consumer preferences for marketing communication channels

FOR INTERNAL USE ONLY – VAIN SISÄISEEN KÄYTTÖÖN

21.3.2012

Kari Elkelä, Itella BI

Consumer preferences for marketing

communication channels

Consumer preferences for marketing


1. Starting points

2. Channel preferences and their change

3. Explanatory models for channel preferences

4. Controllability as the best explanatory variable for

preferences

5. Summary and conclusions

Kari Elkelä - Itella BI 2012-03-21 2

1. Starting points


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

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


Classifications of marketing



• 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

Marketing communication

channels

Phase of channel life

cycle

Reception

mode

Use mode

Catalog or leaflet Old paper

Anonymous

Information

search

channel

Newspaper Old paper

Magazine Old paper

Internet search services New digital

Unaddressed letter Old paper

Reception

channel

Radio Traditional electronic

Television Traditional electronic

Internetin newspages New digital

Social media New digital

Addressed letter Old paper

Personal Phone call Traditional electronic

Text message New digital

Email New digital

2. Channel preferences and

their change


•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

Marketing communication channel preferences in Finland, 2006 and 2010Share of preferred (top3) channels, %

64

49

31

30

29

26

24

20

19

4

3

1

1

55

53

24

44

30

23

19

16

23

5

5

1

1

Catalog or leaf let

Newspaper

Internet

Addressed letter

TV

Email

Outdoor ad

Magazine

Unaddressed letter

Radio

Text message

Phone call

Door-to-door selling

0 10 20 30 40 50 60 70

2010

2006

Itel la Corp. KE 2010-08-06 GallupKanava, June 2010

Preferences according to channel's life

cycle, and mode of reception and use,


•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

PHASE OF

CHANNEL LIFE

CYCLE

RECEPTION AND USE MODE

Anonymous

information search

Anonymous

reception

Personal reception

New digital Internet search

services

Internet newspages Text message

Social media Email

Traditional

electronic

Radio Phone call

Television

Old paper

Catalog or leaflet

Unaddressed letter Addressed letter Newspaper

Magazine

Preference scale Favored Neutrally accepted Opinion separating

Less favored

Utilities and use of marketing communication channels


•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

UTILITY FOR NEW DIGITAL

CHANNELS CHANNEL

Text message Email Internet search

services

Intenet

newspages

Social media Channel group

average

Informative Small Medium Medium Medium Medium Medium

Entertaining Very small Small Medium Medium Medium Small

Personal Very small Medium Medium Medium Small Small

Interactive Very small Medium Medium Medium Medium Medium

Controllable Pieni Medium Large Large Medium Medium

Environmentally responsible Large Large Large Large Medium Large

Uses at least once a week 78 % 86 % 83 % 78 % 45 %

UTILITY FOR TRADITOINAL

ELECTRONIC CHANNELS CHANNEL

Radio Television Phone call Channel group

average

Informative Medium Medium Medium Medium

Entertaining Medium Medium Very small Small

Personal Medium Medium Very small Small

Interactive Medium Medium Small Small

Controllable Medium Medium Very small Medium

Environmentally responsible Large Medium Medium Medium

Uses at least once a week 83 % 91 % 83 %

UTILITY FOR OLD PAPER

CHANNELS CHANNEL

Newspaper Magazine Catalog or

leaflet

Addressed letter Channel group

average

Informative Medium Medium Medium Medium Medium

Entertaining Medium Medium Medium Small Medium

Personal Medium Medium Medium Medium Medium

Interactive Medium Medium Medium Small Medium

Controllable Large Large Large Medium Large

Environmentally responsible Medium Medium Medium Medium Medium

Uses at least once a week 88 % 66 % 51 % 41 %

3. Explanatory models for

channel preferences


Process model of consumer preferences for

marketing communication channels

•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

Use of

communication

channel

Perceived utility

received through

communication

channel

Utility sought

through

communication

channel

COMMUNICATION IN GENERAL


Process model of consumer preferences for

marketing communication channels

Use of

communication

channel

Perceived utility

received through

communication

channel

Consumer

preferences for

marketing

communication

channels

Importance weight for

marketing channel

utility

Expectation value of

marketing utility for

each channel

COMMUNICATION IN GENERAL MARKETING COMMUNICATION

•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

Utility sought

through

communication

channel


Explanatory model of consumer preferences

for marketing communication channels

Expcted utilities of marketing


weighted with their importance

Informative

Entertaining

Personal

Interactive

Controllable

Environmentally responsible

Utility from regularity

of use of each

communication

channel

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

Consumer

preferences for

marketing

communication

channels

General preference model for all marketing



•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%

EXPLANATORY MODEL FOR VARIABLE:

Consumer preference for marketing


Unstandardized Standard-

ized

Beta

t Sig. Collinearity

B Std. error Tole-

rance

VIF

Constant 1,311 0,119 10,987 0,000

Weighted exp.value: personal 0,016 0,003 0,118 6,122 0,000 0,256 3,908

Weighted exp.value: controllable 0,023 0,001 0,200 15,869 0,000 0,597 1,674

Regularity of use of messaging channel 0,253 0,016 0,164 16,106 0,000 0,912 1,097

Weighted exp.value: entertaining 0,019 0,002 0,153 9,216 0,000 0,344 2,904

Weighted exp.value: environment.responsible -0,011 0,001 -0,093 -9,078 0,000 0,897 1,114

Utility from marketing information 0,111 0,017 0,071 6,418 0,000 0,785 1,273

Weighted exp.value: informative 0,011 0,002 0,091 6,148 0,000 0,438 2,284

Weighted exp.value: interactive 0,007 0,002 0,051 2,916 0,004 0,307 3,259

SUMMARY FOR STEPWISE REGRESSION Variable added with each step Explan-

ation

(R 2)

Correct-

ed

R 2

Std. error

of

estimate

Change statistics

R 2

change

F

change

df1; df2 Sig. F

change

Weighted exp.value: personal 0,241 0,241 2,455 0,241 2225,463 1; 7009 0,000

Weighted exp.value: controllable 0,277 0,276 2,397 0,036 345,239 1; 7008 0,000

Regularity of use of messaging channel 0,305 0,304 2,351 0,028 281,716 1; 7007 0,000

Weighted exp.value: entertaining 0,319 0,319 2,326 0,014 147,260 1; 7006 0,000

Weighted exp.value: environment.responsible 0,325 0,324 2,317 0,006 60,168 1; 7005 0,000

Utility from marketing information 0,330 0,329 2,308 0,005 55,221 1; 7004 0,000

Weighted exp.value: informative 0,334 0,333 2,301 0,004 42,667 1; 7003 0,000

Weighted exp.value: interactive 0,335 0,334 2,300 0,001 8,500 1; 7002 0,004

Explanatory model of consumer

preferences for marketing


R 2

%

Standardized Beta-coefficients

Inform-

ative

Entertain-

ing

Personal Inter-

active

Controll-

able

Environ-

mentally

respons-

ible

Regular-

ity of use

of mess-

aging

channel

Utility

from

product

and offer

inform-

ation

TOTAL 33,4 0,091 0,153 0,118 0,051 0,200 -0,093 0,164 0,071

CONSUMER GROUPS

Female 32,1 0,054 0,172 0,117 0,060 0,219 -0,138 0,151 0,054

Male 34,9 0,121 0,149 0,141 0,180 -0,044 0,182 0,088

15-24-year-olds 34,8 0,185 0,097 0,156 0,154 -0,054 0,198

25-34-year-olds 34,8 0,150 0,169 0,260 -0,113 0,054 0,078

35-49-year-olds 35,1 0,138 0,180 0,111 0,075 0,169 -0,107 0,170

50-60-year-olds 38,7 0,253 0,172 0,237 -0,059 0,217

Over 60-year-olds 32,0 0,116 0,099 0,103 0,180 -0,050 0,264 0,101

Low level education 32,4 0,122 0,134 0,135 0,152 -0,065 0,230 0,048

Middle level education 37,3 0,069 0,173 0,193 0,179 -0,117 0,197 0,099

High level education 33,6 0,115 0,142 0,071 0,077 0,263 -0,078 0,095 0,069

Lives in small town 35,7 0,142 0,135 0,085 0,255 -0,061 0,198 0,073

Lives in middle-sized town 33,9 0,114 0,202 0,129 0,151 -0,101 0,203 0,054

Lives in big town 32,3 0,119 0,142 0,133 0,212 -0,099 0,111 0,099

Opinion leader 34,3 0,245 0,099 0,124 0,156 -0,099 0,171

Follower 32,7 0,055 0,141 0,132 0,095 0,192 -0,088 0,155 0,057

CHANNEL CROUPS

Paper messaging 36,3 0,236 0,107 0,070 0,089 0,233 0,128

Traditional electronic 34,0 0,069 0,248 0,130 0,134 -0,082 0,166 0,072

New digital 32,0 0,093 0,107 0,180 0,167 -0,038 0,196 0,050

Targetted messaging 29,9 0,237 0,111 0,116 0,147 -0,073 0,041 0,072

Advertising mass com 33,5 0,163 0,179 0,242 -0,073 0,151 0,098

Journalistic mass com 33,8 0,093 0,100 0,112 0,056 0,113 -0,063 0,289 0,105

Infromation search 31,9 0,200 0,146 0,155 -0,039 0,200 0,124

Reception 31,2 0,038 0,193 0,115 0,097 0,112 -0,060 0,172 0,075


Preference models for consumer and channel groups

•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

Effect of regular use

is emphasized with

age

Need for control is

emphasized with

education

information is most

important for opinion

leaders

The controllability is

emphasized in the

clean advertising

History in life cycle:

information >

entertainment >

interaction

4. Controllability as the best

explanatory variable for

preferences


Channel control is most important for

consumers

• 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

Ranking for utilities from marketing communication channels

Utilities which consumer

says important

Utilities according to which

consumers prefer channels

Utilities in which channel

are considered most

successful

Controllable Controllable Controllable

Informative Regularity of use Envíronmental responsibility

Envíronmental responsibility Entertaining Informative

Personal Personal Interactive


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

– Channel neither disturbs consumer's normal daily routines and is

nor considered attacking push marketing


Perceived controllability of marketing


•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

PHASE OF

CHANNEL LIFE

CYCLE

RECEPTION AND USE MODE

Anonymous

information search

Anonymous

reception

Personal reception

New digital Internet search

services

Internet newspages Text message

Social media Email

Traditional

electronic

Radio Phone call

Television

Old paper

Catalog or leaflet

Unaddressed letter Addressed letter Newspaper

Magazine

Scale for

controllable

Large Medium Small

Very large Very small

5. Summary and

conclusions

Research theoretical contributions

1. Process model of consumer preferences for marketing


2. General explanation model of consumer preferences for marketing


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


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


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


consumer preferences for marketing communication channels

Business