Integrated Marketing Communications

Integrated Marketing Communications
Lamb, Hair, McDaniel Chapter 14 Integrated Marketing Communications CHAPTER 16 Integrated Marketing Communications Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.

Chapter 14 Integrated Marketing Communications
Learning Outcomes LO 1 Discuss the role of promotion in the marketing mix LO 2 Discuss the elements of the promotional mix LO 3 Describe the communication process LO 4 Explain the goal and tasks of promotion

Learning Outcomes LO 5 Discuss the AIDA concept and its relationship to the promotional mix LO 6 Describe the factors that affect the promotional mix LO 7 Discuss the concept of integrated marketing communications

The Role of Promotion in the Marketing Mix
Chapter 14 Integrated Marketing Communications The Role of Promotion in the Marketing Mix Discuss the role of promotion in the marketing mix LO1

The Role of Promotion LO1 Promotional Strategy
Chapter 14 Integrated Marketing Communications The Role of Promotion Promotional Strategy A plan for the optimal use of the elements of promotion: Advertising Public Relations Sales Promotion Personal Selling Notes: 1. Promotional strategy is a plan for using promotion effectively. LO1

Chapter 14 Integrated Marketing Communications The Role of Promotion in the Marketing Mix Overall Marketing Objectives Marketing Mix Product Place Promotion Price Target Market Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan Notes: As Exhibit 14.1 shows, the marketing manager determines the goals of the promotional strategy in light of the firm’s overall goals for the marketing mix. Using the overall goals, marketers combine the elements of the promotional strategy into a coordinated plan. This plan becomes an integral part of the marketing strategy for reaching the target market. The main function of promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition. LO1

Competitive Advantage
Chapter 14 Integrated Marketing Communications Competitive Advantage Unique features Excellent service Low prices Rapid delivery High product quality Notes: The main function of a marketer’s promotional strategy is to convince the target market that the goods and services offered provide a competitive advantage. A competitive advantage is the set of unique features of a company and its products that are perceived as superior over the competition. These features are listed on this slide. Discussion/Team Activity: Discuss companies and products that demonstrate a competitive advantage based on the features shown above. LO1

Chapter 14 Integrated Marketing Communications The Role of Promotion in the Marketing Mix LO1

elements of the promotional mix
Chapter 14 Integrated Marketing Communications The Promotional Mix Discuss the elements of the promotional mix LO2

The Promotional Mix LO2 Promotional Mix
Chapter 14 Integrated Marketing Communications The Promotional Mix Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Advertising Public Relations Sales Promotion Personal Selling Notes: Most promotional strategies use several components of promotion, which may include advertising, public relations, sales promotion, and personal selling to reach the target market. The more emphasis is placed on a particular promotional element, the more important that element is considered to be in the overall promotional mix. A discussion of each of the promotional mix elements follows. LO2

The Promotional Mix LO2 Advertising
Chapter 14 Integrated Marketing Communications The Promotional Mix Advertising Most commonly distributed by traditional media, though increasingly through non-traditional media, such as Web sites, , and blogs. Notes: Almost all companies use some form of advertising, ranging from a newspaper classified ad to a multimillion-dollar campaign. LO2

Advertising Media LO2 Television Radio Newspapers Magazines Books
Chapter 14 Integrated Marketing Communications Advertising Media Traditional Advertising Media Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards New Advertising Media Notes: Media choices are plentiful and fragmented. In addition to the traditional advertising media, new methods are being used to reach consumers. Internet advertising is being increasingly used as a vital component. Banner ads, viral marketing, and interactive promotions are all ways to reach the target audience. Discussion/Team Activity: Some consumers and lawmakers feel that consumer privacy is being violated with Internet advertising methods. Discuss this as a class. Refer to the “Ethics in Marketing” box. Internet Banner ads Viral marketing E- mail Interactive video LO2

Advertising LO2 Advantages Disadvantages Reach large number of people
Chapter 14 Integrated Marketing Communications Advertising Advantages Disadvantages Reach large number of people Low cost per contact Can be microtargeted Total cost is high National reach is expensive for small companies Notes: Advertising has the advantage of being able to reach larger numbers of people, but it can also be microtargeted to small groups. Although the cost per contact in advertising is low, the total cost to advertise is typically very high. Only financially able companies can afford to advertise on a national basis. LO2

Public Relations LO2 Public Relations
Chapter 14 Integrated Marketing Communications Public Relations Public Relations Helps an organization communicate with customers, suppliers, stockholders, government officials, employees, and the community. Notes: Many organizations spend large amounts of money to build a positive public image. Public relations help an organization communicate with stockholders, customers, suppliers, government, employees, and the community. LO2

The Function of Public Relations
Chapter 14 Integrated Marketing Communications The Function of Public Relations Maintain a positive image Educate the public about the company’s objectives Introduce new products Support the sales effort Generate favorable publicity Notes: Public relations is used to maintain a positive image, as well as the functions shown on this slide. Nothing sells a product better than free publicity, but publicity should not be viewed as free. Preparing news releases, staging events, persuading media personnel to print or broadcast them costs money. Discussion/Team Activity: Discuss current examples of publicity regarding organizations. LO2

Sales Promotion LO2 Sales Promotion
Chapter 14 Integrated Marketing Communications Sales Promotion Sales Promotion Marketing activities—other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness. Notes: Sales promotion is generally a short-run tool used to stimulate immediate increases in demand. Sales promotion is used to improve the effectiveness of other ingredients in the promotion mix, especially advertising and personal selling. Online Nabisco Nabisco lists its promotions on its Web site. What do you think the advantages and disadvantages of this technique are? What changes, if any, would you suggest? LO2

Sales Promotion LO2 End Consumers Company Employees Trade Customers
Chapter 14 Integrated Marketing Communications Sales Promotion Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons End Consumers Company Employees Notes: Sales promotion can be aimed at end consumers, trade customers, or a company’s employees. A major promotional campaign might use several of the tools shown on this slide, along with the other elements of the promotion mix. Discussion/Team Activity: Discuss a few recent product releases. What sales promotion techniques were used to complement the other components of the marketing mix? What techniques make sales promotion efforts effective on college campuses? Trade Customers LO2

Personal Selling LO2 Personal Selling
Chapter 14 Integrated Marketing Communications Personal Selling Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale. Notes: Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Both buyer and seller have specific objectives: the buyer may need to minimize cost or assure a quality product, while the salesperson may need to maximize revenue and profits. LO2

Personal Selling Traditional Selling Attempts to persuade the buyer into a specific point of view. Win-lose outcome. Relationship Selling Long-term relationships, create a win-win outcome Notes: Traditional methods of personal selling include a planned presentation to one or more prospective buyers. The seller tries to persuade the buyer to accept a point of view or take action. Frequently, the traditional view of personal selling creates a win-lose outcome at the expense of the buyer. Relationship selling emphasizes a win-win outcome and the accomplishment of mutual objectives that benefit both buyer and salesperson in the long-term. The goal is a long-term, committed relationship based on trust and customer loyalty. Personal selling is increasingly dependent on the Internet to attract potential buyers seeking information. LO2

Elements of the Promotional Mix
Chapter 14 Integrated Marketing Communications Elements of the Promotional Mix LO2

Marketing Communication
Chapter 14 Integrated Marketing Communications Marketing Communication Describe the communication process LO3

The process by which meanings are exchanged or shared through a common set of symbols. Online: McDonald’s How is McDonald's encoding messages at its Web site in order to communicate its marketing message? To whom is its message designed to appeal? Do you think the approach will be effective at improving sales of food products and/or increasing brand loyalty? Why or why not? Notes: Promotional strategy is closely related to the process of communications. As humans we assign meaning to feelings, ideas, facts, attitudes, and emotions. When a company develops a new product, changes an existing one, or tries to increase sales, it must communicate its selling message to potential customers. LO3

Chapter 14 Integrated Marketing Communications Marketing Communication Categories of Communication Interpersonal Mass Notes: Communication can be divided into two major categories: Interpersonal communication is direct, face-to-face communication between two or more people. Mass communication refers to communicating a concept or message to larger audiences, usually through a mass medium such as television or newspapers. When a company advertises, it does not know the consumers personally, nor is it able to respond immediately to reactions to the advertising message. Instead the marketing manager must wait and see how people are reacting to the mass-communicated promotion. Any clutter from competitors’ messages or other distractions can reduce the effectiveness of the mass communication effort. LO3

Chapter 14 Integrated Marketing Communications Marketing Communication As Senders As Receivers Develop messages Adapt messages Spot new communication opportunities Inform Persuade Remind Notes: Marketers are both senders and receivers of messages. As senders, marketers inform, persuade, and remind the target market to adopt courses of action. As receivers, marketers attune themselves to the target market in order to develop and adapt messages, and spot new communication opportunities. Marketing communication is a two-way process. LO3

The Communication Process
Chapter 14 Integrated Marketing Communications The Communication Process Noise Sender Encoding Message Feedback Channel Message Decoding Receiver Notes: Marketing communication is a two-way process, as shown in Exhibit 14.2. The sender originates the message. Encoding is the conversion of the sender’s ideas and thoughts into a message, usually words or signs. Transmission of a message requires a channel—some communication medium. Reception occurs when the message is detected by the receiver. Transmission may be hindered because of noise—anything that interferes with, distorts, or slows down the transmission of information. Decoding is the interpretation of the language and symbols sent. Proper match between the message to be conveyed and the target market’s attitude is the job of the marketing manager. Differences in culture, age, social class, education, and ethnicity can lead to miscommunication. Marketers targeting consumers in foreign countries must also worry about translation and miscommunication issues. The receiver’s response to a message is direct feedback to the source. Since mass communicators are cut off from direct feedback, they rely on market research or analysis of viewer perceptions for indirect feedback. LO3

Characteristics of the Elements in the Promotional Mix
Chapter 14 Integrated Marketing Communications Characteristics of the Elements in the Promotional Mix Notes: The four elements of the promotional mix differ in their ability to affect the target audience. Exhibit 14.3 summarizes these differences. A deeper treatment of each element appears over the next four slides. LO3

Indirect and impersonal Same message to all audiences
Chapter 14 Integrated Marketing Communications Characteristics of the Elements in the Promotional Mix Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Advertising Indirect and impersonal Low Little Delayed One-way Yes Fast Same message to all audiences LO3

Usually indirect, impersonal Usually no direct control
Chapter 14 Integrated Marketing Communications Characteristics of the Elements in the Promotional Mix Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, impersonal Moderate to low Little Delayed One-way No Usually fast Usually no direct control LO3

Usually indirect and impersonal Same message to varied target
Chapter 14 Integrated Marketing Communications Characteristics of the Elements in the Promotional Mix Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and impersonal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target LO3

Direct and face-to-face
Chapter 14 Integrated Marketing Communications Characteristics of the Elements in the Promotional Mix Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect LO3

Web 2.0 LO3 Blogs (online journals) Podcasting (online radio)
Vodcasts (online videos) Social Networks (Facebook, MySpace, Twitter) LO3

Blogging LO3 Corporate Blogs Noncorporate Blogs
Chapter 14 Integrated Marketing Communications Blogging Sponsored by a company or one of its brands and maintained by one or more of the company’s employees. Noncorporate Blogs Corporate Blogs Independent and not associated with the marketing efforts of any particular company or brand. Notes: The Internet and related technologies are having an impact on marketing communication including the promotion mix. The rise of blogging has created a new way for marketers to manage their image, connect with consumers, and generate product interest and desire. LO3

The Communication Process
Chapter 14 Integrated Marketing Communications The Communication Process Sender Feedback channel Receiver Message to be conveyed Message that was understood Encode message Decode message Transmit message Receive message LO3 Message channel

The Goals and Tasks of Promotion
Chapter 14 Integrated Marketing Communications The Goals and Tasks of Promotion Explain the goals and tasks of promotion LO4

Goals and Tasks of Promotion
Chapter 14 Integrated Marketing Communications Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Notes: Promotion seeks to modify behavior and thoughts in some way. It also strives to reinforce existing behavior. Promotion has three basic tasks: it can inform the target audience, persuade the target audience, or remind the target audience. Often a marketer will try to accomplish two or more of these tasks at the same time. LO4

Chapter 14 Integrated Marketing Communications Goals and Tasks of Promotion Informing Reminding Persuading Target Audience PLC Stages: Introduction Early Growth Growth Maturity Notes: The informing phase of promotion seeks to convert an existing need into a want or to stimulate interest in a new product. It is more prevalent during the early stages of the product life cycle. Persuasive promotion is designed to stimulate a purchase or an action. It becomes the main promotion goal when the product enters the growth stage of its life cycle. Reminder promotion is used to keep the product/brand name in the public’s mind. It is effective during the maturity cycle. A discussion of each category follows. Discussion/Team Activity: Name products/brands and discuss the stage of their product life cycle. Categorize the type of promotion—informative, reminder, or persuasive-- that is used in the product/brand promotional mix. LO4

Chapter 14 Integrated Marketing Communications Goals and Tasks of Promotion Increase awareness Explain how product works Suggest new uses Build company image Informative Promotion LO4

Chapter 14 Integrated Marketing Communications Goals and Tasks of Promotion Encourage brand switching Change customers’ perceptions of product attributes Influence immediate buying decision Persuade customers to call Persuasive Promotion LO4

Chapter 14 Integrated Marketing Communications Goals and Tasks of Promotion Remind customers that product may be needed Remind customers where to buy product Maintain customer awareness Reminder Promotion LO4

Barbie in China With Barbie’s U.S. sales diminishing, Mattel moved into China in a grand way. They opened a six-story Barbie life-style store in Shanghai, which includes a spa, café, bar, and racks of Barbie Clothing. Mattel is aiming Barbie toward a new audience: club-age young women. By introducing Barbie into a culture unfamiliar with her, Mattel has the opportunity to expand Barbie’s appeal. LO4 Source: Rein, Shaun. “Barbie Goes to China,” Forbes.com, March 9, 2009.

Promotional Goals and the AIDA Concept
Chapter 14 Integrated Marketing Communications Promotional Goals and the AIDA Concept Discuss the AIDA concept and its relationship to the promotional mix LO5

The AIDA Concept LO5 AIDA Concept Attention Interest Desire Action
Chapter 14 Integrated Marketing Communications The AIDA Concept AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Attention Interest Desire Action Notes: The goal of any promotion is to get someone to buy a good or service, or take some action. A classic model for reaching promotional goals is called the AIDA concept—attention, interest, desire, and action—the stages of consumer involvement. This model proposes that consumers respond to marketing messages in a cognitive--thinking, affective--feeling, and conative--doing sequence. LO5

The AIDA Concept LO5 Action Desire Interest Attention Conative (doing)
Chapter 14 Integrated Marketing Communications The AIDA Concept Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing) Online: NASCAR Sear’s Craftsman products What kind of promotions are coming out of the relationship between Sear’s Craftsman products and NASCAR racing? How successful do you think NASCAR promotions will be in selling tools? How effective do you think Sear’s promotions will be in increasing the number of NASCAR fans? LO5

The AIDA Concept LO5 Chapter 14 Integrated Marketing Communications
Notes: Exhibit 14.4 shows the relationship between the AIDA model and the promotional mix. Above is a variation on that exhibit. For example, advertising is most useful in gaining attention for goods. In contrast, personal selling reaches fewer people at first. Salespeople are more effective at creating customer interest, in creating desire, and taking action. Public relations is best at gaining attention for a company, a good or service. Sales promotion’s greatest strength is in creating strong desire and purchase intent (action). LO5

Factors Affecting the Promotional Mix
Chapter 14 Integrated Marketing Communications Factors Affecting the Promotional Mix Describe the factors that affect the promotional mix LO6

Type of buying decision
Chapter 14 Integrated Marketing Communications Factors Affecting the Choice of Promotional Mix Nature of the product Stage in PLC Target market factors Type of buying decision Promotion funds Push or pull strategy Notes: Promotional mixes vary a great deal from one product and one industry to the next. Advertising and personal selling are used to promote goods and services, supplemented by sales promotion. Public relations helps develop a positive image for the product and the organization. A firm may choose not to use all four promotional elements, or it may choose to use them in varying degrees. This slide shows the factors affecting the promotion mix chosen by a firm. Subsequent slides describe the key points of each factor. LO6

Stage in the Product Life Cycle
Chapter 14 Integrated Marketing Communications Stage in the Product Life Cycle Light Advertising; pre- introduction publicity Heavy use of PR for awareness; sales promotion for trial AD/PR decrease; limited promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; Introduction Growth Maturity Decline Sales ($) Time Notes: The Product Life Cycle is a factor in designing a promotion mix, as shown in Exhibit 14.5. In the introduction stage, the basic goal of promotion is to inform the target audience of product availability. Advertising and public relations inform the target audience, while sales promotion encourages early trial. Personal selling gets retailers to carry the product. During the growth stage, advertising and public relations continue to be important, although sales promotion can be reduced because customers need fewer incentives to purchase. The promotional strategy is to emphasize the product’s differential competitive advantage. Persuasive promotion is used to build and maintain brand loyalty. Personal selling has succeeded in obtaining adequate distribution for the product. In the maturity stage, competition becomes fiercer, and persuasive and reminder advertising are more strongly emphasized. Sales promotion comes back into focus to try to increase market share. As the product enters the decline stage, all promotion, especially advertising, is reduced. Nevertheless, personal selling and sales promotion efforts may be maintained, particularly at the retail level. LO6

Target Market Characteristics
Chapter 14 Integrated Marketing Communications Target Market Characteristics For… Widely scattered market Informed buyers Brand-loyal repeat purchasers Advertising Sales Promotion Less Personal Selling LO6

Type of Buying Decision
Chapter 14 Integrated Marketing Communications Type of Buying Decision Advertising Sales Promotion Routine Personal Selling Neither Routine nor Complex Public Relations Print Advertising Complex Notes: For a routine buying decision such as the purchase of toothpaste, the most effective promotional tools are advertising and especially sales promotion. For buying decisions that are not routine or complex, advertising and public relationships help establish awareness. In contrast, consumers making complex decisions need large amounts of information, and personal selling is the most effective tool. Print ads are also effective for conveying large amounts of information. Discussion/Team Activity: Consider recent purchases of routine and complex products. What promotion tool(s) were effective to reach the buyer and influence the purchase decision? LO6

Available Funds LO6 Trade-offs with funds available
Chapter 14 Integrated Marketing Communications Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements Notes: When funds are available to permit a mix of promotional elements, a firm will try to optimize its return on promotion dollars while minimizing the cost per contact. The cost per contact is high for personal selling, public relations, and sales promotions. On the other hand, the cost per contact is low for national advertising since it reaches a large number of people. There is a trade-off among the funds available, the number of people in the target market, the quality of communication needed, and the relative costs of the promotional elements. LO6

Orders to manufacturer
Chapter 14 Integrated Marketing Communications Push and Pull Strategies Manufacturer promotes to wholesaler Wholesaler retailer Retailer consumer Consumer buys from PUSH STRATEGY Orders to manufacturer demands product from retailer from wholesaler product from manufacturer PULL STRATEGY Notes: Manufacturers may use aggressive personal selling and trade advertising to convince a wholesaler/retailer to carry and sell their merchandise. This is known as a push strategy. The wholesaler, in turn, pushes the merchandise forward by persuading the retailer to handle the goods. The retailer uses advertising and other forms of promotion to convince customers to buy the “pushed” products. At the other end is a pull strategy, which stimulates consumer demand to obtain product distribution. The manufacturer uses a pull strategy by focusing promotional efforts on end consumers and opinion leaders. The wholesaler then places an order for the “pulled” merchandise from the manufacturer. Consumer demand pulls the product through the channel of distribution. A company typically uses a mix of push and pull strategies. The Push and Pull strategies are diagrammed in Exhibit 14.6. Discussion/Team Activity: Discuss products and/or industries that utilize push and/or pull strategies in their promotion mix. LO6

Factors Affecting Promotional Mix
Chapter 14 Integrated Marketing Communications Factors Affecting Promotional Mix Nature of the product Push or pull strategy Product life cycle Promotional Mix % Advertising % Public Relations % Sales Promotion Target market characteristics Funds available % Personal Selling Type of buying decision LO6

Chapter 14 Integrated Marketing Communications Integrated Marketing Communications Discuss the concept of integrated marketing communications LO7

Chapter 14 Integrated Marketing Communications Integrated Marketing Communications Integrated Marketing Communications The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. LO7

IMC Popularity Growth LO7 Proliferation of thousands of media choices
Chapter 14 Integrated Marketing Communications IMC Popularity Growth Proliferation of thousands of media choices Fragmentation of the mass market Slash of advertising spending in favor of promotional techniques that generate immediate response An integrated marketing campaign for HBO's new series about vampires in the Deep South, True Blood, we designed to go viral. First, to create buzz in the blog-o-sphere, HBO sent bloggers a letter and a sample of TruBlood—the synthetic blood beverage featured in the show (the beverage even has its own Web site—a kind of parody of an alcoholic promo site: trubeverage.com.) HBO’s PR firm set up microsites, blogs, youtube videos, forums, and even ads designed to get consumers checking out the buzz (e.g. asking for help translating the dead language of vampires). They even launched “faux” print and outdoor ad campaigns with messages such as, "Friends don't let friends drink friends." Other gimmicks included ARGs (alternate reality games), comic book from Spacedog/Top Cow, a mockumentary, a fan wiki, and even a human-vampire dating service. (The innovative marketing campaign is by Campfire while the media campaign is by Deep Focus, which some consider the best agency around for social marketing). LO7

Chapter 14 Integrated Marketing Communications Integrated Marketing Communications LO7

Integrated Marketing Communications

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