Professional Documents
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Integrated Marketing Communications
Integrated Marketing Communications
Integrated Marketing Communications
Integrated
Marketing
Communications
Chapter Objectives
1. Explain how integrated marketing communications relates
to the development of an optimal promotional mix.
2. Describe the communication process and how it relates to
the AIDA concept.
3. Explain how the promotional mix relates to the objectives
of promotion.
4. Identify the different elements of the promotional mix and
explain how marketers develop an optimal promotional
mix.
5. Describe the role of sponsorships and direct marketing in
integrated marketing communications.
6. Contrast the two major alternative promotional strategies.
7. Explain how marketers budget for and measure the
effectiveness of promotion.
8. Discuss the value of marketing communications.
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Chapter Overview
Promotion:
Promotion
function of informing,
persuading, and
influencing the
consumer’s purchase
decision
Marketing
Communications:
Communications
transmission from a
sender to a receiver of
a message dealing
with the buyer-seller
relationship
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Integrated Marketing Communications
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Importance of Teamwork
IMC requires a total strategy
including all marketing activities, not
just promotion
Successful implementation of IMC
requires that everyone involved in
every aspect of promotion – public
relations, advertising, personal
selling, and sales promotion –
function as a team
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Figure 15.2
Chrysler Crossfire: Using a Web Site and a
Toll-free Number in an IMC Campaign
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Role of Databases in Effective IMC
Programs
With the growth of the Internet, marketers
have been given the power to gather
information faster and to organize it
easier than ever before
By sharing this knowledge appropriately
among all relative parties, a firm can lay
the foundation for a successful IMC
program
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The Communications Process
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AIDA concept (Attention-Interest-Desire-
Action) – an explanation of the steps through
which an individual reaches a purchase
decision [Table on P.487]
Cheerios Coupon
Sender – General Mills Cheerios
Encoding – Marketing and Ad Agency
Channel – FSI, Coupon in Sunday Paper
Decoding – Reader see and clips coupon
Response – Cheerios purchased, coupon
redeemed
Feedback – Detailed reports from News
America or Valassis
Noise – Bad coupon design, wrong
newspapers, wrong markets, damaged FSI
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Global Difficulties with the Communication
Process
In China: KFC’s slogan: “Finger lickin’ good”
came out as “Eat your fingers off”
Also in China: Coca-Cola had thousands of
signs made using the translation: “Ke-kou-ke-la”
Depending on the dialect this means . . .
“Bite the wax tadpole,” or
“Female horse stuffed with wax”
In Taiwan: Pepsi’s slogan, “Come alive with the
Pepsi generation” came out as “Pepsi will bring
your ancestors back from the dead”
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Objectives of Promotion
Provide Information
Inform the market
about the
availability of a
particular good or
service
Disney World
Ad promoting a free
video to provide
Information for
vacation planning
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Figure 15.3
Schick:
Offering
Product
Information
and
Benefits to
Consumers
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Increase Demand
Some promotions
are aimed at
increasing primary
demand, the desire
for a general
product category
More promotions
are aimed at
increasing selective
demand, the desire
for a specific brand
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Differentiate the
Product
Homogenous
demand for many
products results
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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Accentuate the
Product’s Value
Promotion can
explain the greater
ownership utility of
a product to
buyers, thereby
accentuating its
value and justifying
a higher price
Johnson & Johnson
First Aid To Go!
Accentuating a
Product’s Value
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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
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Elements of the Promotional Mix
Promotional mix:
mix blend of personal selling
and nonpersonal selling designed to achieve
promotional objectives
Personal selling:
selling interpersonal
promotional process involving a seller’s
person-to-person presentation to a
prospective buyer
Nonpersonal selling includes:
Advertising, Product placement, Sales
promotion, Direct marketing, Public
relations
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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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Product Placement
Marketer pays a motion picture or television
program owner a fee to display his or her
product prominently in the film or show
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Sales Promotion
Marketing activities
that stimulates
consumer
purchasing
(includes: displays,
trade shows,
coupons, premiums,
contests, product
demonstrations, and
various
nonrecurrent selling
efforts)
Trade promotion
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Direct Marketing
Direct communications other than
personal sales contact between
buyer and seller, designed to
generate sales, information
requests, or store visits
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Public relations:
relations firm’s communications and
relationships with its various publics
Publicity:
Publicity stimulation of demand for good,
service, place, idea, person, or organization
by unpaid placement of commercially
significant news or favorable media
presentations
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Guerilla Marketing:
Marketing Unconventional,
innovative, and low-cost marketing
techniques designed to get consumers’
attention in unusual ways.
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Sponsorships
Provision of funds
for a sporting or
cultural event in
exchange for a
direct association
with the events or
activity
Spending now
$11 Billion year
AT&T: A
Sponsor of the
PGA Tour
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Growth of Sponsorships
Sponsorship has grown rapidly during the
past 30 years
Corporate sponsorship spending has
increased faster than promotional outlays
for advertising and sales promotion
How Sponsorship Differs from Advertising
Sponsor’s degree of control
Nature of the message
Audience reaction
Ambush marketing
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Assessing Sponsorship Results
Marketers utilize some of the same
techniques to measure both advertising
and sponsorship
The differences between the two
promotional alternatives often necessitate
some unique research techniques
Despite the impressive visibility of special
events like soccer’s World Cup and
football’s Super Bowl, the demands do not
necessarily lead directly to increased sales
or improved brand awareness
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Direct Marketing
Few promotional mix elements are growing as
rapidly as direct marketing
Related overall spending total $1.7 trillion
Direct Marketing Communication Channels
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Direct Mail
Marketers combine information from internal
and external databases, surveys, coupons,
and rebates that require responses to
provide information about consumer
lifestyles, buying habits, and wants
Catalogs
Over 10,000 different consumer mail-order
catalogs and thousands more for business-
to- business sales are mailed each year
generating over $57 million in consumer
sales and $36 million in B2B sales
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Telemarketing:
Telemarketing
promotional
presentation
involving the use of
the telephone for
outbound contacts
by salespeople or
inbound contacts
initiated by
customers who
want to obtain
information and
place orders
Offering Toll-Free Telephone
Numbers to Catalog Shoppers
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Direct Marketing via Broadcast Channels
Broadcast direct marketing includes:
Brief (30 to 90 and second) direct response
ads on television or radio
Home shopping channels like:
Quality Value Channel (QVC)
Home Shopping Network (HSN)
Infomercial: promotional presentation for
a single product running 30 minutes or
longer in a format that resembles a regular
television program
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Electronic Direct Marketing Channels
Web advertising is an important
component of electronic direct marketing
E-mail direct marketing is a natural and
easy extension of traditional direct mail
marketing
Other Direct Marketing Channels
Print media is generally not as effective as
Web marketing or telemarketing for direct
marketers
Magazine and newspaper ads with toll-free
telephone numbers, kiosks, and other
media are still useful in many situations
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Starbucks
Encore
Starbucks’
Direct-
Response
Print Ad
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Developing an Optimal Promotional Mix
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Nature of the market
Personal selling may prove effective with a market
composed of a limited number of buyers
Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
Personal selling often works better for intermediary
target markets
Nature of the product
Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
Consumer products are more likely to rely heavily on
advertising than are business products
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Sierra Mist:
Mist Promotion focusing on the
nature of the product
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Stage in the product life-cycle
Promotional mix must be tailored to the products
stage in the product life-cycle
In the introductory stage, there is a heavy emphasis
on personal selling to the to the intermediaries
However, advertising and sales promotion help to
create awareness and stimulate initial purchases
In the growth and maturity stages, advertising gains
relative importance
Personal selling efforts at marketing intermediaries to
expand distribution is continued
In the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures
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Price
Advertising dominates the promotional mix for low-
unit-value products due to the high personal contact
costs of personal selling
Consumers a high-priced items like luxury cars expect
lots of well-presented information via videocassettes,
CDs, fancy brochures, and personal selling
Funds available for promotion
A critical element in the promotional strategy is the
size of the promotional budget
While the cost-per-contact of a $2 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms
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Figure 15.8
McDonald’s
Dollar menu:
Promotion
Based on
Price
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Influencing Factors Personal Selling Advertising
Nature of the market
Number of buyers Limited number Large number
Geographic Concentrated Dispersed
concentration
Type of customer Business purchaser Ultimate consumer
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Budgeting for Promotional Strategy
Percentage-of-sales method
Fixed-sum-per-unit method
Task-objective method
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Method Description Example
Percentage-of- Promotional budget is set as a “Last year we spent $10,500 on
sales method specified percentage of either past promotion and had sales of $420,000.
or forecasted sales. Next year we expect sales to grow to
$480,000, and we are allocating $12,000
for promotion.”
Fixed-sum-per- Promotional budget is set as a “Our forecast calls for sales of 14,000
unit method predetermined dollar amount for units, and we allocate promotion at the
each unit sold or produced. rate of $65 per unit.”
Task-objective Once marketers determine their “By the end of next year, we want 75
method specific, promotional objectives, percent of the area high-school students
the amount (and type) of to be aware of our new, highly
promotional spending needed to automated fast-food prototype outlet.
achieve them is determined. How many promotional dollars will it
take, and how should they be spent?”
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Figure 15.9
Allocation of Promotional Budgets for consumer
Packaged Goods
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Measuring the Effectiveness of Promotion
Two basic measurement tools:
Direct sales results measures the
effectiveness of promotion by revealing the
specific impact on sales revenues for each
dollar of promotional spending
Indirect evaluation concentrates on
quantifiable indicators of effectiveness like:
Recall - how much members of the target
market remember about specific products
or advertisements
Readership – size and composition of a
message’s audience
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Measuring Online Promotions
Early attempts at measuring online promotional
efforts involved counting hits and visits
Incorporating direct response and comparing
different promotions for effectiveness
Two major techniques for setting online
advertising rates:
Cost per impression (CPM), technique that
related the cost of an ad to every thousand
people who read it
Cost per response (click-throughs), which
assumes that those who actually click on an
ad want more information
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The Value of Marketing Communications
Social Importance
Criticisms of promotional messages as
tasteless and lacking any contribution to
society sometimes ignore the fact that society
provides no commonly accepted set of
standards
The one generally accepted standard in a
market society is freedom of choice for the
consumer
Promotion has become an important factor in
campaigns aimed at achieving socially
oriented objectives like the elimination of drug
abuse
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Promotional
Message Addressing
a Universal Social
Concern
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Merck Vaccine
Division
The Social
Importance of
Marketing
Communications
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Business Importance
Promotional strategy has become
increasingly important to both small and large
firms
Its effectiveness to encourage attitude
changes, brand loyalty and increase sales is
well-documented
Both business and nonbusiness enterprises
recognize the importance of promotional
efforts
Nonbusiness organizations using promotion
include governments and religions
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Economic Importance
Effective promotion has allowed society to
derive benefits not otherwise available
Promotion increases the number of units
sold; the resulting economies of scale
lower production costs and allows lower
sales prices
Subsidizes the information contents of
newspapers and the broadcast media
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End of Chapter Fifteen
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