EVENT MARKETING PLANNING Course Handbook

SCIENCE ECONOMY COHESION 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.

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 promoti on and event marketi ng as well as the knowledge on methods, also developing their skills of a problem based percepti on and thinking. Students will get acquainted with the environment of an event marketi ng, the types of the environment, and strategy of event marketi ng when choosing the right target segment, an eﬀ ecti ve strategy of positi oning. Students will have an opportunity to get acquainted with the effi ciency of the processes of event planning, the main methods of event support. The aim of course is to provide students with knowledge on marketi ng while disti nguishing the factors determining its specifi cs, the signifi cance of concepti on to the success of the enti ti es of business system, to develop abiliti es to make strategic and tacti cal decisions in the context of the EU market and global processes; to develop skills and abiliti es to do signifi cant marketi ng research; assess the results of expression of marketi ng communicati on, image and organizati onal culture, and the risk of strategic management of marketi ng; to make decisions on the funding of marketi ng acti vity when implementi ng business development in both internati onal and local markets; to provide knowledge on sales promoti on disti nguishing the factors determining the specifi cs of their selecti on.

Learning outcomes of a Course Event marketi ng planning: 1. To be able to identi fy the functi ons, concepti ons, strategies of event marketi ng, the created types of benefi ts and assess the validity of certain decisions. 2. To be able to correctly select target markets and ways of product positi oning for market or adverti sing research, to make maps of competi ti veness. 3. To be able to assess decisions on the necessity, methods and means of support of event support and assess their effi ciency. 4. To be able to appropriately prepare adverti sing project on the needs of a customer. 5. To be able to plan independently decisions on the management of the marketi ng complex of events and other occurrences and its elements. 6. To be able to correctly choose a suitable set of the means of sales promoti on.

7 Part 1 ENVIRONMENT OF EVENT MARKETING

Objecti ve outline:

1. To introduce students to the elements of marketi ng analysis: marketi ng environment analysis, customer analysis, competi tor analysis, and company analysis; 2. To familiarize students to the generic event marketi ng strategies and strategic marketi ng decisions for profi table delivery of superior value to the customers. 3. To enhance their problem-solving and decision-making abiliti es in strategic areas of marketi ng.

Chapter Key Terms:

Marketi ng Upstream marketi ng acti viti es Downstream marketi ng acti viti es Customer Marketi ng concept

Without a research orientati on, communicati on practi ti oners cannot play a part in Issues or Risk Management and therefore in the formulati on of emergent strategy. There are two types of research in communicati on: environmental scanning, which provides informati on needed for strategy formulati on; and evaluati on research, which assesses the achievement of communicati on objecti ves. In practi ce, the focus is on the latt er. However, it is by conducti ng environmental scanning and analysis that the Communicati on functi on will make its biggest contributi on to strategy formulati on at the Board and top management level.1 The credibility and impact of the Communicati on functi on in the strategic management process is increased by conti nuous scanning of the internal and external environment. This may entail the following: • Conducti ng advanced media analysis at regular intervals, to understand the agenda and behavioural patt erns of key decision- makers (editors and journalists) and publicati ons (electronic and print) in the mass media.

8 • Engaging in rigorous monitoring of relevant government decision- makers on all identi fi ed issues. • Conducti ng opinion audits (formal or informal surveys) amongst strategic stakeholders, infl uencers and opinion leaders to determine their opinions on identi fi ed issues. Creati ng channels to track the opinions of stakeholders on these issues over ti me. • Identi fying any (all) interest groups or acti vists that campaign for, or against, or have a vested interest in any of the identi fi ed issues.1

Issue analysis Resulti ng 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 aﬀ ect the organisati on now, or will it impact on the organizati on in future?). • Understanding the issue in the context of its life cycle development in order to indicate its status (the Traffi c 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 identi fi ed issues can be solved solely through communicati on interventi ons (theIssue Typology tool of Steyn & Puth, 2000 is oft en used to manage expectati ons upfront and lay the foundati on for realisti c goals and objecti ves to follow).2

View an example of Issues Analysis. Stakeholder assessment

If environmental scanning is a starti ng point for the formulati on of emergent strategy, then stakeholder assessment is its control focus. The fi rst step in setti ng communicati on goals and themes is to identi fy the relevant stakeholders to an issue. Any issue without an aﬀ ected stakeholder group is really not an issue at all. The moti vati on to constantly analyse the internal and external environments of an organizati on lies in tracking stakeholder reacti ons to current issues and detecti ng new issues.2

9 Intelligence gained from environmental scanning may entail: • The opinions, knowledge and expectati ons of both internal and external stakeholders such as employees, communiti es, and customers. • The agenda of the media as gatekeepers and advocates of parti cular viewpoints. • The agendas of interest groups and acti vists, who directly seek to infl uence public policy. • The government’s positi on.2 In linking issues to stakeholders, there are four important elements to consider: • The implicati ons of an issue on a stakeholder group and the likely behaviour of the stakeholder group as a result. (What are the implicati ons on stakeholder X? What is the likely behaviour of stakeholder X? Possible acti ons 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 organisati on is vulnerable to the likely stakeholder reacti on (usually rated on a 5-point Likert scale). Itis important to determine the amount of power a stakeholder group has in relati on to a specifi c issue. The amount of power depends on the organisati on’s dependency on that stakeholder group as well as the access that the group has to politi cal processes and to the mass media. • The relati ve strategic importance of the stakeholder to the organisati on. (Is the stakeholder labelled as a primary or secondary stakeholder?).2 View an example of Stakeholder Interpretati on. Stakeholder relati onships There are four approaches in dealing with stakeholders:

Approach 1 - Inacti vity: The fi rst approach, inacti vity, involves ignoring the opinions and values of stakeholder groups and conti nuing “business as usual”. For instance, this would be the case when a company starts receiving complaints from customers about defecti ve tyres that they are

10 manufacturing. The company however decides to ignore the complaints and conti nues selling the tyres.2

Approach 2 - Reacti vity: The second approach, reacti vity, involves waiti ng for something to occur (usually sti mulated by a stakeholder group) and responding to that. Conti nuing the example: Aft er a series of accidents and the loss of lives the Government (Dept. of Transport) commissions an inquiry. Only now does the organisati on withdraw its tyres from the market.2

Approach 3 – Pro-acti vity: The third approach, pro-acti vity, is anti cipatory. It involves trying to predict the behaviour of stakeholder groups, the external changes that may occur and positi oning the organisati on appropriately. In the above example, if the organisati on had been in touch with its customers or dealers through research, they could have investi gated the matt er before it became public knowledge. This could have resulted in fi xing the problem or recalling the tyres. However, government interventi on led to a loss of credibility and reputati on.2

Approach 4 – Interacti vity: The fourth approach in dealing with stakeholders is the interacti ve mode that entails acti ve involvement with the stakeholder groups that can infl uence the future of the organizati on. If the organizati on had good two-way communicati on with their stakeholders, they would have identi fi ed the problem in its early stages. Even more eff ecti ve would have been to follow a partnership approach with stakeholders. Partnering would have involved the aff ected customers, dealers or government in the problem-solving and decision-making processes of the company with regards to the defecti ve tyres. A partnering approach could have strengthened relati onships 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 fi ckle, unpredictable and increasingly “immune” to common marketi ng practi ces (Brown 1995).3 Indeed, the growing affl uence in industrialised societi es is having profound residual eff ects on the societal value system and its dominant consumpti on ethic. In parti cular, the shift from maintenance consumpti on (the compulsory shopping for necessiti es) towards experienti al consumpti on (shopping as a pleasurable end in itself) is exemplifying the current drift towards a romanti c consumpti on

11 in Western societi es, where the emphasis on living your life right here and now (Campbell 1987).4 Social trends, such as increasing orientati on towards leisure and recreati on as well as a desire for individualism, are leading to signifi cant 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 implicati ons for marketi ng practi ce (Brown 1999, 9;10 1994), there is no denying that a number of the conditi ons proposed by Firat (1991)11 determine consumer behaviour and the way of doing business in today’s aﬄ uent societi es (Brown 2002; Cova and Cova 2002; Patt erson 1998).12;13;14 Those conditi ons, which are briefl y discussed in this paper, include among others the fragmentati on of mass-markets, the age of the (self-)image by mixing playfully elements of existi ng styles and blurring disti ncti ons between high and low culture (Cova 1996),15 the nostalgic preoccupati on 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 ti mes call for crazy and creati ve measures, marketers need to consider the design of marketi ng strategies that provide consumers with a platf orm where they can experience brands in a way that contributes to their subjecti vely perceived quality of life. In other words, the emphasis of branding should be placed on sti mulati ng hyperreal experiences for consumers to meet the changing needs in aﬄ uent (postmodern) societi es (Whelan and Wohlfeil 2005).20 In light of these demands, event-marketi ng has already become an increasingly popular alternati ve for marketers in Conti nental Europe. Event-marketi ng is defi ned in the context of this paper as the staging of interacti ve marketi ng-events as 3-dimensional hyperreal brand experiences for consumers, which would result in an emoti onal att achment to the brand. Thus, consumers are acti vely involved on a behavioural level as parti cipants and encouraged to experience the brand values multi -sensually in a 3-dimensional hyper reality. Furthermore, as a pull strategy within marketi ng communicati ons, the parti cipati on of consumers is voluntarily and subsequently not perceived as an invasion of privacy as it is the case with classic marketi ng communicati ons. In fact, the irony is that consumers parti cipate on their own free will in those brand hyper realiti es, even though they are specifi cally designed to communicate the same commercial messages they usually tend to avoid (Whelan and Wohlfeil 2005).20

12 This, however, leads inevitably to the questi on: Is event-marketi ng just another postmodern craze or is it an exciti ng new way for marketers to reach their target audiences in the changing marketi ng communicati on landscape of aﬄ uent societi es? Why should marketi ng managers should stretch their creati ve imaginati on to the limits to create and stage unique brand hyper realiti es for consumers, when it would be much easier, convenient and “less risky” to exploit the commercial propriety of an existi ng external event (event sponsorship)? And, anyway, why should marketers care about making a contributi on to consumers subjecti vely experienced quality of life, when their primary concern and sole purpose should be to sell products and to make profi ts for their shareholders (Friedman 1970/2001).21 Thus, the objecti ve of this paper is to introduce the concept of event-marketi ng fi rst to a broader audience and then to discuss its role within marketi ng communicati ons as well as its impact on consumers in the changing (postmodern) marketi ng communicati ons landscape. As a consequence, the research obviously raises some key academic and managerial implicati ons. By presenti ng empirical evidence from a qualitati ve fi eld 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 emoti onal att achment to the brand, and how marketers can build mutually benefi cial customer- brand relati onships by using their imaginati on in the development and implementati on of creati ve event-marketi ng strategies. The fi ndings will not only narrow the identi fi ed informati on gap, but also demonstrate how the staged brand hyper reality could contribute to consumers’ subjecti ve quality of life as an enchantment of experienti al consumpti on. When explaining the concept of event-marketi ng as an innovati ve marketi ng communicati on strategy, the authors always encounter immediately a variety of disbelief and confusion. One of most utt ered arguments, the authors are on a regular basis confronted with, is the idea that event-marketi ng is not new and the marketers have always managed a seminar, a sales stand in the shopping mall, a competi ti on or a product testi ng of some kind. These points are then either complemented or contradicted by the argument that event-marketi ng de facto is the sponsorship of a concert, the World Cup or a street festi val. Given the general generosity and liberty by which the term event marketi ng has been used to describe all kinds of phenomena in marketi ng practi ce and literature (Cornwell and Maignan 1998)22 ranging from the marketi ng of

13 events within the framework of event management (Goldblatt 1997)23 to event sponsorships (Cunningham et al. 1993)24 and even sales promoti ons (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-marketi ng that is discussed by the authors in this paper has nothing to do with the sponsorship of any events nor with running sales promoti ons in the shopping mall or the professional marketi ng of an event – although to be fair, the management of the marketi ng- event obviously plays a certain role in the operati onal implementati on of the event-marketi ng strategy. Instead, event-marketi ng is defi ned as the staging of interacti ve marketi ng-events as 3-dimensional hyper real brand experiences for consumers, which would result in an emoti onal att achment to the brand.3 As an experienti al marketi ng communicati on strategy in the context of this defi niti on, event-marketi ng fi rst emerged in the late 1980s in response to the signifi cant changes in both the marketi ng environment and consumer behaviour in Germany (Wohlfeil and Whelan 2005a).26 By communicati ng brand values as “real-lived” experiences, event- marketi ng strategies are designed to take in parti cular advantage of the shift from maintenance to experienti al consumpti on in the societal value system of aﬄ uent societi es (Weinberg and Gröppel 1989)27 and the consumers’ desire for idealised simulati ons of reality (Firat 1991).28 Experienti al consumpti on refers to obtaining enriching experiences through emoti onal benefi ts, by which consumers att empt to improve the subjecti vely experienced quality of their lives right here and now (Wohlfeil 2005; Weinberg and Gröppel 1989).29;27 This romanti c consumpti on ethic has not only led to an increasing orientati on towards and acti ve parti cipati on in leisure, recreati on, entertainment and subcultural neo- tribes (Cova and Cova 2002; Opaschowski 2000; Campbell 1987),13;5;4 but has also demonstrated the urgent need for experienti al brand communicati ons to gain consumers’ att enti on. To achieve this objecti ve, the communicati ve innovati on of event- marketi ng derives from its four consti tuti ve features: • Experience-orientati on: As personal lived experiences tend to be stronger than “second- hand” media experiences in determining consumers’ noti on of reality, consumers are encouraged to experience the brand reality as acti ve parti cipants rather than being passive recipients and, subsequently, are oﬀ ered a contributi on to their subjecti ve quality of life (Weinberg and Nickel 1998).30

14 • Interacti vity: In diff erence to the monological provision of informati on in classic marketi ng communicati ons, event-marketi ng off ers a platf orm for interacti ve and personal dialogues between parti cipants, spectators and brand representati ves (Zanger and Sistenich 1996).31 • Self-initi ati on: Because event-marketi ng is aimed at infl uencing consumers emoti onally by staging self-initi ated marketi ng-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 emoti onally experience the lived brand- reality, it requires a unique and creati ve dramaturgy that, similar to a theatre play, brings the brand image to life and captures the imaginati on of the target audience. Therefore, the more the event-marketi ng strategy diff ers from consumers’ everyday life experiences, the higher is the degree of acti vati on among consumers (Sistenich 1999; Zanger and Sistenich 1996).34;35 Thus, in contrast to event sponsorship, event-marketi ng is aimed at positi vely infl uencing customers’ familiarity, image, atti tude and emoti onal att achment to the brand by staging self-initi ated marketi ng- events as a 3-dimensional, interacti ve brand-related hyper reality for consumers. Because personally “lived” experiences tend to be stronger in determining people’s noti on of reality than the “second-hand” experiences as traditi onally communicated by adverti sing (Weinberg and Nickel 1998)33, marketi ng-events are bett er 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 marketi ng communicati on strategies, where customers generally remain passive and distant recipients of brand messages, the major peculiarity of event-marketi ng is the fact that target audiences are encouraged to experience the brand values acti vely by becoming part of its hyper reality (Wohlfeil and Whelan 2004)36. For instance, at the Red Bull Flugtag consumers are invited to “sti mulate their body and mind” and “give themselves wings” by building their own home-made fl ying machines and then leaping off a 6-metre high ramp to get as far as possible over a river. And while in adverti sing or sales promoti ons a contact remains rather accidental, consumers acti vely seek to engage with various event-marketi ng strategy. However, in order to uti lise its full potenti al, any event-marketi ng strategy must be designed in a way

15 that consumers do not want to miss taking part in a brand’s experienti al hyper reality. Thus, marketers must have a thorough understanding of what needs consumers seek to sati sfy by parti cipati ng in marketi ng- events. By meeti ng the growing need for romanti c simulati ons of reality and experienti al consumpti on, marketi ng managers not only make a contributi on to consumers’ subjecti vely perceived quality of life, but also succeed in establishing brand values through a unique communicati on propositi on and building mutually benefi cial customer- brand relati onships, 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 essenti al element of the Irish heritage and culture. In parti cular, 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 consumpti on 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 generati ons. In fact, the younger generati ons in Ireland and abroad increasingly opted increasingly for the more fashionable lagers or alcopops rather than the traditi onal Irish stouts and ales. Therefore, in order to reconnect Guinness with younger Irish drinkers, who were switching more oft en 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-marketi ng, brand lands are immobile corporate theme parks that provide an interacti ve mixture of entertainment and informati on around brand-related themes to consumers (Wohlfeil and Whelan 2005a; 2004). Located in a former fermentati on 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 sett ling Guinness drop, which they receive as an entry ti cket. In other words, they experience the Guinness Storehouse by slowly working their way over seven fl oors, incorporati ng ten diﬀ erent areas, up to the Gravity Bar at the top. Each of the ten areas contains a range of displayed artefacts, graphic designs and interacti ve multi media-shows that engage all the visitors’ senses from visuals and sounds to smell, taste and touch. Aft er a big screen welcomed the visitors to the world of Guinness with video clips, the fi rst area at the ground fl oor interacti vely introduces visitors to the four raw ingredients barley, water, hops and yeasts and their special qualiti es as the basics on which Guinness is made. The next level contains a graphically designed multi media-show that is designated to Arthur Guinness, the foundati on of Guinness and the Guinness family’s contributi ons to the people of Dublin. This is followed by interacti ve areas covering the brewing process, life as an interpretati on of what happens when Guinness and people are mixed together, the art of cooperage, transportati on, Guinness’s global success, its popular world of adverti sing and Diageo’s drink-sensibly campaign by engaging visitors interacti vely in middle of the processes. Finally, like a Guinness drop, they sett le at the top to enjoy their personal pint of Guinness in the Gravity bar with a view over Dublin City. For internal marketi ng purposes, the Guinness Storehouse is not only home to the visitor experience, but houses a number of other faciliti es as well. One of the key areas is the Learning Centre, which features state-of- the-art training (How to pour the perfect pint...) and conference faciliti es for holding moti vati on and training seminars. An events centre provides a number of fi rst class venues catering for 20 to 1000 people for concerts, fashion shows, product launches or lectures. The Guinness Achieve, where records and artefacts dati ng 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 oﬀ ering 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 att racti on 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 orientati on 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 situati onal eff ects that would make the purchase of a new sports-coat a high involvement purchase? Explain. 4. Identi fy 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 diff erent for each purchase. 6. Explain how situati onal eff ects might impact a person’s decision- making 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 relati ves and wants to stop at a restaurant for lunch. d) You have a fi rst date tonight with a person to whom you are very att racted 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 organizati onal behaviour. 9. Identi fy 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 marketi ng exam and fails to contact anyone beforehand. d) Jerri decides to take a vacati on and plans a trip to Africa. e) Jamie invests her ti p 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? Inducti ve derivati on of a consensus defi niti on of the fi eld” (PDF). Strategic Management Journal 28 (9): 935–955. doi:10.1002/smj.615. Retrieved October 22, 2012. 2. Access via Internet: htt p://expertresearchers.blogspot. com/2014_02_01_archive.html 3. Brown, Stephen (1995), Postmodern Marketi ng, London: Routledge. 4. Campbell, Colin (1987), The Romanti c 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. Freizeitf orschungsinsti tut. 6. Schulze, Gerhard (2000), Die Erlebnisgesellschaft : Kultursoziologie der Gegenwart, 8. Auﬂ age, Frankfurt/Main: Campus. 7. Firat, A. Fuat and Alladi Venkatesh (1995), “Liberatory Postmodernism and the Reenchantment of Consumpti on”, Journal of Consumer Research, Vol. 22, No. 3, pp. 239-267. 8. Cova, Bernard (1997), “Community and Consumpti on: Towards a Defi niti on of the “Linking Value” of Product or Services”, European Journal of Marketi ng, Vol. 31, No. 3-4, pp. 297-316. 9. Brown, Stephen (1999), “Postmodernism: The End of Marketi ng?” In: Rethinking Marketi ng: Towards Criti cal Marketi ng Accounti ngs. (Eds.) Brownlie, Douglas, Michael Saren, Robin Wensley and Richard Whitti ngton (London), SAGE, pp. 27- 57. 10. Brown, Stephen (1994), “Marketi ng as Multi plex: Screening Postmodernism”, European Journal of Marketi ng, 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 Pott er and the Marketi ng Imaginarium”, Marketi ng Intelligence & Planning, Vol. 20, No. 3, pp. 134-148. 13. Cova, Bernard and Veronique Cova (2002), “Tribal Marketi ng: The Tribalisati on of Society and Its Impact on the Conduct of Marketi ng”,European Journal of Marketi ng, Vol. 36, No. 5-6, pp. 595-620. 14. Patt erson, Maurice (1998), “Direct Marketi ng in Postmodernity: Neo-Tribes and Direct Communicati ons”, Marketi ng Intelligence & Planning, Vol. 16, No. 1, pp. 68-74. 15. Cova, Bernard (1996), “The Postmodern Explained to Managers: Implicati ons for Marketi ng”, Business Horizons, Vol. 39, No. 6, pp. 15-23. 16. Brown, Stephen (2001), “Marketi ng for Muggles: Harry Pott er and the Retro-Revoluti on”, Journal of Marketi ng Management, Vol. 17, No. 5-6, pp. 463-479. 17. Holbrook, Morris B. (1995), Consumer Research: Introspecti ve Essays on the Study of Consumpti on, Thousand Oaks: SAGE. 18. Opaschowski, Horst W. (2000), Kathedralen des 21. Jahrhunderts: Erlebniswelten im Zeitalter der Eventkultur, Hamburg: B.A.T. Freizeitf orschungsinsti tut. 19. Schulze, Gerhard (2000), Die Erlebnisgesellschaft : Kultursoziologie der Gegenwart, 8. Auﬂ age, Frankfurt/Main: Campus. 20. Whelan and Wohlfeil (2005), “Communicati ng Brands as “Lived” Experiences”, in Proceedings of the 1st Internati onal Colloquium on Criti cal Issues in Brand Management, University of Birmingham, Birmingham: Academy of Marketi ng-Brand SIG. 21. Friedman, Milton (2001), “The Social Responsibility of Business is to Increase its Profi ts”. In:Business Ethics: Readings and Cases in Corporate Morality, 4th Editi on. (Eds.) Hoﬀ man, W. Michael, Robert E. Frederick and Mark S. Schwartz (New York), McGraw- Hill, pp. 156-160. (Original published in The New York Times Magazine, September 13, 1970)

20 22. Cornwell, T. Betti na and Isabelle Maignan (1998), “An Internati onal Review of Sponsorship Research”, Journal of Adverti sing, Vol. 27, No. 1, pp. 1-21. 23. Goldblatt , Joe Jeﬀ (1997), Special Events: Best Practi ces in Modern Event Management, New York: John Wiley & Sons. 24. Cunningham, Peggy, Shirley Taylor and Carolyn Reeder (1993), “Event Marketi ng: The Evoluti on of Sponsorship From Philanthropy to Strategic Promoti on”, in Proceedings of the 6th Conference on Historical Research in Marketi ng and Marketi ng Thought, East Lansing, MI: Michigan State University, pp. 407- 425. 25. Andersson, Malin and Anders Weslau (2000), Organising for Event Marketi ng in Order to Change Brand Image and Increase Sales, Internati onal Management Master Thesis No. 2000:44, Graduate Business School, University of Götheborg, Sweden. 26. Wohlfeil, Markus and Susan Whelan (2005a), “Event-Marketi ng as Innovati ve Marketi ng Communicati ons: Reviewing the German Experience”, Journal of Customer Behaviour, Vol. 4, (forthcoming). 27. Weinberg, Peter and Andrea Gröppel (1989), “Emoti onal Benefi ts in Marketi ng Communicati on”, Irish Marketi ng 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 Moti vati ons to Parti cipate in Marketi ng- Events, Unpublished Master-Thesis at the Waterford Insti tute of Technology. 30. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermitt lungen von Marketi ng-Events”. In: Eventmarketi ng: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 31. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketi ng: Bestandsaufnahme, Standortbesti mmung und ausgewählte theoreti sche Ansätze zur Erklärung eines innovati ven

21 Kommunikati onsinstruments”, Marketi ng – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 32. Wohlfeil, Markus and Susan Whelan (2005b), “Consumer Moti vati ons to Parti cipate in Marketi ng-Events: The Roleof Predispositi onal Involvement”, European Advances in Consumer Research, Vol. 7, (forthcoming). 33. Weinberg, Peter and Oliver Nickel (1998), “Grundlagen für die Erlebnisvermitt lungen von Marketi ng-Events”. In: Eventmarketi ng: Grundlagen und Erfolgsbeispiele. (Ed.) Nickel, Oliver (München), Vahlen, pp. 61-75. 34. Sistenich, Frank (1999), Eventmarketi ng: Ein innovati ves Instrument zur Metakommunikati on in Unternehmen, Doctoral Thesis at Technische Universität Chemnitz, Wiesbaden: DUV. 35. Zanger, Cornelia and Frank Sistenich (1996), “Eventmarketi ng: Bestandsaufnahme, Standortbesti mmung und ausgewählte theoreti sche Ansätze zur Erklärung eines innovati ven Kommunikati onsinstruments”, Marketi ng – Zeitschrift für Forschung und Praxis, Vol. 18, No. 4, pp. 233-242. 36. Wohlfeil, Markus and Susan Whelan (2004), “Investi gati ng Consumers’ Moti vati ons to Parti cipate in Marketi ng-Events”, in Proceedings of the Irish Academy of Management 2004, Trinity College Dublin, on CD-Rom.

FURTHER READING 1. Ghemawat, Pankaj (Spring 2002). “Competi ti on and Business Strategy in Historical Perspecti ve”. Business History Review (Harvard Business Review). 2. Hill, Charles W.L., Gareth R. Jones, Strategic Management Theory: An Integrated Approach, Cengage Learning, 10th editi on 2012 3. Lamb, Robert, Boyden Competi ti ve strategic management, Englewood Cliﬀ s, NJ: Prenti ce-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. Chaﬀ ee, 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 Organizati ons Need Strategy”. California Management Review (Fall 1987). 9. Mintzberg, Henry and, Quinn, James Brian (1996). The Strategy Process: Concepts, Contexts, Cases. Prenti ce Hall. ISBN 978-0- 13-234030-4. 10. Drucker, Peter (1954). The Practi ce of Management. Harper & Row. ISBN 0-06-091316-9. 11. Henderson, Bruce (January 1, 1981). “The Concept of Strategy”. Boston Consulti ng Group. Retrieved April 18, 2014. 12. Mintzberg, Henry “Craft ing Strategy”, Harvard Business Review, July/August 1987. 13. Mintzberg, Henry and Quinn, J.B. The Strategy Process, Prenti ce- Hall, 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). Competi ti ve 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 Practi ce of Management, Harper and Row, New York, 1954. 18. Selznick, Philip Leadership in Administrati on: A Sociological Interpretati on, Row, Peterson, Evanston Il. 1957. 19. Ansoﬀ , Igor Corporate Strategy McGraw Hill, New York, 1965. 20. Henderson, Bruce (1970). Perspecti ves on Experience. Boston Consulti ng Group.ISBN 0-684-84148-7.

23 21. Porter, Michael E. (1985). Competi ti ve Advantage. Free Press. ISBN 0-684-84146-0. 22. Michael Porter-What is Strategy?-Harvard Business Review- November 1996 23. Hamel, G. & Prahalad, C.K. “The Core Competence of the Corporati on”, 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 Introducti on 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 evaluati on 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 Politi cal Decision Theory,” in Redner, Harry, ed., An Hereti cal Heir of the Enlightenment: Politi cs, 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 Editi on, New York: Macmillan, 1996, p. 56. 33. Hamel, Gary Leading the Revoluti on, Plume (Penguin Books), New York, 2002. 34. Moore, Mark H., Creati ng Public Value: Strategic Management in Government, Cambridge: Harvard University Press, 1995. 35. Lindblom, Charles E., “The Science of Muddling Through,” Public Administrati on Review, Vol. 19 (1959), No. 2 36. Tichy, Noel Managing Strategic Change: Technical, politi cal, and cultural dynamics, John Wiley & Sons, New York, 1983.

24 Part 2 STRATEGY OF EVENT MARKETING. MARKET RESEARCHING

Objecti ve outline: 1. Explain the importance of understanding customers and marketplace. 2. Discuss customer relati onship management. 3. Identi fy event marketi ng strategies for creati ng value for customers and capturing value from customers in return.

Chapter Key Terms: Strategy Customer Communicati on Targets Targeti ng

Event management is the applicati on of project management to the creati on and development of large scale events such as festi vals, conferences, ceremonies, formal parti es, concerts, or conventi ons. It involves studying the brand, identi fying the target audience, devising the event concept, planning the logisti cs and coordinati ng the technical aspects before actually launching the event.1 The process of planning and co-ordinati ng the event is usually referred to as event planning and can include budgeti ng, scheduling, site selecti on, acquiring necessary permits, coordinati ng transportati on 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 meeti ngs. Many industries, charitable organizati ons, and interest groups hold events in order to market themselves, build business relati onships, raise money or celebrate achievement.1 What is event planning?3 This questi on actually breaks down into two questi ons: What kinds of events are we talking about? What is event planning? First, what kinds of events are we talking about? They include:

25 • Celebrati ons (fairs, parades, weddings, reunions, birthdays, anniversaries, bar and bat mitzvahs, fi rst communions, sweet 16s) • Educati on (conferences, conventi ons, meeti ngs, graduati ons) • Promoti ons (product launches, politi cal rallies, fashion shows, conventi ons) • Commemorati ons (memorials, civic events) The above list is not an exhausti ve 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 questi on: 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 transportati on to and from the event • Send invitati ons to att endees • Arrange any necessary accommodati ons for att endees • Coordinate the acti viti es of event personnel • Hire employees to work the event • Supervise at the site • Conduct evaluati ons of the event How many of these acti viti es your business engages in will depend on the size and type of a parti cular event, which will, in turn, depend on the specializati on you choose. Your specializati on will, of course, depend on your areas of experti se, but also will depend on your locati on. 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, marketi ng through stand-out events has never been so maverick. Whether you call it event marketi ng, experienti al marketi ng, live marketi ng, parti cipatory adverti sing, 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 moti ve of engaging consumers. We talked with some

26 of the smartest minds in experienti al marketi ng to fi nd out how they pull oﬀ memorable events—and make sure there’s signifi cant consumer engagement long aft er 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 interacti ng in a quality way. I just got back from Sundance, and we were doing VIP and celebrity shutt ling 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 shutt les, and asked the passengers truth-or-dare questi ons, 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 parti cipants, but became a huge hit online aft er 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 adverti sing agency based in New York City, which ranked No. 236 on the 2010 Inc. 500 | 5000 2. Employ GPS and real-ti me 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 fi lm crews] is locati on and GPS. It’s something that someone can parti cipate in and watch and see in real-ti me. 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 connecti on with another event, is really new and the power of new is huge. If it feels like a diﬀ erent experience— if it captures your fascinati on, that’s what really gets passed along, and builds the press and community around it. It’s what fl ash 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 potenti ally transformati ve to events today are essenti ally invisible. People have gott en used to 3-D technology, projecti ons, 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 demonstrati ons. A couple of years ago it would have felt a lot more awkward, forced, and generally very Minority Report. QR codes are prett y invisible at this point, too, becoming much less awkward, more natural, and that lets them become sparks for natural interacti vity. H&M and Samsung have done very beauti ful projecti on mapping on buildings in Europe. It’s the kind of thing that’s not what people think of as traditi onal event, but it’s experience in the public domain that gets att enti on, and really can have the potenti al to get the att enti on online just because it’s cool to watch.” —Liz Bigham, senior vice president and director of marketi ng 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 acti vity? The fi rst 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 off er 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 existi ng 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, meeti ng 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 creati ng 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-marketi ng agency based in Burlington, Vermont 5. Hire outside experts. Lots of them. When working on a campaign for Mafi a Wars, in which an explosion of an armoured truck would be staged in the Nevada desert, David Moranville, creati ve director and executi ve vice president ofDavis Elen Adverti sing, said: “We were hoping to get MythBusters involved with us so they’d do a show. In the meanti me, we started looking into diff erent detonati ons and diff erent 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 eﬀ ects and blast technology in Apollo 13, Transformers, and Batman. The fi rst 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. Blasti ng caps were added to the interior of all the doors, so at detonati on each fl ies 20 or 30 feet. The truck was fi lled with arti fi cial money, also rigged to blast away at the fi rst explosion. Also, he knew that when there’s fi re, there should be fi re offi cials. And an EMT. And some hired police. The number of offi cials 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 ti me, 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 marketi ng 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 fascinati on with a new way the world can work. It’s increasingly true that tech and creati vity are becoming one in the same. I think they was a period of ti me where technology was a platf orm, and it wasa group of people who solved problems for systems and machinery. There was a creati ve group, separately. They didn’t get together. Now there are minds that come from a technology background and have creati vity. The great melding of those worlds is right now. Geek has been cool for a while, and is only getti ng cooler.”—Michael Hart, founder of Mono, an agency based in Minneapolis

29 8. Tweeti ng the deal. “Almost every brand that has an audience in the Twitt er 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 getti ng good at creati ng on-site experiences over Twitt er. 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-marketi ng agency based in Burlington, Vermont Conducti ng market research3 Many interviewees told us that their market research was very informal in nature, consisti ng 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 nati onally, producing corporate events in Florida, Oklahoma, and Ohio. Most of their clients come to them through organizati ons 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 starti ng 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 competi ti on is now global as well as local, and all event planners should do market research. With this idea in mind, we now oﬀ er some suggesti ons on how to conduct this type of research. The market analysis3 One of your fi rst 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 oﬀ er. For example, if you plan parti es, you may limit your market to your county. If you plan corporate meeti ngs, however, you may have a nati onal client base. Studies show that a populati on 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 populati on, the more potenti al clients there will be for your business. If you live in an area with a populati on 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 populati on base may work for you. Many event planners put their hats into this business, planning to earn only a part-ti me salary to supplement other family income. This is one of the real strengths of this fi eld. You can choose to create a successful part-ti me or full-ti me business in event planning. To conduct a market analysis you need to ask and answer the following questi ons: • Is the populati on 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 characteristi cs compati ble with the market you wish to serve? Many chambers of commerce have offi ces that track their area’s economic development. These offi ces are usually called either Offi ce of Economic Development or Economic Development Council. Find an offi ce in your area, and look for the above informati on. In additi on, look at reports and studies conducted by trade associati ons. 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 informati on about how individuals and families spend their money. If you’ll be planning corporate events, you also need to know the number of corporati ons in your service area that hold regular conventi ons and meeti ngs, the size of these companies, their budgets for these events, and if they are using outside services. You will be able to fi nd answers to many of these questi ons on a company’s website. As you conduct your market research, memberships in industry-related associati ons can be well worth the investment. Associati ons usually oﬀ er networking opportuniti es and a wealth of industry-specifi c informati on, such as market stati sti cs, member lists, books, and reference materials. They may also oﬀ er discounts on purchases from certain suppliers. There are several associati ons specifi c to the event planning industry, including the Internati onal Special Events Society and Meeti ng Professionals Internati onal. For informati on on contacti ng an industry associati on, please see the Appendix at the end of this guide. Interview Prospecti ve Clients3 The next step is to interview prospecti ve clients. What are their needs? How likely are they to use a service like yours? If you are planning corporate events, interview meeti ng planners and directors of marketi ng

31 and public relati ons, as well as event directors at conventi on halls and hotels. If your business will focus on social events, interview women in aﬄ uent households (studies show women do most social planning). Whatever your specializati on, also consider interviewing professionals in related fi elds. 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 committ ed,” he says. Analyse The Competi ti 3on Competi ti on in the event planning market is fi erce, but it isnot insurmountable. If you are targeti ng the corporate market, your competi ti on will consist not only of other event planning entrepreneurs, but also of in-house meeti ng planners hired by corporati ons. Many corporati ons choose to outsource event planning responsibiliti esto keep costs low. You may be able to assess the competi ti on by asking corporati ons about the planners they work with. Trade associati ons 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 competi ti on will be other event planning entrepreneurs, as well as some caterers, fl orists, etc., who have taken on the responsibiliti es of planning events as a side-line functi on. Most of the competi ti on 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 adverti sing, preferring to rely solely on word-of mouth to do their adverti sing for them. This means you may have to get creati ve to fi gure out how much local competi ti on you face. Ask vendors which planners they work with. Go to party supply stores and see if you can fi nd out who their major customers are. Ask all your questi ons face-to-face, rather than by phone. If you are friendly and explain that you are trying to fi gure out if there is enough demand for another planning business, most people will cooperate. If you fi nd a large amount of competi ti on in your area, don’t be discouraged. Instead, look for a niche you can fi ll 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 opportuniti es out there than those planners in the marketplace can handle. Social event planners also will be able to fi nd plenty of work

32 in areas with a smaller populati on base. Remember that if you strive to be the best, research your market, promote yourself, and develop a good business plan, you will fi nd your spot in the marketplace. DISCUSSIONS View an example of key prioriti es. Close the vision-culture gap In order to develop strategies to close this gap, the Corporate Communicati on strategist, as a starti ng point, has to have a clear understanding of the organisati on’s strategic intent and prioriti es. Merely repeati ng 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 (someti mes called business plan objecti ves or a variety of other terms) so that employees can truly understand and therefore support it. Another step towards closing this gap is to defi ne 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 communicati on strategy will seek to create maximum understanding and enterprise-wide buy-in for the values and behaviours.

Close the vision-reputati on gap The primary focus of the communicati on strategy in closing this gap is eﬀ ecti ve stakeholder relati onship management. To perform this functi on eﬀ ecti vely, the Communicati on strategist needs to be involved in the formulati on of the vision (organisati on’s strategic intent) and strategic prioriti es as these have to be informed by insights on stakeholder needs, expectati ons and percepti ons. Once the organisati on’s strategy is developed and the vision and strategic goals are clearly arti culated (or implicitly understood), it becomes a functi on of the communicati on strategy to identi fy the most relevant stakeholders, not only for the organisati on as a whole, but more importantly for each of the strategic goals. The communicati on strategy then has to specify the ways in which the relati onship with each of those stakeholders will be managed to ensure common understanding among stakeholders and the organisati on of where it is heading and what it will focus on to get there. It is part of the communicati on strategy development phase to specify the measurement tools that will

33 be employed to determine and track stakeholder percepti ons, thereby determining the size and nature of the gap that sti ll needs to be closed.

Close the reputati on-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 organisati on’s vision and strategic goals (closing the vision-culture gap) and the organisati on and its key stakeholders have a commonly shared view and understanding of the vision and strategic goals (closing the vision-reputati on gap), there should be no gap between what the stakeholders expect of the organisati on 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 meeti ng management: Comprehensive strategies for meeti ngs, conventi ons 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: htt p:// www.inc.com/guides/201102/new-rules-of-event-marketing. html 3. The Event Planning Industry. Access via Internet: htt p://www. entrepreneur.com/downloads/guides/1313_Event_Planning_ ch1.pdf

FURTHER READING 1. Ayuba B. (2005), Marketi ng: Principles and Management, Kaduna:Shukrah Printi ng 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 Marketi ng Strategy, New York: McGraw-Hill Irwin. 4. Edward, J. and William J. (1963): Fundamentals of Marketi ng; NewYork, Mc Graw- Hill, Inc.

34 Part 3 SEGMENTATION OF EVENT MARKETING AND SELECTIONS OF TARGET MARKETS

Objecti ve outline:

1. Defi ne the major steps in designing a customer – driven marketi ng strategy: market segmentati on, targeti ng, diﬀ erenti ati on and positi oning. 2. List and discuss the major bases for segmenti ng consumer and business markets. 3. Explain how companies identi fy att racti ve market segments and choose a market – targeti ng strategy. 4. Describe the environmental forces that aﬀ ect the company’s ability to serve its customers.

Chapter Key Terms:

Target Segmentati on Positi on

Why audience segmentati on is important1 For many in the arti sti c community, marketi ng is a nine-lett er dirty word. To some arti sts, marketi ng seems to represent the ulti mate compromise of their creati ve principles. Marketi ng, they believe, means pandering to the tastes of the audience, rather than expressing their own arti sti c vision. Experienced marketers, in and outside of the arts, recognize this fear as a narrow and incorrect interpretati on of marketi ng principles. In fact, appropriate and insightf ul market segmentati on analysis can help arti sts thrive. When arts organizati ons fi nd and att ract the right audience for each arti sti c eﬀ ort, more arti sts can connect with audiences that appreciate and value their individual talents and ideas. Market segmentati on analysis and the selecti on of the parti cular audience segments you will target are essenti al parts of a strong marketi ng plan. When you analyse your potenti al audience to identi fy key segments, you consciously select groups of people you will try to att ract to your organizati on. Your marketi ng goal is no longer just fi lling

35 seats or getti ng people to walk in the door, but att racti ng the right people with the right message through the right media at the right ti me with the right product at the right price. When you commit to target marketi ng, you tell yourself, your arti sts, your management and your board that some potenti al audience members are more important than others. Excluding anyone may strike some as a risky and controversial strategy. However, when target marketi ng succeeds, you don’t just sell ti ckets. You build a strong and sati sfi ed audience that values the arti sti c product you provide, and keeps coming back for more. In the arts, successful market segmentati on is based on the premise of “diff erent strokes for diff erent folks.” It begins by recognizing that every person is not equally drawn to every work of art. The purpose of audience segmentati on analysis is to identi fy those in the over-all populati on who will be most likely to appreciate and value the parti cular art in questi on so you can promote the work directly to them. In other words, in arts marketi ng, the goal of segmentati on is to fi nd audience members who will be most sati sfi ed by the arti sti c product you have to off er. Market segmentati on protects arti sts from pressures to shape works to fi t the needs and tastes of an undefi ned mass of potenti al audience members. Another word for segmentati on is grouping. When you look for segments of your overall audience, or your potenti al audience, you are searching for groups of people who are similar in some way to each other, and diff erent from everybody else. For a segment to be meaningful for your marketi ng strategy, the ways the individuals are similar should relate to your organizati on or arti sti c product. Your goal in market segmentati on is to appeal to each group’s parti cular needs and interests in much the same way you would if you were meeti ng and talking to one person at a ti me. As soon as marketers began to use television as a major adverti sing medium, they realized that “mass” communicati on must direct itself to a parti cular target consumer or it is lost in the clutt er. In today’s world, potenti al audiences are besieged with informati on everywhere they go. They see fl yers 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 marketi ng, and devote our energy and att enti on to the things we fi nd interesti ng, intriguing or otherwise worth our ti me.

36 Market segmentati on lets you see and know your audience members as individuals, so you can identi fy their needs and more eﬀ ecti vely communicate the ways they can benefi t from what you have to oﬀ er. Armed with this knowledge, you’ll fi nd it easier to develop creati ve marketi ng strategies that reach and moti vate your target, making the most of your always too-scarce promoti onal resources.

How to ﬁ nd important new audience segments1

Before you begin your search for new audience segments, make sure you understand the characteristi cs of your current audience and any segments it may already include. Then, you can look beyond your present audience to fi nd new people to target with special marketi ng eﬀ orts. How would you characterize the people who now support your organizati on? 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 organizati on, and try to formulate a current audience profi le, 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 characteristi cs. 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 occupati on? The typical level of income? The level of educati on? You probably have a general idea of the demographic characteristi cs 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 writt en profi le 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 qualiti es that turn undiﬀ erenti ated 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 diﬀ erent in many other ways. Demographic profi les are so broadly drawn, that they describe many people -including people who don’t fi t into your customer segments. Demographics are only a starti ng point. They can provide a broad general outline, but don’t really help you pinpoint the qualiti es 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 fi ll in the fi ner details.

For real insight, reach inside to identi fy needs1

To get beyond demographics, you need to think about what makes one person diﬀ erent from another. For the most part, the demographic facts are not what really disti nguish 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 fi nd the most powerful informati on about your present audience and the groups you can target to develop new audiences. In defi ning audience segments, your primary goal should be to identi fy a group of people who share a common need that your organizati on or your programming can sati sfy. The need might be expressed in terms of the arti sti c product you deliver, i.e. you might be looking for people who seek out “innovati ve presentati ons of classic dramas” or “modern music from around the world.” The need can also be expressed in non-arti sti c terms, such as opportuniti es for socializing with friends, family entertainment, relaxati on or other end benefi ts. When you defi ne segments based on their needs, you remain focused on how your arti sti c product can fi nd 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 fi nd out about your audience or your prospects. What are their behaviour patt erns relati ve to your organizati on, or relati ve to the arts overall? Are they frequent arts parti cipants, or do you att ract people who are not very involved in the arts? Do you get repeat att endance, or is most of your audience att ending only once? Do diﬀ erent programs or performances att ract diﬀ erent types of people? Do you have a core of subscribers or members? Are your audience members the subscribers or members of other arts organizati ons? Which ones?

38 What Are They Aft er? Then ask yourself what underlying needs may be moti vati ng these behavioural patt erns. Is your audience seeking variety? New experiences? Reliable entertainment? Exposure to the classics? Opportuniti es to learn? By trying to understand why people behave as they do, you may be able to identi fy the important needs your marketi ng 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 subscripti on? 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 atti tudes, opinions and beliefs that moti vate what people do. Ask yourself what your existi ng audience members or your prospects like about the arts. What do they expect from their arts acti viti es? Are they looking for educati on? Inspirati on? Social status? Could their expectati ons provide a basis for meaningful segmentati on? What Are Their Prioriti es? 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 “fi t” into their leisure ti me and other life responsibiliti es? What Do They Think of You? What do your audience members or prospects know or believe about your organizati on? What do they like about what you do? What do they believe you do best? What don’t they like? Are the diﬀ erences in what people know or believe about you enough to create genuinely diﬀ erent audience segments?

QUESTIONS AND DISCUSSION

EXAMPLE: Identi fy speciﬁ c individuals based on records kept of their behaviour.

Dance Company Y’s primary targets for a special Subscripti on renewal eﬀ ort are fi rst-year subscribers. The Company refers to its Database to provide the informati on needed to identi fy the people who fi t the defi niti on of the targeted customers (i.e. all the people who are listed in the Database as fi rst-year subscribers). Note: Your Database records must be clean and up-to-date for the customer informati on

39 to be accurate. In other situati ons you won’t be able to identi fy Target Prospects on an individual name-and-address basis. That’s when you’ll need to learn more about the characteristi cs that prospecti ve customers have in common. These details will help you single out these prospecti ve customers with adverti sing or other marketi ng eﬀ orts, by “talking” to them as if you were talking one-on-one to each person individually.

PSYCHOGRAPHIC EXERCISE: A good way to pull segmentati on informati on together is to create “stories” about hypotheti cal customers who fi t into each customer segment you have identi fi ed. The purpose of the exercise is to get your creati ve juices fl owing toward understanding your customers’ perspecti ves. This is an example of what a Chicago-based chamber ensemble came up with: “Drs. Wayne and Jean Smith are an aﬄ uent 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 conti nue living there aft er they reti re 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 organizati on fi rst started in Hyde Park in 1972. Wayne and Jean know quality when they hear it, and they were thrilled to have such fi ne performances in close proximity to their home (within 1 mile). When the organizati on 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 oﬀ ered 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 starti ng to miss the concerts a litt le, and their friends who sti ll att end say that the series at Old St. Patrick’s Church in the Loop is convenient.”

EXAMPLE: Using psychographic research in a practi cal way. Based on a combinati on of research and insight your organizati on decides that people who have att ended your organizati on’s performances at least three ti mes in the past two years are likely to value your organizati on as an important presenter of new works by established dramati sts. You can reasonably assume that these people would consider subscribing to your season program to support your eﬀ orts.

40 Now match demographic informati on to the needs of each group you are targeti ng. Att endance, in this case, is the demographic behaviour of this parti cular segment. Your organizati on’s brand new season is the benefi t provided by your organizati on that fi lls that segment’s need. First-ti me att endees and fi rst-ti me repeaters are excluded from the customer segment targeted for subscripti ons. Hold on to these segments–they may represent good targets for other Marketi ng eff orts. Since your organizati on knows what moti vates its returning customers, it focuses its Subscripti on Marketi ng eff ort on customers who have att ended its performances at least three ti mes in the past two years. To further enti ce this segment your organizati on emphasizes the “world premiere” performances that will be included in its season. Market segmentati on is a marketi ng 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 prioriti es, and then designing and implementi ng strategies to target them. Market segmentati on strategies are generally used to identi fy and further defi ne the target customers, and provide supporti ng data for marketi ng plan elements such as positi oning to achieve certain marketi ng plan objecti ves. Businesses may develop product diff erenti ati on strategies, or an undiff erenti ated approach, involving specifi c products orproduct lines depending on the specifi c demand and att ributes of the target segment. Marketers can segment according to geographic criteria—nati ons, states, regions, countries, citi es, neighbourhoods, or postal codes. The geo-cluster approach combines demographic data with geographic data to create a more accurate or specifi c profi le.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 marketi ng towards several neighbourhoods in a larger city or area, while ignoring customers in other conti nents. Geographic Segmentati on is important and may be considered the fi rst step to internati onal marketi ng, followed by demographic and psychographic segmentati on.2 Segmentati on according to demography is based on variables such as age, gender, occupati on and educati on level or according to perceived benefi ts which a product/service may provide. Benefi ts may be perceived diff erently depending on a consumer’s stage in the life cycle.

41 Demographic segmentati on divides markets into diff erent life stage groups and allows for messages to be tailored accordingly.3 A variant of this approach known as ‘fi rmographic’ or ‘feature based’ segmentati on is commonly used in business-to-business markets (it’s esti mated 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 locati on (country and/or region).4 Psychographic segmentati on, which is someti mes called Lifestyle. This is measured by studying the acti viti es, interests, and opinions (AIOs) of customers. It considers how people spend their leisure, and which external infl uences they are most responsive to and infl uenced by. Psychographic is highly important to segmentati on, because it identi fi es the personal acti viti es and targeted lifestyle the target subject endures, or the image they are att empti ng to project.Mass Media has a predominant infl uence and eff ect on Psychographic segmentati on. Lifestyle products may pertain to high involvement products and purchase decisions, to speciality or luxury products and purchase decisions.5 Occasion segmentati on 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 considerati on the diff erences an affl uent and middle-class customer would have during these occasions. ‘Occasional customer segmentati on’ merges customer-level and occasion-level segmentati on models and provides an understanding of the individual customers’ needs, behaviour and value under diff erent occasions of usage and ti me. Unlike traditi onal segmentati on models, this approach assigns more than one segment to each unique customer, depending on the current circumstances they are under.6 Cultural Segmentati on7 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 predicti ve models. Cultural segmentati on enables appropriate communicati ons to be craft ed to parti cular cultural communiti es, which is important for message engagement in a wide range of organisati ons, including businesses, government and community groups. Cultural Segmentati on can be applied to existi ng customer data to measure market penetrati on in key cultural segments by product, brand, channel as well as traditi onal measures of recency, frequency and monetary value. These benchmarks

42 form an important evidence-base to guide strategic directi on and tacti cal campaign acti vity, allowing engagement trends to be monitored over ti me.7 Cultural Segmentati on can also be mapped according to state, region, suburb and neighbourhood. This provides a geographical market view of populati on proporti ons and may be of benefi t in selecti ng appropriately located premises, determining territory boundaries and local marketi ng acti viti es. Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name analysis (onomasti cs) is the most reliable and effi cient 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 aft er allowing for female name changes due to marriage, social/politi cal reasons or colonial infl uence. 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 segmentati on. Access via Internet: htt p://racc.org/sites/default/ﬁ les/buildingblocks/ defining/Finding%20your%20Audience%20through%20 Market%20Segmentati on.pdf 2. What is geographic segmentati on’ Kotler, Philip, and Kevin Lane Keller. Marketi ng Management. Prenti ce Hall, 2006. ISBN 978-0- 13-145757-7 3. Riley, Jim (2012-09-23). “Market Segmentati on - Demographics”. Tutor2u.net. Retrieved 15 July 2014. 4. Fripp, Geoﬀ .“Market Segmentati on Bases” Market Segmentati on Study Guide 5. Marketi ng Padawan Designing Marketi ng Strategies With the Help of STP

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

FURTHER READING

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

44 Part 4 STRATEGIES OF EVENT MARKETING POSITIONING

Objecti ve outline:

1. Explain the importance of informati on in gaining insights about the marketplace and customers. 2. Defi ne the marketi ng informati on system and discuss its parts. 3. Outline the steps in the positi oning process. 4. Explain how companies analyse using positi oning map.

Chapter Key Terms:

Positi oning Target Competi tors Competi ti ve advantage Market positi on Market change Value

For almost two decades, managers have been learning to play by a new set of rules. Companies must be fl exible to respond rapidly to competi ti ve and market changes. They must benchmark conti nuously to achieve best practi ce. They must outsource aggressively to gain effi ciencies. And they must nurture a few core competencies in the race to stay ahead of rivals.1 Positi oning-once the heart of strategy-is rejected as too stati c for today’s dynamic markets and changing technologies. According to the new dogma, rivals can quickly copy any market positi on, and competi ti ve 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 destructi ve competi ti on. True, some barriers to competi ti on are falling as regulati on 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 competi ti on is a self-infl icted wound, not the inevitable outcome of a changing paradigm of competi ti on.1

45 The root of the problem is the failure to disti nguish between operati onal eﬀ ecti veness and start edgy. The quest for producti vity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, `benchmarking, ti me- based competi ti on, outsourcing, partnering, reengineering, change management. Although the resulti ng operati onal improvements have oft en been dramati c, many companies have been frustrated by their inability to translate those gains into sustainable profi tability. And bit by bit, almost impercepti bly, management tools have taken the place of strategy. As managers push to improve on all fronts, they move farther away from viable competi ti ve positi ons.1

Finding new positi ons: the entrepreneurial edge1

Strategic competi ti on can be thought of as the process of perceiving new positi ons that woo customers from established positi ons or draw new customers into the market. For example, superstores off ering depth of merchandise in a single product category take market share from broad-line department stores off ering a more limited selecti on in many categories. Mail-order catalogues pick off customers who crave convenience. In principle, incumbents and entrepreneurs face the same challenges in fi nding new strategic positi ons. In practi ce, new entrants oft en have the edge. Strategic positi oning are oft en not obvious, and fi nding them requires creati vity and insight. New entrants oft en discover unique positi ons that have been available but simply overlooked by established competi tors. 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 acti viti es - extensive refurbishing of cars, product guarantees, no-haggle pricing, sophisti cated use of in-house customer fi nancing that has long been open to incumbents. New entrants can prosper by occupying a positi on that a competi tor once held but has ceded through years of imitati on and straddling. And entrants coming from other industries can create new positi ons because of disti ncti ve acti viti es drawn from their other businesses. CarMax borrows heavily from Circuit City’s experti se in inventory management, credit, and other acti viti es in consumer electronics retailing. Most commonly, however, new positi ons open up because of change. New customer groups or purchase occasions arise; new needs emerge

46 as societi es evolve; new distributi on channels appear; new technologies are developed; new machinery or informati on systems become available. When such changes happen, new entrants, unencumbered by a long history in the industry, can oft en more easily perceive the potenti al for a new way of competi ng. Unlike incumbents, newcomers can be more fl exible because they face no trade-oﬀ s with their existi ng acti viti es. Positi oning is a marketi ng strategy that aims to make a brand occupy a disti nct positi on, relati ve to competi ng brands, in the mind ofthe customer. Companies apply this strategy either by emphasizing the disti nguishing 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, uti litarian or luxurious, entry-level or high-end, etc.) throughadverti sing. Once a brand is positi oned, it is very diffi cult to repositi on it without destroying its credibility. It is also called product positi oning.2 Positi oning was fi rst introduced by Jack Trout in 1969 (“Industrial Marketi ng” Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestselling book “Positi oning - The Batt le for Your Mind.” (McGraw-Hill 1981).3 This diﬀ ers slightly from the context in which the term was fi rst published in 1969 by Jack Trout in the paper “Positi oning” is a game people play in today’s me-too market place” in the publicati onIndustrial Marketi ng, in which the case is made that the typical consumer is overwhelmed with unwanted adverti sing, and has a natural tendency to discard all informati on that does not immediately fi nd a comfortable (and empty) slot in the consumer’s mind. It was then expanded into their ground-breaking fi rst book, “Positi oning: The Batt le for Your Mind,” in which they defi ne Positi oning as “an organized system for fi nding a window in the mind. It is based on the concept that communicati on can only take place at the right ti me and under the right circumstances” (p. 19 of 2001 paperback editi on).3 What most will agree on is that Positi oning is something (percepti on) that happens in the minds of the target market. It is the aggregate percepti on the market has of a parti cular company, product or service in relati on to their percepti ons of the competi tors in the same category. An important concept in positi oning is that it expects that consumers compare and analyse products in the marketplace, whether based on features of the product itself (quality, multi ple uses, etc.), price, and/ or packaging and image.4 It will happen whether or not a company’s management is proacti ve, reacti ve or passive about the ongoing process

47 of evolving a positi on. But a company can positi vely infl uence the percepti ons through enlightened strategic acti ons.4 A company, a product or a brand must have positi oning concept in order to survive in the competi ti ve marketplace. Many individuals confuse a core idea concept with a positi oning 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 Positi oning Concept att empts to sell the benefi ts of the product or service to a potenti al buyer. The positi oning concepts focus on the rati onal or emoti onal benefi ts that buyer will receive or feel by using the product/service. A successful positi oning concept must be developed and qualifi ed before a “positi oning statement” can be created. The positi oning concept is shared with the target audience for feedback and opti mizati on; the Positi oning Statement (as defi ned below) is a business person’s arti culati on of the target audience qualifi ed idea that would be used to develop a creati ve brief for an agency to develop adverti sing or a communicati ons strategy.5 Positi oning Statement As writt en in the book Crossing the Chasm (Copyright 1991, by Geoff rey Moore, HarperCollins Publishers), the positi on 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 benefi t – that is, compelling reason to buy). Unlike (primary competi ti ve alternati ve), our product (statement of primary diff erenti ati on).5 Diff erenti ati on 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 fi rst or the fastest. Whatever it is a business can use to stand out from the rest is called diff erenti ati on. Diff erenti ati on in today’s over-crowded marketplace is a business imperati ve, not only in terms of a company’s success, but also for its conti nuing survival.5

More generally, there are three types of positi oning concepts:

1. Functi onal positi ons • Solve problems • Provide benefi ts to customers

48 • Get favourable percepti on by investors (stock profi le) and lenders 2. Symbolic positi ons • Self-image enhancement • Ego identi fi cati on • Belongingness and social meaningfulness • Aﬀ ecti ve fulfi lment 3. Experienti al positi ons • Provide sensory sti mulati on • Provide cogniti ve sti mulati6 on

In volati le markets, it can be necessary - even urgent - to repositi on an enti re company, rather than just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shift ed from investment to commercial banks, for example, the expectati ons of investors, employees, clients and regulators all needed to shift , and each company needed to infl uence how these percepti ons changed. Doing so involves repositi oning the enti re fi 6rm. This is especially true of small and medium-sized fi rms, many of which oft en lack strong brands for individual product lines. Ina prolonged recession, business approaches that were eﬀ ecti ve during healthy economies oft en become ineﬀ ecti ve and it becomes necessary to change a fi rm’s positi oning. Upscale restaurants, for example, which previously fl ourished on expense account dinners and corporate events, may for the fi rst ti me need to stress value as a sale tool.6 Repositi oning a company involves more than a marketi ng challenge. It involves making hard decisions about how a market is shift ing and how a fi rm’s competi tors will react. Oft en these decisions must be made without the benefi t of suffi cient informati on, simply because the defi niti on of “volati lity” is that change becomes diffi cult or impossible to predict.7 Positi oning is however diffi cult to measure, in the sense that customer percepti on of a product may not have been tested on quanti tati ve measures.8

49 DISCUSSION

Case study Brand Positi oning and Market Segmentati on Brand positi oning is an important strategy for achieving diff erenti al advantage. Essenti ally, positi oning refl ects “the place” a product occupies in a market or segments. GAP has a wide range of products that are refl ected in multi -segments. Initi ally, 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 diff erences among GAP’s three brands: Old Navy (discount/ value), Gap (mid-price), and Banana Republic (high-end). In the past decades GAP’s diff erenti al 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 adverti sing 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 competi ti on intensifi ed as new players also targets some of the same market segments aimed by GAP brands. GAP’s major competi tors included vast array of companies from three market segments. In the discount/value market the main competi tor 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 Outf itt ers. All three brands target the same age group. Thirdly, in the high-end apparel segments, J. Crew and Urban Outf itt ers are Banana Republic’s biggest opponents. Based on the informati on, a positi oning map can be constructed to show GAP’s current positi on relati ve to its competi tors. EXHIBT is a diagram that shows GAP’s three brands and its competi tors 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 creati on of Forth & Towne allows GAP to transfer brand equity from the three original brands to this new brand. In additi on, 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 fi nancial conditi on of GAP is sti ll questi onable.

50 Please ﬁ nd:

Old Navy

Target Segments

Selling Points

Opportuniti es

Threats

Answer - study case Gap

Target Segments Although people of various ages shops at Gap, but Gap specifi cally targets 18- to 30-year-old. The sub-brands of Gap also targets shoppers for shop for inti mate 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. Opportuniti es 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 directi on. The redesigning of stores has a favourable impact on customers’ shopping experience, which can ulti mately maximize sales. China served as a both demand of supply market for Gap, which also true for the other two brands. The internati onal market is risky as was shown in Gap’s exit of the German market, but at the same ti me it is rewarding. If Gap is able to capture the opportuniti es in China, it just opened the door for huge growth. Threats Conti nuous research and customer surveys are needed in order to keep pace with the apparel industry. Customers feedback to Gap’s oﬀ ering are really important. Gap is risking losing businesses to competi tors if it ignores customer feedbacks and insights. Also, maintaining Gap’s identi ty can also be an issue as some people believed that Old Navy was

51 cannibalizing Gap. If customers see no diﬀ erence between Gap and Old Navy, they would be indiﬀ erent 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: htt ps://hbr.org/1996/11/ what-is-strategy 2. Business Dicti onary. (n.d.) Defi niti on of Positi oning. Retrieved from htt p://www.businessdicti onary.com 3. Lamb, C. (2013). e-Study Guide for MKTG 7. Retrieved from htt ps://books.google.com/books 4. Trout, J., (1969) “”Positi oning” is a game people play in today’s me-too market place”, Industrial Marketi ng, Vol.54, No.6, (June 1969), pp. 51–55. 5. Ries, A. and Trout, J. (1981) Positi oning, The batt le for your mind, Warner Books - McGraw-Hill Inc., New York, 1981, ISBN 0-446- 34794-9 6. Trout, J. and Rivkin, S. (1996) The New Positi oning : 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) “Diﬀ erenti ate or Diminish: The Art and Necessity of Business Positi oning”, (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 Segmentati on - 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 Retenti on” secti on). Upper Saddle River, NJ: Pearson Educati on/Wharton School Publishing, 2005. ISBN 0-13-142895-0 5. Goldstein, Doug. “What is Customer Segmentati on?” MindofMarketi ng.net, May 2007. New York, NY.

53 Part 5 EVENT MARKETING SPONSORSHIP

Objecti ve outline:

1. Understand sponsorships and how they relate to segmentati on, target marketi ng and integrated marketi ng communicati on 2. Understand how to develop and sell sponsorships to organizati ons 3. Learn techniques for fi nancial evaluati on, quanti fying impact and recommending decisions regarding sponsorship purchases based on marketi ng and fi nancial targets.

Chapter Five Glossary

Sponsorship Event strategy Event bugged Financial evaluati on Planning

Over the years we have identi fi ed 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 piloti ng sponsorship workshops for athletes including 1-1 sessions with identi fi ed 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 diffi cult economic ti mes, it takes planning, eﬀ ort and someti mes it isn’t enough to meet the growing cost of your budgets.1 In this arti cle we share what athletes have said about their approach to sponsorship in the past, and provide you practi cal ti ps 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 oﬀ er in conjuncti on with their sporti ng talents or how to demonstrate them in a proposal;

54 • They are all very worried about $$ and it is eﬀ ecti ng 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 sorti ng and assessing the background work in order to fi nd out who are the most suitable sponsors for your funding project. It involves putti ng together the following informati on. Seeking out companies whose project image can be associated with your project. It is helpful if the people who benefi t 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 benefi t. An example of this would be Danyon Loader (Olympic Gold Medallist) and breakfast cereal.1

Suggested process for a tt racti ng sponsorship . Identi fy benefi ts to Sponsor . Value benefi ts to Sponsor . Identi fy suitable Sponsoring Companies . Tailor proposal to demonstrate benefi ts (To Sponsor!) . Identi fy decision makers and infl uencers . Lobby infl uencers . Present proposal . Negoti ate proposal . Use altruisti c benefi ts as “icing” . Leverage media coverage2 First of all Consider the sponsors perspecti ve 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 acti viti es or events? . Do your acti viti es or events achieve the sponsor’s marketi ng objecti ves? . Is it a good fi t with their product image? . What profi le 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 platf orm of the sponsor: The Brand platf orm 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 associati on . Is there a strategic fi t . Are your core values similar . What can you oﬀ er 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 - identi fy their ti ming 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 confi dent you will feel marketi ng yourself.

People in your network…

The Coﬀ ee Meeti ng/Networking at Functi ons2 Opportuniti es 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 eﬀ ecti vely2 Maintain the relati onship and be realisti c about your ti me frame. Don’t forget the contract and seek some legal advice.

What is your ti me frame?

Manage the relati onship and plan how you will do this • Keep in contact – remember to share all your experiences (the good and not so good) • Take the ti me to learn and understand their business

What do you know about How will you manage the their business? relati onship?

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?

Nati onal Sporti ng SPARC NZOC Organisati on (NSO)

57 Ongoing acti viti es and programmes.

Who and how many people are involved?

What opportuniti es exist for the sponsors’ involvement here?

Special events. Shows, conferences, etc.

Who and how many people are involved? Is the event successful and what opportuniti es exist for the sponsors’ involvement?

Communicati ons tools, newslett ers, 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 Marketi ng assets? What do you own? What relati onships, partnerships have you established and what infl uenti al members and unique appeal do you have?

Clearly deﬁ ne your needs

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

58 The prospecti ve sponsor needs to know (and may require evidence) that their money will be spent wisely in the area you claim your organisati on is sound and reputable. Is your sponsorship request for cash only?2 Have you considered the use of other arrangements? For instance, requesti ng supplies products or services that your group would normally purchase or could on-sell.2

Develop a list of benefi ts2 . Exposure and awareness: How can you expose the sponsor, their products, logos, e.g. signage, programmes, fl yers, adverti sements, vehicles, ti ckets, uniforms, bumper sti ckers, 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 opportuniti es can you provide and what target markets can you access? . The Sponsor’s Marketi ng Objecti ves: What is their philosophy? . Does their Managing Director have a personal objecti ve? . 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 benefi ts you can off er in return for the sponsorship. Keep in mind that the more ways a sponsor can promote their fi rm, product or service, the more agreeable they will be to lending their support.

Sponsor benefi ts: Sponsors need to benefi t from being involved with you. Be as specifi c as possible. You should aim to give sponsors suffi cient data so that they can evaluate the Cost eff ecti veness of your project alongside other promoti onal opportuniti es. As you proceed further in your approach to potenti al sponsors you will need to tailor the benefi ts you off er 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 benefi ts.1

59 Ways to recognise sponsors are: . Sponsors name on all clothing . all stati onery. Can be done simply with a self-inking stamp. . all promoti onal material e.g. entry or registrati on forms posters ti ckets . noti ceboards at clubrooms or offi ces . cups, medals and ribbons . displays requesti ng members to give the sponsor their business support. . Club banner . adverti sing in programmes and newslett ers . promote and foster sponsors name and produce on the PA system during the event . team or individual players to lend themselves to promoti onal acti viti es for the sponsor . give the sponsor the opportunity to market products at the venue or to the parti cipants . distributi on of sponsors adverti sing material to all parti cipants . venue adverti sing . use of photos of the event by the sponsor for own promoti ons.1 What can you oﬀ er: think outside the square Where can you transfer your skills? (e.g. coaching sessions)

What can you oﬀ er?

60 This is oft en the sti cking point for local clubs and events but there will be opportuniti es 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 parti cipant, whether the manager or a volunteer, using an oppositi ons logo brand or equipment

. Do not use a photograph of any one in any media unless wearing something identi fying sponsor or subject.

. All press releases to use full event or club ti tle i.e. always include the sponsors name if they have naming rights.

. Community newspaper and radio stati ons oft en welcome arti cles 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 organizati on.[1] There are two main diﬀ erences between project sponsorship and project management. Firstly project sponsorship includes the identi fi cati on and defi niti on of the project whereas project management is concerned with delivering a project that is already defi ned, if only quite loosely. Secondly the project sponsor is responsible for the project’s case and should not hesitate to recommend cancellati on of the project if the business case no longer justi fi es the project. Project sponsors can encourage separati on of decision making responsibiliti es between project manager and project sponsor, accountability for the realisati on of project benefi ts, oversight of the project management functi on and can carry out senior stakeholder management.[2] The project sponsor or executi ve sponsor needs a range of skill sets, or at least access to skill sets which include appreciati on of corporate strategy; ability to prepare a business case and profound knowledge of the organizati on’s operati ons. The project sponsor also needs to know

61 his or her way around the organizati on and command respect within it. The project sponsor and project manager should form an eﬀ ecti ve partnership with the project manager orchestrati ng all players involved in delivering the project e.g. designers, manufacturers and contractors, whilst the project sponsor coordinates all departments of the client organizati on and associated stakeholders so as to integrate the delivered project into the client organizati on and take full benefi ts from it such that the business case is fulfi lled.[3] Because the project sponsor is the ‘owner’ of the project from concepti on to commissioning and operati on it is parti cularly important to achieve conti nuity of sponsor throughout the project[4] yet correspondingly diffi cult to achieve because of the extended durati on of sponsorship compared to project management.

PRACTICAL TASK

Write your proposal using these folowing recommendati ons and structure • An opening lett er, clear and concise which summarises some key points: • Your introductory paragraph should state you are submitti ng 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 acti vity, what you can oﬀ er the sponsor and the ongoing benefi t for the sponsor. • Conclude with a paragraph on some of the business benefi ts to them and close the lett er with an indicati on of the next step (i.e. you will call for a meeti ng 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:

Organisati on history and future: Name, locati on, size, nature of client base nature of group, profi le of executi ve, affi liati ons, special features of group, etc.

62 Sponsorship Outline: What acti vity is being proposed? What are the purposes and objecti ves? How many parti cipants? What locati on? Is there a history of success?

Features and Beneﬁ ts of the Sponsorship: Summarise the features (signs, att endees, adverti sements, coupons, fl yers, etc.) and benefi ts to the sponsor based on your brainstorming notes. How will the features meet the sponsor’s need for sales, exposure etc. Link the benefi ts to the outlined features.

Investment and Term List the price of the sponsorship (GST exclusive) and indicate any opti ons you are oﬀ ering (i.e. cash or kind). Suggest a term for the sponsorship (i.e. 1 to 3 years). A longer term may indicate you are committ ed to investi ng ti me and eﬀ ort into building a relati onship with the sponsor.

Budgets/Timetable: How will you spend the money? Provide a realisti c budget for your acti vity (GST excl.) Show you too are investi ng money in your acti viti es. Include a ti metable and schedule of criti cal dates. This demonstrates you are organised and professional.

Appendices Including annual reports, media clippings, referral lett ers, 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 ti tles 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 portf olio 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 ti meframe for the partnership . know what you will do/how you will cope if the sponsorship fi nishes

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/.../fi les/...Athletes/Athlete.../Sponsorship_ideas.doc 2. Att racti ng funding and sponsorship. Access via Internet: htt p:// www.100ways.org.uk/att racti ng-funding-and-sponsorship-a. html 3. West, D. (2010) ‘Project Sponsorship: An Essenti al Guide for Those Sponsoring Projects Within Their Organizati ons’, Gower Publishing, Farnham, ISBN 978-0-566-08888-9 4. Sponsoring change - A guide to the governance aspects of project sponsorship, Associati on 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 Administrati on] (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 marketi ng of Sport. Prenti ce Hall and Financial Times. p. 592. ISBN 978-0-273-68826-6. 3. Lynn R. Kahle, Angeline G. Close (2011). Consumer Behavior Knowledge for Eﬀ ecti ve Sports and Event Marketi .ng New York: Routledge. ISBN 978-0-415-87358-1. 4. NSW Government. “ (2010) Marketi ng - Sports Clubs”. (of publish, if any). Retrieved (27, September 2011). Check date values in: |accessdate= (help) 5. Business dicti onary.com (5 November 2010). “Event marketi ng” [Defi nicion de marketi ng de un evento]. Bisnessdicti onary.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. Puromarketi ng (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 unti l 2013] (in Spanish). Puromarketi ng. Retrieved October 17, 2010. 8. Orange.Online. (2010). “Adidas renueva con la selección Mexicana de futbol.” [Adidas renews its contract with the Mexico nati onal football team] (in Spanish). Orange.Online. Retrieved October 17, 2010. 9. Luis Marentes (2010). “Representacion y derechos de imagen” [Rights of image and representati ons] (in Spanish). periodismo y marketi ng deporti vo. Retrieved October 17,2010.

65 Part 6 MARKETING ELEMENTS IN EVENT MARKETING

Objecti ve outline:

1. Describe the decisions companies make regarding their individual products or service and services, product lines and product mixes. 2. Identi fy and defi ne the other important external and internal factors aﬀ ecti ng a fi rm’s pricing decisions 3. Explain why companies use marketi ng channels and discuss the functi ons these channels perform 4. Defi ne the fi ve promoti on mix tools for communicati ng customer value

Chapter Key Terms:

Product/service Price Place Promoti on

Marketi ng elements in event marketi ng

In this chapter we begin a series of chapters on the components of the marketi ng mix: Product, Price, Distributi on, and Promoti on. Our emphasis in this chapter will be the product or service that the organizati on markets and how products are envisioned, created and commercialized.1 We will defi ne ‘product’ as all things the buyer receives inan exchange, bad and good, intended and unintended. Products include all things the buyer receives including the physical att ributes (a new car) and the intangible att ributes (a warranty and a fi nancing contract). It is someti mes helpful to list the main (someti mes called ‘salient’) att ributes for purposes of performing both upstream acti viti es (for example, concept development) and downstream acti viti es (for example, adverti sing and personal sales presentati ons).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 - pitf alls in the NPD - the role of product positi oning in NPD1

Idea generati on1

The idea generati on stage is the fi rst stage in the NPD. However, in an organizati on with a healthy environment for creati ve thinking, new ideas abound, and only rarely is it necessary to have a formal meeti ng to generate ideas. New ideas fl ow from every day acti viti es within the organizati on. Ideally, idea generati on should be fun and naturally occurring. This is why a ‘formal meeti ng for idea generati on’ should be somewhat of an oxymoron in healthy, creati ve organizati ons. There are many creati ve problem-solving (CPS) techniques that provide extra sti mulati on for generati ng ideas for new products and services. The Couger Center for the Study of Creati vity and Innovati on has applied over thirty CPS techniques in organizati ons with success. CPS approaches fall along a conti nuum from intuiti ve to analyti cal. For example, a commonly used analyti cal 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 intuiti ve CPS approach. The appendix to this chapter describes how to use each of these two techniques.

Idea assessment1

Most organizati ons have extensive guidelines concerning the criteria for new product ideas. Some typical criteria are: potenti al esti mated demand for the product, cost/revenue expectati ons, fi t with the organizati on’s business and marketi ng strategy (you may want to go back and review compati bility in the discussion of requirements for eﬀ ecti ve segmentati on in Chapter Three.) Many product ideas may not match with the fi rm’s current product line and there should be guidance about what to do if this happens. Some organizati ons broker or sell new product ideas that don’t entail serving current or planned future customer segments. Creati ve ideas are judged on two criteria: Novelty and Value (or uti lity). We have found that business fi rms primarily put more importance on

67 the expected economic returns (value) of a new idea than whether the idea is parti cularly novel or new. However, in a context of the arts, this emphasis is usually reversed. That is, in the arts, judges oft en look to novelty fi rst 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 someti mes diffi cult to assess for some ti me. In order to have a steady fl ow of new ideas, organizati ons must establish a clear understanding with personnel responsible for new product development how these two dimensions will be assessed.

Concept testi ng1

In this stage, employees play with the idea and have fun considering its potenti al. The rati onale underlying concept testi ng is that organizati ons are much wiser to explore the idea thoroughly before actually building a physical prototype. Oft en the ‘Five W’s and H’ technique, described in Chapter Eleven, can be helpful in fl eshing out the new product idea. If customers are involved in this stage, ‘projecti ve techniques’ can oft en be used to illicit the opinions of customers about new product ideas without asking the customers directly. We have menti oned 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 ulti mately arriving at a point of conclusion. Divergent thinking is quite diﬀ erent in that it requires the parti cipant or parti cipants to ‘play’ with ideas going oﬀ in unexpected directi ons. De Bono is well known for coining the term “lateral thinking” which is a type of divergent thinking (see: htt p://www. edwdebono.com/ and review De Bono’s “Six Hats Method”). Note that when involved in the ideal approach to creati ve thinking, people feel they have ti me 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 ti me expended. Parti cularly, 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 oft en rewarded informally and formally in many organizati ons. That is, in our culture there is oft en more reward for observing what is wrong with an idea, rather than stati ng what right about it. Many great ideas with considerable positi ve potenti al are rejected every day in organizati ons, not because the idea isn’t any good, but because people in the organizati on are more oriented to idea destructi on than idea constructi on.

Idea Choice1

During this stage, the organizati on decides where its resources are best invested. A multi att ribute model similar to the one we discussed in chapter three is oft en used to make such decisions. The major criteria for choice are listed and an importance weight is assigned to each att ribute. Then competi ng ideas are assessed on this basis. Obviously, this process requires a healthy climate for creati vity and innovati on within which employees can ‘let go’ of personal ownership of ideas and judge the ideas on an objecti ve basis.

Price concepti on1

How is the pricing decision made?

The price variable in the marketi ng mix is a criti cal 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 matt er, at a yard sale? Most consumers link price with quality and there are many organizati ons that carefully reinforce the quality of their product, using price as a surrogate cue (or substi tute indicator) for quality. For example, check out the websites of marketers of presti ge items and observe how the price variable is used to indicate quality). When the pricing decision is made, the organizati on must consider several factors. These factors are as follows:

a. Supply (or cost) b. Demand (or revenue) c. Percepti ons in the marketplace

69 d. Competi ti on and Competi tors’ pricing strategies e. Government Regulati on f. Company’s desired pricing positi on

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 plenti ful supply. Of course, in Colorado, many people fi nd that the air supplied by the great outdoors is not suffi cient in oxygen, thus, they must buy air that is rich in oxygen by renti ng oxygen tanks to enhance their respiratory systems. Nati ve Americans had to locate close to a water supply, but didn’t worry about having to purify the water. Hence, ti me can change most everything, parti cularly how we perceive certain goods and services as candidates for commercial products. Just a few years ago, people consumed very litt le bott led water throughout most of the United States. Today, demand for bott led 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 justi fy commanding a positi ve price in the marketplace, there must be some demand for a product or service. We have seen above where many products traditi onally considered as free, have given way to other identi cal 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 oft en see that demand for a product can decrease or even disappear if substi tute products are introduced that are perceived as being superior in their ability to provide the benefi ts being sought. For example, eight track audiotapes were popular for a few years in the late 1960’s and early 1970’s unti l a newer technology in the form of cassett e 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? Percepti ons in the marketplace can set both a positi ve price and a normati ve price in the marketplace. A positi ve price simply describes how much something costs whereas a normati ve price describes what something ‘should cost’ based on an individual’s or a group’s opinion. For example, the positi ve price was so high for selected drugs used to treat AIDS that some groups protested that the normati ve price was simply too high gaining societal support and eventual price decreases from the manufacturers of these pharmaceuti cals. 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 essenti ally were observing that gasoline had reach a price that was above the normati ve price for most people. In the U.S., a branch of government oft en sets normati ve prices, parti cularly in the case where there is only one supplier (a monopoly). For example, most states have a public uti liti es commission or board that is responsible for overseeing the pricing practi ces of fi rms that provide the populace with uti lity service for natural gas, water, and electricity. However, there are notable excepti ons to this rule. Normati ve prices do not have to be specifi c. Usually there are consumer expectati ons that help guide the normati ve price. For example, how many ti mes have you heard that, ‘my water bill is too high!” This interacti on between positi ve price and normati ve price isan ongoing phenomenon and of parti cular interest to marketers who att empt to create and sustain customer sati sfacti on. While the marketer does not usually have control over the normati ve price, s/he can usually control the positi ve price. Setti ng price can be a ti me-consuming process and we will discuss setti ng 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 normati ve price for a product or service above which a price may be considering ‘unfair’ or ‘price-gouging.’

Competi ti on and Competi tors’ pricing strategies

First, if the fi rm is the only seller of a product considered essenti al to public welfare, the fi rm may have to functi on in a heavily regulated environment.

71 This type of environment is called a monopoly (one seller). Second, a fi rm may functi on in an industry in which there isan established price leader that perennially sets a price that other fi rms follow, although this may not always be the case. This type of competi ti ve structure is called an oligopoly (few sellers). Third, if the fi rm functi ons in a market where there are many competi tors oﬀ ering similar products, the fi rm may not have a choice about what level price to seek. (pure competi ti on). Fourth, the fi rm may compete in an industry or market in which although products are physically similar, sellers are able to draw diﬀ erences in percepti on of such things as quality and presti ge among products. This competi ti ve model is called ‘monopolisti c competi ti on’ 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 diﬀ erent factors. Thus, the initi al pricing decision can be ti me-consuming although there are excepti ons. In pricing livestock, for example, the pricing decision can be quite simple. A catt le rancher may take his or her catt le to the local aucti on 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 catt le bring at the aucti on. In this case, the pricing decision is reduced to answering the questi on: “Can I accept the price being oﬀ ered at the local aucti on?” If the answer to this questi on is ‘no,’ the rancher then has to decide whether to seek another aucti on or liquidate his/her herd. However, usually the pricing decision is much more complicated and should involve a careful considerati on of all fi ve factors listed above.

Cost and Demand Oriented Pricing Models

We may use cost or demand as a basis for setti ng pricing. Traditi onally, this orientati on is applied in microeconomic theory by creati ng demand curves based a summati on of individual uti lity functi ons for buyers in the marketplace. Thus, we fi rst assess buyers’ percepti on of how much they would expect to pay for a product or service based on the uti lity (or usefulness) they would expect to derive from product or service and

72 combine these individual uti lity functi ons to create a demand curve for the product in questi on. While, this approach is straightf orward theoreti cally, it oft en defi es practi cal applicati on. 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 uti lity (benefi ts) 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 ‘key- stoning’ 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 determinati on and then computes diﬀ erent projected levels of return on investment for future ti me 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 profi t margin, the approach ignores the most important factor in pricing; demand. Thus, by using solely a cost-based approach the seller my miss opportuniti es for additi onal profi t 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 athleti c 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 benefi ts they would derive from it, would expect to pay $30,000 dollars for a new kind of testi ng device, this at least gives the seller some guidance in setti ng price. This approach is known as ‘the expected price approach’ and, theoreti cally, is the basis for setti ng price based on demand in Microeconomics. Of course, this approach requires a ti me consuming analysis and it not as simple as just setti ng the price based on

73 cost. However, if a seller focuses only on cost to set a price, s/he might be either setti ng price so high there will be no demand, or foregoing considerable profi ts. For example, if demand is very high there are ti mes when we can virtually ignore cost structures. For example, if a professional athlete has a remarkable season of performance, s/he can someti mes 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 anti cipate being reasonable for the benefi ts 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 expectati ons. For example, if consumer testers try out a new, revoluti onary vacuum cleaner, when asked they indicate that they would pay normally anti cipate paying $500 or less for the product, although the seller cost structure would mean losing money at a price of less than $500. Presti ge pricing is oft en applied by organizati ons that att emptto 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 ‘monopolisti c competi ti on.’ Thus, prospecti ve buyers perceive a diﬀ erence in products based on the disti ncti on or reputati on of parti cular brands. Many product categories this factor to set price. For example, wristwatches, liquor, and automobiles all have a ‘presti ge’ segment created through the percepti on of exclusivity and disti ncti on. Of course, in order to create and sustain such a market positi on, the organizati on must commit to a long-term strategy.

Distributi on channels, marketi ng logisti1 cs

How do producers get their products and services to their target customers?

This area of the marketi ng mix is usually called ‘distributi on’ simply because its main concern is to distribute goods and services to the target customers. Organizati ons typically use a large number of strategies to get their goods and services to target customers rather than only one. Criti cal to understanding and managing distributi on are the concepts of ti me and

74 place uti lity. Time uti lity can be defi ned as having the product available when the customer would prefer to acquire it and place uti lity is having the product available where the customer would prefer to acquire it. While the internet can provide the ulti mate in ti me uti lity for some products or services (for example, e-mail), for many products, it does not provide suffi cient ti me uti lity. Buying a book over the internet sti ll requires that the book be delivered to the buyer before ‘consumpti on 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 situati on. For example, this e-book is delivered to the user instantly anyti me 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 effi cient or eﬀ ecti ve for most fi rms, parti cularly small fi rms due to the cost. The strategy is typically adopted by many organizati ons that have not done suffi cient research to understand the specifi c characteristi cs their target customer and how the customer would generally prefer to obtain the product or service in questi on. For example, organizati ons that are producti on-oriented concentrate primarily on manufacturing their products effi ciently (with the underlying assumpti on that there will be a demand for the product). Sales-oriented organizati ons focus on promoti on and personal selling and are not typically concerned with the ideal product soluti on that the customer is seeking. Technology oriented fi rms assume that customers are seeking the most advanced technology, thus these fi rms focus on the most advanced way of doing things whether the customer is seeking this soluti on or not. All of the organizati ons above oft en adopt these respecti ve orientati ons because they have insuffi cient knowledge of customers or concern for customers to engage in a focused distributi on 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 denti st), those that cannot be seen or touched during the process of providing the service. Although traditi onally services have been delivered through a ‘direct’ marketi ng 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 opti ons) historically required a face-to-face meeti ng between the investor and his investment advisor. Today, many people manage their investments through the internet and never work face-to- face with another human being. Financial services off ered by banks are similar in that, since the introducti on of the Automati c Teller Machine (ATM), it is not necessary for customers of banks to meet face-to-face with bank representati ves. As the practi ce of “direct deposit” and other electronic forms of banking grow, there will less and less need for personal interacti ons between fi nancial insti tuti ons 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 sti ll feel it necessary to visit personally with the bank’s representati ons. Event-driven marketi ng (EDM) Event-driven marketi ng (EDM) is a discipline within marketi ng, where commercial and communicati on acti viti es are based upon the measurement of relevant and identi fi able changes in a customer’s individual needs. It is a disti nct and diff erent approach to direct marketi ng and traditi onal Database marketi ng which typically use stati sti cal methods.2 In this context, an “Event” is defi ned as a detectable change in an Individual’s circumstances, today, which is relevant and signifi cant, either in fact or in their mind.3 A “Signifi cant 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 interacti on patt ern. It off ers a reason to communicate with the customer, with a relevant proposal, at the right ti me. Events increase the knowledge, understanding and informati on about a customer that enables the marketer to make bett er, more informed decisions.3 Event-driven marketi ng is synonymous with and exactly the same as event-based marketi ng (EBM). In some cases it is also referred to as Trigger-based marketi ng. The defi niti on above is consistent for all of these terms.3 The theory behind event-driven marketi ng is that the most producti ve message is one that is relevant to the Customer and based on what’s going on in their life at that moment in ti me.3 EDM expands the relati onship with customers by monitoring them (and their personal or commercial situati on) on a constant basis and

76 responding immediately to relevant changes in their circumstances. This includes monitoring both their transacti onal behaviour (as is done in direct marketi ng) as well as their life or business circumstances beyond your immediate transacti onal relati onship. The results from implementi ng EDM are notably spectacular and have a positi ve eﬀ ect on several common marketi ng KPIs and metrics. It is common to achieve average positi ve Customer response rates to communicati ons of 34%.4 This compares to normal targeted direct marketi ng response rates of 1%-4%.4 Other metrics aﬀ ected include Customer Sati sfacti on and Churn/ Retenti on Event-driven marketi ng was fi rst implemented in Australia in 1995- 1996 at Nati onal 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 marketi ng approaches were using limited amounts of data of variable quality and that these returned piti ful results (1-4%). They postulated that, if only they could monitor a customer’s acti viti es in a more ti mely and dynamic way, they could accurately determine any changes and hence customer needs. Two things enabled this approach to come to fruiti on, Teradata’s at that ti me unrivalled ability to load and process large volumes of data, and NAB providing the source of customer transacti ons. The results were so spectacular that NAB decided to maintain secrecy over this new approach, fearing replicati on and competi ti on from their rivals. However in 1999-2000 the bank had a change of policy and decided to publicise their results. Since that ti me they have been a major presenter of EDM at marketi ng conferences around the world.5 By 2000 there were sti ll only a very few exponents of EDM. This was due to the fact that large amounts of transacti onal 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 consultati ve, bespoke implementati on lasti ng years and costi ng millions. During this period all implementati ons tended to be in very large multi -nati onal 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 implementati ons. At around the same ti me, three EDM products were launched:

77 • eventricity’s Timeframe • SynapseEBM (now part of Conclusive Marketi ng) • Unica’s Detect (now called IBM Opportunity Detecti on).5 More recently Teradata, who employ a purely consultati ve approach, have released: Teradata’s Relati onship Manager (now branded as Aprimo Relati onship Manager). NB. Teradata’s own blurb on this product does NOT menti on Events or event-driven marketi ng. It appears to be a perfectly good example of a campaign management tool and not an EDM product like those menti oned above. Unti l recently there has been no empirical research into EDM and all informati on has been derived from conference presentati ons. A synopsis of the diff erent 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 objecti ve was to provide a clear, unbiased ‘state of the union’ on diff ering CRM approaches and techniques. It was conducted with 65 Banks from 29 diff erent countries. Below is an excerpt of the research, covering the results obtained from the diff ering Database marketi ng 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 Att ributes

An Event was defi ned as a detectable change in an Individual’s circumstances, today, which is signifi cant, either in fact or in their mind. The three key words in this defi niti on are: individual, today and signiﬁ cant.

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 signifi cance (see below). This analysis shows historical levels, trends and patt erns that are specifi c to each parti cular person. Signiﬁ cance: Signifi cance is a test applied to an ‘Event’ to determine if the fact that it has happened to a customer is relevant and noteworthy. Signifi cance in this context is therefore a measure of the variance from the norm for that parti cular individual. Today: Once a signifi cant Event has been detected the ti meliness of customer communicati on is crucial. In fact, if the company is not able to communicate with a customer within 48 hours of detecti ng 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 classifi ed into several diﬀ erent types. These include: • Triggers: • Simple (predicted) Events • Signifi cant Events • Behavioural Events and Lifecycle Events Triggers

A Trigger is a circumstance that has happened to a Customer today but which is not necessarily signifi cant. It is this lack of signifi cance that diﬀ erenti ates a Trigger from a Signifi cant Event. Triggers are not very accurate and as such their use is not generally advocated. However they can be extremely useful when considered in combinati on with other Triggers or Events.

79 Triggers can be very valuable for acti vati on of straightf orward business processes. Their best use is for acti ons that are completely automated and which require no human interventi on. Thus they can be programmed to fi re whenever a defi ned circumstance occurs, and provide a clear result. In such situati ons they are a very cheap and eff ecti ve tool. Examples can include things such as: • Triggering the issue of a new cheque book when the penulti mate one is issued • Sending an SMS off ering a new mobile top-up when the current one has 10 minutes left • Sending an SMS off ering an overdraft facility when an ATM max payment is made, etc. The key to using eff ecti ve Triggers is that the resulti ng acti on is binary, i.e. Situati on A results in Acti on B. They can be very eff ecti ve for Service based off ers. Thus a Trigger sati sfi es the standard Event criteria of Individual and Today but fails in terms of Signifi cance. Numerous studies have shown that the trigger based emails can double the response rate of direct marketi ng communicati ons.8 It should be noted that the ti mescale for communicati on of a Trigger can be anything from instantaneous to the maximum of a day or so. Aft er this, it is not worthwhile.

Simple (predicted) Events

Most Events are reacti ve, i.e. based on what has previously happened. But with some Events we can predict situati ons that will occur in the future. For example, a customer will fi nish his loan in 30 days. Undoubtedly, this is important to the customer and a good reason for communicati on. It is hardly a surprise and there is no urgent need to communicate today. In fact we can schedule a call anyti me over a two- week period and get the same result.9 Thus the event sati sfi es the standard Event criteria of Individual and Signifi cant but fails on Today. We call this type of Event a Predicted or Scheduled Event. Examples include • End of contract, • End of loan

80 • Signifi cant Birthday and • any kind of Customer acti vity for which there is a known, scheduled date. The ti mescale for communicati on of a scheduled Event can bea window anything from 5 to 30 days or even more.

Signiﬁ cant Events

A single, signifi cant event tells us something about the Customer. It is an excellent indicator of real / potenti al change. Customers are very responsive and accepti ng of communicati on at this ti me. Examples include. • Large Deposit, • Salary start / stop, etc. The ti mescale for communicati on of a Signifi cant Event is usually quite short – usually only 1 to 2 days. Aft er this, the eﬀ ecti veness drops rapidly (typically response rates drop at 60% per day).

Behavioural (Super) Events

A single, signifi cant event may tell us something about a customer, but someti mes Events happen in groups and the sequence and combinati on 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 ti me) may signify something much more important such as ‘Redundancy’. A Super (or behavioural) Event is a situati on where a series of circumstances happen to a customer within a specifi c period of ti me and possibly in a certain sequence. These circumstances can be combinati ons of such things as Events, Scheduled Events, Triggers (see above) and even other Super Events. Examples of circumstances that Super Events can potenti ally detect include: • Redundancy, • Churn, • Moving house / job • Marriage, etc.10

81 Lifecycle Events

Lifecycle Events are very similar to behavioural Events and can someti mes 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 • Getti ng 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 parti cular att enti on to sales-driven versus customer-driven behaviour on the part of the salesperson or salespersons you met. 2. Obtain a magazine adverti sement for which you think the target market is clearly defi ned and comment on what you believe are the characteristi cs 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 adverti sing has changed since your chosen retromercial aired. 5. Go to a grocery store and interview the manager there. Ask the manager about his/her promoti on 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 fi ndings. 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

Situati on descripti on: – 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 esti mated to be around 20 million people who are parti cularly concerned about the presence of germs on their hands during food preparati on. 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 initi al adverti sing 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, fi ft y percent of the people in the target market will be exposed to the ad at least one or more ti mes.) Concerning reach, some people subscribe to the ‘three-hit theory.” That is, it takes three eff ecti ve exposures to move the prospect through the hierarchy of eff ects. (Att enti on, Interest, Desire, and Acti on). Three eff ecti ve exposures usually requires much greater than three total exposures. Why? 2. Frequency –“the average number of exposures to adverti sements received by all prospects who were reached during the given ti me 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 ti mes while 5 million people will be exposed four ti mes during the campaign. Thus, the frequency or average number of exposures for the target market will be fi ve.

GRP’s or gross rati ng points-the GRP level is a rule of thumb used by media personnel to assess the relati ve strength of the campaign.

83 In our example, the GRP’s would be 250. GRP’s yield a comparison of diff erent opti ons for reach and frequency through examining the relati ve exposure schedule of diff erent campaign opti ons (their relati ve ‘bang for the buck.’) While this measure has obvious shortcomings (that is, is an exposure more powerful if it occurs previous to the food preparati on period versus aft er the food preparati on period) it has been applied traditi onally in TV and radio adverti sing. There is the growing questi on of eff ecti veness. 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 communicati on and learning that has taken place with the target market? However, the measure is helpful for comparing competi ng media schedules. In our example above, need to decide which is more important for our situati on, reach or frequency. That is, is it more important fora larger proporti on of the target market to be exposed at least once, or is it more important for prospects to be exposed to our message several ti mes. This debate fi nds litt le agreement, except to say the ‘moreis bett er.’ Of course, ad agencies and media representati ves 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 benefi ts the product delivers relati vely easy to understand? If so, which would you prefer to emphasize in a campaign: reach or frequency? On the other hand, if product benefi ts are diffi cult to convey would your answer be diff erent? Think about diff erent schedules and how they impact your communicati on potenti al. Remember that you are spreading the amount of dollars over diff erent communicati on objecti ves. 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 organizati on expect to be able to trust your answers. Aft er all, you are the marketer with the MASTER OF BUSINESS ADMINISTRATION DEGREE!

84 Measures of television audiences and their relati onships to each other Coverage (number of TV households in signal range of TV stati on or network) □ □ □ □ □ □ □ □ □ □

HUT (homes using TV) Rati ng Percentage of coverage Percentage of with sets turned on coverage tuned to a parti cular program, stati on, or network

Audience Share (percentage of HUT tuned to a parti cular program, stati on or network)

HUT X Audience share = Rati ng

Brief example A recent infomercial for Suzanne Somers’ Depression Cure aired on the local cable TV stati on 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. ti me slot, the percentage of coverage with TV sets turned on is one out of twenty or ﬁ ve percent or .05 Audience Share – during that ti me slot the percentage of homes using TV that is tuned to this cable channel is sixty percent Rati ng – the rati ng for this infomercial would be .05 X .60 = .03 Thus the percentage of total coverage tuned to this parti cular 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 fi nd in your own search.

Newspaper and magazine audience measurement

The Basic CPM formula is used to compare diﬀ erent media opti ons. That is, we compare the cost of reaching one thousand viewers across diﬀ erent stati ons. For example, if we used the basic CPM formula (cost of one unit of ti me)/number of households reached).

REFERENCES

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

86 FURTHER READING

1. Kotler, Philip; Kevin Lane Keller (2009). “1”. A Framework for Marketi ng Management (4th ed.). Pearson Prenti ce Hall. ISBN 0-13-602660-5. 2. Adcock, Dennis; Al Halborg; Caroline Ross (2001). “Introducti on”. Marketi ng: principles and practi ce (4th ed.). Xavier Thomas. p. 15. ISBN 9780273646778. Retrieved2009-10-23. 3. Kotler, Philip & Keller, L. Kevin (2012). Marketi ng Management 14e. Pearson Educati on Limited 2012 4. Adcock, Dennis; Al Halborg; Caroline Ross (2001). “Introducti on”. Marketi ng: principles and practi ce. p. 16. ISBN 9780273646778. Retrieved 2009-10-23. 5. Strategic Marketi ng by David W. Cravens and Nigel F. Piercy 6. “Marketi ng Management: Strategies and Programs”, Guilti nan 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 Marketi ng Mix into the 21st Century”. Marketi ng 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). Marketi ng: The Core. McGaw-Hill Ryerson. p. 31. 10. Kotler, Armstrong, Philip, Gary. Principles of Marketi ng. Pearson educati on. 11. Hochbaum, Dorit S. (2011). “Rati ng Customers According to Their Promptness to Adopt New Products”. Operati ons Research 59 (5): 1171–1183. doi:10.1287/opre.1110.0963.edit 12. “Segmentati on, Targeti ng, and Positi oning”. University of Southern California. Retrieved 21 May 2013. 13. Stolley, Karl. “Primary Research”. Purdue Online Writi ng Lab. Retrieved 21 May 2013.

87 14. Kardes et al.; 2015; Consumer Behavior; 2nd editi on; Cengage Learning, Stamford 15. Developing Business Strategies, David A. Acker, John Wiley and Sons, 1988 16. Mitt al, Vikas and Frennea, Carly, Customer Sati sfacti on:A Strategic Review and Guidelines for Managers (2010). MSI Fast Forward Series, Marketi ng Science Insti tute, Cambridge, MA, 2010. Available at SSRN: htt p://ssrn.com/abstract=2345469 17. “Chapter 6: Organizati onal markets and buyer behaviour”. Rohan.sdsu.edu. Retrieved2010-03-06. 18. Goldstein, D.; Lee, Y. (2005). “The rise of right-ti me marketi ng”. The Journal of Database Marketi ng & Customer Strategy Management 12 (3): 212–225.doi:10.1057/palgrave dbm.3240258. 19. Dacko, Scott G. (2008). The advanced dicti onary of marketi ng. pp. 377–378. ISBN 0-19-928600-0.

88 Part 7 PROMOTION MIX IN EVENT MARKETING

Objecti ve outline:

1. Defi ne the fi ve promoti on mix tools for communicati ng customer value. 2. Discuss the changing communicati ons landscape. 3. Outline the communicati on process and the steps in developing eﬀ ecti ve marketi ng communicati ons. 4. Explain the methods for setti ng the promoti on budget and factors that aﬀ ect the design of the promoti on mix.

Chapter Key Terms:

Adverti sing Personal selling Sales promoti on Merchandising Public relati ons (PR)

The promoti on mix or the marketi ng communicati ons mix

Promoti on refers to raising customer awareness of a product or brand, generati ng sales, and creati ng brand loyalty. It is one of the four basic elements of the market mix, which includes the four P’s: price, product, promoti on, and place.1 Promoti on is also defi ned as one of fi ve pieces in the promoti onal mix or promoti onal plan. These are personal selling, adverti sing, sales, direct marketi ng, and publicity. A promoti onal mix specifi es how much att enti on to pay to each of the fi ve factors, and how much money to budget for each.2 Fundamentally, there are three basic objecti ves of promoti on. These are:3 1. To present informati on to consumers and others. 2. To increase demand. 3. To diﬀ erenti ate a product. The purpose of a promoti on and thus its promoti onal plan can have a

89 wide range, including: sales increases, new product acceptance, creati on of brand equity, positi oning, competi ti ve retaliati ons, or creati on of a corporate image.2 Promoters have used newspapers, special events, endorsements, Promoti ons can be held in physical environments at special events such as concerts, festi vals, trade shows, and in the fi eld, such as in grocery or department stores. Interacti ons in the fi eld allow immediate purchases. The purchase of a product can be incenti ve with discounts (i.e., coupons), free items, or a contest. This method is used to increase the sales of a given product. Interacti ons between the brand and the customer are performed by a brand ambassador or promoti onal model who represents the product in physical environments. Brand ambassadors or promoti onal models are hired by a marketi ng company, which in turn is booked by the brand to represent the product or service. Person-to-person interacti on, as opposed to media-to-person involvement, establishes connecti ons that add another dimension to promoti on.Building a community through promoti ng goods and services can lead to brand loyalty. Promoti on can be done by diﬀ erent 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 interacti ng with consumers as it releases news, informati on and adverti sing from the technological limits of print and broadcast infrastructures.4 Mass communicati on has led to modern marketi ng strategies to conti nue focusing on brand awareness, large distributi ons and heavy promoti ons.5 The fast-paced environment of digital media presents new methods for promoti on to uti lize new tools now available through technology. With the rise of technological advances, promoti ons can be done outside of local contexts and cross geographic borders to reach a greater number of potenti al consumers. The goal of a promoti on is then to reach the most people possible in a ti me effi cient and a cost effi cient manner.5 Promoti onal acti viti es to push a brand enabling social media channels to spread content making something viral, such as the adverti sing by Coke. Using the release of a new Bond fi lm creati ng att enti on which then gets promoted across all social channels by people spreading the informati on due to excitement. Social media, as a modern marketi ng tool, oﬀ ers opportuniti es to reach larger audiences in an interacti ve way.

90 These interacti ons allow for conversati on rather than simply educati ng the customer. Facebook, Twitt er, LinkedIn, Pinterest, Google Plus, Tumblr and Instagram are rated as some of the most popular social networking sites.6 As a parti cipatory media cultures, social media platf orms orsocial networking sites are forms of mass communicati on that through media technologies allow large amounts of product and distributi on of content to reach the largest audience possible.7 However, there are downsides to virtual promoti ons as servers, systems, and websites may crash, fail, or become overloaded.8 With promoti on through parti cipatory media, there is an opportunity to gain Social capital. Promoti on, has its own mix of communicati on tools which are someti mes called the promoti on mix or the marketi ng communicati ons mix. A company’s total promoti on mix consist of specifi c blend of fi ve (5) major promoti on tools as follows: - Adverti sing - Sales promoti on - Personal selling - Public relati ons and - Direct – marketi ng tools

The company uses these tools to persuasively communicate customer value and build customer relati ons. Traditi onally, we employ a promoti on mix to eﬀ ecti vely budget and distribute funds for promoti on. The promoti on mix includes the following components:

a) Adverti sing – 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 Promoti on – any program that provides additi onal incenti ve 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 characteristi c of the arti cle printed.

91 When creati ng a promoti on program we att empt 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 ti me. This practi ce is call ‘integrated promoti on management’ or ‘integrated marketi ng communicati ons.’ For organizati ons marketi ng convenience goods in consumer markets, adverti sing usually accounts for the largest proporti on of the promoti on mix, whereas, personal selling traditi onally comprises the largest expenditure for organizati onal markets. Let us look at the defi niti on of these 5 major promoti on tools as follows;

Adverti sing:

Adverti sing in a nutshell is any paid form of non – personal presentati on of ideas, goods and services by an identi fi ed sponsor. Its functi ons are to att ract att enti on, inform, moti vate or persuade, inspire convicti ons and provoke acti on and sati sfacti on.

Sales promoti on

Sales promoti on is defi ned as the short term incenti ves 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 oﬀ er deals.

Personal selling:

Personal selling is defi ned as personal presentati on by the fi rm’s sales force for the purpose of selling and making customer relati ons. It is one of the means through which marketi ng 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 att empts to create awareness, moti vate or persuade the prospecti ve buyer to buy. Both adverti sing and personal selling makes use of the salesmanship skills.

92 Public relati ons:

Public relati on here is defi ned as building and maintaining good relati onships with diﬀ erent 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 marketi ng:

Direct marketi ng is defi ned as having direct connecti ons with carefully targeted individual consumers to obtain an immediate response as well as culti vate lasti ng customer relati onships. Tools of direct marketi ng includes; telemarketi ng, direct mail, online marketi ng. Direct marketi ng share some characteristi cs in common; - it is non – public, the message is directed to a specifi c person - it is immediate and customized - it is interacti ve, it allows dialogue between the team and the customer.

Publicity means positi ve editorial coverage in the media. It does not include “bad press”. We have already discussed the importance of performing upstream marketi ng acti viti es prior to performing downstream marketi ng acti viti es. Promoti on takes place in the intermediate and later stages of marketi ng planning because promoti on requires: 1. fi rst a defi niti on of the target audience 2. second, a descripti on of the benefi ts to be delivered to that target audience 3. third, clear objecti ves about what the program aims to accomplish, and 4. fourth, a strategy to be employed to communicate with that target audience and accomplish the objecti ves.

This process may seem backwards to some who would expect to make the media decision fi rst. That is, if an organizati on is sales-driven, it would fi rst att empt to perform number four above. However, a market- driven fi rm realizes that is must perform the fi rst three steps prior to media choice.

93 Deﬁ niti on of the target audience9

Traditi onally, the role of promoti on has been identi fi ed as to ‘inform, persuade, and remind.’ While these stages are always necessary, oft en one or the other has taken place prior to the creati on of a promoti on program. For example, most consumers in the U.S. culture are aware of and understand the benefi ts of Coca-Cola and where to fi nd the product, so informati onal adverti sing may not be necessary (htt p:// www.cocacola.com/). However, Coca-Cola must conti nually 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 benefi ts. “Reminder adverti sing” is oft en placed by market leaders to support other promoti onal campaigns that are in progress. Thus, Coca- Cola is committ ed to constant adverti sing, although most consumers are aware of the product in over two hundred countries (see htt p://www. cocacola.com/). When you think of target markets, realize that they are always changing. People age and change over ti me, therefore, target markets do the same thing. So, new Coca-Cola ads while persuading and reminding a porti on of the target market, also conti nually 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 competi ti ve positi on if they don’t constantly keep their name in front of their target market. This is parti cularly true with today’s media saturati on and intense competi ti on. As we discussed in Chapter Three, the target audience for consumer products is usually defi ned in terms of demographic, psychographic, geographic, and behaviouristi c att ributes. Once we have clearly defi ned the target market, we create marketi ng programs to communicati on with members of the target market.

Descripti on of beneﬁ ts to be delivered to the target market

It is imperati ve to understand what benefi ts (not product features) the target market will receive by buying our product or service and this descripti on should be craft ed in words that communicate these benefi ts to members of the target market. Thus, the noti on of “empathy” with the target market becomes criti cal. If we don’t really understand our customers well, it will show in our att empts to communicate with them. For example, if our target market fi rst seeks the minimizati on of fi nancial

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 adopti ng promoti on comprised of user testi monials dealing with the product.

Clear objecti ves about what the program aims to accomplish9

Setti ng objecti ves for promoti on programs is a criti cal part of achieving success. However, in practi ce, setti ng objecti ves someti mes destroys creati vity associated with the promoti on program. Thus, while we strongly recommend formulati ng objecti ves that will guide the promoti on program, we cauti on promoti on managers to avoid an approach that is too rigid and quells the creati ve process. Objecti ves for promoti on programs can be either sales-oriented objecti ves or communicati on-oriented objecti ves. That is, we can either identi fy specifi c targets we wish to meet in terms of increased sales or specifi c targets we want to att ain in terms of communicati ng 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 diff erent ways in promoti on management. First, strategy can refer to an overall game plan or orientati on to the promoti on program. For example, a company might discover through research that their target customers seek reliability above all other att ributes thus the organizati on might adopt a strategy of ‘emphasis on reliability.’ On the other hand, an organizati on might adopt a ‘direct mail strategy’ if it fi nds 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 explanati on regarding how the strategy would be implemented. This leaves no doubt regarding the word’s meaning. Communicati on objecti ves can be driven by measures such as product awareness, knowledge (of certain att ributes or benefi ts) or preference. Each of these measures can be used to assess how eff ecti ve promoti onal eff orts have been in att aining their objecti ves.

95 Creati ng Successful Promoti on Programs9

As discussed above, there are four steps to creati ng successful promoti on programs:

1) a defi niti on of the target audience 2) a descripti on of the benefi ts to be delivered to that target audience 3) clear objecti ves 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 conti nuously since then. Marie, aft er earning a college degree with a major in marketi ng, was asked by her parents to manage the gift shop so that her parents could reti re. Marie accepted this challenge although she had two small children and was a single mother. Marie realized any funds spent for promoti on must yield results in the form of increased sales. The fi rst step for Marie was to determine who the target audience for any promoti on would be. Having worked in the shop part-ti me for many years, Marie believed that most her customers were from the local Manitou Springs area although a signifi cant proporti on of customers in the summer were tourists. She commissioned a small marketi ng research study with her former university to explore her customer base. Two of the research questi ons for this study were “(1) Who are our present customers and (2) why do they buy from us?” The marketi ng research study found the answers to these questi ons 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 gift s for immediate family and friends for traditi onal gift -giving occasions including birthdays, weddings, and Christmas. Thus, aft er the marketi ng research study, Marie defi ned her target audience as ‘Present customers with a ZIP code in the Manitou Springs city limits and ZIP codes conti guous to the Manitou Springs ZIP codes. Marie also realized that she should begin to keep a Customer Informati on System that would enable her to communicate regularly with her present customer.

96 Another of the questi ons in Marie’s study was ‘Why do you make purchases from Marie’s Gift Shop?’ One of the responses to this questi on on the survey was “I am familiar with the Ruohonen family.” Over sixty percent responded affi rmati vely to this questi on indicati ng that one of their main buying moti ves was to ‘support local businesses’ and that the customer ‘enjoyed visiti ng 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 benefi ts 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

Aft er a meeti ng with a local marketi ng communicati ons fi rm, these benefi ts were used as a guide for creati ng a promoti on strategy for Marie’s Gift Shop. Marie’s decided to adopt this approach as a long- term strategy and committ ed to this strategy for a three year period, thus, adopti on of a promoti on strategy should not usually be seen as short-term. We will discuss this promoti on program in more detail in a later chapter.

Overview of Adverti sing9

As indicated above, adverti sing can be defi ned as communicati ng with target audiences through paid, non-personal messages, usually placed in a mass medium. Adverti sing is the easiest but absolutely, more expensive alternati ve for marketi ng communicati ons. That is, the initi al outlay for an adverti sing campaign may be the most expensive opti on for promoti on. However, adverti sing may possibly provide the lowest ‘cost per contact.’ For example, usually audiences are measured by using a fi gure known at CPM or cost per thousand (the ‘M’ denotes use of the Roman numeral designati on for one thousand.) See the appendix to this chapter: An easy guide to audience measurement. If you do an internet search on the word, ‘adverti sing’, you will fi nd many diﬀ erent references and categories presented there. Some researchers esti mate that by the age of eighteen the average person in

97 the U.S. was viewed well over one million adverti sements and that fi gure is probably very low if we consider all commercial messages to which we are exposed in the U.S. What are the implicati ons of this staggering stati sti c? First, most of us consider ourselves ‘experts’ in adverti sing because we have seen so many ads. However, to be truly expert, one must understand and develop the att ribute of ‘empathy.’ Empathy is simply being able to understand another person’s feelings are reacti ons 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 adverti sing is to the average person. However, adverti sing is someti mes very important to us as individuals. Why? First, we oft en use adverti sing as a way to identi fy 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 identi fy how ‘cool behaviour’ and ‘uncool behaviour’ have changed in the last few decades? The tobacco industry conti nues to adverti se heavily through alternati ve means that avoid regulati ons of the Federal Trade Commission (FTC), thus easily avoiding the law, while conti nuing to adverti se a product proven hazardous the health of its users. For example, note how the moti on picture industry conti nues to accept money to feature its products in fi lms. 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 marketi ng students have about a career in marketi ng. 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 defi nes 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 marketi ng and management,

98 has said: “(true)…. marketi ng 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 soluti on that the customer is truly seeking, it only remains for the marketer to explain how this soluti on will provide the benefi ts sought, and the customer is then willing and eager to buy. Why does this sound so unrealisti c to many of us? Because, as consumers, we rarely experience a soluti on that is so well researched or a seller who values the customer this much. As menti oned 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 sati sfacti on but selling the customer what the company has available to sell. Therefore, it is no surprise that many consumers are dissati sfi ed with the product and services they buy. However, as competi ti on forces organizati ons to be more customer-oriented, the remaining fi rms that are solely sales- driven will eventually disappear from the economic landscape. Traditi onally in personal selling, organizati ons follow a process from the ti me preceding customer contact to the ti me following the sale, including some follow-up acti vity. In many organizati onal markets, this follow-up stage is called ‘post-sales support’ and is one of the most eff ecti ve methods for keeping customers. Investi ng in retaining current customers is much more cost-effi cient 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 fi rms. New and used car sales are examples of product categories that used the churning method for decades, although, due in some cases to the eff orts of new car manufacturers, this practi ce 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 producti on and services systems that are responsible for delivering customer sati sfacti on. Today this commitment is sti ll rare, but in the future it will be essenti al. Many fi rms view the personal selling process as a ‘sales funnel,’ that is, the process begins with many diff erent possible customers, and narrows over ti me to more specifi c customers who are fi rst identi fi ed as ‘qualifi ed prospects.’ A qualifi ed prospect can be defi ned as an individual, family, or organizati on that is likely to be seeking the benefi ts we seek to provide and has the ability to obtain those benefi ts by entering into a relati onship with our organizati on. Thus, locati ng and identi fying qualifi ed prospects

99 becomes a primary functi on of the marketi ng or sales eﬀ ort. However, we must remember that if an organizati on is truly marketi ng oriented, this process is made much easier because the customer profi le created early on in product or service development has already given clear defi niti on to our target customers. Aft er identi fying qualifi ed prospects, it remains to contact these prospects and consult with them about our chosen soluti on to their product needs in terms of the benefi ts they are seeking which we aspire to provide. Thus, while the ‘sales funnel’ begins with a profi le of our target customer and the benefi ts that s/he wants, the number of prospects decreases as we proceed through the sales process. As we gather more informati on about what customers we can bett er sati sfy, we conti nually use this informati on as feedback to more precisely align our soluti on with the benefi ts sought by our target market. The ‘delivery system’ of the organizati on must strive to maintain fl exibility throughout the personal selling process and be capable of adjusti ng the product soluti on to meet needs of customers as the organizati on gains bett er resoluti on about what those needs are exactly. Most traditi onal models of the selling process have the process culminate in a ‘presentati on’ and then proceed to a ‘feedback’ stage that occurs aft er a presentati on and purchase. While this approach to modelling the process if helpful, it denies the required dynamic nature of customer relati onships and oft en is too infl exible to be of maximum use. That is, as we learn more about exactly what benefi ts our customers are seeking, we must conti nually adjust our product or service oﬀ ering to bett er provide those benefi ts. 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, organizati ons marketi ng such goods must always aspire to solicit this kind of feedback and respond to it as quickly as possible. For more informati on on personal selling and sales management consult the two topics at the following website:

Overview of Sales Promoti on9

Because we defi ne sales promoti on as “any added incenti ve designed to inform, persuade or remind a certain porti on of the target market,” sales promoti on ends up being a large, catch-all category including

100 coupons, special oﬀ ers, customer sweepstakes, and many other promoti onal acti viti es. These acti viti es are used both in consumer markets and organizati onal markets although the methods oft en diﬀ er. For example, if one reviews the local Sunday paper, one will fi nd almost countless coupons included by adverti sers to encourage customers to buy. However, only a very small percentage of these coupons are ever even seen let alone exchanged by consumers. In organizati onal markets, companies oft en spend large amounts of money on trade shows which are regional, nati onal, and internati onal expositi ons that usually share a common theme such as an industry.

Overview of Publicity9

Publicity diﬀ ers from adverti sing in that the adverti ser does not pay for the space in the medium or publicati on with publicity. That is, a new feature is placed because it ostensibly will be of interest to the readers of the publicati on. There are also public service announcements that oft en att ain similar objecti ves. The challenge with publicity is preparing an arti cle that is newsworthy and of interest to the readers of a publicati on. Obtain a copy of a local newspaper, and see if you can fi nd an arti cle included in the newspaper that you believe was published without a charge to the adverti ser based on its interest to readers. The main requirement of obtaining publicity in most media is that the arti cle placed should be newsworthy and credible and of special interest to viewers or readers.

Formulati ng an Integrated Marketi ng Communicati ons Plan9

The primary challenge in promoti on management is the integrati on of all acti viti es directed at communicati ng with one’s various audiences so that the organizati on presents a consistent understandable image to those groups. We say ‘audiences’ because at any given ti me, the organizati on may be communicati ng with its customers, suppliers, employees, competi tors, and the general public in several diﬀ erent contexts. It is imperati ve that the organizati on create and reinforce a clear image in the marketplace. Thus, all communicati ons should be centrally produced and managed. This is not to say that there will be no creati vity in individual marketi ng communicati ons eﬀ orts, only that

101 these eff orts will have agreed upon guidelines so that all of the diff erent groups with which the organizati on communicates are given a consistent image of the organizati on. Aft er diff erent parts of the organizati on agree upon what image the organizati on seeks to att ain, an integrated marketi ng communicati ons (MARCOM) program can be established and implemented. All components of the promoti on 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 communicati ons with customers, employees, and suppliers used the same logo and lett erhead. Marie also realized that an emphasis on personal service, the availability of unique products, and the consistency of local ownership would be criti cal to maintain her chosen organizati onal image. We will describe Marie’s chosen MARCOM program at length later on.

A Note on Positi oning9

As we have indicated, it is essenti al to know who the target customer is and what benefi ts s/he is seeking. For example, there is usually a temptati on to ignore this requirement and att empt 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 fi rm. 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 defi niti on of a target market is too broad and provides insuffi cient 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 defi ne the concept of the restaurant and precisely who they were expecti ng to serve in the business. For example, the needs of those who are searching for ‘a fast lunch’ will diﬀ er signifi cantly from those who aspire to ‘relax and talk’ over their lunch. It would be diffi cult to positi on a restaurant to simultaneously meet all of these needs well. Promoti on is the communicati ons part of marketi ng. It is the way we tell the world our product. Promoti on provides consumers with informati on and knowledge in an informati ve and persuasive manner.

102 This, we hope, will sooner or later result in sales of our services or products. The informati on and knowledge can be communicated using one or more of the fi ve promoti onal techniques - adverti sing, personal selling, sales promoti on, merchandising, and public relati ons. Taken together, these techniques are referred to as the promoti onal mix.

Goals of Promoti on9

The ulti mate purpose of promoti on is to modify behaviour through communicati on. This requires helping customers at the various buying process stages so they eventually purchase or repurchase a parti cular service. Promoti on achieves this by informing, persuading, and reminding - the three principal goals of promoti on. Promoti ons usually fi t into one of these categories; they are either informati ve, persuasive, or reminders. Informati ve promoti ons work best with new services or products (early product-life-cycle stages) and with customers in early buying process stages (need awareness and informati on search). These types of promoti ons tend to communicate data or ideas about the key features of services. Persuasive promoti ons are harder. They are aimed at getti ng customers to select one parti cular company or “brand” over those of competi tors, and to actually make the purchase. Adverti sements that compare one company’s services to another, and most sales promoti ons, fi t into this category. Persuasive promoti ons work best in intermediate/ late stages of product life cycle (growth and maturity) and the buying process (evaluati on of alternati ves and purchase). Reminder promoti ons are used to push customers’ memories about adverti sing they may have seen, and to sti mulate repurchases. They are most eﬀ ecti ve in the late product-life-cycle (maturity and decline) and buying process stages (post purchase evaluati on).

The ﬁ ve communicati ons mix elements are; 1. Adverti sing 2. Personal selling 3. Sales promoti on 4. Merchandising 5. Public relati ons (PR)

103 Adverti sing in event marketi ng Adverti sing is any paid form of non-personal presentati on and promoti on of ideas, goods, or services by an identi fi ed sponsor. The three key words in this defi niti on are “paid”, “nonpersonal” and “identi fied sponsor.” Paid - hospitality and travel organizati ons always have to pay for adverti sing, 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 representati ves are physically present to give the message to customers. Identi fi ed sponsor - the paying organizati on is clearly identi fi ed in the adverti sement. The media adverti sing is mainly two types as printed media adverti sing (newspapers, magazines, brochures, direct mail and billboards), and broadcast media adverti sing (radio and television). Direct mail which is used extensively by tour operators, is postal communicati on by an identi fi ed sponsor. And this promoti onal tool is classifi ed asdirect marketi ng. Because event is an intangible service, a great deal of promoti on includes the producti on of printed communicati ons such as brochures or sales leafl ets. The design, organizati on and printi ng of tourism brochures is one of the most important promoti on functi ons. Printed communicati ons are oft en costly. In fact, the printi ng and distributi on costs of brochures comprise the largest part of most marketi ng budgets within the tourism industry. Adverti sing is used to achieve a whole range of objecti ves which may include changing atti tudes or building image as well as achieving sales. However, adverti sing messages do not always have to be aimed directly at creati ng a sale. Someti mes it’s the sponsor’s goal simply to convey a positi ve idea or a favourable image of the organizati on (oft en called “insti tuti onal” adverti sing). (Sponsorship is the material or fi nancial support of a specifi c acti vity which does not form part of the sponsor company’s normal business) For example, IBM has sponsored ads during the Atlanta 96 Olympics. Adverti sing is oft en described as above-the-line promoti on (where the media space is paid by the company) with all other forms of promoti on (where space is not paid) being termed below-the-line.

Personal Selling in event marketi ng Personal selling involves oral conversati ons. These are, either by telephone or face-to-face, between salespersons and prospecti ve customers. This sort selling may be used by a non-profi t-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 Promoti on in event marketi ng Sales promoti ons are approaches where customers are given a short term incenti ve (encouragement) to make an immediate purchase. Sales promoti on campaigns add value to the product because the incenti ves does not normally accompany the product. Like adverti sing, the sponsor is clearly identi fi ed and the communicati on is nonpersonal. Examples include discount coupons, contests (trial), samples and premiums (prize, bonus). Free wine or free accommodati on oﬀ ers are frequently used in sales promoti on campaigns for hotel restaurants which need to increase demand at certain periods.

Merchandising (point-of-purchase adverti sing) Merchandising, or point-of-purchase “adverti sing” includes materials used in-house to sti mulate sales. These include menus, wine lists, signs, posters, displays, and other point-of-sale promoti onal items (in-room materials). It is a common practi ce to categorize merchandising as a sales promoti on technique, because it does not include media adverti sing, personal selling, or public relati ons. In this course, merchandising is separated from other sales promoti on techniques because of its uniqueness and its importance to the industry. Merchandising is important as a means of creati ng impulse purchase or remind the consumer of what is on oﬀ er.

Public Relati ons (PR) in event marketi ng Public relati ons includes all the acti viti es that an event management organizati on engages in to maintain or improve its relati onship with other organizati ons and individuals. In other words, public relati ons try to provide commercially signifi cant news about the product or service in a published medium, or obtaining favourable presentati on in a medium that is not paid by the sponsor. Publicity is one public relati ons technique that involves nonpaid communicati on of informati on about an organizati on’s services.

Characteristi cs of each promoti on Each of the above promoti onal elements has capacity to achieve a diﬀ erent promoti onal objecti ve. Personal selling has high potenti al for

105 achieving communicati on objecti ves, however, only a small number of people can be contacted. Therefore adverti sing is a bett er method of reaching a high number of people at low cost. Public relati ons is more credible than adverti sing, but there is more control over adverti sing messages and they can be repeated on a regular basis. When it is diffi cult to raise adverti sing budgets, public relati ons is a lower cost alternati ve, but it is diffi cult to control the ti ming and consistency of PR coverage. Sales promoti on may produce an initi al trial for a product, but this type of promoti on can only be used over a short period. Each part of the promoti on mix has its own strengths and weaknesses. While these may include the factors of cost, ability to target diﬀ erent groups, and control, there are other important considerati ons. On the following fi gure, they are compared on the basis of the level of awareness of the communicati on, and its comprehension (understanding, realizati on), as well as on whether it can build convicti on (confi dence, certainty) and succeed in creati ng acti on.

Factors aff ecti ng the promoti onal mix Choosing a promoti onal program for a coming period requires very careful research and planning. The stage of customers’ decision processes and product life cycle stages aff ect the promoti onal campaign decisions. However, there are some other factors that also aff ect promoti onal mix decisions. The eff ecti veness of the fi ve promoti onal mix elements varies according to the target market. For example, in promoti ng its conventi on/ meeti ng faciliti es, a lodging property might fi nd that personal selling to key meeti ng planners is much more eff ecti ve than adverti sing. On the other hand, using personal selling to att ract individual pleasure travellers would not be feasible. The geographic locati on of potenti al customers also has an impact. Where they are widely dispersed, adverti sing may be the most effi cient and eff ecti ve way to reach them. The promoti onal mix selected should fl ow directly from the objecti ves for each target market. For example, if the objecti ve isto build awareness by a certain percentage, the emphasis may be placed on media adverti sing. If, on the other hand, it is to build sales signifi cantly in a short ti me period, the focus may be put on sales promoti on. There is a disti nct tendency in certain parts of the hospitality and travel industry for most competi ti ve organizati ons to use the same “lead element” in promoti onal mixes. Fast-food chains focus on heavy

106 television adverti sing, hotels and airlines focus on frequent-traveller award programs, and cruise lines put a heavy emphasis on personal selling to travel agents. It is diffi cult and extremely risky for one competi tor to “break from the pack” in this respect. Obviously the funds available for promoti on have a direct impact on choosing promoti onal mix elements. Smaller organizati ons with more limited budgets usually have to place greater emphasis on lower- cost promoti ons, including publicity and sales promoti ons. Larger organizati ons can bett er aﬀ ord to use media adverti sing and personal selling.

Creati ng speciﬁ c promoti onal messages10

When the objecti ves which promoti on is to fulfi l have been decided in relati on to an identi fi ed segment of buyers, the crucial step inthe adverti sing process is to create memorable pictures and words. Creati ve executi on captures att enti on, expresses the essence of a product in a few words that say it all, and provides key informati on. In travel and tourism good examples of creati ve executi ons are:

“We try harder” (Avis) “We speak your language” (Briti sh Tourist Authority in the USA market) “I love New York” (New York State) “The World’s favourite airline” (Briti sh 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 internati onal adverti sing 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 interesti ng. And you won’t be interesti ng unless you say things freshly, originally, and imaginati vely.

107 EXERCISE

Congratulati ons, your Adverti sing Firm has just been hired bya new company to create a one-month promoti onal plan! Your fi rm will write a marketi ng plan and create all of the promoti onal elements for the company that has hired your Adverti sing fi rm. The four-week promoti onal campaign can be for any of the businesses listed below or can be for a business of your choice in the Monona-Cott age Grove area, with approval.

The promoti onal campaign must achieve the following objecti ves:

 Increase sales for the chosen ti me period (4 Weeks)  Increase the preferred customer base for the chosen business  Increase customer awareness of the chosen business In additi on your fi rm must develop a budget for the four-week campaign. The developed marketi ng campaign must include all four parts of the promoti onal mix: adverti sing, sales promoti on, personal selling, and publicity. Your team must detail all expenses as they relate to the four components of the promoti onal mix.

Your fi rm can choose to work with the following companies:

Kat’s Coﬀ ee House Budget = $3,000 Studio 27 Aveda Concept Salon Budget = $5,000 Grand Atlanti c Hotel and Resort Budget = $75,000 Monona Area business of your choice Budget = ______2-Group’s for School Store! Budget = $100 1-Group for Eagle Eye Café! Budget= “0”

Your marketi ng plan along with all promoti onal elements is due May 10th

Your team should be prepared to do an informal presentati on on your marketi ng plan and promoti onal elements on the due date. (Show us your items ELECTRONICALLY)

108 Promoti onal Mix Elements

Your adverti sing fi rm must develop plans for a one-month marketi ng campaign for a local business that has hired your fi rm. Your fi rm 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 promoti onal mix, Write a 1 page summary of what your plan is and why you are doing it!  Develop a one-month promoti onal mix budget

In additi on to creati ng the above, your fi rm must create 8 of the following promoti onal acti viti es. You must have at least 1 acti vity from each area. *(Make sure you consider your target market, media reach, and budget when making your selecti ons, not just, which are easiest for you.)* Adverti sing…(pick 3) Create a newspaper adverti sement Create a magazine adverti sement 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 adverti sing Create a yellow pages adverti sement Create a direct mail piece Create an outdoor sign for the business Create a web page for the business

Sales Promoti ons…(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-liquidati ng premium Create a window display

Public Relati ons… Coordinate an event that is newsworthy with a press-release.

Adverti sing 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 promoti on Be very specifi c. For example…6-30 second radio spots @ 40 EUR each = 240 EUR

Adverti sing 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 (producti on) 500.00 EUR Local Magazine (one month) full colour 975.00 EUR Nati onal 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 (producti on) 2,500.00 EUR Yellow pages (1/8 page ad, one month) 50.00 EUR Newspaper (1/8 page, Rhythm Secti on) 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 marketi ng instructor for sales promoti on costs

SAMPLE Promoti onal Budget

Radio 10-30 second spots @ 120 EUR each 1200.00 EUR AM drive ti me on WZEE, WIBA 5-30 second spots @ 80 EUR each 400.00 EUR PM drive ti me on WZEE, WMAD

110 Television—Local cable Product costs 2500.00 EUR 25-60 second spots @ 40 EUR 1,000.00 EUR Prime ti me rotati on MTV, USA, ESPN, WB, and TBS

Billboard Producti on Costs 975.00 EUR 4 @ 975 EUR each Locati ons… East Wash, Hwy 51, Hwy 113, Hwy 12 3,900.00 EUR

Newspaper 4 – ¼ page @ 500.00 EUR Every Thursday Rhythm secti on for one month 2,000.00 EUR

Sales Promoti on Contest Prize…1-month FREE cup of coﬀ ee 7.50 EUR Giveaway…100 coﬀ ee mugs FREE 250.00 EUR

Sales Staﬀ Grand Opening Training Luncheon 300.00 EUR

Public Relati ons Press Release 0.00 EUR Sent to Herald Independent, State Journal, WZEE, WMAD, WIBA

Total Promoti onal Budget 12,532.50 EUR

Monona – Cott age Grove Business of Your Choice

 Choose the business that you will be creati ng a marketi ng plan for ......

 Find out what the business oﬀ ers  Get Business Approved by your Marketi ng Teacher  History

111 ......  Products Oﬀ ered  Pricing  Promoti onal Budget for one month ......  You may NOT use any promoti onal 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.

Introducti on to Marketi ng Promoti onal 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 justi fi cati on for your choice of the promoti onal mix. Explain why you chose each element that you did and your rati onale. (1-2 pages)  8 promoti onal acti viti es, including one from each of the3 elements  One month Promoti onal budget o Including specifi cs of where each element will be distributed

112 Grading Rubric- Promoti onal Project Missing a Had Required Missing Some Not existent Required Cover Page Elements Elements Element 5 4 3 2 1 0 Detailed, explained Detailed, Ok, included a No summary all projects (1-2 pgs.) explained summary Summary most 15 14 13 12 11 10 1 At least 3 types of 2 types of 2 types of Adverti sing adverti sing were adverti sing adverti sing Promoti onal shown with proper were shown were shown item(s) were Adverti sing formatti ng of each and displayed and displayed not present Promoti onal and displayed and were Items creati vely as it would be published 20 19 18 17 16 15 14 13 0 2 types At least 2 types of 2 types of sales Sales of sales sales promoti on promoti on were Promoti onal promoti on were shown with shown and item(s) were Sales were proper formatti ng of displayed not present Promoti onal shown and each and displayed Items displayed with creati vely as it would formatti ng be published

20 19 18 17 16 15 14 13 0 Press release was Press Release Many Publicity included with was created components Promoti onal Public specifi c details were missing item(s) were Relati ons to the business. not present Promoti onal Newsworthy event Items 10 9 8 7 10 9 0 Formatt ed with Identi ﬁ ed Ok, included a No Budget specifi cs identi fying most sources budget all sources and and realisti c Budget realisti c pricing pricing

10 9 8 7 6 5 1 Presentati on Presentati on Presentati on Presentati on was given. was given. was detailed and with Budget and Budget and professional. Budget budget and promoti onal promoti onal was shown with promoti onal Presentati on item was item were weak 1 slide for each items were shown and/or missing promoti onal item not present areas

20 19 18 17 16 15 14 13 0

Total points ______/100 113 Promoti onal Mix Project Partner Evaluati on form Your partners Your name name How much ti me did Just as much as I did, Almost as much as Hardly any eﬀ ort at all your partner put into if not more I did. this project 10 9 8 7 6 5 4 3 2 Yes, completely and Yes they fi nished it When assigned a They fi nished but not on with creati vity task did your partner ti me nor was it creati ve complete it? 10 9 8 7 6 5 4 3 2 Yes, they had some Yes, they helped Did your partner ad No, I had to think of all great promoti onal me think of ideas creati ve Ideas to the the ideas for the project ideas for the project group 10 9 8 7 6 5 4 3 2 Yes, we met several Yes, they were able No, they had no ti me to Was your partner ti mes outside of to meet meet outside of class for available to meet and class to work on the this project. work on the project project 10 9 8 7 6 5 4 3 2

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

Promoti onal Mix Project Partner Evaluati on form Your name Your partners name How much ti me did Just as much as I did, Almost as much as Hardly any eﬀ ort at all your partner put into if not more I did. this project 10 9 8 7 6 5 4 3 2 Yes, completely and Yes they fi nished it When assigned a They fi nished but not on with creati vity task did your partner ti me nor was it creati ve complete it? 10 9 8 7 6 5 4 3 2 Yes, they had some Yes, they helped Did your partner ad No, I had to think of all great promoti onal me think of ideas creati ve Ideas to the the ideas for the project ideas for the project group 10 9 8 7 6 5 4 3 2 Yes, we met several Yes, they were able No, they had no ti me to Was your partner ti mes outside of to meet meet outside of class available to meet and class to work on the for this project. work on the project project 10 9 8 7 6 5 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 Marketi ng. A Managerial Approach. Homewood, IL: Irwin. p. 769. ISBN 0256025339. 2. Rajagopal. (2007) Marketi ng Dynamics: Theory and Practi ce. New Delhi, India: New Age Internati onal. Retrieved April 5, 2010, from NJIT EBook Library:htt p://www.njit.eblib.com.libdb.njit. edu:8888/patron/FullRecord.aspx?p=437711 3. Kurtz, Dave. (2010). Contemporary Marketi ng. Mason, OH: South-Western Cengage Learning. 4. Mulhern, Frank (2009). “Integrated marketi ng communicati ons: From media channels to digital connecti vity”. Journal of Marketi ng Communicati ons 15 (2-3): 87. 5. Mulhern, Frank (2009). “Integrated marketi ng communicati ons: From media channels to digital connecti vity”. Journal of Marketi ng Communicati ons 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 introducti on. Melbourne: Oxford University Press. p. 107. ISBN 9780195431810. 8. Flew, Terry (2008). New Media: an introducti on. Melbourne: Oxford University Press.ISBN 9780195431810. 9. What are the opti ons for promoti ng products and services. Access via Internet: www.principlesofmarketi ng.com/htm/ Chapter-Ten.htm 10. Promoti on mix. Access via Internet: www.tourism.bilkent.edu. tr/~eda/promoti on%20mix.DOC FURTHER READING 1. Maria Carlton and David Blaise, 2004 (2013). “The Excepti onal Marketi ng Power of Promoti onal Products, excerpt from the book The Power of Promoti onal Products” (PDF). Australia: Promoti on 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 - Inventi on of Kellogg’s Corn Flakes”. Ideafi nder.com. Retrieved 2010-12-27. 7. “Kellogg’s Off ers 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 Eff ect, Harvard Business School Press, Boston, 1996. 10. Philip Kotler. According to Kotler: The World’s Foremost Authority on Marketi ng Answers Your Questi ons. 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, Off ers”, “Bloomberg”, July 19, 2011. Retrieved on July 29, 2011 13. Neff , Jack, [2] “In a First, Unilever, Supervalu Pair for Groupon Deal,” “Adverti sing 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 soluti ons 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 Oﬀ ermati c pulls in $4.5M”, “VentureBeat”, March 9, 2011. Retrieved on July 12, 2011 19. Walsh, Mark.[8] “Startup Clovr Touts Card-Linked Oﬀ ers”, 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 Practi ces” 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 retenti on”, Journal of Retail Banking, vol 13, no 4, 1992.

117 Part 8 EFFICIENCY OF EVENT PLANNING

Objecti ve outline:

1. Answer the questi on “What is an effi ciency?” and discuss the importance of effi ciency in event planning marketi ng campaign. 2. Identi fy the major effi ciency strategies and discuss the importance of understanding customer – value percepti ons, company costs and competi tor strategies when setti ng prices. 3. Identi fy and defi ne the other important external and internal factors aﬀ ecti ng a fi rm’s effi ciency measurement instruments.

Chapter Key Terms:

Effi ciency Risk management External and internal factors Planning Effi ciency measurement instruments Eff ecti veness

Managing Special Event Risks1

In Managing Special Event Risks we discuss “ten steps to safety” as a way of providing practi cal 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 fi nance losses associated with special events. This arti cle explores the fi rst two of these vital “steps.” STEP 1—Establish Goals The fi rst step in the development of a special events risk management program is to identi fy the organizati on’s purpose in creati ng and sponsoring the event and to ensure that: ⇒ the purpose and executi on of the special event advance the mission of the organizati on. This can happen by providing service to the community (e.g. a blood drive), increasing awareness of the organizati on and its goals, raising funds for the achievement of those goals or a combinati on of these purposes. ⇒ the special event and its acti viti es 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 organizati on 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 confi rmed that it will advance the non-profi t’s mission and is mission-appropriate, you should identi fy event specifi c risk management goals. These may include: ⇒ Prevent injury—including injuries to staﬀ , spectators, parti cipants and others—in the acti vity and ensure rapid, eﬀ ecti ve 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 fi nancial goals—for many non-profi ts a key goal of special events is to generate net income that can be used for mission fulfi lment.

⇒ Avoid event cancellati on—for example, an event planned by a non-profi t may be key to sustaining interest in a parti cular cause. Cancelling the event could be disastrous to an ongoing advocacy eﬀ ort or cause unnecessary ill will among stakeholders.

⇒ Fulfi l social responsibiliti es—risk management is someti mes perceived as part of a non-profi t’s responsibility in oﬀ ering programs which meet community needs.

⇒ Reduce anxiety about risk—many non-profi ts look at sound risk management practi ces 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 objecti ves 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 Functi ons People are the key to success for most non-profi t programs, including special events. Organizing a team is a big step to ensure a successful event. Irrespecti ve 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 organizati onal structure used successfully for emergency response operati ons provides a simple and responsive functi onal model for a special events management team: Special Event Director ⇒ Overall leadership, responsibility, directi on and control of the special event

⇒ Public Informati on—Media

⇒ Liaison—communicati on & coordinati on with representati ves from other enti ti es

⇒ Safety for enti re event, all operati ons Operati ons Coordinator ⇒ Services and acti viti es involving att endees and parti cipants

⇒ Food, beverages, seati ng, lighti ng, communicati ons

⇒ Sanitati on, trash, restrooms Safety Coordinator ⇒ Risk management, emergency response, evacuati on, rain or rescheduling/relocati on planning and coordinati on

⇒ Incident and status reports during event, post-event evaluati on Logisti cs Coordinator ⇒ Contracti ng with vendors providing supplies and services

⇒ Coordinati ng services for event staﬀ and volunteers Finance Coordinator ⇒ Registrati ons, sales and donati ons

120 ⇒ Insurance claims reporti ng and coordinati on ⇒ For a small event or acti vity all fi ve functi ons can be managed by a person or two. For larger events, each of the primary functi ons should be assigned to a member of the special event management team. As a special event increases in size and complexity, additi onal people should be assigned specifi c tasks. ⇒ Creati ng a special events management team has the benefi t of focusing on the planning and management of the special event and establishing who is specifi cally responsible for each functi on. Important informati on regarding the planning or management of the event can be handled by the team. This can be criti cal in emergency situati ons that require decisive acti on. ⇒ This structure is referred to as the “Incident Command System.” More informati on is available on this topic. ⇒ While some large non-profi ts have a fullti me risk manager, most small to mid-sized agencies use a team approach to identi fy and control risks in their day to day operati ons and special events. This approach has advantages when people from diﬀ erent units become advocates for safety. The likelihood of spotti ng hazards increases when more than one person is involved in the eﬀ ort. ⇒ Managing special event risks requires equal measures of awareness, planning, diligence and team work. The ti me spent on this aspect of your special event is certain to contribute to the event’s success and the favourable reputati on your non-profi t enjoys in the community it serves.

Measurement and evaluati on of eﬃ ciency of event planning2 The common thread that runs through discussions on measurement and evaluati on appears to be the questi on of accountability. Well- managed organisati ons that are accountable to their shareholders, members or taxpayers, view expenditure on Communicati on, Marketi ng and Human Resources as an investment. As such, these functi ons should yield a ROI. From the perspecti ve of senior management and shareholders, the most desired and att racti ve 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 fi nancial

121 criteria. Given these criteria, some management disciplines such as the Communicati on functi on preferred to think about themselves as “intangible” and therefore, not subject to ROI expectati ons. However, mounti ng pressure for increased accountability and the robust shift towards triple bott om line performance not only introduced new forms of ROI measurement, but extended the ROI criteria beyond the fi nancial bott om line. Systems such as Key Performance Indicators (KPIs) or Key Results Areas (KRAs), Benchmarking and Balanced Score Cards used widely by organisati ons, are no longer concerned with fi nancial results only. Sound social and environmental performance is becoming prerequisites to obtain and maintain a ‘licence to operate’. Intangible assets of organisati ons such as intellectual capital, customer sati sfacti on and loyalty, corporate reputati on, positi ve stakeholder relati ons, employee sati sfacti on and loyalty, and corporate culture are now esti mated to account for 70% of an organisati on’s worth. For some companies, the esti mati on is even higher. The current concept of bott om-line, a 15th century method of accounti ng for an organisati on’s tangible assets (land, buildings machinery, raw materials, an inventory of fi nished products, capital etc.) cannot recognise intangible assets or, for that matt er, the contributi on of any functi on towards intangible assets. If growth and prosperity in present-day business no longer depend on fi nancial performance alone, and if value creati on in the new economy is fuelled less by physical or tangible assets and more by intangible assets, then clearly delivery on Reputati on Risk Management, Corporate Social Responsibility and Stakeholder Relati onship Management resides within the core of this ‘new ROI criteria’. This argument does not only make the evaluati on of a Communicati on Functi on possible, it puts building a ROI case through the systemati c accumulati on of measurement results well within the reach of users of this soft ware system.

The comPro Performance Measurement System

Borrowing from thought leaders on communicati on measurement and evaluati on, a performance measurement system has been developed consisti ng of a generic framework for evaluati on that can be customised for an organisati on’s strategic intent, own context or specifi c organisati onal needs.

122 The system asks of the user to choose from a list of metrics and methods to evaluate (1) eff ecti veness and (2) effi ciency on three levels: ⇒ Level 1: Evaluati ng communicati on acti viti es, products and events (against pre-specifi ed deliverables). ⇒ Level 2: Evaluati ng communicati on plans, programmes and campaigns (against objecti ves). ⇒ Level 3: Evaluati on the communicati on strategy (against goals). The primary aim of the performance measurement management system is conti nuous improvement and organisati onal learning through constant feedback. Involvement of all practi ti oners is important and therefore the system is designed to be accessible, transparent and easy to understand and use. There are three criti cal principles: Principle 1: Evaluati on is not research Some of the main reasons off ered for the lack of communicati on evaluati on are ‘lack of research budget’, ‘lack of ti me to do research’ and ‘lacking research skills’ suggesti ng some kind of confusion between research and evaluati on. Evaluati on does not equate formal research. There are many evaluati on techniques such as self-assessment, peer group rati ngs 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 evaluati on per se. If measurement and evaluati on can only take place when research is possible, ROI will forever be elusive. Research is a strategic tool that feeds into planning, implementati on and evaluati on and a valid and reliable tool it can indeed be. Measurement and evaluati on on the other hand is a management process, not a once-off or bi-annual project. In the absence of a research budget or ti me, measurement and evaluati on should sti ll carry on. Principle 2: Evaluati on is an ongoing, systemati c process By evaluati ng acti viti es, plans and strategies in a conti nuous, integrated and systemati c process, and by using a range of formal and informal methods, evaluati on can be more strategic and valuable to management. Instead of att empti ng one large research project when money and ti me is available, ‘lots of litt le bits of evaluati on’ make the process more valuable, manageable and cost eff ecti ve.

123 Principle 3: Evaluati on is a forward looking acti vity The reason we systemati cally measure everything boils down to reducing uncertainti es, improving eﬀ ecti veness, and enhancing decisions. The purpose and focus of evaluati on is learning to improve future performance. Naturally the collecti on of historical data is an essenti al prerequisite, but when perceived simply as looking backto judge past performance, evaluati on can be threatening. When used as a process to gather informati on in order to advise management and contribute to the cycle of conti nuous improvement, measurement and evaluati on are much more constructi ve. Practi ti oners may feel uncomfortable if they have the percepti on 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 evaluati on as a forward looking acti vity is important to resolve the ‘fear of being evaluated’ which has kept many communicati on practi ti oners from embracing evaluati on more enthusiasti cally. Levels of evaluati on A questi on oft en asked is “Why ‘setti ng an evaluati on methodology’ should be part of planning?” The answer to this questi on lies in the essence of strategic alignment. Strategic alignment is a process whereby the imperati ves in the organisati on’s top-level strategies (e.g. Enterprise and Corporate strategy) are translated into a functi onal strategy (e.g. Communicati on strategy). Consecuti vely, the functi onal strategy is deployed into cascading levels of planning and implementati on. The number of levels in the planning system is of litt le importance as long as every subsequent plan, project, programme or acti vity is in line with the strategic intent. In the process of strategic alignment, planning is ‘rolled down’ and evaluati on is ‘rolled up’ along the same strategic line. Therefore strategy development and planning are integral parts of the performance measurement system. The evaluati on process to measure the success of a Communicati on functi on cannot be initi ated at the end of the fi nancial 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 isolati on, with litt le or no value for evaluati on. Measurement becomes evaluati on only when compared to a specifi c norm such as a

124 communicati on goal, objecti ve, target, or deliverable. The yardsti ck for performance measurement will always be imbedded in the communicati on functi on’s planning architecture. Metrics and Methods The fi rst step in evaluati on is to determine ‘what’ to measure? The strong emphasis in existi ng literature on measurement techniques, methods and tools is concerning, as too much energy is spent on discussing the ‘how to’ of communicati on measurement instead of focusing on the ‘what’ that should be measured. All too oft en, instead of conceptualizing the ‘what’ of measurement, practi ti oners seem to be locked in discussions on the merits of focus groups, media content analysis and opinion surveys, or defending the objecti vity and randomness or ti ming of methodologies deployed. The ‘what’ to measure in communicati on evaluati on 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 communicati on measurement. In most cases the ‘how to’ of communicati on measurement involves ‘asking the relevant stakeholders’, be it with a focus group, or survey, or interview. View list of methods. To set realisti c metrics, communicati on practi ti oners need lots of common sense and at least an elementary understanding of communicati on theory. Measuring intangible assets like corporate reputati on, brand equity, relati onships and corporate citi zenship is not an easy task. Clustered within terms such as reputati on and relati onships are many diﬀ erent, more basic constructs like loyalty, trust, sati sfacti on, faith and admirati on. We need to understand what we want to measure before we can ask. Ill-conceived assumpti ons about what communicati on can achieve someti mes lead to misguided and overly opti misti c goals that make evaluati on risky and problemati c. 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 operati onal matt er, for which external advice can be sought.

125 Level 3 Evaluati on The third level of evaluati on, planned in this step of the Communicati on strategy, measures the performance of the functi on against its set strategic goals in the longer term. Usually these measures cannot be linked to one specifi c acti vity or plan, but relates to the collecti ve performance of the functi on over ti me. Movement on indicators such as reputati onal value and relati onship health is a consequence of the value created by Communicati on Management over a longer period of ti me. It therefore is known as the measurement of ‘outgrowths’ or the cumulati ve eff ects of the performance of Communicati on Management on the previous two levels (acti viti es and plans). Measurement of the Communicati on functi on’s eff ecti veness is criti cal to link its performance with organisati onal goal achievement. The majority of communicati on goals do not directly contribute to increased market penetrati on, market share, sales and ulti mately profi tability (the bott om line). Communicati on Management is oft en called upon to infl uence areas important to long-term sustainable success such as key stakeholders’ percepti ons of the organisati on. If a communicati on goal was set in a ‘straight strategic line’ with an organisati onal goal, then achieving that communicati on goal will positi vely impact on achievement of the organisati onal goal – thereby contributi ng to the new ROI criteria or triple bott om line. Accordingly, the contributi on of Communicati on Management must be measured in more than direct monetary returns, even in fi nancially–orientated public and private companies. View an example of selected metrics and methods for measuring eff ecti veness.

Effi ciency metrics comprise the areas in which top management would like to see improvement of the overall management (ti me, cost and quality) of the functi on. Metrics can include process improvements, producti vity improvements, cost containment or people development – culminati ng in a process of conti nuous improvement.

View an example of selected metrics and methods for measuring effi ciency.

126 DISCUSSION STUDY CASE – NIKE SUCSSES STORY (Source: web.unbc.ca/~chenj/course/project/Nike.doc)

Introducti on

The athleti c footwear industry is a highly competi ti ve environment where the top four manufacturers hold over 70% of the market share. The barriers to entry into the industry are comparati vely low, as anyone with new creati ve design ideas can produce and market their product, but the success of smaller companies is oft enti mes shaky. Brand loyalty, ample capital, and broad based sourcing create an environment where the bigger companies such as Nike and Reebok have litt le 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 fi ghti ng for a shot at survival.

NIKE Corporati on

NIKE Corporati on was incorporated in 1968. NIKE has primarily been in the business of designing, developing, and marketi ng athleti c footwear, apparel, equipment and accessories. NIKE Corporati on is a well-managed company in an att racti ve industry, the company has a strong brand image, and they are eﬀ ecti vely capturing the value created from their investment. NIKE is dependent upon high technology in their eﬀ ort to stay ahead of their competi tors 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 marketi ng strategies and adverti sing campaigns.

Key factors that inﬂ uence success of NIKE

If a company is able to establish brand awareness, they will have a signifi cant advantage in grabbing consumer’s att enti on and, therefore, market share. In today’s society where consumers have signifi cantly less ti me to shop and compare, brand awareness is criti cal. Ifan established brand name eﬀ ecti vely conveys the messages of quality and

127 dependability, consumers will automati cally go to that brand relying on the image that has been created when they don’t have ti me to shop around. Manufacturing effi ciency is something that companies are constantly striving for as well. Athleti c shoe manufacturers must balance the costs of labour, raw materials, shipping, import tariﬀ s, and technological advancements. In an eﬀ ort 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 legislati on regarding foreign manufacturing has led to a huge increase in foreign sourcing. Overseas producti on and sourcing can lower material, and labour costs. The footwear companies must choose their distributi on 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 relati onships 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 distributi on cycle to only a few months. Also, new technology has facilitated new quick- response 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 aft er a sale is made, electronic point of sale scanners read the informati on related to the sale such as price, product, size, etc. and noti fy the manufacturer of the sale. With this, the manufacturer is able to accurately modify producti on to fi t consumer demand.

Demand cycles

Due to the largely subjecti ve nature of athleti c footwear purchasing, the success of the industry is dependent on the current economic cycle. When consumers are concerned about future economic conditi ons, they will put off their purchases unti l their confi dence rebounds. In additi on to the amount of confi dence that consumers have for the future, the amount of disposable income available to them directly aff ects how much is spent on athleti c footwear. When consumers experience a drop in disposable income, discreti onary purchases such as footwear are put off .

128 Adverti sing campaigns

Companies spend a large porti on of their revenue on adverti sing. A lot of pressure is put on the companies to come up with new and successful adverti sing campaigns. If a campaign fails, the companies’ sales suﬀ er as a result. NIKE has always been an industry leader when it comes to adverti sing. Their adverti sing campaigns are known all over the world as being widely successful. NIKE is truly a trendsett er when it comes to adverti sing, not just for shoes, but for the adverti sing industry as well. The company was all about the clarity of matching technology to athleti c performance- and, in the ads, showing the passion that resulted. By going against the norms in adverti sing, 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, Generati on X, and Generati on Y. These three generati ons are broken down as follows: Baby Boomers are from ages 35-53, Generati on Y are consumers from 4-21, and Generati on 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 populati on, which is equal to about 81 million consumers. Generati on Y is the second largest group that accounts for 28% of the populati on which represents about 75 million consumers. The smallest customer group is Generati on X, they comprise about 17% of the populati on, which equals about 46 million consumers. Nike has become more appealing among younger consumers and has shift ed away from the Generati on of the Baby Boomers. Nike and many other large shoe industry retailers are shift ing their marketi ng directi on from the Baby Boomers to the younger consumers of Generati on X and Generati on 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 atti tudes, prioriti es, and ti me obligati ons have decreased their ambiti on for shopping. Now that many of the Baby Boomers are within their forti es and fi ft ies, many of their prioriti es have shift ed towards the future, in a sense that they need to save for reti rement, diﬀ erent tuiti on payments for their children, and also diﬀ erent healthcare necessiti es that are important to them and their families.

129 SWOT Analysis

Strengths NIKE is the largest manufacturer of athleti c footwear and apparel in the world. In terms of footwear, NIKE enjoyed control of nearly 42.3% of the enti re footwear market in 2000 at nearly 8 billion dollars. That is more than both its number two and number three competi tors combined. NIKE has virtually invented the noti on of the celebrity endorsement with the likes of Pete Sampras and Andre Agassi in Tennis; Michael Jordan in Basketball; and the acquisiti on of teen basketball sensati on Lebron James who signed with NIKE for a reported $90 million. In additi on, NIKE’s fi nancial soundness has proven stable through economic cycles. Weakness There are weaknesses that NIKE has gained for a couple of diﬀ erent reasons. Labour practi ces are one issue that really att ached to the Nike Corporati on. Acti vist groups and student organizati ons have made Nike symbol of labour exploitati on. These groups blame Nike for poor conditi ons in its third world factories, under-paying workers, employing children, and ignoring the basic rights of its workers. Nike eﬀ orts toward global expansion have become a weakness in the company’s reputati on. Nike has operated in the Asian region and uses subcontractors throughout the globe to manufacture their products. Nike has a litt le control over its extended product line because it is such a large company with the majority of its operati ons overseas. In additi on, many people in the United States see Nike outsourcing as taking away jobs from Americans. Opportuniti es Nike has new opportuniti es and markets that they must penetrate and take advantage of to conti nue to be a world leader and sustain profi ts and growths. Nike not only has the ability to succeed inthe basketball shoe market, but in virtually every other athleti c 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 fl exible when the market shift s, making demand in some areas higher than others. Nike must also conti nue to expand into current internati onal markets while penetrati ng into new ones. The company must conti nue to create new technologies and systems to

130 compete internati onally. Another opportunity is expanding promoti ons to include entertainment and other non-sports venues, since the line between entertainment and sports has become popular. Nike adverti sements make waves. People enjoy them and wait for new ones. The hype of Nike adverti sing brings with it the opportunity to reach the public through the promoti on of Nike newest adverti sing endeavour. The Nike massive web site will prove to be an opportunity for Nike consumers to get up to update consumers about new and innovati ve 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 Competi ti on is always a threat to a competi ti ve company both domesti cally and internati onally. The rivalry is very fi erce with many companies competi ng for sales. Lots of money is spent on marketi ng and promoti ons through diﬀ erent 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 athleti c footwear industry, however new markets are emerging with high growth rates. Nike currently dominates the market, but Nike competi tors pose a potenti al threat to the company’s reputati on If Nike cannot stay one step ahead of their competi tors in terms of product design and customer sati sfacti on the corporati on could fl ounder. Current Strategies and Goals: Nike has in placed several strategies that encompass improving growth and profi ts in a variety of areas. The struggling economy has not changed Nike’s atti tude towards growth. One strategy that Nike focuses on, in conti nuing to help the company grow is Person Marketi ng. Nike has been using the best athletes, and sports teams (or clubs) all over the world to help market their products. The regenerati ve 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 expectati ons and will set the standards for the next generati on to exceed. Nike’s second greatest source of potenti al 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 innovati ve equipment to improve performance. The third strategy that Nike uses, perhaps the most important, is adverti sing and marketi ng. These two

131 components capture the essence of the product and the att enti on of consumers around the world. These strategies support the fi nancials especially profi t 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 fi nd out how much the market is actually willing to pay for each dollar of annual earnings of Nike, we look at the Price/Earnings rati o. Currently the rati o 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 rati o uses the invested capital of the company and then divided by sales over the past 12 months. This fi gure is usually seen as the lower the bett er for investors. Granted there are far more competi tors 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 rati o has been considerably increasing from 10.37 in 2002 to 15 in 2007. The rati o 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 suffi ciently using its assets. Nike Inc. is an effi cient company as it boasts a higher gross profi t margin than its competi tors and industry. During fi scal 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%. Analyti cal Theory Comparison Project investment can be determined by using an analyti cal theory of project investment. “The Analyti cal theory enables us to make precise calculati ons of returns of diff erence projects under diff erent kinds of environments.” (Chen, 37) We will examine the relati onship between fi xed cost and variable cost at diff erent levels of uncertainty. In NIKE’s case, as fi xed costs are increased, variable costs decrease rapidly in a low uncertainty environment (see exhibit 1). In relati on to NIKE the high fi xed cost represent the large amount of marketi ng expenditures, and the variable costs are related to the low labour and manufacturing costs. This analyti cal theory diff ers from the real opti on theory because it is an initi al value problem, valuing the outcome as a variable cost to the project (C). Furthermore, aft er determining the variable cost of a project

132 (C) , the profi t of a project can be determined based on the variables of S (present value of the projects cash fl ows), K (fi xed cost of the project), Q (market size or output of the project), and C.

Exhibit 1:

High Volatility

Low Volatility

Variable Cost

0 5 10 15 20

Level of fixed Cost

A project with a high fi xed cost will generate high returns if the level of uncertainty is stable and the market size is large, and a project with a low fi xed cost will benefi t largely from a small, unstable market. (see exhibit 2) “When an industry becomes mature and uncertainty decreases, increased in fi xed 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 oft en develop highly opti mized structures to reduce uncertainty and bring down variable costs in producing parti cular 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 analyti cal theory of project investment.

133 Exhibit 2:

Rate of return of Rate

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. htt ps://www.nonproﬁ trisk.org/library/arti cles/ rmbasics060709.shtml 2. Communicati on strategy, Access via Internet: htt p:// expertresearchers.blogspot.com/2014/02/communicati on- strategy.html

FURTHER READING 1. Ambler, Tim, Marketi ng and the Bott om Line (2004) FT Press. ISBN 0-273-66194-9 2. American Producti vity & Quality Center, Maximizing Marketi ng ROI (2001) American Producti vity Center. ISBN 1-928593-57-7

134 3. Aspatore Books Staff , Improving Marketi ng ROI: Leading CMOs on Adding Value, Calculati ng Return on Investments, and Creati ng a Financial Impact (2006) Aspatore Books.ISBN 1-59622-434-7 4. Briggs, Rex, Stuart, Greg, What Sti cks: Why Most Adverti sing 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., Marketi ng Metrics: 50+ Metrics Every Executi ve Should Master (2006) Wharton School Publishing.ISBN 0-13-187370-9 6. Kotler, Philip.; Kevin Lane Keller (2006). Marketi ng Management, 12th ed.. Pearson Prenti ce Hall. ISBN 0-13-145757-8. 7. Laermer, Richard; Simmons, Mark, Punk Marketi ng, New York : Harper Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketi ng 24(7), 2007) 8. Lenskold, James, Marketi ng ROI: The Path to Campaign, Customer, and Corporate Profi tability (2003) McGraw-Hill. ISBN 0-07-141363-4 9. Li, Charlene & Bernoff , Josh Groundswell (2008) 10. Lilien, Gary L., Rangaswamy, Arvind, Marketi ng Engineering (2004) Traff ord Publishing. ISBN 1-4120-2252-5 11. Mann, Don, Brand Ecosystems, the relati ve harmony among all marketi ng elements that support brands (2008) 12. Powell, Guy R., Return on Marketi ng Investment: Demand More From Your Marketi ng And Sales Investments (2003) RPI Press. ISBN 0-9718598-1-7 13. Schultz, Don E., Measuring Brand Communicati on ROI (1997) Assn of Natl Adverti sers. ISBN 1-56318-053-7 14. Thaler, Linda Kaplan, Koval, Robin, Marshall, Delia, Bang! Getti ng Your Message Heard in A Noisy World (2003) Doubleday Publishing. ISBN 0-385-50816-6

135 TASKS FOR INDIVIDUAL/GROUP WORKS

Following the event marketi ng plan example please prepare plan for your chosen event.

EVENT MARKETING PLAN OUTLINE - EXAMPLE

Executi ve Summary 4 The Challenge 4 Situati on Analysis 4 Company Analysis 4 Customer Analysis 4 Competi tor Analysis 4 Collaborators 4 Climate 4 Politi cal Factors 4 Economic Factors 4 Social Factors 4 Technological Factors 4 SWOT Analysis 4 Strengths 4 Weaknesses 4 Opportuniti es 4 Threats 4 The SWOT Matrix 4 Market Segmentati on 4 Consumer Market Segmentati on 4 Business Market Segmentati on 4 Profi ling the Segments 4 Goals 4 Selected Marketi ng Strategy 4 Product 4 Price 4 Distributi on (Place) 4 Promoti on 4 Short & Long-Term Projecti ons 4 Conclusion 4 Appendix 4 Exhibits 4

136 Executi ve Summary A high-level summary of the marketi ng plan.

The Challenge Brief descripti on of product to be marketed and associated goals, such as sales fi gures and strategic goals.

Situati on Analysis Company Analysis • Goals • Focus • Culture • Strengths (see SWOT Analysis) • Weaknesses (see SWOT Analysis) • Market share Customer Analysis • Number • Type • Value drivers • Decision process Competi tor Analysis • Market positi on • Strengths • Weaknesses • Market shares Collaborators • Subsidiaries, joint ventures, and distributors, etc. Climate

Macro-environmental PEST analysis:

Politi cal Factors Politi cal factors include government regulati ons and legal issues and defi ne both formal and informal rules under which the fi rm must operate. Some examples include: • tax policy • employment laws • environmental regulati ons • trade restricti ons and tariﬀ s • politi cal stability

137 Economic Factors Economic factors aﬀ ect the purchasing power of potenti al customers and the fi rm’s cost of capital. The following are examples of factors in the macroeconomy: • economic growth • interest rates • exchange rates • infl ati on rate

Social Factors Social factors include the demographic and cultural aspects of the external macroenvironment. These factors aﬀ ect customer needs and the size of potenti al markets. Some social factors include: • health consciousness • populati on growth rate • age distributi on • career atti tudes • emphasis on safety

Technological Factors Technological factors can lower barriers to entry, reduce minimum effi cient producti on levels, and infl uence outsourcing decisions. Some technological factors include: R&D acti vity • automati on • technology incenti ves • 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 fi rm usually can be classifi ed as strengths (S) or weaknesses (W), and those external to the fi rm can be classifi ed as opportuniti es (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides informati on that is helpful in matching the fi rm’s resources and capabiliti es to the competi ti ve environment in which it operates. As such, it is instrumental in strategy formulati on and selecti on. The following diagram shows how a SWOT analysis fi ts into an environmental scan:

138 SWOT Analysis Framework

Environmental Scan

Internal Analysis External Analysis

Strengths Weaknesses Opportuniti es Threats

SWOT Matrix

Strengths A fi rm’s strengths are its resources and capabiliti es that can be used as a basis for developing a competi ti ve advantage. Examples of such strengths include: • patents • strong brand names • good reputati on among customers • cost advantages from proprietary know-how • exclusive access to high grade natural resources • favourable access to distributi on 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 protecti on • a weak brand name • poor reputati on among customers • high cost structure • lack of access to the best natural resources • lack of access to key distributi on channels

In some cases, a weakness may be the fl ip side of a strength. Take the case in which a fi rm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competi tors do

139 not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the fi rm from reacti ng quickly to changes in the strategic environment.

Opportuniti es The external environmental analysis may reveal certain new opportuniti es for profi t and growth. Some examples of such opportuniti es include: • an unfulfi lled customer need • arrival of new technologies • loosening of regulati ons • removal of internati onal trade barriers

Threats Changes in the external environmental also may present threats to the fi rm. Some examples of such threats include: • shift s in consumer tastes away from the fi rm’s products • emergence of substi tute products • new regulati ons • increased trade barriers

The SWOT Matrix A fi rm should not necessarily pursue the more lucrati ve opportuniti es. Rather, it may have a bett er chance at developing a competi ti ve advantage by identi fying a fi t between the fi rm’s strengths and upcoming opportuniti es. In some cases, the fi rm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.

S-O strategies pursue opportuniti es that are a good fi t to the company’s strengths. W-O strategies overcome weaknesses to pursue opportuniti es. S-T strategies identi fy ways that the fi rm can use its strengths to reduce its vulnerability to external threats. W-T strategies establish a defensive plan to prevent the fi rm’s weaknesses from making it highly suscepti ble to external threats. Market Segmentati on Present a descripti on of the market segmentati on as follows:

140 Segment 1 Descripti on Percent of sales What they want How they use product Support requirements How to reach them Price sensiti vity

Segment 2 Descripti on Percent of sales What they want How they use product Support requirements How to reach them Price sensiti vity

Segment 3 …

Market segmentati on is the division of a market into diff erent homogeneous groups of consumers. Rather than off er the same marketi ng mix to vastly diff erent customers, market segmentati on makes it possible for fi rms to tailor the marketi ng mix for specifi c target markets, thus bett er sati sfying customer needs. Not all elements of the marketi ng mix are necessarily changed from one segment to the next. For example, in some cases only the promoti onal campaigns would diff er.

A market segment should be:

• measurable • accessible by communicati on and distributi on channels • diﬀ erent in its response to a marketi ng mix • durable (not changing too quickly) • substanti al enough to be profi table

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

141 Consumer Market Segmentati on A basis for segmentati on is a factor that varies among groups within a market, but that is consistent within groups. One can identi fy four primary bases on which to segment a consumer market:

• Geographic segmentati on is based on regional variables such as region, climate, populati on density, and populati on growth rate. • Demographic segmentati on is based on variables such as age, gender, ethnicity, educati on, occupati on, income, and family status. • Psychographic segmentati on is based on variables such as values, atti tudes, and lifestyle. • Behavioural segmentati on is based on variables such as usage rate and patt erns, price sensiti vity, brand loyalty, and benefi ts sought.

The opti mal bases on which to segment the market depend on the parti cular situati on and are determined by marketi ng research, market trends, and managerial judgment.

Business Market Segmentati on While many of the consumer market segmentati on bases can be applied to businesses and organizati ons, the diﬀ erent nature of business markets oft en leads to segmentati on on the following bases:

• Geographic segmentati on - based on regional variables such as customer concentrati on, regional industrial growth rate, and internati onal macroeconomic factors. • Customer type - based on factors such as the size of the organizati on, its industry, positi on in the value chain, etc. • Buyer behaviour - based on factors such as loyalty to suppliers, usage patt erns, and order size.

Profi ling the Segments The identi fi ed market segments are summarized by profi les, often given a descripti ve name. From these profi les, the att racti veness 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, att ainable. 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 relati onship with Legal and Regulatory Departments in fi rst quarter. Reduce staﬀ ti me spent on call-in, ad hoc requests for help with Internet searching

Selected Marketi ng Strategy Discuss why the strategy was selected, then the marketi ng mix decisions (4 P’s) of product, price, place (distributi on), and promoti on. 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 fi nancing opti ons • Leasing opti ons Distributi on (Place) Decision variables include: • Distributi on channels, such as direct, retail, distributors & intermediates • Moti vati ng the channel - for example, distributor margins • Criteria for evaluati ng distributors • Locati ons • Logisti cs, including transportati on, warehousing, and order fulfi lment

143 Promoti on • Adverti sing, including how much and which media. • Public relati ons • Promoti onal programs • Budget; determine break-even point for any additi onal spending • Projected results of the promoti onal programs

Short & Long-Term Projecti ons

The selected strategy’s immediate eﬀ ects, expected long-term results, and any special acti ons required to achieve them. This secti on 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 calculati ons of market size, commissions, profi t margins, break- even analyses, etc.

REFERENCE OUTLINE

EVENT MARKETING PLANING COURSE TEST - EXAM

MULTIPLE CHOICE QUESTIONS

1. At one ti me, fi rms scatt ered their marketi ng eﬀ orts (a “shotgun” approach) to reach consumers. Today, a fi rm is more likely to use: a. a “bazooka” approach, where special eﬀ ects are used to “explode” into the buyer’s consciousness. b. a “knife” approach, where the fi rm tries to “cut” to the most important product advantage. c. a “rifl e” approach, where the fi rm focuses on the buyers who have greater interest in the values that the fi rm creates the best. d. a “pistol” approach, where the fi rm realizes that it has multi ple chances to gain consumer interest.

144 Answer: (c) Diﬃ culty: (2) Page: 235

2. ______is the process of dividing a market into smaller groups of buyers with disti nct needs, characteristi cs, or behaviours who might require separate products or marketi ng mixes. a. Mass marketi ng b. Market segmentati on c. Target marketi ng d. Market positi oning

Answer: (b) Diﬃ culty: (1) Page: 235

3. ______is the process of evaluati ng each market segment’s att racti veness and selecti ng one or more segments to enter. a. Mass marketi ng b. Market segmentati on c. Market targeti ng d. Market positi oning

Answer: (c) Diﬃ culty: (2) Page: 235

4. Setti ng the competi ti ve positi oning for the product and creati nga detailed marketi ng mix is called: a. mass marketi ng. b. target marketi ng. c. market segmentati on. d. marketi ng positi oning.

Answer: (d) Diﬃ culty: (1) Page: 235

5. During which step of the marketi ng segmentati on, targeti ng, and positi oning process does the fi rm “develop a marketi ng mix for each segment?” a. market segmentati on b. market targeti ng c. market positi oning d. The fi rm does not go through the “development” during any of the above steps.

Answer: (c) Diﬃ culty: (2) Page: 235, Figure 7-1

145 6. During one of the steps in the marketi ng segmentati on, targeti ng, and positi oning process, the marketer develops measures of segment att racti veness. This procedure belongs in the category of: a. market segmentati on. b. market targeti ng. c. market massing. d. market positi oning.

Answer: (b) Diﬃ culty: (2) Page: 235, Figure 7-1

7. When companies divide large, heterogeneous markets into smaller segments that can be reached more effi ciently with products and services that match their unique needs, they are conducti ng a ______process. a. marketi ng aggregati on b. marketi ng positi oning c. marketi ng target d. marketi ng segmentati on

Answer: (d) Diﬃ culty: (1) Page: 236

8. Market segmentati on can be carried out at several diﬀ erent levels. Which of the following WOULD NOT BE among these levels? a. micromarketi ng b. segment marketi ng c. competi ti on marketi ng d. niche marketi ng

Answer: (c) Diﬃ culty: (1) Page: 236

9. Another word for complete segmentati on is: a. macromarketi ng. b. micromarketi ng. c. niche marketi ng. d. mass marketi ng.

Answer: (b) Diﬃ culty: (2) Page: 236

146 10. For most of the 20th century, fi rms practi ced which of the following forms of marketi ng? a. mass marketi ng b. micromarketi ng c. niche marketi ng d. segment marketi ng

Answer: (a) Diﬃ culty: (2) Page: 236

11. Which of the following marketers epitomized the mass marketi ng strategy? a. Henry Ford b. Bill Gates c. F.W. Woolworth d. Thomas A. Edison

Answer: (a) Diﬃ culty: (3) Page: 236

12. Which of the following statements is closest to the traditi onal argument for mass marketi ng? a. Find a need and fi ll it. b. The largest potenti al market can lead to the lowest costs, which translates into either lower prices or higher margins. c. The rifl e approach rarely hits what it is aiming at. d. The consumer is king. Long live the king.

Answer: (b) Diﬃ culty: (2) Page: 236

13. Isolati ng broad segments that make up a market and adapti ng the marketi ng to match the needs of one or more segments is called ______. a. niche marketi ng b. mass marketi ng c. segment marketi ng d. micromarketi ng

Answer: (c) Diﬃ culty: (1) Page: 237

147 14. When General Motors designs specifi c models for diﬀ erent income and age groups, it is practi cing which of the following marketi ng formats? a. micromarketi ng b. macromarketi ng c. mass marketi ng d. segment marketi ng

Answer: (d) Diﬃ culty: (1) Page: 237

15. Segment marketi ng oﬀ ers several benefi ts over mass marketi ng. All of the following would be among those benefi ts EXCEPT: a. the company can market more effi ciently and target its programs toward only those consumers that it can serve best. b. the company can fi ne-tune its programs to meet the needs of carefully defi ned segments. c. the company can reduce costs because of the ability to sell to customers one-on-one. d. the company may face fewer competi tors if fewer competi tors are focusing on the company’s chosen market segment.

Answer: (c) Diﬃ culty: (3) Page: 237

16. A company is practi cing ______if it focuses on subsegments with disti ncti ve traits that may seek a special combinati on of benefi ts. a. micromarketi ng b. niche marketi ng c. mass marketi ng d. segment marketi ng

Answer: (b) Diﬃ culty: (2) Page: 237

17. As an example of ______, a company could build sport uti lity vehicles and direct marketi ng eﬀ orts towards the luxury SUV market (as does Lexus). a. micromarketi ng b. niche marketi ng c. mass marketi ng d. segment marketi ng

Answer: (b) Diﬃ culty: (3) Page: 237

148 18. American Express oﬀ ers not only its traditi onal 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 marketi ng eﬀ orts is American Express following with their credit card policies? a. macromarketi ng b. segment marketi ng c. niche marketi ng d. self-marketi ng

Answer: (c) Diﬃ culty: (2) Page: 237

19. ______is the practi ce of tailoring products and marketi ng programs to suit the tastes of specifi c individuals and locati ons. a. Niche marketi ng b. Micromarketi ng c. Segment marketi ng d. Mass marketi ng

Answer: (b) Diﬃ culty: (2) Page: 238

20. Micromarketi ng includes: a. segment marketi ng and niche marketi ng. b. mass marketi ng and demographic marketi ng. c. local marketi ng and individual marketi ng. d. individual marketi ng and self-marketi ng.

Answer: (c) Diﬃ culty: (2) Page: 238

21. ______involves tailoring brands and promoti ons to the needs and wants of specifi c small groups such as citi es, neighbourhoods, and even specifi c stores. a. Niche marketi ng b. Local marketi ng c. Detail marketi ng d. Individual marketi ng

Answer: (b) Diﬃ culty: (1) Page: 238

149 22. All of the following are considered to be drawbacks of local marketi ng EXCEPT: a. it can drive up manufacturing and marketi ng costs by reducing economies of scale. b. it can create logisti cal problems when the company tries to meet varied requirements. c. it can att ract unwanted competi ti on. d. it can dilute the brand’s overall image.

Answer: (c) Diﬃ culty: (3) Page: 238

23. ______is tailoring products and marketi ng programs to the needs and preferences of individual customers. a. Niche marketi ng b. Local marketi ng c. Self-marketi ng marketi ng d. Individual marketi ng

Answer: (d) Diﬃ culty: (1) Page: 238

24. Individual marketi ng is known by a variety of names. All ofthe following would appropriately be called individual marketi ng EXCEPT: a. mono-marketi ng. b. one-to-one marketi ng. c. customized marketi ng. d. markets-of-one marketi ng.

Answer: (a) Diﬃ culty: (2) Page: 238

25. ______is the process through which fi rms interact one- to-one with masses of customers to create customer-unique value by designing products and services tailor-made to individual needs. a. Mass marketi ng b. Detail marketi ng c. Mass globalizati on d. Mass customizati on

Answer: (d) Diﬃ culty: (2) Page: 239

150 26. The move toward individual marketi ng mirrors the trend in consumer ______. a. backlash b. self-marketi ng. c. dialog marketi ng d. niche marketi ng

Answer: (b) Diﬃ culty: (1) Page: 242

27. All of the following are considered to be major variables for segmenti ng markets EXCEPT: a. geographic variables. b. trait variables. c. demographic variables. d. psychographic variables.

Answer: (b) Diﬃ culty: (2) Page: 243, Table 7-1

28. If a marketer att empts segmentati on of a market by dividing the market into diﬀ erent units based on nati ons, regions, states, counti es, citi es, or even neighbourhoods, then the marketer is practi cing ______segmentati on. a. demographic b. geographic c. politi cal d. cartographic

Answer: (b) Diﬃ culty: (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 practi cing ______segmentati on. a. geographic b. demographic c. psychographic d. behavioural variable

Answer: (a) Diﬃ culty: (2) Page: 242

151 30. All of the following would be ways to segment within the category of psychographic segmentati on EXCEPT: a. social class. b. occupati on. c. lifestyle. d. personality.

Answer: (b) Diﬃ culty: (3) Page: 243, Table 7-1

31. All of the following would be ways to segment within the category of behavioural variable segmentati onEXCEPT : a. occasions. b. user status. c. loyalty status. d. lifestyle.

Answer: (d) Diﬃ culty: (3) Page: 243, Table 7-1

32. ______factors are the most popular bases for segmenti ng customer groups. a. Geographic b. Demographic c. Psychographic d. Behavioural

Answer: (b) Diﬃ culty: (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) Diﬃ culty: (3) Page: 244

34. Age is oft en a poor predictor of a person’s life-cycle, health, work, or family status. Therefore, when using age and life-cycle segmentati on, the marketer must guard against:

152 a. stereotyping. b. gender bias. c. racial bias. d. intellectual bias.

Answer: (a) Diﬃ culty: (2) Page: 244-245

35. Proctor & Gamble joined a growing list of marketers who use ______segmentati on when they developed Secret, a brand specially formulated for a woman’s chemistry. a. geographic b. income c. benefi t d. gender

Answer: (d) Diﬃ culty: (1) Page: 245

36. All of the following Web sites would be examples of sites wishing to make gender segmentati on appeals as their primary marketi ng segmentati on strategyEXCEPT : a. www.iVillage.com. b. www.girlson.com. c. www.playboy.com. d. www.neimanmarcus.com.

Answer: (d) Diﬃ culty: (1) Page: 246

37. ______is the process of dividing a market into diﬀ erent groups based on social class, lifestyle, or personality characteristi cs. a. Gender segmentati on b. Behavioural segmentati on c. Psychological segmentati on d. Psychographic segmentati on

Answer: (d) Diﬃ culty: (2) Page: 247

153 38. Many marketers believe that ______are the best starti ng point for building market segments and programs. a. behavioural variables b. geographic variables c. demographic variables d. psychographic variables

Answer: (a) Diﬃ culty: (3) Page: 247

39. “Coke in the morning” is an att empt to segment according to which of the following? a. gender segmentati on b. psychographic segmentati on c. benefi t segmentati on d. occasion segmentati on

Answer: (d) Diﬃ culty: (2) Page: 248

40. The orange juice manufacturers know that orange juice is most oft en consumed in the mornings. However, they would like to change this and make the drink acceptable for other ti me periods during the day. Which form of segmentati on would they need to work with to establish a strategy refl ecti ve of their desires? a. gender segmentati on b. benefi t segmentati on c. occasion segmentati on d. age and life-cycle segmentati on

Answer: (c) Diﬃ culty: (2) Page: 248

41. When companies market products on the basis of what the product’s att ributes will do for a given segment of consumers, they are using a powerful form of behavioural segmentati on known as: a. occasion segmentati on. b. benefi t segmentati on. c. user status segmentati on. d. usage rate segmentati on.

Answer: (b) Diﬃ culty: (2) Page: 249

154 42. If people that take cruise ship vacati ons do so because of “gambling,” “fun,” or “for adventure or educati onal purposes,” then it is possible to segment this market based on what might be called: a. psychographic segmentati on. b. benefi t segmentati on. c. demographic segmentati on. d. gender segmentati on.

Answer: (b) Diﬃ culty: (1) Page: 249

43. A marketi ng fi rm classifi es customers as nonusers, ex-users, potenti al users, fi rst-ti me users, and regular users. Which of the following classifi cati ons is the fi rm 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. benefi t status

Answer: (a) Diﬃ culty: (1) Page: 249

44. One of the most promising developments in multi variable segmentati on is called ______, where a host of demographic and socioeconomic factors are used. a. terragraphic segmentati on b. fermagraphic segmentati on c. geothermal segmentati on d. geodemographic segmentati on

Answer: (d) Diﬃ culty: (2) Page: 250

45. All of the following are major variables that can be used to segment business markets EXCEPT: a. operati ng characteristi cs. b. psychographics. c. demographics. d. situati onal factors.

Answer: (b) Diﬃ culty: (2) Page: 250

155 46. ______is forming segments of consumers who have similar needs and buying behaviour even though they are located in diﬀ erent countries. a. External segmentati on b. Internati onal segmentati on c. Intermarket segmentati on d. Enriched segmentati on

Answer: (c) Diﬃ culty: (2) Page: 253

47. When Mercedes-Benz targets the world’s well-to-do, regardless of their country, they are most likely following a segmentati on strategy called: a. external segmentati on. b. internati onal segmentati on. c. enriched segmentati on. d. intermarket segmentati on.

Answer: (d) Diﬃ culty: (2) Page: 253

48. Clearly, there are many ways to segment markets. However, not all segmentati ons are eﬀ ecti ve or successful. To be useful, market segments must have all the following characteristi cs EXCEPT being: a. measurable. b. plausible. c. accessible. d. acti onable.

Answer: (b) Diﬃ culty: (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 att empt to appeal to or design products for this group because there is litt le in the way of census data about this group. Therefore, this group fails in one of the requirements for eﬀ ecti ve segmentati on. Which of the following is most likely to apply in this case? a. acti onable b. substanti al c. diﬀ erenti able d. measurable

156 Answer: (d) Diﬃ culty: (2) Page: 254

50. Knowing the size, purchasing power, and profi les of a market segment are all part of which of the following characteristi cs? a. substanti ality b. measurability c. acti onability d. accessibility

Answer: (b) Diﬃ culty: (2) Page: 254

51. The ability to reach and serve a market segment defi nes the characteristi c of: a. measurability. b. acti onability. c. accessibility. d. substanti ality.

Answer: (c) Diﬃ culty: (1) Page: 254

52. Married and unmarried women may use the same perfume, and might respond in a similar way to promoti onal sales of this fragrance. It might, therefore, be diffi cult to consider that marital status designates separate segments in this case. Which of the following requirements of eﬀ ecti ve segmentati on would probably rule out segmentati on based on marital status in this case? a. acti onable b. substanti al c. diﬀ erenti able d. measurable

Answer: (c) Diﬃ culty: (2) Page: 254

53. Stephanie Cross has a small clothing store, and has identi fi ed 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 adverti sing budget, she cannot eﬀ ecti vely reach these various segments (especially since several of the segments are distant from her store). Which of the following requirements of eﬀ ecti ve segmentati on

157 would probably rule out segmentati on based on Stephanie’s current segmentati on classifi cati on scheme? a. acti onable b. substanti al. c. diﬀ erenti able d. measurable

Answer: (a) Diﬃ culty: (3) Page: 254

54. In market targeti ng, a fi rm looks at all of the following factorsEXCEPT : a. segment size and growth. b. segment structural att racti veness. c. company objecti ves and resources. d. segment public relati ons value.

Answer: (d) Diﬃ culty (2) Page: 255

55. All of the following factors can aﬀ ect the att racti veness of a market segment EXCEPT: a. the presence of many strong and aggressive competi tors. b. the likelihood of government monitoring. c. actual or potenti al substi tute products. d. the power of buyers in the segment.

Answer: (b) Diﬃ culty: (2) Page: 256

56. A(n) ______is a set of buyers sharing common needs or characteristi cs that the company decides to serve. a. undiﬀ erenti ated market b. market segment c. target market d. diﬀ erenti ated market

Answer: (c) Diﬃ culty: (1) Page: 255

57. A market-coverage strategy in which a fi rm decides to ignore market segment diff erences and go aft er the whole market with one off er is called: a. undiff erenti ated marketi ng. b. diff erenti ated marketi ng.

158 c. concentrated marketi ng. d. turbo marketi ng.

Answer: (a) Diﬃ culty: (1) Page: 255, 256, Figure 7-3

58. Deciding to target several market segments and design separate off ers for each is called: a. undiff erenti ated marketi ng. b. diff erenti ated marketi ng. c. concentrated marketi ng. d. turbo marketi ng.

Answer: (b) Diﬃ culty: (1) Page: 256, Figure 7-3

59. A growing number of fi rms have adopted diﬀ erenti ated marketi ng. 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 competi tors as to your strategy. d. is a poor strategy internati onally.

Answer: (b) Diﬃ culty: (2) Page: 256

60. The practi ce of going aft er a large share of a smaller market or subsets of a few markets is called: a. undiﬀ erenti ated marketi ng. b. diﬀ erenti ated marketi ng. c. concentrated marketi ng. d. turbo marketi ng.

Answer: (c) Diﬃ culty: (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. organizati onal culture. b. product variability. c. product’s life-cycle. d. market variability.

Answer: (a) Diﬃ culty: (1) Page: 258

159 62. The way the product is defi ned by consumers on important att ributes is called ______. a. market segmentati on b. image psychology c. product positi on d. market targeti ng

Answer: (c) Diﬃ culty: (1) Page: 260

63. The positi oning task consists of three steps. Which of the following does not belong? a. Identi fying a set of possible competi ti ve advantages upon which to build a positi on. b. Choosing the right competi ti ve advantages. c. Comparing the positi on with ethical and legal guidelines established by the trade. d. Selecti ng an overall positi oning strategy.

Answer: (c) Diﬃ culty: (2) Page: 260

64. The key to winning and keeping customers is to understand their needs and buying processes bett er than competi tors do and: a. adverti se 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) Diﬃ culty: (1) Page: 260

65. Product diﬀ erenti ati on can be along all of the following linesEXCEPT : a. consistency. b. durability. c. reliability. d. competi ti ve parity.

Answer: (d) Diﬃ culty: (2) Page: 261

66. Gaining competi ti ve advantage through speedy or careful delivery is an example of which type of diﬀ erenti ati on?

160 a. product b. services c. personnel d. image

Answer: (b) Diﬃ culty: (2) Page: 261 67. The strategy of choosing one att ribute to excel at to create competi ti ve advantage is known as (the): a. unique selling propositi on. b. underpositi oning. c. overpositi oning. d. confused positi oning.

Answer: (a) Diﬃ culty: (1) Page: 262 68. In general, a company needs to avoid three major positi oning errors. Which of the following is NOT one of those errors? a. underpositi oning b. repositi oning c. overpositi oning d. confused positi oning

Answer: (b) Diffi culty: (2) Page: 263 69. In determining which diff erences to promote, focusing on a diff erence that delivers a highly valued benefi t to target buyers would mean selecti ng the diff erence that is most: a. important. b. disti ncti ve. c. superior. d. communicable. Answer: (a) Diffi culty: (3) Page: 263 70. Choosing a product diff erence that competi tors cannot easily copy would be which kind of diff erenti ati on criterion? a. important b. disti ncti ve c. superior d. preempti ve Answer: (d) Diffi culty: (3) Page: 263

161 71. A brand’s ______is the full positi oning of the brand—the full mix of benefi ts upon which it is positi oned. a. disti ncti ve propositi on b. preempti ve propositi on c. value propositi on d. superior propositi on

Answer: (c) Diﬃ culty: (2) Page: 263

72. The text describes a series of value propositi ons. Of these propositi ons, Southwest Airlines has chosen to adopt the: a. more for less propositi on. b. less for much less propositi on. c. same for less propositi on. d. more for more propositi on.

Answer: (b) Diﬃ culty: (3) Page: 263-269, Figure 7-4, Marketi ng at Work 7-3

TRUE/FALSE QUESTIONS

73. Companies today realize that they can appeal to all buyers in the marketplace by using concentrated marketi ng.

Answer: (False) Diﬃ culty: (2) Page: 235 74. Because of profi t pressures and the threat of the Internet, most companies have now moved away from market segmentati on and targeti ng and toward mass marketi ng.

Answer: (False) Diﬃ culty: (2) Page: 235 75. With respect to markets, the “shotgun” approach in marketi ng eﬀ orts seems to be bett er than the “rifl e” approach.

Answer: (False) Diﬃ culty: (2) Page: 235 76. Market segmentati on is the process of taking a market and dividing the buyers into disti nct groups for which marketi ng mixes can be constructed. Answer: (True) Diﬃ culty: (1) Page: 235

162 77. Today, most companies are rushing toward mass marketi ng because of the changing nature of the marketplace.

Answer: (False) Diﬃ culty: (2) Page: 236

78. A good illustrati on of the niche marketi ng 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) Diﬃ culty: (2) Page: 236

79. Micromarketi ng is focusing on subsegments or niches with disti ncti ve traits that may seek a special combinati on of benefi ts.

Answer: (False) Diﬃ culty: (2) Page: 237

80. If a marketer were to tailor products and marketi ng programs to the needs and wants of specifi c individuals and local customer groups, the marketer would be practi cing micromarketi ng.

Answer: (True) Diﬃ culty: (1) Page: 238

81. One of the drawbacks for adopti ng a policy of local marketi ng is that it can drive up manufacturing and marketi ng costs by reducing economies of scale.

Answer: (True) Diﬃ culty: (1) Page: 238

82. Because buyers have unique needs and wants, each buyer is potenti ally a separate market.

Answer: (True) Diﬃ culty: (1) Page: 238

83. Customized marketi ng is oft en called individual marketi ng.

Answer: (True) Diﬃ culty: (1) Page: 238

84. An example of a fi rm that practi ces individual marketi ng is Matt el, with its My Design page of its Barbie Web site.

Answer: (True) Diﬃ culty: (2) Page: 240-242, Marketi ng at Work 7-1

163 85. The move toward individual marketi ng mirrors the trend in consumer concentrati on strategy.

Answer: (False) Diﬃ culty: (3) Page: 239

86. The most popular base for segmenti ng markets and customer groups is geographic segmentati on.

Answer: (False) Diﬃ culty: (2) Page: 242, 243

87. Demographic variables are easier to measure than most other types of variables with respect to segmentati on.

Answer: (True) Diﬃ culty: (1) Page: 244

88. Income segmentati on is used not only with the aﬄ uent, but also with the consumers with lower spending power.

Answer: (True) Diﬃ culty: (2) Page: 247

89. Psychographic segmentati on occurs when a market is divided into diﬀ erent groups based on social class, lifestyle, or personality characteristi cs.

Answer: (True) Diﬃ culty: (1) Page: 247

90. One of the forms of behavioural segmentati on would be lifestyle segmentati on.

Answer: (False) Diﬃ culty: (2) Page: 243, 247, Table 7-1

91. If a marketer were to link U.S. Census data with lifestyle patt erns to bett er segment markets, this would be an example of geodemographic segmentati on.

Answer: (True) Diﬃ culty: (2) Page: 250

92. A common way to segment a business market would be to segment based on operati ng characteristi cs and situati onal factors.

Answer: (True) Diﬃ culty: (2) Page: 250

164 93. Segmenti ng internati onal markets on the basis of geographic, economic, politi cal, cultural, and other factors is called internati onal psychographics.

Answer: (False) Diﬃ culty: (2) Page: 253

94. To be useful, a market segment must be substanti al.

Answer: (True) Diﬃ culty: (1) Page: 254

95. To be useful, a market segment must be conspicuous.

Answer: (False) Diﬃ culty: (1) Page: 254

96. A market segment is a set of buyers sharing common needs or characteristi cs that the company decides to serve.

Answer: (False) Diﬃ culty: (3) Page: 255

97. Concentrated marketi ng is a market-coverage strategy in which a fi rm decides to ignore market segment diﬀ erences and go aft er the whole market with one oﬀ er.

Answer: (False) Diﬃ culty: (2) Page: 255

98. If a fi rm decides to go aft er a large share of one or a few segments or niches, then the fi rm will probably be following a concentrated marketi ng strategy.

Answer: (True) Diﬃ culty: (2) Page: 257

99. In market targeti ng, the issue is not how and for what, but who is targeted.

Answer: (False) Diﬃ culty: (3) Page: 259

100. A product’s positi on is the way the product is defi ned by consumers on important att ributes.

Answer: (True) Diﬃ culty: (1) Page: 260

165 101. One of the major positi oning errors that a company needs to avoid is that of confused positi oning.

Answer: (True) Diﬃ culty: (1) Page: 263

102. A diﬀ erence is worth establishing to the extent that it sati sfi es the criterion of cultural imperati ve.

Answer: (False) Diﬃ culty: (2) Page: 263

103. According to the nine cell matrix that describes possible value propositi ons, the cell that produces a higher price for reduced benefi ts should be pursued by the marketer.

Answer: (False) Diﬃ culty: (2) Page: 264, Figure 7-4

104. According to the value propositi on presented by Southwest Airlines, the customer gets “less for much less.”

Answer: (True) Diﬃ culty: (2) Page: 267, Marketi ng 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 diﬀ erent segment of the vast laundry detergent market. Comment on Proctor & Gamble’s strategy for this market. Describe the company’s atti tude toward intracompany brand competi ti on and competi ti on from other competi tors. Finally, give examples of how the various laundry detergent brands are directed toward specifi c 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 diff erent people want diff erent mixes of benefi ts from the products that they buy. For example, laundry detergent customers want several diff erent things: to get clothes clean,

166 economy, bleaching power, fabric soft ening, 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 competi ti on (and by doing so, it will keep all the money from the various brands in one common pocket rather than giving it to competi ti on). The company has also developed a separate brand for each of the eight important laundry detergent segments. For example (for other informati on see the introductory comments in the chapter where all eight segments are identi fi ed): 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 soft ener. d) Gain—the “enzyme” fresh smelling detergent. e) Era—built-in stain removers. f) Dreft —removes baby stains. g) Febreze Clean Wash—gets out diffi cult odours. h) Ivory Snow—mild product for cleaning fi ne washables and baby clothes.

Diﬃ culty: (2) Page: 233-235

106. Defi ne market segmentati on, market targeti ng, and market positi oning. Demonstrate through the steps of a model how these concepts fi t together to aid the decision maker in his or her att empt to use market segmentati on in the marketi ng process.

Answer: Market segmentati on is the process of dividing a market into disti nct groups of buyers with diﬀ erent needs, characteristi cs, or behaviour who might require separate products or marketi ng mixes. Market targeti ng involves evaluati ng each segment’s att racti veness and deciding which segment(s) to enter. Market positi oning is arranging for a product to occupy a clear, disti ncti ve, and desirable place relati ve to competi ng products in the minds of target consumers. The marketer formulates a competi ti ve positi on for a product and a detailed marketi ng mix. A model that might show the relati onships between these three terms is found in Figure 7-1 in the chapter. The steps shown in this model are: (1) Identi fy bases for segmenti ng the market, (2) Develop

167 profi les of resulti ng segments—these two steps are related to market segmentati on; (3) Develop measures of segment att racti veness, (4) Select the target segment(s)—these two steps are related to market targeti ng; (5) Develop positi oning for each target segment, and (6) Develop marketi ng mix(es) for each target segment—these two steps are related to marketi ng positi oning.

Diﬃ culty: (2) Page: 235, Figure 7-1

107. Identi fy the diﬀ erences between the mass marketi ng, segment marketi ng, niche marketi ng, and micromarketi ng strategies.

Answer: For most of this century, businesses practi ced mass marketi ng. 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 marketi ng creates the largest potenti al 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 marketi ng, where marketers isolate broad segments that make up a market and adapt the marketi ng to match the needs of one or more segments. The benefi ts of this approach are that the company can market more eﬀ ecti vely and effi ciently by creati ng programs that are directed only toward those consumers that can be most eﬀ ecti vely served. In niche marketi ng, there is a focus on subsegments or niches with disti ncti ve traits that may seek a special combinati on of benefi ts. Niche marketers presumably understand their niches’ needs so well that their customers willingly pay a price premium. The newest form of segmentati on is called micromarketi ng, where the marketer tailors products and marketi ng programs to suit the tastes of specifi c individuals and locati ons. This can take the form of either local or individual marketi ng.

Diﬃ culty: (2) Page: 236-243, Figure 7-2

108. List and briefl y discuss the major bases for segmenti ng consumer markets. Demonstrate how these major bases would compare to the bases used in segmenti ng business markets (what are the diﬀ erences and similariti es?).

168 Answer: The major bases for segmenti ng 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, occupati on, or race), psychographic (social class, lifestyle, or personality), or behavioural (occasions, benefi ts, user status, usage rate, loyalty, readiness stage, or atti tude toward the object). These bases are contrasted to the major bases for segmenti ng business markets, which include (1) demographics, (2) operati ng variables, (3) purchasing approaches, (4) situati onal factors, and (5) personal characteristi cs. Examples within these categories might be demographics (industry, company size, or locati on), operati ng variables (technology, user/nonuser status, or customer capabiliti es), purchasing approaches (purchasing functi on organizati on, power structure, nature of existi ng relati onships, or purchasing policies), situati onal factors (urgency, specifi c applicati on, or size of order), and personal characteristi cs (buyer-seller similarity, atti tudes toward risk, or loyalty). Noti ce that similariti es exist between some of the demographic and personal characteristi cs (behavioural) categories.

Diﬃ culty: (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 diﬀ erences. Using the approach suggested in the text, list and briefl y describe the additi onal variables that would be important to the business marketer who wished to segment markets.

Answer: Some additi onal variables would include: a). Operati ng characteristi cs—how does the customer operate within the industry? b). Purchasing approaches—are buying centres used? c). Situati onal factors—are there certain ti mes of the year when the buyer is more likely to purchase? d). Personal characteristi cs—are there characteristi cs about the purchasing unit or the senior managers that might impact the purchase decision?

Diﬃ culty: (3) Page: 250-252

169 110. Defi ne and give a specifi c example of intermarket segmentati on.

Answer: To conduct intermarket segmentati on, an internati onal marketer forms segments of consumers who have similar needs and buying behaviour even though they are located in diﬀ erent countries. The text uses the examples of MTV (who targets the world of the teen) and Mercedes-Benz (who targets the aﬄ uent no matt er where they live).

Diﬃ culty: (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 eff ecti ve. To be useful and eff ecti ve, market segments should have fi ve diff erent characteristi cs. List these and briefl y explain each.

Answer: Market segments must be (1) measurable (in terms of size, purchasing power, and clear profi les), (2) accessible (can be eff ecti vely reached and served), (3) substanti al (large or profi table enough), (4) diff erenti able (the segments are disti nguishable and respond diff erently to diff erent marketi ng mixes), and (5) acti onable (can design programs for att racti ng customers eff ecti vely).

Diﬃ culty: (2) Page: 254

112. A fi rm can adopt one of three market-coverage strategies when att empti ng to market its goods and services. List and describe each of these possible market-coverage strategies and provide and example of each.

Answer: Undiff erenti ated marketi—a ng market-coverage strategy in which a fi rm decides to ignore market segment diff erences and go aft er the whole market with one off er. It relies on mass marketi ng techniques. Distributi ng salt might be an example of this form.

Diﬀ erenti ated marketi —ang market-coverage strategy in which a fi rm decides to target several market segments and designs separate oﬀ ers for each. Automobiles might be examples of this strategy.

170 Concentrated marketi ng—a market-coverage strategy in which a fi rm goes aft er a large share of one or a few sub-markets. A specialty truck producer might be an example of this strategy.

Diﬃ culty: (2) Page: 255-258, Figure 7-3

113. What factors might a company need to consider when choosing a market-coverage strategy? Explain and justi fy 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). competi tor’s marketi ng strategies

If students present others, make sure they are justi fi ed.

Diﬃ culty: (2) Page: 258

114. In general, a company needs to avoid three major positi oning errors. What are these errors? Present a brief descripti on and illustrati on of each.

Answer: The major errors are: a). Underpositi oning—failing to really positi on the company at all. b). Overpositi oning—giving buyers too narrow a picture of the company. c). Confused positi oning—leaving buyers with a confused image of a company.

Students are free to suggest their own illustrati ons. If you would like more structure, suggest this structure prior to assigning this questi on.

Diﬃ culty: (2) Page: 264

171 115. Companies are oft en faced with the problem of deciding which diﬀ erences of a product or service to promote. This is especially relevant to product positi oning. According to the text, a diﬀ erence is worth promoti ng if it sati sfi es seven criteria. What are those criteria? Briefl y explain each.

Answer: The seven criteria suggested by the text include: a). Important—the diff erence delivers highly valued benefi t to target buyers. b). Disti ncti —competive tors do not off er the diff erence, or the company can off er it in a more disti ncti ve way. c). Superior—the diff erence is superior to other ways that customers might obtain the same benefi t. d). Communicable—the diff erence is communicable and visible to buyers. e). Preempti ve—competi tors cannot easily copy the diff erence. f). Aff ordable—buyers can aff ord to pay for the diff erence. g). Profi table—the company can introduce the diff erence profi tably.

Diﬃ culty: (3) Page: 263

APPLICATION QUESTION

116. New Balance athleti c shoe company has a diffi cult problem—how to compete in the highly competi ti ve athleti c shoe market against such industry giants as Nike and Reebok. The company does have certain advantages (it makes a quality product, has a good reputati on with distributors, and is the only athleti c shoe that off ers 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 opti ons— undiff erenti ated marketi ng, diff erenti ated marketi ng, and concentrated marketi ng. Choose one of these methods and support your choice with a logical explanati on.

172 Answer: Students are free to pick any method they wish, however, considering the competi ti on, the undiff erenti ated marketi ng method would be hard to support. This mass-marketi ng strategy focuses on what is common in the needs of consumers, rather than what is diff erent. The company designs a product and a marketi ng program that will appeal to the largest number of buyers. It relies on mass distributi on and mass adverti sing, and it aims to give the product a superior image in people’s minds. With the diff erenti ated approach (the method most likely chosen by Nike and Reebok), a fi rm decides to target several market segments or niches and designs separate off ers for each. By off ering product and marketi ng variati ons, the company using this method hopes for higher sales and a stronger positi on within each market segment. The student could make a case for this method, however, this method requires expensive outlays such as extra marketi ng research, forecasti ng, sales analysis, promoti on planning, and channel management. With the concentrated approach (which generally appeals to companies with limited resources), the company goes aft er 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 competi tors. The company is usually able to achieve a strong market positi on 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 att enti on 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 selecti ng the strategy) a company’s resources, the degree of product variability, the stage in the product’s lifecycle, market variability, and competi tor’s marketi ng strategies when making a fi nal selecti on.

Diﬃ culty: (3) Page: 255-259, Figure 7-3

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178 7. Moore, G. (1991) Crossing the Chasm, HarperCollins Publishers, 1991. 8. Levi, K. (2007) “Diﬀ erenti ate or Diminish: The Art and Necessity of Business Positi oning”, (March 2007), p. 9 Part 5 1. Sponsorship ideas. Access via Internet: hpsnz.org.nz/sites/ all/.../fi les/...Athletes/Athlete.../Sponsorship_ideas.doc 2. Att racti ng funding and sponsorship. Access via Internet: htt p:// www.100ways.org.uk/att racti ng-funding-and-sponsorship-a. html 3. West, D. (2010) ‘Project Sponsorship: An Essenti al Guide for Those Sponsoring Projects Within Their Organizati ons’, Gower Publishing, Farnham, ISBN 978-0-566-08888-9 4. Sponsoring change - A guide to the governance aspects of project sponsorship, Associati on 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 marketi ng. Access via Internet: www. principlesofmarketi ng.com/htm/Chapter-Six.htm 2. van Bel, Sander, Weber. “Follow that Customer”. Racom Communicati ons; htt p://www.failsafe.nl/ followthatcustomercom/ 3. Holtom, Mark. “What is an Event”. htt p://www.eventricity.biz/ What_is_an_Event.php 4. Holtom, Mark. “EDM KPIs”. htt p://www.eventricity.biz/ Marketi ng_KPIs_for_Event_Driven_Marketi ng.php 5. Ricardo, Fernando. “NAB Nati onal Leads”.htt p://www.nab.com. au/

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180 9. What are the opti ons for promoti ng products and services. Access via Internet: www.principlesofmarketi ng.com/htm/ Chapter-Ten.htm 10. Promoti on mix. Access via Internet: www.tourism.bilkent.edu. tr/~eda/promoti on%20mix.DOC Part 8 1. Joe Risser and Melanie Lockwood Herman. Managing Special Event Risks. htt ps://www.nonproﬁ trisk.org/library/arti cles/ rmbasics060709.shtml 2. Communicati on strategy, Access via Internet: htt p:// expertresearchers.blogspot.com/2014/02/communicati on- strategy.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.

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