Marketing: Real People, Real Decisions Integrated Marketing Communications and

Relationship Management
Chapter 16
Lecture Slides

Solomon, Stuart,
Carson, & Smith

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Marketing: Real People, Real Decisions
Chapter Learning Objectives
When you have completed your study of this chapter,
you should be able to:
• Explain integrated marketing
communications and its implementation,
and why some markers resist it.
• List, describe and contrast elements of
the communications mix.
• Explain the steps involved in developing
a communications plan.
• Explain the philosophy and practices of
relationship marketing.
• Explain the role of databases in
facilitating marketing communications
and relationship management.

©Copyright 2003 Pearson Education Canada Inc. 16-2

Marketing: Real People, Real Decisions
Introduction to the Topic
• The next three chapters deal with the topic of promotion, with this
chapter covering overall strategy, and the others covering specific
topics within it in more detail.
• Promotion: the coordination of a
marketer’s communications efforts to
influence attitudes or behaviour toward
a product or service.
• Marketing communication:
informing consumers and customers
about the relative value of products,
and developing trust and other
relational bonds that facilitate ongoing
exchange relationships.

©Copyright 2003 Pearson Education Canada Inc. 16-3

Marketing: Real People, Real Decisions
Integrated Communication Strategy
• Integrated marketing communications (IMC): a strategic
business process that marketers use to plan, develop, execute, and
evaluate coordinated, measurable, persuasive brand communication
programs over time with targeted audiences.
• The important thing to
understand about this concept Personal Selling
Advertising
is the need for, and benefit of
consistency between
components of the program.
Communication Idea
• The question: how much
should an organization spend
on its integrated marketing Direct Sales
communications program, Marketing Public Promotion
and how do you know when Relations
it is working?
©Copyright 2003 Pearson Education Canada Inc. 16-4
Marketing: Real People, Real Decisions
The Communications Mix
• Communications mix: the major elements of marketer-
controlled communications, including advertising, sales promotions,
marketing public relations, direct marketing, and personal selling.
• Some might argue that the Internet
belongs in that group as well.
• Advertising: non-personal, paid
communication from an identified
sponsor, primarily using mass media.
• Interactive marketing: two-way
communications, in which customized
marketing communications elicit a
measurable response from individual
customers. Also known as direct
marketing.

©Copyright 2003 Pearson Education Canada Inc. 16-5

Marketing: Real People, Real Decisions
The Communications Mix (continued)
• Personal selling: personal presentation by a firm’s sales force for
the purpose of making sales and building customer relationships.
• Characterized by:
– Direct contact with the buyer
– Two way communication
– Flexible message content
– Immediate feedback as to success
• Public relations: communication
strategies to build good relationships
with an organization’s publics.
• Publicity: unpaid communication
about an organization appearing in the
mass media.

©Copyright 2003 Pearson Education Canada Inc. 16-6

Marketing: Real People, Real Decisions
The Communications Mix (continued)
• Sales promotion: short-term incentives or programs to encourage
the trial, purchase or sale of a product or service.
– Contests, coupons, and rebates
– Information seminars, product
demonstrations, special events
– Specialty advertising
– Loyalty programs
• There are no shortage of ways to
spend money on sales promotion-
virtually unlimited
• The questions are: what is the value,
and the impact on brand loyalty?

©Copyright 2003 Pearson Education Canada Inc. 16-7

Marketing: Real People, Real Decisions Developing a Communications Plan
• Communications plan: A Establish communication
objectives
framework that outlines the
strategies for developing,
implementing, and controlling the Identify influence on the
firm’s communication activities. communications mix
• Target audience: a highly
segmented group of people who Determine the total
receive and respond similarly to communication budget
marketing messages.
• Objectives:
– create awareness Allocate to the
communication mix budget
– inform the market
– create desire
– encourage trial Evaluate the effectiveness
– of the communication mix
build loyalty Figure 16.2
©Copyright 2003 Pearson Education Canada Inc. 16-8
Marketing: Real People, Real Decisions
Direction of Promotional Effort
• Companies have a number of ways to promote their products, but
their strategies will generally fall under one of the two methods
below:
• Pull Strategy: moving products
through the channel by building desire
Manufacturers for the products among consumers, who
convince retailers to stock the items.
Use primarily advertising.
• Push strategy: moving products
Wholesalers
through the channel by convincing
Retailers
channel members to offer them. Use
primarily personal selling.
• Industrial products tend to follow the
Consumers push strategy, while consumer goods
tend to rely more on pull, although most
now use a combination of both.
©Copyright 2003 Pearson Education Canada Inc. 16-9
Marketing: Real People, Real Decisions
Determining the Communications Budget
• Top-down budgeting techniques: allocation of the
promotion budget that is based on the total amount to be devoted to
marketing communications.
• Percentage-of-sales method: a method for promotion
budgeting, in which the promotion budget is based on last’s sales
or on estimates for this year’s sales.
• Bottom-up budgeting techniques: allocation of the
promotion budget that is based on identifying promotional goals
and allocating enough money to accomplish them.
• Objective-task method: a promotion budgeting method in
which an organization first defines the specific communication
goals it hopes to achieve and then tries to calculate what kind of
promotional efforts it must take to meet these goals.

©Copyright 2003 Pearson Education Canada Inc. 16-10

Marketing: Real People, Real Decisions
Allocating the Communications Budget
• The amount of budget to be allocated to each of the different types of
communication will depend on:
• Organization factors: the company’s past history of spending,
how well it understands the effectiveness of different forms, the
agencies used, and the personal preferences of decision makers.
• Market potential: the size
of the target market(s) to be
communicated with.
• Market size: the size of
markets to be communicated in
will determine the costs of using
different media. Larger markets
will be more expensive and
favour mass media.

©Copyright 2003 Pearson Education Canada Inc. 16-11

Marketing: Real People, Real Decisions
Communication Theory
• Communications model: the elements necessary for meaning to
be transferred from a sender to a receiver.
• Encoding: the
process of Message
translating an idea Encoding Decoding
into a form of Media
communication that
will convey
meaning. Source Receiver
• Source: an Noise
organization or
individual that sends
a message. Feedback Response

©Copyright 2003 Pearson Education Canada Inc. 16-12

Marketing: Real People, Real Decisions
Communication Theory (continued)
• Message: the communication in physical form that goes from a
sender to a receiver.
• AIDA model: the
communication Message
goals of attention, Encoding Decoding
interest, desire, and Media
action.
• Medium: a
communications Source Receiver
vehicle through Noise
which a message is
transmitted to a
target audience. Feedback Response

©Copyright 2003 Pearson Education Canada Inc. 16-13

Marketing: Real People, Real Decisions
Communication Theory (continued)
• Receiver: the organization or individual that intercepts and
interprets the message.
• Noise: anything
that interferes with Message
effective Encoding Decoding
communication. Media
• Decoding: the
process by which a
receiver assigns Source Receiver
meaning to the Noise
message.
• Feedback:
Feedback Response
receivers’ reactions
to the message.
©Copyright 2003 Pearson Education Canada Inc. 16-14
Marketing: Real People, Real Decisions
Relationship Marketing
• Relationship marketing: the philosophy and practice of
developing long-term relationships with key stakeholders.
• Customer relationship
marketing (CRM): relationship
marketing focused on delivering
customer satisfaction and improved
customer retention.
• Database marketing: the use of
direct marketing tools and techniques to
establish and develop ongoing customer
relationships.
• Database marketing can be used to locate
new customers, stimulate cross-selling,
and provide measurable results.

©Copyright 2003 Pearson Education Canada Inc. 16-15

Marketing: Real People, Real Decisions
Famous Last Words…

• Promotion is how
organizations communicate
with their target markets
and all other interested
stakeholders.
• There are many ways to
communicate, the difficulty
is in determining the
effectiveness of monies
spent.

©Copyright 2003 Pearson Education Canada Inc. 16-16