Consumer preferences for marketing communication channels
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Marketing communication is at a turning point in which new digital channels and services are continuously being introduced to consumers. This is a summary of the study, how agreeable the currently available channels are to consumers and how their preferences have changed during the last few years are examined.
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Consumer preferences for marketing communication channels
- 1. Consumer preferences for marketing communication channels Kari Elkelä, Itella BI 21.3.2012 FOR INTERNAL USE ONLY – VAIN SISÄISEEN KÄYTTÖÖN
- 2. Consumer preferences for marketing communication channels 1. 2. 3. 4. Starting points Channel preferences and their change Explanatory models for channel preferences Controllability as the best explanatory variable for preferences 5. Summary and conclusions 2 Kari Elkelä - Itella BI 2012-03-21
- 4. Marketing communication in breakage • The development of the technology introduces all the time new digital channels and services • When the alternatives increase, also consumer's desire to make decisions on the use of channels will increase • The information about the consumers' channel preferences is more important than before to the companies • Such information and research results about new channels are generally presented in the media, the comparability of which it is difficult to check => • A comparative angle of view is needed about attitudes to old and new marketing communication channels, to their changes, and to factors which influence on the choices 4 Kari Elkelä - Itella BI 2012-03-21
- 5. Research questions 1. How agreeable or undesirable are the different marketing communication channels to the consumers and how have these preferences changed during the last few years? 2. Is it possible to build, and how, a general explanation model for consumer preferences for marketing communication channels, and to estimate it? Data General view and change • June 2010, 1180 respondents, compared with December 2006, 1303 respondents Explanatory model for preferences • October 2010, vastaajia 1397 respondents • All data were collected in GallupKanava and are representative samples of over 15-year-old Finns 5 Kari Elkelä - Itella BI 2012-03-21
- 6. Classifications of marketing communication channels Marketing communication Phase of channel life channels cycle Catalog or leaflet Newspaper Magazine Internet search services Unaddressed letter Radio Television Internetin newspages Social media Addressed letter Phone call Text message Email • Old paper Old paper Old paper New digital Old paper Traditional electronic Traditional electronic New digital New digital Old paper Traditional electronic New digital New digital Reception mode Use mode Information search channel Anonymous Reception channel Personal It is easier to compare a marketing communication channels, if the channels are classified according to the phase of their life cycle, the typical reception mode of messages, and the main use mode of channels 6 Kari Elkelä - Itella BI 2012-03-21
- 7. 2. Channel preferences and their change
- 8. Marketing communication channel preferences in Finland, 2006 and 2010 Share of preferred (top3) channels, % Catalog or leaf let 49 Newspaper Internet 53 31 24 30 Addressed letter 44 29 30 TV Email Outdoor ad Magazine 16 19 20 19 Unaddressed letter 4 Radio 3 Text message 23 24 26 23 5 5 1 1 1 1 Phone call Door-to-door selling 0 Itella Corp. KE 2010-08-06 64 55 2010 2006 10 20 30 40 50 60 70 GallupKanava, J une 2010 •Catalog or leaflet and newspaper distinctly most preferred reception channels for marketing •Text message, phone call and door-to-door selling disfavored by a clear majority •Choice of addressed letter for preferred channel distinctly diminished •Catalog or leaflet and Internet increased most of their popularity 8 Kari Elkelä - Itella BI 2012-03-21
- 9. Preferences according to channel's life cycle, and mode of reception and use, RECEPTION AND USE MODE PHASE OF Anonymous Anonymous Personal reception CHANNEL LIFE reception CYCLE information search Internet newspages Text message Internet search New digital services Social media Email Radio Traditional electronic Television Phone call Catalog or leaflet Old paper Newspaper Unaddressed letter Addressed letter Neutrally accepted Opinion separating Less favored Magazine Preference scale Favored •Consumers prefer anonymous information search channels in the reception of marketing communication •Attitude to anonymous reception channels is usually neutral •Personal reception channels are considered least preferred because they are difficult to control •Many consumers prefer letters, email and social media but on the other hand many others consider them undesirable 9 Kari Elkelä - Itella BI 2012-03-21
- 10. Utilities and use of marketing communication channels UTILITY FOR NEW DIGITAL CHANNELS Informative Entertaining Personal Interactive Controllable Environmentally responsible Uses at least once a week UTILITY FOR TRADITOINAL ELECTRONIC CHANNELS Text message Email Small Very small Very small Very small Pieni Large 78 % Medium Small Medium Medium Medium Large 86 % Radio Television Informative Entertaining Personal Interactive Controllable Environmentally responsible Uses at least once a week UTILITY FOR OLD PAPER CHANNELS Medium Medium Medium Medium Medium Large 83 % Medium Medium Medium Medium Medium Medium 91 % Newspaper Magazine Informative Entertaining Personal Interactive Controllable Environmentally responsible Uses at least once a week Medium Medium Medium Medium Large Medium 88 % Medium Medium Medium Medium Large Medium 66 % CHANNEL Internet search Intenet services newspages Medium Medium Medium Medium Medium Medium Medium Medium Large Large Large Large 83 % 78 % CHANNEL Phone call Medium Very small Very small Small Very small Medium 83 % CHANNEL Catalog or Addressed letter leaflet Medium Medium Medium Small Medium Medium Medium Small Large Medium Medium Medium 51 % 41 % Social media Medium Medium Small Medium Medium Medium 45 % Channel group average Medium Small Small Medium Medium Large Channel group average Medium Small Small Small Medium Medium Channel group average Medium Medium Medium Medium Large Medium •The strength in new digital channels is environmental responsibility, in paper it is controllability •A text message and phone call are considered to be worst in their properties •The majority of the consumers uses most channels at least once a week 10 Kari Elkelä - Itella BI 2012-03-21
- 11. 3. Explanatory models for channel preferences
- 12. Process model of consumer preferences for marketing communication channels COMMUNICATION IN GENERAL Utility sought through communication channel Use of communication channel Perceived utility received through communication channel •Formation of consumer preferences for communication channels is continuous process •Communication channels are used because of expected utilities •The use experiences produce observations from perceived utilities •These perceived utilities affect as feedback what utilities are expected in the future •This forms a process which maintains, strengthens and weakens channel preferences. Especially, launching a new channel can change these preferences •All kind of use of communication channels have also an effect on marketing channel preferences 12 Kari Elkelä - Itella BI 2012-03-21
- 13. Process model of consumer preferences for marketing communication channels COMMUNICATION IN GENERAL Utility sought through communication channel Use of communication channel Perceived utility received through communication channel MARKETING COMMUNICATION Importance weight for marketing channel utility Expectation value of marketing utility for each channel Consumer preferences for marketing communication channels •Consumers prefer marketing communication channels according to expected utilities weighed with their evaluated importance •Routine use of communication channels has also an effect on preferences of marketing communication channels •The changes in preferences are relatively slow because the consumers tend to continue their routines •In the background of the model are theories of uses and gratifications, reasoned action, subjective quality and expectation-confirmation 13 Kari Elkelä - Itella BI 2012-03-21
- 14. Explanatory model of consumer preferences for marketing communication channels Expcted utilities of marketing communication channels weighted with their importance Informative Entertaining Personal Interactive Controllable Environmentally responsible Utility from regularity of use of each communication channel Consumer preferences for marketing communication channels Perceived utility from product and offer information Channel-specific utilities explain the channel preferences for marketing communication: •Information, entertainment, person and interaction utilities are adapted via uses and gratifications theory by McQuail •Controllability and the environmental responsibility are are adapted via other theories and empiric results Model includes two additional utility variables: •Regularity of use of communication channel, and perceived utility from marketing information 14 Kari Elkelä - Itella BI 2012-03-21
- 15. General preference model for all marketing communication channels EXPLANATORY MODEL FOR VARIABLE: Consumer preference for marketing communication channels Constant Weighted exp.value: personal Weighted exp.value: controllable Regularity of use of messaging channel Weighted exp.value: entertaining Weighted exp.value: environment.responsible Utility from marketing information Weighted exp.value: informative Weighted exp.value: interactive SUMMARY FOR STEPWISE REGRESSION Variable added with each step Weighted exp.value: personal Weighted exp.value: controllable Regularity of use of messaging channel Weighted exp.value: entertaining Weighted exp.value: environment.responsible Utility from marketing information Weighted exp.value: informative Weighted exp.value: interactive Unstandardized Standardt ized B Std. error Beta 1,311 0,119 10,987 0,016 0,003 0,118 6,122 0,023 0,001 0,200 15,869 0,253 0,016 0,164 16,106 0,019 0,002 0,153 9,216 -0,011 0,001 -0,093 -9,078 0,111 0,017 0,071 6,418 0,011 0,002 0,091 6,148 0,007 0,002 0,051 2,916 Explanation 2 (R ) 0,241 0,277 0,305 0,319 0,325 0,330 0,334 0,335 Correct- Std. error 2 ed of R 2 R estimate change 0,241 0,276 0,304 0,319 0,324 0,329 0,333 0,334 2,455 2,397 2,351 2,326 2,317 2,308 2,301 2,300 0,241 0,036 0,028 0,014 0,006 0,005 0,004 0,001 Sig. 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,004 Collinearity ToleVIF rance 0,256 0,597 0,912 0,344 0,897 0,785 0,438 0,307 Change statistics F df1; df2 change 2225,463 345,239 281,716 147,260 60,168 55,221 42,667 8,500 1; 7009 1; 7008 1; 7007 1; 7006 1; 7005 1; 7004 1; 7003 1; 7002 3,908 1,674 1,097 2,904 1,114 1,273 2,284 3,259 Sig. F change 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,004 •Estimated model includes all variables from the theoretical model •First four variables have best explanation force according to Beta coefficients, controllable is the best •Explanation per cent in all variable model is 33% 15 Kari Elkelä - Itella BI 2012-03-21
- 16. Preference models for consumer and channel groups Explanatory model of consumer preferences for marketing communication channels TOTAL CONSUMER GROUPS Female Male 15-24-year-olds 25-34-year-olds 35-49-year-olds 50-60-year-olds Over 60-year-olds Low level education Middle level education High level education Lives in small town Lives in middle-sized town Lives in big town Opinion leader Follower CHANNEL CROUPS Paper messaging Traditional electronic New digital Targetted messaging Advertising mass com Journalistic mass com Infromation search Reception 2 R % 33,4 Standardized Beta-coefficients Inform- Entertain- Personal Inter- Controll- Environ- Regular- Utility ative ing active able mentally ity of use from respons- of mess- product ible aging and offer channel information 0,091 0,153 0,118 0,051 0,200 -0,093 0,164 0,071 32,1 34,9 34,8 34,8 35,1 38,7 32,0 32,4 37,3 33,6 35,7 33,9 32,3 34,3 32,7 0,054 0,121 0,185 36,3 34,0 32,0 29,9 33,5 33,8 31,9 31,2 0,236 0,069 0,138 0,122 0,069 0,115 0,114 0,119 0,245 0,055 0,163 0,093 0,200 0,038 0,172 0,149 0,097 0,150 0,180 0,253 0,116 0,134 0,173 0,142 0,142 0,202 0,142 0,099 0,141 0,117 0,141 0,156 0,169 0,111 0,172 0,099 0,135 0,193 0,071 0,135 0,129 0,133 0,124 0,132 0,107 0,248 0,093 0,237 0,070 0,130 0,107 0,111 0,179 0,112 0,146 0,115 0,100 0,193 0,060 0,075 0,103 0,077 0,085 0,095 0,180 0,116 0,056 0,097 0,219 0,180 0,154 0,260 0,169 0,237 0,180 0,152 0,179 0,263 0,255 0,151 0,212 0,156 0,192 0,089 0,134 0,167 0,147 0,242 0,113 0,155 0,112 -0,138 -0,044 -0,054 -0,113 -0,107 -0,059 -0,050 -0,065 -0,117 -0,078 -0,061 -0,101 -0,099 -0,099 -0,088 -0,082 -0,038 -0,073 -0,073 -0,063 -0,039 -0,060 0,151 0,182 0,054 0,170 0,217 0,264 0,230 0,197 0,095 0,198 0,203 0,111 0,171 0,155 0,233 0,166 0,196 0,041 0,151 0,289 0,200 0,172 0,054 0,088 0,198 0,078 0,101 0,048 0,099 0,069 0,073 0,054 0,099 Effect of regular use is emphasized with age Need for control is emphasized with education information is most important for opinion leaders 0,057 0,128 0,072 0,050 0,072 0,098 0,105 0,124 0,075 History in life cycle: information > entertainment > interaction The controllability is emphasized in the clean advertising •General explanation model is validated by consumer and channel group models. Their explanation per cents are on the same level and they include the same explanatory variables (seven of possible eight on an average) •Presence of controllability in all subgroup models emphasizes its significance 16 Kari Elkelä - Itella BI 2012-03-21
- 17. 4. Controllability as the best explanatory variable for preferences
- 18. Channel control is most important for consumers Ranking for utilities from marketing communication channels Utilities which consumer Utilities according to which Utilities in which channel says important consumers prefer channels are considered most successful Controllable Controllable Controllable Informative Regularity of use Envíronmental responsibility Envíronmental responsibility Entertaining Informative Personal Personal Interactive • • • • 18 The consumers themselves say that controllability is the most important utility in channels Controllability has the strongest influence on the realized channel preferences Many channels are highly controllable eg. Internet, papers, catalogs and brochures In their own words consumers tend to complain about attacking push marketing, and interrupting of another more important doing, which are opposites of controllability Kari Elkelä - Itella BI 2012-03-21
- 19. Controllable marketing communication channel is 1. Transferable – Received message can be easily stored and it is possible to move acquaintance with it on better suitable time 2. Disregardable – Uninteresting marketing causes as few troubles as possible 3. Unobstrusive – 19 Channel neither disturbs consumer's normal daily routines and is nor considered attacking push marketing Kari Elkelä - Itella BI 2012-03-21
- 20. Perceived controllability of marketing communication channels RECEPTION AND USE MODE PHASE OF Anonymous Anonymous Personal reception CHANNEL LIFE reception CYCLE information search Internet newspages Text message Internet search New digital services Social media Email Radio Traditional Phone call electronic Television Catalog or leaflet Old paper Newspaper Unaddressed letter Addressed letter Magazine Scale for controllable Large Very large Medium Small Very small •Anonymous information search channels are regarded as most controllable •Personal reception channels are reacted most critically. For this reason successful marketing in these requires especially good know-how •All the paper channels are at least a middle level in their controllability •Poorly controllable channels are found among traditional electronic and new digital channels 20 Kari Elkelä - Itella BI 2012-03-21
- 22. Research theoretical contributions 1. Process model of consumer preferences for marketing communication channels 2. General explanation model of consumer preferences for marketing communication channels 3. Finding of the controllability utility which explains channel preferences best and specifying of the concept 4. Commensurable comparison of marketing communication channels and developing of the tools needed in it 22 Kari Elkelä - Itella BI 2012-03-21
- 23. Commercial recommendations • The consumers' different channel preferences and their changes should be taken in attention when marketing communication is planned • In targeted marketing should be better utilized buying behavior, phase of life and other information that has already been collected from the customers • Be careful not to roll too much marketing to well-paid and wealthy • All marketing channels should be treated impartially in planning • Don't hurt consumer's feelings of the independence and controllability, when taking into use new channels • Be careful with research results which praise effectiveness of new channels and have been done in different target groups and with different samples 23 Kari Elkelä - Itella BI 2012-03-21
- 24. Restrictions of results and further study proposals • • • • Because of large number of channels in comparison the preferences were examined at a general level without taking into consideration situation factors, message contents, or the phase of buying process The classification of channels according to the properties is not absolute but was done as a rule (sometimes for example a reception channel can serve as an information search channel) Research was done from the point of view of consumer and also new digital channels were examined but the huge possibilities of social media were not highlighted Further study is needed: – Preconditions, mistakes and developing means for targeted marketing – Reasons for marketing prohibitions and means to prevent and remove them – Effect of a social media and social filtering on the marketing – Commensurable international comparison of channel preferences and their change – Qualitative study to understand occurred and expected changes 24 Kari Elkelä - Itella BI 2012-03-21