Chapter 12

Catch the Buzz: Promotional

Strategy and Integrated
Marketing Communication
 Chapter Objectives
1. Understand the communication model
2. Understand the role of integrated marketing
communication
3. List and describe the tradition elements of the
promotion mix
4. Contrast two major alternative promotional
strategies: Advertising and Personal Selling
5. Cover Buzz Marketing -- alternatives to
traditional media forms
6. Discuss the role of sponsorships
7. Discuss the ethical issues around promotion

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 Figure 12.2 Communication Model

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 The Communication Model

Elements of the model:

1. Source: Firm or person sending a message
2. Encoding: Transmitting an idea into a form
of communication that conveys meaning
3. Message: Communication in physical form
that goes from a sender to a receiver
4. Medium: Communication vehicle through
which a message is transmitted

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 The Communication Model
Elements of the model (cont.):
5. Receiver: Individual or organization that
intercepts and interprets the message
6. Decoding: Process whereby a receiver
assigns meaning to a message
7. Noise: Anything that interferes with
effective communication
8. Feedback: Receiver’s reactions to the
message

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 IMC Overview

Integrated Marketing Communications (IMC):

Coordination of all promotional activities –
advertising, direct mail, personal selling,
sales promotion, and public relations – to
produce a unified customer-focused
promotional message

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 Importance of Teamwork to IMC Programs
 Successful implementation of IMC requires
that everyone involved in every aspect of
promotion – public relations, advertising,
personal selling, direct mail and sales
promotion – function as a team
 Beyond that, IMC requires a comprehensive
strategy that includes all marketing activities,
not just promotion
 Many companies have integrated by hiring a
single company to execute all aspects of
promotion
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 Figure 12.4
Steps to Develop an IMC Plan

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 Developing the IMC Plan

 Step 1: Identify target audiences

 Step 2: Establish the communication
objectives, which may include…
– Create awareness
– Inform the target market
– Create desire
– Encourage purchase and trial
– Build loyalty
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 Developing the IMC Plan
 Step 3: Determine and allocate the
marketing communication budget
– Determine the total promotion budget
– Use one the following:
• Top-down budgeting techniques
• Percentage-of-sales
• Competitive-parity
• Bottom-up budgeting techniques

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 Developing the IMC Plan
 Step 4: Design the promotion mix
– Which forms of promotion
– Which types of media
– Which media alternatives
– Which executions

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 Developing the IMC Plan
 Step 5: Evaluate the effectiveness of
the communication program
– Are communication objectives adequately
translated into marketing communication that
is reaching the right target market?
– Some activities (sales promotions and direct
marketing) are easier to evaluate than others
(public relations and advertising)

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Effective Promotional Messages

An effective promotional message should

accomplish the following:
1. It gains the receiver’s attention
2. It is understood as intended
3. It stimulates the receiver’s needs
4. It suggests an appropriate method of
satisfying the receiver’s needs

Let’s put a couple of ads through this test:

Video_Ch12\Budweiser1.mpg
Video_Ch12\DAEWOOD2.MPG
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 Five Objectives of Promotion
1. Provide
Information
– Inform the market
about the
availability of a
particular good or
service

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2. Increase Demand
– Most promotions are
aimed at increasing
selective demand,
the desire for a
specific brand

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3. Differentiate the
Product
 When consumers
regard the firm’s
output as virtually
identical to its
competitors’, then
the firm has
virtually no control
over marketing
variables
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See how two competitors, Visa
and MasterCard, go about
differentiating their products in
these two ads.

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4. Increase the
Product’s Value
– Promotion can
explain the greater
ownership utility of
a product to
buyers, thereby
increasing its value
to the consumer
and justifying a
higher price

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5. Stabilize Sales
– For the typical firm, sales fluctuations may result
from cyclical, seasonal, or irregular demand
– Stabilizing these variations is often an objective
of promotional strategy

Q. Is the purpose of this ad primarily to provide

information, increase demand, differentiate the
product, accentuate the product’s value or
stabilize sales?
Q. What do you remember from this ad?

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 The Promotional Mix
Promotional mix: blend of personal selling,
advertising, sales promotion, direct marketing,
and public relations designed to achieve
promotional objectives

1. Advertising: Paid, nonpersonal communication

through various media by a business firm, not-
for-profit organization, or individual identified
in the message with the hope of informing or
persuading members of a particular audience

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2. Sales Promotion: Marketing activities that
stimulate immediate consumer purchasing
(includes: displays, trade shows, coupons,
premiums, contests, & product demonstrations)
– Trade promotion: sales promotion aimed at
marketing intermediaries rather than ultimate
consumers
3. Personal selling: interpersonal promotional
process involving a seller’s person-to-person
presentation to a prospective buyer

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4. Direct Marketing: Direct communications other
than personal sales contact between buyer and
seller, designed to generate sales, information
requests, or store visits.

5. Public relations: Firm’s communications and

relationships with its various publics

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 The Promotional Mix

– The extent of the marketer’s control over

different communication elements varies

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 Comparison of the Five Promotional Elements
Personal Sales Promotion Direct Public
Selling Advertising Marketing Relations
Permits Reaches a large Produces an Can generate Creates a
measurement of group of immediate an immediate positive
effectiveness. potential consumer response. attitude
Can elicit an consumers for a response Covers a toward a
relatively low (usually sales). product or
Advantages

immediate wide
response. price per Attracts attention audience company.
Can tailor the exposure. and creates with targeted Enhances
message to fit Allows strict product advertising. credibility of
the customer. control over the awareness and Allows a product or
Receive final message. excitement. complete, company.
immediate Can be adapted Allows relatively customized, Low cost.
feedback. to either mass easy personal
audiences or measurement of message.
specific results. Produces Continued
audience Can reach price- measurable on next
segments. sensitive results. slide . . .
Rich Images. customers.
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 Personal Sales Direct Public
Selling Advertising Promotion Marketing Relations

Relies almost Does not Is Suffers Can not measure

exclusively permit totally nonpersonal from image effect on sales.
upon the accurate in nature. problem.
Disadvantages

Can’t guarantee
ability of the measurement Is difficult to Involves a the target will be
salesperson. of results. differentiate high cost reached.
Involves high Usually cannot from per reader.
cost per close sales. competitor’s Can be low
contact. Expensive. efforts. quality and
Salespeople Often Lacks inaccurate
differ in credibility. mailing
ability and lists.
messages. May annoy
consumers.

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 Sponsorships
Sponsorships- Provision of funds for a sporting or
cultural event in exchange for a direct association
with the events
 Integrates several promotional mix elements:
advertising, sales promotion, and public relations
 Sponsorship Spending has more than tripled
during the past 10 years to almost $10
Billion/year
 Nearly impossible to measure effectiveness

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 – AT&T: A
Sponsor of the
PGA Tour

Q. Why do
companies
sponsor events
and facilities
outside of their
HQ market?
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 Influencing Factors Personal Selling Advertising
1.Nature of the market
Number of buyers Limited number Large number
Geographic concentration Concentrated Dispersed
Type of customer Business purchaser Ultimate consumer

2.Nature of the product

Complexity Custom-made, complex Standardized
Service Considerable Minimal
requirements
Type of good or
service Business Consumer
Use of trade-ins Trade-ins common Trade-ins uncommon
3.Stage in the product life Heavy emphasis in the Often emphasized at every
cycle introductory and early growth stage; heavy emphasis in the
stages in acquainting marketing latter part of the growth stage,
intermediaries and potential as well as the maturity and
consumers with the new good or early decline stages, to
service persuade consumers to select
specific brands
4.Price 17-28 High unit value Low unit value
Pulling vs. Pushing Promotional Strategies

Pulling strategy: Promotional effort by a seller to

stimulate demand among consumers, who will then
exert pressure on retailers to carry the product,
pulling it though the marketing channel
Pushing strategy: Promotional effort by a seller to
retailers intended to stimulate personal selling of
the good or service, thereby pushing it through the
marketing channel

Q. Can you think of some examples of

promotions which use each of these
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strategies?
 Colgate Total
– Using a Pulling
Strategy With Ads
Like This Combined
With a Pushing
Strategy (30 Million
Samples to Dental
Practitioners)
Created Strong
Demand for This
Improved Product

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 Buzz Appeals
 Buzz:
– Word-of-mouth communication that
consumers view as authentic
 Buzz marketing:
– Using high-profile entertainment or news that
gets people to talk about the brand
 Viral marketing:
– Creating entertaining or informative
messages to be passed along

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 Buzz Appeals

 Word-of-mouth (WOM) marketing:

– Activities that give people a reason to talk
about the product
 Guerrilla marketing:
– Activities that “ambush” consumers with
promotional content in places they are not
expecting to encounter this kind of activity

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 Buzz Appeals

 Experiential marketing:
– Marketing activities that attempt to give
customers an opportunity to actually interact
with a brand
 Consumer-generated media:
– The on-line consumer-generated comments,
opinions, and product-related stories available
to other consumers through digital media (such
as Twitter)

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 Ethical Issues in Buzz Marketing
 Ethical problems in buzz marketing can
occur when:
– Activities are designed to deceive consumers
– Directing buzz marketing at children or teens
– Stealth marketing activities deliberately
deceive or lie on behalf of clients
– Shilling – pretending to be a customer

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 The Ethics of Promotion

Q. Is Promotion overall good for society

or bad for society?

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The Ethics of Promotion
Pro’s
 Provides information to allow selection of the
best product
 Boosts the economy by stimulating sales
 Provides entertainment
 Enables companies of all sizes to compete
 Opens up the world to companies
 Is an important factor in campaigns aimed at
achieving socially oriented objectives like the
elimination of drug abuse
 Increases the firm’s units sold, resulting in
lower production costs & therefore lower
sales prices
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The Ethics of Promotion
Con’s
 Exaggerated claims & lies
 Poor taste & offensiveness (sex and violence)
 Irritating repetition & intrusiveness
 Encourages usage of products some consider
unethical – alcohol & tobacco usage and gambling
 Perpetuates stereotypes
 Plays on humans’ desires, like self-esteem,
security, & acceptance
 Encourages people to believe that their needs and
desires can be best satisfied by purchases
 Creates needs that didn’t previously exist
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