the member of an international advertising agency quoted; ... people can’t believe you if they don’t know what you’re saying, and they can’t know what you’re saying if they don’t listen to you, and they won’t listen to you if you’re not interesting. And you won’t be interesting unless you say things freshly, originally, and imaginatively.

107

EXERCISE Congratulations, your Advertising Firm has just been hired by a new company to create a one-month promotional plan! Your firm will write a marketing plan and create all of the promotional elements for the company that has hired your Advertising firm. The four-week promotional campaign can be for any of the businesses listed below or can be for a business of your choice in the Monona-Cottage Grove area, with approval. The promotional campaign must achieve the following objectives:

 Increase sales for the chosen time period (4 Weeks)  Increase the preferred customer base for the chosen business  Increase customer awareness of the chosen business

In addition your firm must develop a budget for the four-week campaign. The developed marketing campaign must include all four parts of the promotional mix: advertising, sales promotion, personal selling, and publicity. Your team must detail all expenses as they relate to the four components of the promotional mix. Your firm can choose to work with the following companies: Kat’s Coffee House Studio 27 Aveda Concept Salon Grand Atlantic Hotel and Resort Monona Area business of your choice 2-Group’s for School Store! 1-Group for Eagle Eye Café!

Budget = $3,000 Budget = $5,000 Budget = $75,000 Budget = ___________ Budget = $100 Budget= “0”

Your marketing plan along with all promotional elements is due May 10th Your team should be prepared to do an informal presentation on your marketing plan and promotional elements on the due date. (Show us your items ELECTRONICALLY)

108

Promotional Mix Elements Your advertising firm must develop plans for a one-month marketing campaign for a local business that has hired your firm. Your firm is required to create the following.

 Design a Logo for the new business  Create a grand opening theme/slogan/concept/integrated campaign that is incorporated into ALL elements of the promotional mix, Write a 1 page summary of what your plan is and why you are doing it!  Develop a one-month promotional mix budget

In addition to creating the above, your firm must create 8 of the following promotional activities. You must have at least 1 activity from each area. *(Make sure you consider your target market, media reach, and budget when making your selections, not just, which are easiest for you.)* Advertising…(pick 3) Create a newspaper advertisement Create a magazine advertisement Write & create a radio commercial script…30-60 seconds Write & create a story board for a television commercial…30-60 seconds *EC For actual TV or Radio Commercial. Create a billboard Create transit advertising Create a yellow pages advertisement Create a direct mail piece Create an outdoor sign for the business Create a web page for the business Sales Promotions…(pick 3) Create a coupon Create a contest Create a sweepstakes Create a way to give free samples Create a factory pack 109

Create a self-liquidating premium Create a window display Public Relations… Coordinate an event that is newsworthy with a press-release. Advertising Costs… You may spend any amount during the month, but your total may not exceed your budgeted amount. Indicate what you will spend on each element of promotion Be very specific. For example…6-30 second radio spots @ 40 EUR each = 240 EUR Advertising Media Costs… Radio spot (locally) 30 seconds PM Drive Time 80.00 EUR Radio spot (locally) 30 seconds AM Drive Time 120.00 EUR Billboard (one month) 1000.00 EUR Billboard (production) 500.00 EUR Local Magazine (one month) full colour 975.00 EUR National Magazine (one month) full colour 20,000.00 EUR Direct Mail (per piece includes postage) 1.25 EUR /item Local Network Television (30 seconds) 575.00 EUR Local Cable Television (30 seconds) 140.00 EUR Television (production) 2,500.00 EUR Yellow pages (1/8 page ad, one month) 50.00 EUR Newspaper (1/8 page, Rhythm Section) each 500.00 EUR Local Newspaper (1/8 page, weekly) 75.00 EUR State-wide (1/8 page, daily) 300.00 EUR Sunday Insert (local) 150.00 EUR Sunday Insert (State-wide) 500.00 EUR *See your marketing instructor for sales promotion costs SAMPLE Promotional Budget Radio 10-30 second spots @ 120 EUR each AM drive time on WZEE, WIBA 5-30 second spots @ 80 EUR each PM drive time on WZEE, WMAD 110

1200.00 EUR 400.00 EUR

Television—Local cable Product costs 2500.00 EUR 25-60 second spots @ 40 EUR 1,000.00 EUR Prime time rotation MTV, USA, ESPN, WB, and TBS Billboard Production Costs 975.00 EUR 4 @ 975 EUR each Locations… East Wash, Hwy 51, Hwy 113, Hwy 12 3,900.00 EUR Newspaper 4 – ¼ page @ 500.00 EUR Every Thursday Rhythm section for one month 2,000.00 EUR Sales Promotion Contest Prize…1-month FREE cup of coffee Giveaway…100 coffee mugs FREE

7.50 EUR 250.00 EUR

Sales Staff Grand Opening Training Luncheon

300.00 EUR

Public Relations Press Release Sent to Herald Independent, State Journal, WZEE, WMAD, WIBA Total Promotional Budget

0.00 EUR

12,532.50 EUR

Monona – Cottage Grove Business of Your Choice  Choose the business that you will be creating a marketing plan for .......................................................................................................................   

Find out what the business offers Get Business Approved by your Marketing Teacher History

111

....................................................................................................................... ....................................................................................................................... ...................................................................................................................... ...................................................................................................................... ...................................................................................................................... ...................................................................................................................... ...................................................................................................................... ...................................................................................................................... ......................................................................................................................  Products Offered  Pricing  Promotional Budget for one month ..............................................  You may NOT use any promotional material or campaigns they have used in the past or will be using in the future.  All of the same requirements apply. You just add the business. Introduction to Marketing Promotional Mix Project Checklist Put your items in this order….  Cover page o Should include:  name of company  partners names  date  theme/slogan of campaign  logo of business  Summary of your theme and the justification for your choice of the promotional mix. Explain why you chose each element that you did and your rationale. (1-2 pages)  8 promotional activities, including one from each of the 3 elements  One month Promotional budget o Including specifics of where each element will be distributed

112

Grading Rubric- Promotional Project Cover Page

Summary

Advertising Promotional Items

Sales Promotional Items

Public Relations Promotional Items

Budget

Presentation

Missing a Required Element 4 3 Detailed, explained most

Had Required Elements 5 Detailed, explained all projects (1-2 pgs.) 15 14 At least 3 types of advertising were shown with proper formatting of each and displayed creatively as it would be published 20 19 At least 2 types of sales promotion were shown with proper formatting of each and displayed creatively as it would be published

13 12 2 types of advertising were shown and displayed and were 18

17 16 2 types of sales promotion were shown and displayed with formatting

20 19 Press release was included with specific details to the business. Newsworthy event

18 17 16 Press Release was created

10 Formatted with specifics identifying all sources and realistic pricing

9 8 7 Identified most sources and realistic pricing

10 Presentation was detailed and professional. Budget was shown with 1 slide for each promotional item

9 8 7 Presentation was given. Budget and promotional item was shown

20

19

18

17

16

Missing Some Elements

Not existent

2 1 Ok, included a summary

0 No summary

11 10 2 types of advertising were shown and displayed

1 Advertising Promotional item(s) were not present

15 14 13 2 types of sales promotion were shown and displayed

0 Sales Promotional item(s) were not present

15

14 13 Many components were missing

10

0 Publicity Promotional item(s) were not present 0

9

Ok, included a budget

No Budget

6 5 Presentation was given. Budget and promotional item were weak and/or missing areas

1 Presentation with budget and promotional items were not present

15

14

13

0

Total points ___________/100 113

Promotional Mix Project Partner Evaluation form Your name How much time did your partner put into this project When assigned a task did your partner complete it? Did your partner ad creative Ideas to the group Was your partner available to meet and work on the project

Just as much as I did, if not more 10 9 8 Yes, completely and with creativity 10 9 8 Yes, they had some great promotional ideas 10 9 8 Yes, we met several times outside of class to work on the project 10 9 8

Your partners name Almost as much as I did. 7 6 5 Yes they finished it

Hardly any effort at all 4 3 2 They finished but not on time nor was it creative

7 6 5 Yes, they helped me think of ideas for the project 7 6 5 Yes, they were able to meet

4 3 2 No, I had to think of all the ideas for the project

7

4

6

5

4 3 2 No, they had no time to meet outside of class for this project. 3

2

Total Points _____/40 = _____% x your group grade for project ______/100 = your score _______ Promotional Mix Project Partner Evaluation form Your name How much time did your partner put into this project When assigned a task did your partner complete it? Did your partner ad creative Ideas to the group Was your partner available to meet and work on the project

Just as much as I did, if not more 10 9 8 Yes, completely and with creativity 10 9 8 Yes, they had some great promotional ideas 10 9 8 Yes, we met several times outside of class to work on the project 10 9 8

Your partners name Almost as much as I did. 7 6 5 Yes they finished it 7 6 5 Yes, they helped me think of ideas for the project 7 6 5 Yes, they were able to meet 7

6

5

Hardly any effort at all 4

3

2

They finished but not on time nor was it creative 4 3 2 No, I had to think of all the ideas for the project 4 3 2 No, they had no time to meet outside of class for this project. 4

3

2

Total Points _____/40 = _____% x your group grade for project ______/100 = your score _______ 114

REFERENCES The context of this part has been adapted from the following product(s): 1. McCarthy, Jerome E. (1964). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin. p. 769. ISBN 0256025339. 2. Rajagopal. (2007) Marketing Dynamics: Theory and Practice. New Delhi, India: New Age International. Retrieved April 5, 2010, from NJIT EBook Library:http://www.njit.eblib.com.libdb.njit. edu:8888/patron/FullRecord.aspx?p=437711 3. Kurtz, Dave. (2010). Contemporary Marketing. Mason, OH: South-Western Cengage Learning. 4. Mulhern, Frank (2009). “Integrated marketing communications: From media channels to digital connectivity”. Journal of Marketing Communications 15 (2-3): 87. 5. Mulhern, Frank (2009). “Integrated marketing communications: From media channels to digital connectivity”. Journal of Marketing Communications 15 (2-3): 85.doi:10.1080/13527260 902757506. 6.

“Top 15 Most Popular Social Networking Sites”. eBizMBA - The eBusiness Guide. Retrieved 3 April 2014.

7. Flew, Terry (2008). New Media: an introduction. Melbourne: Oxford University Press. p. 107. ISBN 9780195431810. 8. Flew, Terry (2008). New Media: an introduction. Melbourne: Oxford University Press.ISBN 9780195431810. 9. What are the options for promoting products and services. Access via Internet: www.principlesofmarketing.com/htm/ Chapter-Ten.htm 10. Promotion mix. Access via Internet: www.tourism.bilkent.edu. tr/~eda/promotion%20mix.DOC

FURTHER READING 1. Maria Carlton and David Blaise, 2004 (2013). “The Exceptional Marketing Power of Promotional Products, excerpt from the book The Power of Promotional Products” (PDF). Australia: Promotion Products Pty Ltd. p. 13. Retrieved 1 May 2014. 115

2.

Evans, Stuart. (2007) “No Such Thing as Loyalty”, iclployalty. com, 2007.

3. Fred Reichheld (1996) Loyalty Rules!, Harvard Business School Press, Boston, 2001. 4. Lonto, Jeff R. (2004a). “THE TRADING STAMP STORY (or When Trading Stamps Stuck) Part 1”. STUDIO Z•7 PUBLISHING. 5.

Lonto, Jeff R. (2004b). “THE TRADING STAMP STORY (or When Trading Stamps Stuck) Part 2”. STUDIO Z•7 PUBLISHING.

6. Phil Ament. “Corn Flakes History - Invention of Kellogg’s Corn Flakes”. Ideafinder.com. Retrieved 2010-12-27. 7. “Kellogg’s Offers First Cereal Premium Prize”. Timelines.com. Retrieved 2010-12-27. 8. Widner, James F. (1998). “Captain Midnight — History”. Old Time Radio. 9. Fred Reichheld (1996) The Loyalty Effect, Harvard Business School Press, Boston, 1996. 10. Philip Kotler. According to Kotler: The World’s Foremost Authority on Marketing Answers Your Questions. AMACOM Div American Mgmt Assn. 2005. ISBN 0-8144-7295-8 11. American Airlines AAdvantage | Frequent Flyer Points | Airline Mileage | AA.com 12. Kopecki, Dawn [1] “AmEx Facebook Page Lets Users Get Customized Discounts, Offers”, “Bloomberg”, July 19, 2011. Retrieved on July 29, 2011 13. Neff, Jack, [2] “In a First, Unilever, Supervalu Pair for Groupon Deal,” “Advertising Age”, July 29, 2011. Retrieved on July 29, 2011 14. Future Banking [3] “Get smart: reviving loyalty in retail banking”, “Future Banking - 21st-century strategies and solutions for Europe”, Winter 2014 15. Kutz, Erin [4] “Cartera Commerce Eyes Local Merchants to Drive Card-Linked Loyalty Program Business”, “Xconomy”, August 23, 2011 116

16. Geron, Tomio [5] “Womply Adds Loyalty Rewards Via Credit Cards”, “Forbes.com”, December 7, 2011 17. Wauters, Robin [6] “Bain Capital Ventures Believes In ‘Loyalty 2.0ʹ, Invests $8.3 Million In Clovr Media”, “TechCrunch”, March 10, 2011. Retrieved on July 12, 2011 18. McDermid, Riley [7] “Group-buying startup Offermatic pulls in $4.5M”, “VentureBeat”, March 9, 2011. Retrieved on July 12, 2011 19. Walsh, Mark.[8] “Startup Clovr Touts Card-Linked Offers”, MediaPost News, October 19, 2010. Retrieved on July 12, 2011 20. Chris X. Moloney (2006) “Winning Your Customer’s Loyalty: The Best Tools, Techniques and Practices” AMA Workshop Event(s). Misc. materials distributed related to event(s). San Diego, 2006. 21. Carrol, P. and Reichheld, F. (1992) “The fallacy of customer retention”, Journal of Retail Banking, vol 13, no 4, 1992.

117

Part 8 EFFICIENCY OF EVENT PLANNING Objective outline: 1. Answer the question “What is an efficiency?” and discuss the importance of efficiency in event planning marketing campaign. 2. Identify the major efficiency strategies and discuss the importance of understanding customer – value perceptions, company costs and competitor strategies when setting prices. 3. Identify and define the other important external and internal factors affecting a firm’s efficiency measurement instruments. Chapter Key Terms: Efficiency Risk management External and internal factors Planning Efficiency measurement instruments Effectiveness Managing Special Event Risks1 In Managing Special Event Risks we discuss “ten steps to safety” as a way of providing practical guidance on the planning and staging of a special event. The steps give a framework for the planners to follow to prevent and manage risk as well as finance losses associated with special events. This article explores the first two of these vital “steps.” STEP 1—Establish Goals The first step in the development of a special events risk management program is to identify the organization’s purpose in creating and sponsoring the event and to ensure that: ⇒ the purpose and execution of the special event advance the mission of the organization. This can happen by providing service to the community (e.g. a blood drive), increasing awareness of the organization and its goals, raising funds for the achievement of those goals or a combination of these purposes. ⇒ the special event and its activities are mission-appropriate. If 118

something goes wrong at your event, the media coverage and community response to the event should not be “What were they thinking?” ⇒ the organization has the resources and the skills to create and manage the special event. TIP: failure to plan = planning to fail. Once you have established the overall purpose and goals of the special event and have confirmed that it will advance the non-profit’s mission and is mission-appropriate, you should identify event specific risk management goals. These may include: ⇒ Prevent injury—including injuries to staff, spectators, participants and others—in the activity and ensure rapid, effective and appropriate response to any injury. ⇒ Operate legally and in compliance with agreements with facility owners and service providers. ⇒ Reduce the cost of insurance and avoid jeopardizing eligibility

for insurance coverage.

⇒ Meet financial goals—for many non-profits a key goal of special

events is to generate net income that can be used for mission fulfilment.

⇒ Avoid event cancellation—for example, an event planned by a

non-profit may be key to sustaining interest in a particular cause. Cancelling the event could be disastrous to an ongoing advocacy effort or cause unnecessary ill will among stakeholders.

⇒ Fulfil social responsibilities—risk management is sometimes

perceived as part of a non-profit’s responsibility in offering programs which meet community needs.

⇒ Reduce anxiety about risk—many non-profits look at sound

risk management practices as one way to manage the anxiety about mishaps that may be expressed by dedicated staff, board members and community members.

⇒ By determining your risk management objectives before

undertaking a special event, you can guide the process of planning and managing the event to increase the odds of success on many levels. 119

STEP 2—Organize to Manage the Special Event and Assign Key Functions People are the key to success for most non-profit programs, including special events. Organizing a team is a big step to ensure a successful event. Irrespective of how a team is organized, it is important to remember that each member of the group should view themselves as a team member. The organizational structure used successfully for emergency response operations provides a simple and responsive functional model for a special events management team: Special Event Director ⇒ Overall leadership, responsibility, direction and control of the

special event

⇒ Public Information—Media ⇒ Liaison—communication & coordination with representatives

from other entities

⇒ Safety for entire event, all operations

Operations Coordinator ⇒ Services and activities involving attendees and participants ⇒ Food, beverages, seating, lighting, communications ⇒ Sanitation, trash, restrooms

Safety Coordinator ⇒ Risk management, emergency response, evacuation, rain or

rescheduling/relocation planning and coordination

⇒ Incident and status reports during event, post-event evaluation

Logistics Coordinator ⇒ Contracting with vendors providing supplies and services ⇒ Coordinating services for event staff and volunteers

Finance Coordinator ⇒ Registrations, sales and donations

120

⇒ Insurance claims reporting and coordination ⇒ For a small event or activity all five functions can be managed

by a person or two. For larger events, each of the primary functions should be assigned to a member of the special event management team. As a special event increases in size and complexity, additional people should be assigned specific tasks.

⇒ Creating a special events management team has the benefit of

focusing on the planning and management of the special event and establishing who is specifically responsible for each function. Important information regarding the planning or management of the event can be handled by the team. This can be critical in emergency situations that require decisive action.

⇒ This structure is referred to as the “Incident Command

System.” More information is available on this topic.

⇒ While some large non-profits have a fulltime risk manager, most

small to mid-sized agencies use a team approach to identify and control risks in their day to day operations and special events. This approach has advantages when people from different units become advocates for safety. The likelihood of spotting hazards increases when more than one person is involved in the effort.

⇒ Managing special event risks requires equal measures of

awareness, planning, diligence and team work. The time spent on this aspect of your special event is certain to contribute to the event’s success and the favourable reputation your non-profit enjoys in the community it serves.

Measurement and evaluation of efficiency of event planning2 The common thread that runs through discussions on measurement and evaluation appears to be the question of accountability. Wellmanaged organisations that are accountable to their shareholders, members or taxpayers, view expenditure on Communication, Marketing and Human Resources as an investment. As such, these functions should yield a ROI. From the perspective of senior management and shareholders, the most desired and attractive form of ROI has always been a direct monetary return demonstrated in increased sales, share price, market share or increased membership, sponsorship, funding and other financial 121

criteria. Given these criteria, some management disciplines such as the Communication function preferred to think about themselves as “intangible” and therefore, not subject to ROI expectations. However, mounting pressure for increased accountability and the robust shift towards triple bottom line performance not only introduced new forms of ROI measurement, but extended the ROI criteria beyond the financial bottom line. Systems such as Key Performance Indicators (KPIs) or Key Results Areas (KRAs), Benchmarking and Balanced Score Cards used widely by organisations, are no longer concerned with financial results only. Sound social and environmental performance is becoming prerequisites to obtain and maintain a ‘licence to operate’. Intangible assets of organisations such as intellectual capital, customer satisfaction and loyalty, corporate reputation, positive stakeholder relations, employee satisfaction and loyalty, and corporate culture are now estimated to account for 70% of an organisation’s worth. For some companies, the estimation is even higher. The current concept of bottom-line, a 15th century method of accounting for an organisation’s tangible assets (land, buildings machinery, raw materials, an inventory of finished products, capital etc.) cannot recognise intangible assets or, for that matter, the contribution of any function towards intangible assets. If growth and prosperity in present-day business no longer depend on financial performance alone, and if value creation in the new economy is fuelled less by physical or tangible assets and more by intangible assets, then clearly delivery on Reputation Risk Management, Corporate Social Responsibility and Stakeholder Relationship Management resides within the core of this ‘new ROI criteria’. This argument does not only make the evaluation of a Communication Function possible, it puts building a ROI case through the systematic accumulation of measurement results well within the reach of users of this software system. The comPro Performance Measurement System Borrowing from thought leaders on communication measurement and evaluation, a performance measurement system has been developed consisting of a generic framework for evaluation that can be customised for an organisation’s strategic intent, own context or specific organisational needs. 122

The system asks of the user to choose from a list of metrics and methods to evaluate (1) effectiveness and (2) efficiency on three levels: ⇒ Level 1: Evaluating communication activities, products and

events (against pre-specified deliverables).

⇒ Level 2: Evaluating communication plans, programmes and

campaigns (against objectives).

⇒ Level 3: Evaluation the communication strategy (against goals).

The primary aim of the performance measurement management system is continuous improvement and organisational learning through constant feedback. Involvement of all practitioners is important and therefore the system is designed to be accessible, transparent and easy to understand and use. There are three critical principles: Principle 1: Evaluation is not research Some of the main reasons offered for the lack of communication evaluation are ‘lack of research budget’, ‘lack of time to do research’ and ‘lacking research skills’ suggesting some kind of confusion between research and evaluation. Evaluation does not equate formal research. There are many evaluation techniques such as self-assessment, peer group ratings and one-on-one client or management feedback that can fairly, and easily, be applied without any formal research. While the importance of formal, structured research is not to be debated, it is not evaluation per se. If measurement and evaluation can only take place when research is possible, ROI will forever be elusive. Research is a strategic tool that feeds into planning, implementation and evaluation and a valid and reliable tool it can indeed be. Measurement and evaluation on the other hand is a management process, not a once-off or bi-annual project. In the absence of a research budget or time, measurement and evaluation should still carry on. Principle 2: Evaluation is an ongoing, systematic process By evaluating activities, plans and strategies in a continuous, integrated and systematic process, and by using a range of formal and informal methods, evaluation can be more strategic and valuable to management. Instead of attempting one large research project when money and time is available, ‘lots of little bits of evaluation’ make the process more valuable, manageable and cost effective. 123

Principle 3: Evaluation is a forward looking activity The reason we systematically measure everything boils down to reducing uncertainties, improving effectiveness, and enhancing decisions. The purpose and focus of evaluation is learning to improve future performance. Naturally the collection of historical data is an essential prerequisite, but when perceived simply as looking back to judge past performance, evaluation can be threatening. When used as a process to gather information in order to advise management and contribute to the cycle of continuous improvement, measurement and evaluation are much more constructive. Practitioners may feel uncomfortable if they have the perception that they are being “judged” by their immediate managers, but seldom object to having a process measured by a tool. This shift in focus to see evaluation as a forward looking activity is important to resolve the ‘fear of being evaluated’ which has kept many communication practitioners from embracing evaluation more enthusiastically. Levels of evaluation A question often asked is “Why ‘setting an evaluation methodology’ should be part of planning?” The answer to this question lies in the essence of strategic alignment. Strategic alignment is a process whereby the imperatives in the organisation’s top-level strategies (e.g. Enterprise and Corporate strategy) are translated into a functional strategy (e.g. Communication strategy). Consecutively, the functional strategy is deployed into cascading levels of planning and implementation. The number of levels in the planning system is of little importance as long as every subsequent plan, project, programme or activity is in line with the strategic intent. In the process of strategic alignment, planning is ‘rolled down’ and evaluation is ‘rolled up’ along the same strategic line. Therefore strategy development and planning are integral parts of the performance measurement system. The evaluation process to measure the success of a Communication function cannot be initiated at the end of the financial or calendar year, or even half way through. The measurement criteria must be built into the strategy development and planning. Without ‘something to measure against’, measurement provides results in isolation, with little or no value for evaluation. Measurement becomes evaluation only when compared to a specific norm such as a 124

communication goal, objective, target, or deliverable. The yardstick for performance measurement will always be imbedded in the communication function’s planning architecture. Metrics and Methods The first step in evaluation is to determine ‘what’ to measure? The strong emphasis in existing literature on measurement techniques, methods and tools is concerning, as too much energy is spent on discussing the ‘how to’ of communication measurement instead of focusing on the ‘what’ that should be measured. All too often, instead of conceptualizing the ‘what’ of measurement, practitioners seem to be locked in discussions on the merits of focus groups, media content analysis and opinion surveys, or defending the objectivity and randomness or timing of methodologies deployed. The ‘what’ to measure in communication evaluation is referred to as metrics. Metrics are therefore the various constructs (things) that are to be measured. View list of metrics. Methods, on the other hand, describe the ‘how to’ (techniques) of communication measurement. In most cases the ‘how to’ of communication measurement involves ‘asking the relevant stakeholders’, be it with a focus group, or survey, or interview. View list of methods. To set realistic metrics, communication practitioners need lots of common sense and at least an elementary understanding of communication theory. Measuring intangible assets like corporate reputation, brand equity, relationships and corporate citizenship is not an easy task. Clustered within terms such as reputation and relationships are many different, more basic constructs like loyalty, trust, satisfaction, faith and admiration. We need to understand what we want to measure before we can ask. Ill-conceived assumptions about what communication can achieve sometimes lead to misguided and overly optimistic goals that make evaluation risky and problematic. This is best achieved with a conceptual construct that displays the full ‘what’ of measurement in a framework (Likely, 2000:24). The ‘how’ (techniques of measurement) is an operational matter, for which external advice can be sought.

125

Level 3 Evaluation The third level of evaluation, planned in this step of the Communication strategy, measures the performance of the function against its set strategic goals in the longer term. Usually these measures cannot be linked to one specific activity or plan, but relates to the collective performance of the function over time. Movement on indicators such as reputational value and relationship health is a consequence of the value created by Communication Management over a longer period of time. It therefore is known as the measurement of ‘outgrowths’ or the cumulative effects of the performance of Communication Management on the previous two levels (activities and plans). Measurement of the Communication function’s effectiveness is critical to link its performance with organisational goal achievement. The majority of communication goals do not directly contribute to increased market penetration, market share, sales and ultimately profitability (the bottom line). Communication Management is often called upon to influence areas important to long-term sustainable success such as key stakeholders’ perceptions of the organisation. If a communication goal was set in a ‘straight strategic line’ with an organisational goal, then achieving that communication goal will positively impact on achievement of the organisational goal – thereby contributing to the new ROI criteria or triple bottom line. Accordingly, the contribution of Communication Management must be measured in more than direct monetary returns, even in financially–orientated public and private companies. View an example of selected metrics and methods for measuring effectiveness. Efficiency metrics comprise the areas in which top management would like to see improvement of the overall management (time, cost and quality) of the function. Metrics can include process improvements, productivity improvements, cost containment or people development – culminating in a process of continuous improvement. View an example of selected metrics and methods for measuring efficiency.

126

DISCUSSION

STUDY CASE – NIKE SUCSSES STORY (Source: web.unbc.ca/~chenj/course/project/Nike.doc) Introduction The athletic footwear industry is a highly competitive environment where the top four manufacturers hold over 70% of the market share. The barriers to entry into the industry are comparatively low, as anyone with new creative design ideas can produce and market their product, but the success of smaller companies is oftentimes shaky. Brand loyalty, ample capital, and broad based sourcing create an environment where the bigger companies such as Nike and Reebok have little trouble maintaining market share. Nike enjoys the largest share, with 42.3% of the nearly $8 billion market in the year 2000. Reebok was second with 11.9%, Adidas had 10.8%, and New Balance had 9.6% of the market. The remaining 25% must be divided among the numerous smaller companies fighting for a shot at survival. NIKE Corporation NIKE Corporation was incorporated in 1968. NIKE has primarily been in the business of designing, developing, and marketing athletic footwear, apparel, equipment and accessories. NIKE Corporation is a well-managed company in an attractive industry, the company has a strong brand image, and they are effectively capturing the value created from their investment. NIKE is dependent upon high technology in their effort to stay ahead of their competitors and produce products and machines that actually make the shoes. Its success had been fuelled by the use of low wage labour in developing countries, accompanied by highly acclaimed marketing strategies and advertising campaigns. Key factors that influence success of NIKE If a company is able to establish brand awareness, they will have a significant advantage in grabbing consumer’s attention and, therefore, market share. In today’s society where consumers have significantly less time to shop and compare, brand awareness is critical. If an established brand name effectively conveys the messages of quality and 127

dependability, consumers will automatically go to that brand relying on the image that has been created when they don’t have time to shop around. Manufacturing efficiency is something that companies are constantly striving for as well. Athletic shoe manufacturers must balance the costs of labour, raw materials, shipping, import tariffs, and technological advancements. In an effort to keep costs down, the industry has been looking to overseas sourcing. This reduces the risk of losing revenue if one region which a manufacturer incurs problems. Favourable legislation regarding foreign manufacturing has led to a huge increase in foreign sourcing. Overseas production and sourcing can lower material, and labour costs. The footwear companies must choose their distribution channels carefully because they want to make the product available, yet remain true to their image and goals. Retailers account for the largest percentage of sales, so manufacturers must be especially careful with their relationships with them. Technological advancement is becoming more and more of a player in the footwear industry. With computer-aided design (CAD), companies have been able to successfully shorten their design to distribution cycle to only a few months. Also, new technology has facilitated new quickresponse programs that link retailers with manufacturers to allow the retailer to have the correct inventory when it is needed called electronic data interchange (EDI). Immediately after a sale is made, electronic point of sale scanners read the information related to the sale such as price, product, size, etc. and notify the manufacturer of the sale. With this, the manufacturer is able to accurately modify production to fit consumer demand. Demand cycles Due to the largely subjective nature of athletic footwear purchasing, the success of the industry is dependent on the current economic cycle. When consumers are concerned about future economic conditions, they will put off their purchases until their confidence rebounds. In addition to the amount of confidence that consumers have for the future, the amount of disposable income available to them directly affects how much is spent on athletic footwear. When consumers experience a drop in disposable income, discretionary purchases such as footwear are put off. 128

Advertising campaigns Companies spend a large portion of their revenue on advertising. A lot of pressure is put on the companies to come up with new and successful advertising campaigns. If a campaign fails, the companies’ sales suffer as a result. NIKE has always been an industry leader when it comes to advertising. Their advertising campaigns are known all over the world as being widely successful. NIKE is truly a trendsetter when it comes to advertising, not just for shoes, but for the advertising industry as well. The company was all about the clarity of matching technology to athletic performanceand, in the ads, showing the passion that resulted. By going against the norms in advertising, NIKE was able to distance itself from other shoe makers and thus establish strong customer core. Main customers The industry of footwear can be broken up into three main customer groups, which are the Baby Boomers, Generation X, and Generation Y. These three generations are broken down as follows: Baby Boomers are from ages 35-53, Generation Y are consumers from 4-21, and Generation X is consumers from 22-32. As we develop ideas about the main customer groups within the footwear industry we can conclude that the Baby Boomers account for 31% of the population, which is equal to about 81 million consumers. Generation Y is the second largest group that accounts for 28% of the population which represents about 75 million consumers. The smallest customer group is Generation X, they comprise about 17% of the population, which equals about 46 million consumers. Nike has become more appealing among younger consumers and has shifted away from the Generation of the Baby Boomers. Nike and many other large shoe industry retailers are shifting their marketing direction from the Baby Boomers to the younger consumers of Generation X and Generation Y. There are many reasons to why the industry is trying to change their target market to younger viewers. As people become older many of their attitudes, priorities, and time obligations have decreased their ambition for shopping. Now that many of the Baby Boomers are within their forties and fifties, many of their priorities have shifted towards the future, in a sense that they need to save for retirement, different tuition payments for their children, and also different healthcare necessities that are important to them and their families. 129

SWOT Analysis Strengths NIKE is the largest manufacturer of athletic footwear and apparel in the world. In terms of footwear, NIKE enjoyed control of nearly 42.3% of the entire footwear market in 2000 at nearly 8 billion dollars. That is more than both its number two and number three competitors combined. NIKE has virtually invented the notion of the celebrity endorsement with the likes of Pete Sampras and Andre Agassi in Tennis; Michael Jordan in Basketball; and the acquisition of teen basketball sensation Lebron James who signed with NIKE for a reported $90 million. In addition, NIKE’s financial soundness has proven stable through economic cycles. Weakness There are weaknesses that NIKE has gained for a couple of different reasons. Labour practices are one issue that really attached to the Nike Corporation. Activist groups and student organizations have made Nike symbol of labour exploitation. These groups blame Nike for poor conditions in its third world factories, under-paying workers, employing children, and ignoring the basic rights of its workers. Nike efforts toward global expansion have become a weakness in the company’s reputation. Nike has operated in the Asian region and uses subcontractors throughout the globe to manufacture their products. Nike has a little control over its extended product line because it is such a large company with the majority of its operations overseas. In addition, many people in the United States see Nike outsourcing as taking away jobs from Americans. Opportunities Nike has new opportunities and markets that they must penetrate and take advantage of to continue to be a world leader and sustain profits and growths. Nike not only has the ability to succeed in the basketball shoe market, but in virtually every other athletic market from golf apparel to women’s workout gear. This diversity of products presents Nike with a great opportunity to build up strength in all of its product lines and also to be flexible when the market shifts, making demand in some areas higher than others. Nike must also continue to expand into current international markets while penetrating into new ones. The company must continue to create new technologies and systems to 130

compete internationally. Another opportunity is expanding promotions to include entertainment and other non-sports venues, since the line between entertainment and sports has become popular. Nike advertisements make waves. People enjoy them and wait for new ones. The hype of Nike advertising brings with it the opportunity to reach the public through the promotion of Nike newest advertising endeavour. The Nike massive web site will prove to be an opportunity for Nike consumers to get up to update consumers about new and innovative products and services that Nike has. Nike should be able to capitalize on its web and emphasize those issues that Nike publics would not otherwise be exposed to by other media. Threats Competition is always a threat to a competitive company both domestically and internationally. The rivalry is very fierce with many companies competing for sales. Lots of money is spent on marketing and promotions through different channels in order to communicate to the young demographic group of consumers who spend the most money on their products. Growth has also slowed in the athletic footwear industry, however new markets are emerging with high growth rates. Nike currently dominates the market, but Nike competitors pose a potential threat to the company’s reputation If Nike cannot stay one step ahead of their competitors in terms of product design and customer satisfaction the corporation could flounder. Current Strategies and Goals: Nike has in placed several strategies that encompass improving growth and profits in a variety of areas. The struggling economy has not changed Nike’s attitude towards growth. One strategy that Nike focuses on, in continuing to help the company grow is Person Marketing. Nike has been using the best athletes, and sports teams (or clubs) all over the world to help market their products. The regenerative nature of sports has allowed Nike to sign new upcoming stars like LeBron James, Carmelo Anthony and others. These are the athletes that will push Nike beyond their expectations and will set the standards for the next generation to exceed. Nike’s second greatest source of potential lies with the products the company is working on. Nike’s design team is constantly developing new concepts in speed and agility to give athletes the latest innovative equipment to improve performance. The third strategy that Nike uses, perhaps the most important, is advertising and marketing. These two 131

components capture the essence of the product and the attention of consumers around the world. These strategies support the financials especially profit margin and market share. Under consumer measures Nike’s strategies also support the percentage of customers who purchase Nike products based on image. Price and Earnings To find out how much the market is actually willing to pay for each dollar of annual earnings of Nike, we look at the Price/Earnings ratio. Currently the ratio is 17.9 showing that Nike is not a risky investment. This is very valuable in comparing companies within the same industry. The price/sales ratio uses the invested capital of the company and then divided by sales over the past 12 months. This figure is usually seen as the lower the better for investors. Granted there are far more competitors up and coming these days, we think Nike has a solid place in the market and will only be growing in the next years and years to come. The return on assets ratio has been considerably increasing from 10.37 in 2002 to 15 in 2007. The ratio is higher than industry average which is at 14.1. Creditors, bondholders, and shareholders like to see high return on their investment. This indicates that the business is sufficiently using its assets. Nike Inc. is an efficient company as it boasts a higher gross profit margin than its competitors and industry. During fiscal 2007, Nike Inc. gross margin has increased from 44% in 2006 to 45.9% in 2007. It is higher than the industry average of 41.83%. Analytical Theory Comparison Project investment can be determined by using an analytical theory of project investment. “The Analytical theory enables us to make precise calculations of returns of difference projects under different kinds of environments.” (Chen, 37) We will examine the relationship between fixed cost and variable cost at different levels of uncertainty. In NIKE’s case, as fixed costs are increased, variable costs decrease rapidly in a low uncertainty environment (see exhibit 1). In relation to NIKE the high fixed cost represent the large amount of marketing expenditures, and the variable costs are related to the low labour and manufacturing costs. This analytical theory differs from the real option theory because it is an initial value problem, valuing the outcome as a variable cost to the project (C). Furthermore, after determining the variable cost of a project 132

(C) , the profit of a project can be determined based on the variables of S (present value of the projects cash flows), K (fixed cost of the project), Q (market size or output of the project), and C. Exhibit 1:

1

Variable Cost

High Volatility Low Volatility

0 5

10

15

20

Level of fixed Cost

A project with a high fixed cost will generate high returns if the level of uncertainty is stable and the market size is large, and a project with a low fixed cost will benefit largely from a small, unstable market. (see exhibit 2) “When an industry becomes mature and uncertainty decreases, increased in fixed costs, K, (capital investments and accumulated human capital), drive down variable cost rapidly, which permits leading companies to lower product prices and drive out small high variable cost companies. In a mature industry only very few big companies can stay in business. Also, large companies often develop highly optimized structures to reduce uncertainty and bring down variable costs in producing particular products” (Chen, 40). In Nike’s case, the company is able to use highly advanced technologies, such as EDI’s and CAD’s to reduce variable cost. While using the analytical theory of project investment. 133

Rate of return

Exhibit 2:

Low Fixed Cost High Fixed Cost

Market size Discuss about Nike success story in groups of 4 students.

REFERENCES The context of this part has been adapted from the following product(s): 1. Joe Risser and Melanie Lockwood Herman. Managing Special Event Risks. https://www.nonprofitrisk.org/library/articles/ rmbasics060709.shtml 2. Communication strategy, Access via Internet: http:// expertresearchers.blogspot.com/2014/02/communicationstrategy.html

FURTHER READING

134

1.

Ambler, Tim, Marketing and the Bottom Line (2004) FT Press. ISBN 0-273-66194-9

2.

American Productivity & Quality Center, Maximizing Marketing ROI (2001) American Productivity Center. ISBN 1-928593-57-7

3.

Aspatore Books Staff, Improving Marketing ROI: Leading CMOs on Adding Value, Calculating Return on Investments, and Creating a Financial Impact (2006) Aspatore Books.ISBN 1-59622-434-7

4.

Briggs, Rex, Stuart, Greg, What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds (2006) Kaplan Business. ISBN 1-4195-8433-2

5.

Farris, Paul W., Bendle, Neil T., Pfeifer, Phillip E. and Reibstein, David J., Marketing Metrics: 50+ Metrics Every Executive Should Master (2006) Wharton School Publishing.ISBN 0-13-187370-9

6.

Kotler, Philip.; Kevin Lane Keller (2006). Marketing Management, 12th ed.. Pearson Prentice Hall. ISBN 0-13-145757-8.

7.

Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)

8.

Lenskold, James, Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability (2003) McGraw-Hill. ISBN 0-07-141363-4

9.

Li, Charlene & Bernoff, Josh Groundswell (2008)

10. Lilien, Gary L., Rangaswamy, Arvind, Marketing Engineering (2004)

Trafford Publishing. ISBN 1-4120-2252-5

11. Mann, Don, Brand Ecosystems, the relative harmony among all

marketing elements that support brands (2008)

12. Powell, Guy R., Return on Marketing Investment: Demand

More From Your Marketing And Sales Investments (2003) RPI Press. ISBN 0-9718598-1-7

13. Schultz, Don E., Measuring Brand Communication ROI (1997)

Assn of Natl Advertisers. ISBN 1-56318-053-7

14. Thaler, Linda Kaplan, Koval, Robin, Marshall, Delia, Bang!

Getting Your Message Heard in A Noisy World (2003) Doubleday Publishing. ISBN 0-385-50816-6

135

TASKS FOR INDIVIDUAL/GROUP WORKS Following the event marketing plan example please prepare plan for your chosen event. EVENT MARKETING PLAN OUTLINE - EXAMPLE Executive Summary The Challenge Situation Analysis Company Analysis Customer Analysis Competitor Analysis Collaborators Climate Political Factors Economic Factors Social Factors Technological Factors SWOT Analysis Strengths Weaknesses Opportunities Threats The SWOT Matrix Market Segmentation Consumer Market Segmentation Business Market Segmentation Profiling the Segments Goals Selected Marketing Strategy Product Price Distribution (Place) Promotion Short & Long-Term Projections Conclusion Appendix Exhibits 136

4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

Executive Summary A high-level summary of the marketing plan. The Challenge Brief description of product to be marketed and associated goals, such as sales figures and strategic goals. Situation Analysis Company Analysis • Goals • Focus • Culture • Strengths (see SWOT Analysis) • Weaknesses (see SWOT Analysis) • Market share Customer Analysis • Number • Type • Value drivers • Decision process Competitor Analysis • Market position • Strengths • Weaknesses • Market shares Collaborators • Subsidiaries, joint ventures, and distributors, etc. Climate Macro-environmental PEST analysis: Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include: • tax policy • employment laws • environmental regulations • trade restrictions and tariffs • political stability 137

Economic Factors Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. The following are examples of factors in the macroeconomy: • economic growth • interest rates • exchange rates • inflation rate Social Factors Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential markets. Some social factors include: • health consciousness • population growth rate • age distribution • career attitudes • emphasis on safety Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include: R&D activity • automation • technology incentives • rate of technological change SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan: 138

SWOT Analysis Framework

Environmental Scan Internal Analysis

External Analysis

Strengths Weaknesses

Opportunities Threats

SWOT Matrix

Strengths A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include: • patents • strong brand names • good reputation among customers • cost advantages from proprietary know-how • exclusive access to high grade natural resources • favourable access to distribution networks Weaknesses The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses: • lack of patent protection • a weak brand name • poor reputation among customers • high cost structure • lack of access to the best natural resources • lack of access to key distribution channels In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do 139

not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment. Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: • an unfulfilled customer need • arrival of new technologies • loosening of regulations • removal of international trade barriers Threats Changes in the external environmental also may present threats to the firm. Some examples of such threats include: • shifts in consumer tastes away from the firm’s products • emergence of substitute products • new regulations • increased trade barriers The SWOT Matrix A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm’s strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. S-O strategies pursue opportunities that are a good fit to the company’s strengths. W-O strategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the firm’s weaknesses from making it highly susceptible to external threats. Market Segmentation Present a description of the market segmentation as follows: 140

Description Percent of sales What they want How they use product Support requirements How to reach them Price sensitivity Description Percent of sales What they want How they use product Support requirements How to reach them Price sensitivity …

Segment 1

Segment 2

Segment 3

Market segmentation is the division of a market into different homogeneous groups of consumers. Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ. A market segment should be: • • • • •

measurable accessible by communication and distribution channels different in its response to a marketing mix durable (not changing too quickly) substantial enough to be profitable

A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets, as described below. 141

Consumer Market Segmentation A basis for segmentation is a factor that varies among groups within a market, but that is consistent within groups. One can identify four primary bases on which to segment a consumer market: • • • •

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate. Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status. Psychographic segmentation is based on variables such as values, attitudes, and lifestyle. Behavioural segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.

The optimal bases on which to segment the market depend on the particular situation and are determined by marketing research, market trends, and managerial judgment. Business Market Segmentation While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases: • • •

Geographic segmentation - based on regional variables such as customer concentration, regional industrial growth rate, and international macroeconomic factors. Customer type - based on factors such as the size of the organization, its industry, position in the value chain, etc. Buyer behaviour - based on factors such as loyalty to suppliers, usage patterns, and order size.

Profiling the Segments The identified market segments are summarized by profiles, often given a descriptive name. From these profiles, the attractiveness of each segment can be evaluated and a target market segment selected.

142

Goals What do we want to achieve? The goal statement(s) should be challenging and yet, attainable. Is it important to increase the number of departments served? Which departments? Do you intend to provide more training programs? Sample goal statements might read: Establish relationship with Legal and Regulatory Departments in first quarter. Reduce staff time spent on call-in, ad hoc requests for help with Internet searching Selected Marketing Strategy Discuss why the strategy was selected, then the marketing mix decisions (4 P’s) of product, price, place (distribution), and promotion. Product The product decisions should consider the product’s advantages and how they will be leveraged. Product decisions should include: • Brand name • Quality • Scope of product line • Warranty • Packaging Price Discuss pricing strategy, expected volume, and decisions for the following pricing variables: • List price • Discounts • Bundling • Payment terms and financing options • Leasing options Distribution (Place) Decision variables include: • Distribution channels, such as direct, retail, distributors & intermediates • Motivating the channel - for example, distributor margins • Criteria for evaluating distributors • Locations • Logistics, including transportation, warehousing, and order fulfilment 143

Promotion • Advertising, including how much and which media. • Public relations • Promotional programs • Budget; determine break-even point for any additional spending • Projected results of the promotional programs Short & Long-Term Projections The selected strategy’s immediate effects, expected long-term results, and any special actions required to achieve them. This section may include forecasts of revenues and expenses as well as the results of a break-even analysis. Conclusion Summarize all of the above. Appendix Exhibits Any calculations of market size, commissions, profit margins, breakeven analyses, etc.

REFERENCE OUTLINE EVENT MARKETING PLANING COURSE TEST - EXAM MULTIPLE CHOICE QUESTIONS 1. At one time, firms scattered their marketing efforts (a “shotgun” approach) to reach consumers. Today, a firm is more likely to use: a. a “bazooka” approach, where special effects are used to “explode” into the buyer’s consciousness. b. a “knife” approach, where the firm tries to “cut” to the most important product advantage. c. a “rifle” approach, where the firm focuses on the buyers who have greater interest in the values that the firm creates the best. d. a “pistol” approach, where the firm realizes that it has multiple chances to gain consumer interest. 144

Answer: (c) Difficulty: (2) Page: 235 2. ________________ is the process of dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviours who might require separate products or marketing mixes. a. Mass marketing b. Market segmentation c. Target marketing d. Market positioning Answer: (b) Difficulty: (1) Page: 235 3. __________________ is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. a. Mass marketing b. Market segmentation c. Market targeting d. Market positioning Answer: (c) Difficulty: (2) Page: 235 4. Setting the competitive positioning for the product and creating a detailed marketing mix is called: a. mass marketing. b. target marketing. c. market segmentation. d. marketing positioning. Answer: (d) Difficulty: (1) Page: 235 5. During which step of the marketing segmentation, targeting, and positioning process does the firm “develop a marketing mix for each segment?” a. market segmentation b. market targeting c. market positioning d. The firm does not go through the “development” during any of the above steps. Answer: (c) Difficulty: (2) Page: 235, Figure 7-1 145

6. During one of the steps in the marketing segmentation, targeting, and positioning process, the marketer develops measures of segment attractiveness. This procedure belongs in the category of: a. market segmentation. b. market targeting. c. market massing. d. market positioning. Answer: (b) Difficulty: (2) Page: 235, Figure 7-1 7. When companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently with products and services that match their unique needs, they are conducting a ___________________ process. a. b. c. d.

marketing aggregation marketing positioning marketing target marketing segmentation

Answer: (d) Difficulty: (1) Page: 236 8. Market segmentation can be carried out at several different levels. Which of the following WOULD NOT BE among these levels? a. micromarketing b. segment marketing c. competition marketing d. niche marketing Answer: (c) Difficulty: (1) Page: 236 9. Another word for complete segmentation is: a. macromarketing. b. micromarketing. c. niche marketing. d. mass marketing. Answer: (b) Difficulty: (2) Page: 236

146

10. For most of the 20th century, firms practiced which of the following forms of marketing? a. mass marketing b. micromarketing c. niche marketing d. segment marketing Answer: (a) Difficulty: (2) Page: 236 11. Which of the following marketers epitomized the mass marketing strategy? a. Henry Ford b. Bill Gates c. F.W. Woolworth d. Thomas A. Edison Answer: (a) Difficulty: (3) Page: 236 12. Which of the following statements is closest to the traditional argument for mass marketing? a. Find a need and fill it. b. The largest potential market can lead to the lowest costs, which translates into either lower prices or higher margins. c. The rifle approach rarely hits what it is aiming at. d. The consumer is king. Long live the king. Answer: (b) Difficulty: (2) Page: 236 13. Isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments is called _________________. a. b. c. d.

niche marketing mass marketing segment marketing micromarketing

Answer: (c) Difficulty: (1) Page: 237

147

14. When General Motors designs specific models for different income and age groups, it is practicing which of the following marketing formats? a. micromarketing b. macromarketing c. mass marketing d. segment marketing Answer: (d) Difficulty: (1) Page: 237 15. Segment marketing offers several benefits over mass marketing. All of the following would be among those benefits EXCEPT: a. the company can market more efficiently and target its programs toward only those consumers that it can serve best. b. the company can fine-tune its programs to meet the needs of carefully defined segments. c. the company can reduce costs because of the ability to sell to customers one-on-one. d. the company may face fewer competitors if fewer competitors are focusing on the company’s chosen market segment. Answer: (c) Difficulty: (3) Page: 237 16. A company is practicing ________________ if it focuses on subsegments with distinctive traits that may seek a special combination of benefits. a. micromarketing b. niche marketing c. mass marketing d. segment marketing Answer: (b) Difficulty: (2) Page: 237 17. As an example of _______________, a company could build sport utility vehicles and direct marketing efforts towards the luxury SUV market (as does Lexus). a. micromarketing b. niche marketing c. mass marketing d. segment marketing Answer: (b) Difficulty: (3) Page: 237 148

18. American Express offers not only its traditional green cards but also gold cards, corporate cards, and even a black card, called the Centurian, with a $1,000 annual fee aimed at a small group of “superpremium customers.” Which of the following marketing efforts is American Express following with their credit card policies? a. macromarketing b. segment marketing c. niche marketing d. self-marketing Answer: (c) Difficulty: (2) Page: 237 19. _________________ is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. a. Niche marketing b. Micromarketing c. Segment marketing d. Mass marketing Answer: (b) Difficulty: (2) Page: 238 20. Micromarketing includes: a. segment marketing and niche marketing. b. mass marketing and demographic marketing. c. local marketing and individual marketing. d. individual marketing and self-marketing. Answer: (c) Difficulty: (2) Page: 238 21. ______________ involves tailoring brands and promotions to the needs and wants of specific small groups such as cities, neighbourhoods, and even specific stores. a. Niche marketing b. Local marketing c. Detail marketing d. Individual marketing Answer: (b) Difficulty: (1) Page: 238

149

22. All of the following are considered to be drawbacks of local marketing EXCEPT: a. it can drive up manufacturing and marketing costs by reducing economies of scale. b. it can create logistical problems when the company tries to meet varied requirements. c. it can attract unwanted competition. d. it can dilute the brand’s overall image. Answer: (c) Difficulty: (3) Page: 238 23. ________________ is tailoring products and marketing programs to the needs and preferences of individual customers. a. Niche marketing b. Local marketing c. Self-marketing marketing d. Individual marketing Answer: (d) Difficulty: (1) Page: 238 24. Individual marketing is known by a variety of names. All of the following would appropriately be called individual marketing EXCEPT: a. mono-marketing. b. one-to-one marketing. c. customized marketing. d. markets-of-one marketing. Answer: (a) Difficulty: (2) Page: 238 25. ______________ is the process through which firms interact oneto-one with masses of customers to create customer-unique value by designing products and services tailor-made to individual needs. a. Mass marketing b. Detail marketing c. Mass globalization d. Mass customization Answer: (d) Difficulty: (2) Page: 239

150

26. The move toward individual marketing mirrors the trend in consumer _________. a. backlash b. self-marketing. c. dialog marketing d. niche marketing Answer: (b) Difficulty: (1) Page: 242 27. All of the following are considered to be major variables for segmenting markets EXCEPT: a. geographic variables. b. trait variables. c. demographic variables. d. psychographic variables. Answer: (b) Difficulty: (2) Page: 243, Table 7-1 28. If a marketer attempts segmentation of a market by dividing the market into different units based on nations, regions, states, counties, cities, or even neighbourhoods, then the marketer is practicing ____________ segmentation. a. demographic b. geographic c. political d. cartographic Answer: (b) Difficulty: (1) Page: 243, Table 7-1 29. When Campbell Soup makes Cajun gumbo soup for Louisiana and Mississippi and nacho cheese soup for Texas and California, it is practicing _______________ segmentation. a. geographic b. demographic c. psychographic d. behavioural variable Answer: (a) Difficulty: (2) Page: 242

151

30. All of the following would be ways to segment within the category of psychographic segmentation EXCEPT: a. social class. b. occupation. c. lifestyle. d. personality. Answer: (b) Difficulty: (3) Page: 243, Table 7-1 31. All of the following would be ways to segment within the category of behavioural variable segmentation EXCEPT: a. occasions. b. user status. c. loyalty status. d. lifestyle. Answer: (d) Difficulty: (3) Page: 243, Table 7-1 32. _______________ factors are the most popular bases for segmenting customer groups. a. Geographic b. Demographic c. Psychographic d. Behavioural Answer: (b) Difficulty: (3) Page: 244 33. _________________ factors or variables are generally easier to measure than most of the other types of variables or factors. a. Geographic b. Demographic c. Psychographic d. Behavioural Answer: (b) Difficulty: (3) Page: 244 34. Age is often a poor predictor of a person’s life-cycle, health, work, or family status. Therefore, when using age and life-cycle segmentation, the marketer must guard against: 152

a. b. c. d.

stereotyping. gender bias. racial bias. intellectual bias.

Answer: (a) Difficulty: (2) Page: 244-245 35. Proctor & Gamble joined a growing list of marketers who use __________ segmentation when they developed Secret, a brand specially formulated for a woman’s chemistry. a. geographic b. income c. benefit d. gender Answer: (d) Difficulty: (1) Page: 245 36. All of the following Web sites would be examples of sites wishing to make gender segmentation appeals as their primary marketing segmentation strategy EXCEPT: a. www.iVillage.com. b. www.girlson.com. c. www.playboy.com. d. www.neimanmarcus.com. Answer: (d) Difficulty: (1) Page: 246 37. ___________________ is the process of dividing a market into different groups based on social class, lifestyle, or personality characteristics. a. Gender segmentation b. Behavioural segmentation c. Psychological segmentation d. Psychographic segmentation Answer: (d) Difficulty: (2) Page: 247

153

38. Many marketers believe that ________________ are the best starting point for building market segments and programs. a. behavioural variables b. geographic variables c. demographic variables d. psychographic variables Answer: (a) Difficulty: (3) Page: 247 39. “Coke in the morning” is an attempt to segment according to which of the following? a. gender segmentation b. psychographic segmentation c. benefit segmentation d. occasion segmentation Answer: (d) Difficulty: (2) Page: 248 40. The orange juice manufacturers know that orange juice is most often consumed in the mornings. However, they would like to change this and make the drink acceptable for other time periods during the day. Which form of segmentation would they need to work with to establish a strategy reflective of their desires? a. gender segmentation b. benefit segmentation c. occasion segmentation d. age and life-cycle segmentation Answer: (c) Difficulty: (2) Page: 248 41. When companies market products on the basis of what the product’s attributes will do for a given segment of consumers, they are using a powerful form of behavioural segmentation known as: a. occasion segmentation. b. benefit segmentation. c. user status segmentation. d. usage rate segmentation. Answer: (b) Difficulty: (2) Page: 249 154

42. If people that take cruise ship vacations do so because of “gambling,” “fun,” or “for adventure or educational purposes,” then it is possible to segment this market based on what might be called: a. psychographic segmentation. b. benefit segmentation. c. demographic segmentation. d. gender segmentation. Answer: (b) Difficulty: (1) Page: 249 43. A marketing firm classifies customers as nonusers, ex-users, potential users, first-time users, and regular users. Which of the following classifications is the firm most likely using to segment its market and devise strategies for selling its products and services? a. user status b. user rate c. loyalty status d. benefit status Answer: (a) Difficulty: (1) Page: 249 44. One of the most promising developments in multivariable segmentation is called _________________, where a host of demographic and socioeconomic factors are used. a. terragraphic segmentation b. fermagraphic segmentation c. geothermal segmentation d. geodemographic segmentation Answer: (d) Difficulty: (2) Page: 250 45. All of the following are major variables that can be used to segment business markets EXCEPT: a. operating characteristics. b. psychographics. c. demographics. d. situational factors. Answer: (b) Difficulty: (2) Page: 250 155

46. ____________________ is forming segments of consumers who have similar needs and buying behaviour even though they are located in different countries. a. External segmentation b. International segmentation c. Intermarket segmentation d. Enriched segmentation Answer: (c) Difficulty: (2) Page: 253 47. When Mercedes-Benz targets the world’s well-to-do, regardless of their country, they are most likely following a segmentation strategy called: a. external segmentation. b. international segmentation. c. enriched segmentation. d. intermarket segmentation. Answer: (d) Difficulty: (2) Page: 253 48. Clearly, there are many ways to segment markets. However, not all segmentations are effective or successful. To be useful, market segments must have all the following characteristics EXCEPT being: a. measurable. b. plausible. c. accessible. d. actionable. Answer: (b) Difficulty: (2) Page: 254 49. It is a fact that there are 32.5 million left-handed people in the United States. However, most marketers do not attempt to appeal to or design products for this group because there is little in the way of census data about this group. Therefore, this group fails in one of the requirements for effective segmentation. Which of the following is most likely to apply in this case? a. actionable b. substantial c. differentiable d. measurable 156

Answer: (d) Difficulty: (2) Page: 254 50. Knowing the size, purchasing power, and profiles of a market segment are all part of which of the following characteristics? a. substantiality b. measurability c. actionability d. accessibility Answer: (b) Difficulty: (2) Page: 254 51. The ability to reach and serve a market segment defines the characteristic of: a. measurability. b. actionability. c. accessibility. d. substantiality. Answer: (c) Difficulty: (1) Page: 254 52. Married and unmarried women may use the same perfume, and might respond in a similar way to promotional sales of this fragrance. It might, therefore, be difficult to consider that marital status designates separate segments in this case. Which of the following requirements of effective segmentation would probably rule out segmentation based on marital status in this case? a. actionable b. substantial c. differentiable d. measurable Answer: (c) Difficulty: (2) Page: 254 53. Stephanie Cross has a small clothing store, and has identified seven separate categories of clothing buyers that form the general market for clothing stores in her city. Her problem is that because of a limited advertising budget, she cannot effectively reach these various segments (especially since several of the segments are distant from her store). Which of the following requirements of effective segmentation 157

would probably rule out segmentation based on Stephanie’s current segmentation classification scheme? a. actionable b. substantial. c. differentiable d. measurable Answer: (a) Difficulty: (3) Page: 254 54. In market targeting, a firm looks at all of the following factors EXCEPT: a. segment size and growth. b. segment structural attractiveness. c. company objectives and resources. d. segment public relations value. Answer: (d) Difficulty (2) Page: 255 55. All of the following factors can affect the attractiveness of a market segment EXCEPT: a. the presence of many strong and aggressive competitors. b. the likelihood of government monitoring. c. actual or potential substitute products. d. the power of buyers in the segment. Answer: (b) Difficulty: (2) Page: 256 56. A(n) __________________ is a set of buyers sharing common needs or characteristics that the company decides to serve. a. undifferentiated market b. market segment c. target market d. differentiated market Answer: (c) Difficulty: (1) Page: 255 57. A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer is called: a. undifferentiated marketing. b. differentiated marketing. 158

c. concentrated marketing. d. turbo marketing. Answer: (a) Difficulty: (1) Page: 255, 256, Figure 7-3 58. Deciding to target several market segments and design separate offers for each is called: a. undifferentiated marketing. b. differentiated marketing. c. concentrated marketing. d. turbo marketing. Answer: (b) Difficulty: (1) Page: 256, Figure 7-3 59. A growing number of firms have adopted differentiated marketing. However, one drawback to this approach is that it: a. is hard for managers to understand. b. increases the costs of doing business. c. alerts competitors as to your strategy. d. is a poor strategy internationally. Answer: (b) Difficulty: (2) Page: 256 60. The practice of going after a large share of a smaller market or subsets of a few markets is called: a. undifferentiated marketing. b. differentiated marketing. c. concentrated marketing. d. turbo marketing. Answer: (c) Difficulty: (1) Page: 257, Figure 7-3 61. All of the following would be among the chief factors to consider when choosing a market-coverage strategy EXCEPT: a. organizational culture. b. product variability. c. product’s life-cycle. d. market variability. Answer: (a) Difficulty: (1) Page: 258 159

62. The way the product is defined by consumers on important attributes is called ________________. a. market segmentation b. image psychology c. product position d. market targeting Answer: (c) Difficulty: (1) Page: 260 63. The positioning task consists of three steps. Which of the following does not belong? a. Identifying a set of possible competitive advantages upon which to build a position. b. Choosing the right competitive advantages. c. Comparing the position with ethical and legal guidelines established by the trade. d. Selecting an overall positioning strategy. Answer: (c) Difficulty: (2) Page: 260 64. The key to winning and keeping customers is to understand their needs and buying processes better than competitors do and: a. advertise constantly to let customers know about changes in products and services. b. hire the best sales people. c. have an updated Web presence. d. to deliver more value. Answer: (d) Difficulty: (1) Page: 260 65. Product differentiation can be along all of the following lines EXCEPT: a. consistency. b. durability. c. reliability. d. competitive parity. Answer: (d) Difficulty: (2) Page: 261 66. Gaining competitive advantage through speedy or careful delivery is an example of which type of differentiation? 160

a. b. c. d.

product services personnel image

Answer: (b) Difficulty: (2) Page: 261 67. The strategy of choosing one attribute to excel at to create competitive advantage is known as (the): a. unique selling proposition. b. underpositioning. c. overpositioning. d. confused positioning. Answer: (a) Difficulty: (1) Page: 262 68. In general, a company needs to avoid three major positioning errors. Which of the following is NOT one of those errors? a. underpositioning b. repositioning c. overpositioning d. confused positioning Answer: (b) Difficulty: (2) Page: 263 69. In determining which differences to promote, focusing on a difference that delivers a highly valued benefit to target buyers would mean selecting the difference that is most: a. important. b. distinctive. c. superior. d. communicable. Answer: (a) Difficulty: (3) Page: 263 70. Choosing a product difference that competitors cannot easily copy would be which kind of differentiation criterion? a. important b. distinctive c. superior d. preemptive Answer: (d) Difficulty: (3) Page: 263 161

71. A brand’s _____________ is the full positioning of the brand—the full mix of benefits upon which it is positioned. a. distinctive proposition b. preemptive proposition c. value proposition d. superior proposition Answer: (c) Difficulty: (2) Page: 263 72. The text describes a series of value propositions. Of these propositions, Southwest Airlines has chosen to adopt the: a. more for less proposition. b. less for much less proposition. c. same for less proposition. d. more for more proposition. Answer: (b) Difficulty: (3) Page: 263-269, Figure 7-4, Marketing at Work 7-3 TRUE/FALSE QUESTIONS 73. Companies today realize that they can appeal to all buyers in the marketplace by using concentrated marketing. Answer: (False) Difficulty: (2) Page: 235 74. Because of profit pressures and the threat of the Internet, most companies have now moved away from market segmentation and targeting and toward mass marketing. Answer: (False) Difficulty: (2) Page: 235 75. With respect to markets, the “shotgun” approach in marketing efforts seems to be better than the “rifle” approach. Answer: (False) Difficulty: (2) Page: 235 76. Market segmentation is the process of taking a market and dividing the buyers into distinct groups for which marketing mixes can be constructed. Answer: (True) Difficulty: (1) Page: 235 162

77. Today, most companies are rushing toward mass marketing because of the changing nature of the marketplace. Answer: (False) Difficulty: (2) Page: 236 78. A good illustration of the niche marketing approach was when Henry Ford said (with respect to cars) “they can have any colour they want as long as it’s black.” Answer: (False) Difficulty: (2) Page: 236 79. Micromarketing is focusing on subsegments or niches with distinctive traits that may seek a special combination of benefits. Answer: (False) Difficulty: (2) Page: 237 80. If a marketer were to tailor products and marketing programs to the needs and wants of specific individuals and local customer groups, the marketer would be practicing micromarketing. Answer: (True) Difficulty: (1) Page: 238 81. One of the drawbacks for adopting a policy of local marketing is that it can drive up manufacturing and marketing costs by reducing economies of scale. Answer: (True) Difficulty: (1) Page: 238 82. Because buyers have unique needs and wants, each buyer is potentially a separate market. Answer: (True) Difficulty: (1) Page: 238 83. Customized marketing is often called individual marketing. Answer: (True) Difficulty: (1) Page: 238 84. An example of a firm that practices individual marketing is Mattel, with its My Design page of its Barbie Web site. Answer: (True) Difficulty: (2) Page: 240-242, Marketing at Work 7-1 163

85. The move toward individual marketing mirrors the trend in consumer concentration strategy. Answer: (False) Difficulty: (3) Page: 239 86. The most popular base for segmenting markets and customer groups is geographic segmentation. Answer: (False) Difficulty: (2) Page: 242, 243 87. Demographic variables are easier to measure than most other types of variables with respect to segmentation. Answer: (True) Difficulty: (1) Page: 244 88. Income segmentation is used not only with the affluent, but also with the consumers with lower spending power. Answer: (True) Difficulty: (2) Page: 247 89. Psychographic segmentation occurs when a market is divided into different groups based on social class, lifestyle, or personality characteristics. Answer: (True) Difficulty: (1) Page: 247 90. One of the forms of behavioural segmentation would be lifestyle segmentation. Answer: (False) Difficulty: (2) Page: 243, 247, Table 7-1 91. If a marketer were to link U.S. Census data with lifestyle patterns to better segment markets, this would be an example of geodemographic segmentation. Answer: (True) Difficulty: (2) Page: 250 92. A common way to segment a business market would be to segment based on operating characteristics and situational factors. Answer: (True) Difficulty: (2) Page: 250 164

93. Segmenting international markets on the basis of geographic, economic, political, cultural, and other factors is called international psychographics. Answer: (False) Difficulty: (2) Page: 253 94. To be useful, a market segment must be substantial. Answer: (True) Difficulty: (1) Page: 254 95. To be useful, a market segment must be conspicuous. Answer: (False) Difficulty: (1) Page: 254 96. A market segment is a set of buyers sharing common needs or characteristics that the company decides to serve. Answer: (False) Difficulty: (3) Page: 255 97. Concentrated marketing is a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. Answer: (False) Difficulty: (2) Page: 255 98. If a firm decides to go after a large share of one or a few segments or niches, then the firm will probably be following a concentrated marketing strategy. Answer: (True) Difficulty: (2) Page: 257 99. In market targeting, the issue is not how and for what, but who is targeted. Answer: (False) Difficulty: (3) Page: 259 100. A product’s position is the way the product is defined by consumers on important attributes. Answer: (True) Difficulty: (1) Page: 260 165

101. One of the major positioning errors that a company needs to avoid is that of confused positioning. Answer: (True) Difficulty: (1) Page: 263 102. A difference is worth establishing to the extent that it satisfies the criterion of cultural imperative. Answer: (False) Difficulty: (2) Page: 263 103. According to the nine cell matrix that describes possible value propositions, the cell that produces a higher price for reduced benefits should be pursued by the marketer. Answer: (False) Difficulty: (2) Page: 264, Figure 7-4 104. According to the value proposition presented by Southwest Airlines, the customer gets “less for much less.” Answer: (True) Difficulty: (2) Page: 267, Marketing at Work 7-3 ESSAY QUESTIONS 105. Proctor & Gamble makes eight brands of laundry detergent (Tide, Cheer, Bold, Gain, Era, Dreft, Febreze, and Ivory Snow). Each of these brands is directed toward a different segment of the vast laundry detergent market. Comment on Proctor & Gamble’s strategy for this market. Describe the company’s attitude toward intracompany brand competition and competition from other competitors. Finally, give examples of how the various laundry detergent brands are directed toward specific market segments by Proctor & Gamble. Answer: The various Proctor & Gamble brands compete with one another on the same supermarket shelves. Why would the company allow this to happen? The answer lies in the fact that different people want different mixes of benefits from the products that they buy. For example, laundry detergent customers want several different things: to get clothes clean, 166

economy, bleaching power, fabric softening, fresh smell, strength or mildness (depending on the cleaning chore), and lots of suds. The various Proctor & Gamble products address these issues. The company will accept intracompany brand competition (and by doing so, it will keep all the money from the various brands in one common pocket rather than giving it to competition). The company has also developed a separate brand for each of the eight important laundry detergent segments. For example (for other information see the introductory comments in the chapter where all eight segments are identified): a) Tide—an all-purpose family detergent that is “tough on greasy stains.” b) Cheer—guards against fading, colour transfer, and fuzzy build-up. c) Bold—has a built-in fabric softener. d) Gain—the “enzyme” fresh smelling detergent. e) Era—built-in stain removers. f) Dreft—removes baby stains. g) Febreze Clean Wash—gets out difficult odours. h) Ivory Snow—mild product for cleaning fine washables and baby clothes. Difficulty: (2) Page: 233-235 106. Define market segmentation, market targeting, and market positioning. Demonstrate through the steps of a model how these concepts fit together to aid the decision maker in his or her attempt to use market segmentation in the marketing process. Answer: Market segmentation is the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviour who might require separate products or marketing mixes. Market targeting involves evaluating each segment’s attractiveness and deciding which segment(s) to enter. Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. The marketer formulates a competitive position for a product and a detailed marketing mix. A model that might show the relationships between these three terms is found in Figure 7-1 in the chapter. The steps shown in this model are: (1) Identify bases for segmenting the market, (2) Develop 167

profiles of resulting segments—these two steps are related to market segmentation; (3) Develop measures of segment attractiveness, (4) Select the target segment(s)—these two steps are related to market targeting; (5) Develop positioning for each target segment, and (6) Develop marketing mix(es) for each target segment—these two steps are related to marketing positioning. Difficulty: (2) Page: 235, Figure 7-1 107. Identify the differences between the mass marketing, segment marketing, niche marketing, and micromarketing strategies. Answer: For most of this century, businesses practiced mass marketing. They mass produced, mass distributed, and mass promoted the same product in almost the same ways to all consumers. The argument for this approach was that mass marketing creates the largest potential market, which leads to lower costs, which in turn can translate into either lower prices or higher margins. This approach has given way to segment marketing, where marketers isolate broad segments that make up a market and adapt the marketing to match the needs of one or more segments. The benefits of this approach are that the company can market more effectively and efficiently by creating programs that are directed only toward those consumers that can be most effectively served. In niche marketing, there is a focus on subsegments or niches with distinctive traits that may seek a special combination of benefits. Niche marketers presumably understand their niches’ needs so well that their customers willingly pay a price premium. The newest form of segmentation is called micromarketing, where the marketer tailors products and marketing programs to suit the tastes of specific individuals and locations. This can take the form of either local or individual marketing. Difficulty: (2) Page: 236-243, Figure 7-2 108. List and briefly discuss the major bases for segmenting consumer markets. Demonstrate how these major bases would compare to the bases used in segmenting business markets (what are the differences and similarities?).

168

Answer: The major bases for segmenting consumer markets are (1) geographic, (2) demographic, (3) psychographic, and (4) behavioural. Examples within these categories might be: geographic (country, region, density, or climate), demographic (age, gender, family size, income, occupation, or race), psychographic (social class, lifestyle, or personality), or behavioural (occasions, benefits, user status, usage rate, loyalty, readiness stage, or attitude toward the object). These bases are contrasted to the major bases for segmenting business markets, which include (1) demographics, (2) operating variables, (3) purchasing approaches, (4) situational factors, and (5) personal characteristics. Examples within these categories might be demographics (industry, company size, or location), operating variables (technology, user/nonuser status, or customer capabilities), purchasing approaches (purchasing function organization, power structure, nature of existing relationships, or purchasing policies), situational factors (urgency, specific application, or size of order), and personal characteristics (buyer-seller similarity, attitudes toward risk, or loyalty). Notice that similarities exist between some of the demographic and personal characteristics (behavioural) categories. Difficulty: (3) Page: 243-254, Table 7-1 109. Consumer and business markets use many of the same variables to segment their markets. However, there are also differences. Using the approach suggested in the text, list and briefly describe the additional variables that would be important to the business marketer who wished to segment markets. Answer: Some additional variables would include: a). Operating characteristics—how does the customer operate within the industry? b). Purchasing approaches—are buying centres used? c). Situational factors—are there certain times of the year when the buyer is more likely to purchase? d). Personal characteristics—are there characteristics about the purchasing unit or the senior managers that might impact the purchase decision? Difficulty: (3) Page: 250-252 169

110. Define and give a specific example of intermarket segmentation. Answer: To conduct intermarket segmentation, an international marketer forms segments of consumers who have similar needs and buying behaviour even though they are located in different countries. The text uses the examples of MTV (who targets the world of the teen) and Mercedes-Benz (who targets the affluent no matter where they live). Difficulty: (2) Page: 253-254 111. As demonstrated in the text, there are several ways to segment a market. However, not all of these ways are always effective. To be useful and effective, market segments should have five different characteristics. List these and briefly explain each. Answer: Market segments must be (1) measurable (in terms of size, purchasing power, and clear profiles), (2) accessible (can be effectively reached and served), (3) substantial (large or profitable enough), (4) differentiable (the segments are distinguishable and respond differently to different marketing mixes), and (5) actionable (can design programs for attracting customers effectively). Difficulty: (2) Page: 254 112. A firm can adopt one of three market-coverage strategies when attempting to market its goods and services. List and describe each of these possible market-coverage strategies and provide and example of each. Answer: Undifferentiated marketing—a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It relies on mass marketing techniques. Distributing salt might be an example of this form. Differentiated marketing—a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. Automobiles might be examples of this strategy. 170

Concentrated marketing—a market-coverage strategy in which a firm goes after a large share of one or a few sub-markets. A specialty truck producer might be an example of this strategy. Difficulty: (2) Page: 255-258, Figure 7-3 113. What factors might a company need to consider when choosing a market-coverage strategy? Explain and justify your choices. Answer: The text suggests the following factors: a). company resources b). product variability c). the product’s life cycle d). market variability e). competitor’s marketing strategies If students present others, make sure they are justified. Difficulty: (2) Page: 258 114. In general, a company needs to avoid three major positioning errors. What are these errors? Present a brief description and illustration of each. Answer: The major errors are: a). Underpositioning—failing to really position the company at all. b). Overpositioning—giving buyers too narrow a picture of the company. c). Confused positioning—leaving buyers with a confused image of a company. Students are free to suggest their own illustrations. If you would like more structure, suggest this structure prior to assigning this question. Difficulty: (2) Page: 264

171

115. Companies are often faced with the problem of deciding which differences of a product or service to promote. This is especially relevant to product positioning. According to the text, a difference is worth promoting if it satisfies seven criteria. What are those criteria? Briefly explain each. Answer: The seven criteria suggested by the text include: a). Important—the difference delivers highly valued benefit to target buyers. b). Distinctive—competitors do not offer the difference, or the company can offer it in a more distinctive way. c). Superior—the difference is superior to other ways that customers might obtain the same benefit. d). Communicable—the difference is communicable and visible to buyers. e). Preemptive—competitors cannot easily copy the difference. f). Affordable—buyers can afford to pay for the difference. g). Profitable—the company can introduce the difference profitably. Difficulty: (3) Page: 263 APPLICATION QUESTION 116. New Balance athletic shoe company has a difficult problem—how to compete in the highly competitive athletic shoe market against such industry giants as Nike and Reebok. The company does have certain advantages (it makes a quality product, has a good reputation with distributors, and is the only athletic shoe that offers width sizes as well as length sizes) that it hopes will help meet the challenges of the industry giants. Your job as a strategic planning consultant is to formulate a market-coverage strategy for New Balance. You have three options— undifferentiated marketing, differentiated marketing, and concentrated marketing. Choose one of these methods and support your choice with a logical explanation.

172

Answer: Students are free to pick any method they wish, however, considering the competition, the undifferentiated marketing method would be hard to support. This mass-marketing strategy focuses on what is common in the needs of consumers, rather than what is different. The company designs a product and a marketing program that will appeal to the largest number of buyers. It relies on mass distribution and mass advertising, and it aims to give the product a superior image in people’s minds. With the differentiated approach (the method most likely chosen by Nike and Reebok), a firm decides to target several market segments or niches and designs separate offers for each. By offering product and marketing variations, the company using this method hopes for higher sales and a stronger position within each market segment. The student could make a case for this method, however, this method requires expensive outlays such as extra marketing research, forecasting, sales analysis, promotion planning, and channel management. With the concentrated approach (which generally appeals to companies with limited resources), the company goes after a large share of a small market rather than a small share of a large market. This method allows small companies to get a foothold against larger, more resourceful competitors. The company is usually able to achieve a strong market position because of its greater knowledge of the segment’s needs and special requirements. The company may also achieve economies in the various 4P areas. However, the segment that the company selects for attention must be carefully chosen because “all the eggs are in one basket.” New Balance currently sells well in specialized shoe stores (such as orthopaedic stores) because of their width feature, their response to dealer needs, and a limited but quality line. Mass merchandisers do not tend to carry this brand. Lastly, students should consider (when selecting the strategy) a company’s resources, the degree of product variability, the stage in the product’s lifecycle, market variability, and competitor’s marketing strategies when making a final selection. Difficulty: (3) Page: 255-259, Figure 7-3

173

Part 1

LITERATURE

1. Nag, R.; Hambrick, D. C.; Chen, M.-J (2007). “What is strategic management, really? Inductive derivation of a consensus definition of the field” (PDF). Strategic Management Journal 28 (9): 935–955. doi:10.1002/smj.615. Retrieved October 22, 2012. 2. Access via Internet: http://expertresearchers.blogspot. com/2014_02_01_archive.html 3. Brown, Stephen (1995), Postmodern Marketing, London: Routledge. 4. Campbell, Colin (1987), The Romantic Ethic and the Spirit of Modern Consumerism, Oxford: Basil Blackwell. 5. Opaschowski, Horst W. (2000), Kathedralen des 21. Jahrhunderts: Erlebniswelten im Zeitalter der Eventkultur, Hamburg: B.A.T. Freizeitforschungsinstitut. 6. Schulze, Gerhard (2000), Die Erlebnisgesellschaft: Kultursoziologie der Gegenwart, 8. Auflage, Frankfurt/Main: Campus. 7. Firat, A. Fuat and Alladi Venkatesh (1995), “Liberatory Postmodernism and the Reenchantment of Consumption”, Journal of Consumer Research, Vol. 22, No. 3, pp. 239-267. 8. Cova, Bernard (1997), “Community and Consumption: Towards a Definition of the “Linking Value” of Product or Services”, European Journal of Marketing, Vol. 31, No. 3-4, pp. 297-316. 9. Brown, Stephen (1999), “Postmodernism: The End of Marketing?” In: Rethinking Marketing: Towards Critical Marketing Accountings. (Eds.) Brownlie, Douglas, Michael Saren, Robin Wensley and Richard Whittington (London), SAGE, pp. 2757. 10. Brown, Stephen (1994), “Marketing as Multiplex: Screening Postmodernism”, European Journal of Marketing, Vol. 28, No. 8-9, pp. 27-51. 11. Firat, A. Fuat (1991), “The Consumer in Postmodernity”, Advances in Consumer Research, Vol. 18, pp. 70-76. 174

12. Brown, Stephen (2002), “Who Moved My Muggle? Harry Potter and the Marketing Imaginarium”, Marketing Intelligence & Planning, Vol. 20, No. 3, pp. 134-148. 13. Cova, Bernard and Veronique Cova (2002), “Tribal Marketing: The Tribalisation of Society and Its Impact on the Conduct of Marketing”, European Journal of Marketing, Vol. 36, No. 5-6, pp. 595-620. 14. Patterson, Maurice (1998), “Direct Marketing in Postmodernity: Neo-Tribes and Direct Communications”, Marketing Intelligence & Planning, Vol. 16, No. 1, pp. 68-74. 15. Cova, Bernard (1996), “The Postmodern Explained to Managers: Implications for Marketing”, Business Horizons, Vol. 39, No. 6, pp. 15-23. 16. Brown, Stephen (2001), “Marketing for Muggles: Harry Potter and the Retro-Revolution”, Journal of Marketing Management, Vol. 17, No. 5-6, pp. 463-479. 17. Holbrook, Morris B. (1995), Consumer Research: Introspective Essays on the Study of Consumption, Thousand Oaks: SAGE. 18. Opaschowski, Horst W. (2000), Kathedralen des 21. Jahrhunderts: Erlebniswelten im Zeitalter der Eventkultur, Hamburg: B.A.T. Freizeitforschungsinstitut. 19. Schulze, Gerhard (2000), Die Erlebnisgesellschaft: Kultursoziologie der Gegenwart, 8. Auflage, Frankfurt/Main: Campus. 20. Whelan and Wohlfeil (2005), “Communicating Brands as “Lived” Experiences”, in Proceedings of the 1st International Colloquium on Critical Issues in Brand Management, University of Birmingham, Birmingham: Academy of Marketing-Brand SIG. 21. Friedman, Milton (2001), “The Social Responsibility of Business is to Increase its Profits”. In: Business Ethics: Readings and Cases in Corporate Morality, 4th Edition. (Eds.) Hoffman, W. Michael, Robert E. Frederick and Mark S. Schwartz (New York), McGrawHill, pp. 156-160. (Original published in The New York Times Magazine, September 13, 1970) 22. Cornwell, T. Bettina and Isabelle Maignan (1998), “An International Review of Sponsorship Research”, Journal of Advertising, Vol. 27, No. 1, pp. 1-21. 175

23. Goldblatt, Joe Jeff (1997), Special Events: Best Practices in Modern Event Management, New York: John Wiley & Sons. 24. Cunningham, Peggy, Shirley Taylor and Carolyn Reeder (1993), “Event Marketing: The Evolution of Sponsorship From Philanthropy to Strategic Promotion”, in Proceedings of the 6th Conference on Historical Research in Marketing and Marketing Thought, East Lansing, MI: Michigan State University, pp. 407425. 25. Andersson, Malin and Anders Weslau (2000), Organising for Event Marketing in Order to Change Brand Image and Increase Sales, International Management Master Thesis No. 2000:44, Graduate Business School, University of Götheborg, Sweden. 26. Wohlfeil, Markus and Susan Whelan (2005a), “Event-Marketing as Innovative Marketing Communications: Reviewing the German Experience”, Journal of Customer Behaviour, Vol. 4, (forthcoming). 27. Weinberg, Peter and Andrea Gröppel (1989), “Emotional Benefits in Marketing Communication”, Irish Marketing Review, Vol. 4, No. 1, pp. 21-31. 28. Firat, A. Fuat (1991), “The Consumer in Postmodernity”, Advances in Consumer Research, Vol. 18, pp. 70-76. 29. Wohlfeil, Markus (2005), When Brands Become “Real-Lived” Experiences: Consumer Motivations to Participate in MarketingEvents, Unpublished Master-Thesis at the Waterford Institute of Technology. 30. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermittlungen von Marketing-Events”. In: Eventmarketing: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 31. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketing: Bestandsaufnahme, Standortbestimmung und ausgewählte theoretische Ansätze zur Erklärung eines innovativen Kommunikationsinstruments”, Marketing – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 32. Wohlfeil, Markus and Susan Whelan (2005b), “Consumer 176

Motivations to Participate in Marketing-Events: The Role of Predispositional Involvement”, European Advances in Consumer Research, Vol. 7, (forthcoming). 33. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermittlungen von Marketing-Events”. In: Eventmarketing: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 34. Sistenich, Frank (1999), Eventmarketing: Ein innovatives Instrument zur Metakommunikation in Unternehmen, Doctoral Thesis at Technische Universität Chemnitz, Wiesbaden: DUV. 35. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketing: Bestandsaufnahme, Standortbestimmung und ausgewählte theoretische Ansätze zur Erklärung eines innovativen Kommunikationsinstruments”, Marketing – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 36. Wohlfeil, Markus and Susan Whelan (2004), “Investigating Consumers’ Motivations to Participate in Marketing-Events”, in Proceedings of the Irish Academy of Management 2004, Trinity College Dublin, on CD-Rom. Part 2 1. Ramsborg, G.C.; B Miller, D Breiter, BJ Reed & A Rushing (eds), Professional meeting management: Comprehensive strategies for meetings, conventions and events, 2008, 5th ed, Kendall/Hunt Publishing, Dubuque, Iowa. ISBN 0-7575-5212-9 2. The new rules for event management. Access via Internet: http://www.inc.com/guides/201102/new-rules-of-eventmarketing.html 3. The Event Planning Industry. Access via Internet: http://www. entrepreneur.com/downloads/guides/1313_Event_Planning_ ch1.pdf Part 3 1. Finding your audience through market segmentation. Access via Internet: http://racc.org/sites/default/files/buildingblocks/ defining/Finding%20your%20Audience%20through%20 Market%20Segmentation.pdf 177

2. What is geographic segmentation’ Kotler, Philip, and Kevin Lane Keller. Marketing Management. Prentice Hall, 2006. ISBN 978-013-145757-7 3. Riley, Jim (2012-09-23). “Market Segmentation - Demographics”. Tutor2u.net. Retrieved 15 July 2014. 4.

Fripp, Geoff.“Market Segmentation Bases” Market Segmentation Study Guide

5. Marketing Padawan Designing Marketing Strategies With the Help of STP 6. Philip Kotler and Gary Armstrong : Principles of Marketing Pearson Education Limited 2014, 2012 7. “Market Segmentation and Targeting”. Academic.brooklyn.cuny. edu. 2011. Retrieved 15 July 2014. 8. “Occasional Customer Segmentation”. Forte Consultancy Group. 2010. Retrieved 8 May 2015. 9. Dove, Michael (2013-09-05). “Cultural Segmentation - Customer Segmentation”. OriginsInfo.com.au. Retrieved 6 October 2014. Cultural Segmentation Part 4 1. What is strategy? Access via Internet: https://hbr.org/1996/11/ what-is-strategy 2. Business Dictionary. (n.d.) Definition of Positioning. Retrieved from http://www.businessdictionary.com 3. Lamb, C. (2013). e-Study Guide for MKTG 7. Retrieved from https://books.google.com/books 4. Trout, J., (1969) “”Positioning” is a game people play in today’s me-too market place”, Industrial Marketing, Vol.54, No.6, (June 1969), pp. 51–55. 5. Ries, A. and Trout, J. (1981) Positioning, The battle for your mind, Warner Books - McGraw-Hill Inc., New York, 1981, ISBN 0-44634794-9 6. Trout, J. and Rivkin, S. (1996) The New Positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York, 1996, ISBN 0-07-065291-0 178

7. Moore, G. (1991) Crossing the Chasm, HarperCollins Publishers, 1991. 8. Levi, K. (2007) “Differentiate or Diminish: The Art and Necessity of Business Positioning”, (March 2007), p. 9 Part 5 1. Sponsorship ideas. Access via Internet: hpsnz.org.nz/sites/ all/.../files/...Athletes/Athlete.../Sponsorship_ideas.doc 2. Attracting funding and sponsorship. Access via Internet: http:// www.100ways.org.uk/attracting-funding-and-sponsorship-a. html 3. West, D. (2010) ‘Project Sponsorship: An Essential Guide for Those Sponsoring Projects Within Their Organizations’, Gower Publishing, Farnham, ISBN 978-0-566-08888-9 4. Sponsoring change - A guide to the governance aspects of project sponsorship, Association for Project Management, 2009. ISBN 978-1-903494-30-1 5. “What to expect from a Project Sponsor”. ProjectManager.com. Retrieved 24 May 2013. 6.

Englund, R.L. and Bucero, A. (2006) Project Sponsorship: Achieving Management Commitment for Project Success, San Francisco, Jossey-Bass

Part 6 1. Principles of marketing. Access via Internet: principlesofmarketing.com/htm/Chapter-Six.htm

www.

2. van Bel, Sander, Weber. “Follow that Customer”. Racom Communications; http://www.failsafe.nl/ followthatcustomercom/ 3. Holtom, Mark. “What is an Event”. http://www.eventricity.biz/ What_is_an_Event.php 4. Holtom, Mark. “EDM KPIs”. http://www.eventricity.biz/ Marketing_KPIs_for_Event_Driven_Marketing.php 5. Ricardo, Fernando. “NAB National Leads”. http://www.nab.com. au/ 179

6.

Holtom, Mark. “EDM Infographic”. http://www.eventricity.biz/ EDM_Infographic.php

7. Holtom, Mark. “EDM Research”. http://www.eventricity.biz/ Research.php 8.

EFMA. “EFMA CRM Research”. http://www.efma.com/index. php/init/home/index/EN/0/0

9. Atos Origin. “EFMA EDM research”. http://www.efma.com/ index.php/init/home/index/EN/0/0 10. Ingalls, Neil. “Triggered Email Marketing – The Stats Speak for Themselves”. http://www.sproutloud.com. Retrieved 2014-0318. Part 7 1. McCarthy, Jerome E. (1964). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin. p. 769. ISBN 0256025339. 2. Rajagopal. (2007) Marketing Dynamics: Theory and Practice. New Delhi, India: New Age International. Retrieved April 5, 2010, from NJIT EBook Library:http://www.njit.eblib.com.libdb. njit.edu:8888/patron/FullRecord.aspx?p=437711 3. Kurtz, Dave. (2010). Contemporary Marketing. Mason, OH: South-Western Cengage Learning. 4. Mulhern, Frank (2009). “Integrated marketing communications: From media channels to digital connectivity”. Journal of Marketing Communications 15 (2-3): 87. 5. Mulhern, Frank (2009). “Integrated marketing communications: From media channels to digital connectivity”. Journal of Marketing Communications 15 (2-3): 85.doi:10.1080/1352726 0902757506. 6. “Top 15 Most Popular Social Networking Sites”. eBizMBA - The eBusiness Guide. Retrieved 3 April 2014. 7. Flew, Terry (2008). New Media: an introduction. Melbourne: Oxford University Press. p. 107. ISBN 9780195431810. 8. Flew, Terry (2008). New Media: an introduction. Melbourne: Oxford University Press.ISBN 9780195431810. 180

9. What are the options for promoting products and services. Access via Internet: www.principlesofmarketing.com/htm/ Chapter-Ten.htm 10. Promotion mix. Access via Internet: www.tourism.bilkent.edu. tr/~eda/promotion%20mix.DOC Part 8 1. Joe Risser and Melanie Lockwood Herman. Managing Special Event Risks. https://www.nonprofitrisk.org/library/articles/ rmbasics060709.shtml 2. Communication strategy, Access via Internet: http:// expertresearchers.blogspot.com/2014/02/communicationstrategy.html

181

Indre Radaviciene EVENT MARKETING PLANNING Course Handbook

ISBN 978-9955-648-71-0

This Course Handbook was prepared with support from the European Structural Funds. This publication reflects the views only of the author, and the SMK University of Applied Social Sciences cannot be held responsible for any use which may be made of the information contained therein.

Order no. 150730345 S. Jokuzys Publishing-Printing House. 2015 Nemuno str. 139, LT-93262 Klaipeda www.spaustuve.lt