1. 6
CHAPTER
Integrated Marketing Communication Strategy and Management

2. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
Describe the practice and framework of integrated marketing communications.
Explain the process of how buyers purchase an offering.
Select the appropriate communication approach based on an offering’s marketing strategy and life cycle.

3. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
Describe the factors that influence the development of the integrated marketing communication mix.
Compare a push versus a pull communication strategy.
Describe the types of marketing websites.

4. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
Identify the different approaches used to formulate a communications budget.
Discuss the mechanisms for evaluating and controlling the marketing communication process.

5. Achieve Postpurchase Satisfaction
MARKETING COMMUNICATION
Marketing communication is the process by which information about a firm and its offerings is disseminated to selected markets.
Its goals are to:
Induce Initial Trial
Achieve Postpurchase Satisfaction
Generate Repeat Sales

6. MARKETING COMMUNICATION
Communication informs buyers of the:
Availability of an offering
Unique benefits of the offering
Where and how to obtain and use the offering
The message should be:
Desirable to the Target Market
Exclusive to the Offering
Believable as to the Offering’s Benefits

7. Marketing Communication Mix
Personal Selling
Advertising
Sales Promotion
Direct Marketing
Public Relations

8. MARKETING COMMUNICATION
Integrated marketing communication is the practice of blending different elements of the communication mix in mutually reinforcing ways to inform, persuade, and induce consumer action.
Examples:
Advertising
Develop offering awareness and comprehension
Personal Selling
Obtain final conviction and purchase
Sales Promotion
Increase purchase intention and induce actual purchase

9. INTEGRATED MARKETING COMMUNICATION STRATEGY FRAMEWORK
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
INTEGRATED MARKETING COMMUNICATION STRATEGY FRAMEWORK

10. INTEGRATED MARKETING COMMUNICATION STRATEGY DECISIONS
What are the info requirements of target markets?
What objectives must the communication strategy achieve?
How might the mix of communication activities be combined to convey information to target markets?
How much should be budgeted for communicating with target markets and how should resources be allocated among various communication activities?
How should the communication be timed and scheduled?
How should the communication process be evaluated?

11. INFORMATION REQUIREMENTS IN PURCHASE DECISIONS
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
INFORMATION REQUIREMENTS IN PURCHASE DECISIONS

12. INFORMATION REQUIREMENTS IN PURCHASE DECISIONS
The purchase (or adoption) process model describes how buyers purchase a particular offering and defines the role of information
Awareness
Consideration
Preference
Purchase
At any point in time:
Different buyers are in different stages of the model
Each stage requires a different communication strategy

13. Purchase Decision Roles
INFORMATION REQUIREMENTS IN PURCHASE DECISIONS
Purchase Decision Roles
Purchaser
Influencer
Decision Maker
Consumer
A person may play more than one role
In a joint purchase decision, the roles may be played by different individuals

14. Purchase Decision Roles
INFORMATION REQUIREMENTS IN PURCHASE DECISIONS
Purchase Decision Roles
The role consumers play is a prerequisite for successfully determining:
The communication message itself
To whom the message should be directed
How the message should be communicated

15. INFORMATION REQUIREMENTS IN PURCHASE DECISIONS
To communicate effectively, a marketer must know:
What
Information consumers think is necessary (price, location, size, etc.).
Consumers will seek it (newspapers, the Internet, friends, etc.).
Where
Consumers will seek it (how far in advance, on what days, etc.).
When
Consumers will apply the information obtained.
How

16. SETTING REASONABLE COMMUNICATION OBJECTIVES
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
SETTING REASONABLE COMMUNICATION OBJECTIVES

17. SETTING REASONABLE COMMUNICATION OJBECTIVES
Communication objectives depend on:
The offering-market strategies of the firm
The stage of the offering life cycle

18. SETTING REASONABLE COMMUNICATION OJBECTIVES
Communication objectives for offering-market strategies:
Market Penetration
Market Development
Emphasize more frequent offering usage
Stimulate awareness and trial of the offering
Build preference for or loyalty to the offering

19. SETTING REASONABLE COMMUNICATION OJBECTIVES
Communication goals for the offering life cycle:
Primary Demand
Selective Demand
Demand for the offering class
Demand for a brand or offering
Occurs early in the life cycle
Occurs later in the life cycle
The message focuses on:
Substitute offerings exist
Introducing the benefits of an offering
The message:
Focuses on the benefits of a specific brand or offering
Overcoming the objections to the offering
Differentiates the offering from competitive ones

20. SETTING REASONABLE COMMUNICATION OJBECTIVES
Communication objectives must be:
Articulated
For both the IMC program and the marketing communication tools
Among themselves and with other marketing elements
Consistent
For measurement and evaluation purposes
Quantifiable
With an appropriate amount of effort and expenditure
Within a specific time frame
Attainable

21. DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX

22. DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Factors to consider when designing the communication mix are:
Information Requirements of Buyers
Nature of the Target Markets
Nature of the Offering
Capacity of the Organization

23. Information Requirements of Buyers
DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Information Requirements of Buyers
Analyze the value of the communication tools used at various stages in the purchase-decision process
Identify consumer touch points to designate where, when, and how a customer or prospective buyer comes in contact with an offering, a firm, or a brand message

24. DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Nature of the Offering
Personal selling is used for a highly technical offering, one whose benefits are not readily apparent or is relatively expensive
Advertising is appropriate when the offering:
Is not complex
Has benefits that differentiates it from competing offerings
Is frequently purchased
Is relatively inexpensive
Sales promotion is used to induce consumer action

25. Target Market Characteristics
DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Target Market Characteristics
Use personal selling when target consumers:
Consist of a small number of potential buyers
Exist in close proximity to one another
Purchase in large quantities
Use advertising and direct marketing when a mass market is geographically scattered

26. Target Market Characteristics
DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Target Market Characteristics
Many consumer-oriented firms:
Substitute mail and telephone solicitations for mass media advertising
Use the Internet to complement advertising
Many industrial-oriented firms use Internet advertising to supplement personal selling

27. Organizational Capacity
DEVELOPING AN INTEGRATED MARKETING COMMUNICATION MIX
Organizational Capacity
Make Decision
Buy Decision
Perform the communication mix activity internally with own human resources
Buy, contract, or outsource the communication mix activity externally with outside experts

28. MAKE-OR-BUY DECISION FACTORS
“Buy” Independent Sales Reps
Variable Cost
Selects, trains, and supervises personnel
Fixed Cost
Economic Dimension
Behavioral Dimensions
Control
Costs
Flexibility
Effort
Avail-ability
Selection, training and supervision done as well by agencies at no cost to firm
Represent only firm’s product line
Change sales-call patterns and customers; transfer personnel
Sales rep may not exist in geographic area; can relocate
Fixed investment in sales force is minimal
Increased since sales reps must live on commissions
Venturesome spirit motivates sales reps to go wherever effective demand exists
“Make” Company Sales Force

29. Independent Sales Reps Salary and Administration
MAKE-OR-BUY DECISION EXAMPLE
Company Sales Force
Independent Sales Reps
Commission
Commission = 3% = 5%
Salary and Administration X =
$500,000 =
Break-even sales level
At what sales level (X) would a company sales force cost more or less than independent sales reps? [Hint: This is a form of break-even analysis.]
Set the cost equations for both types of sales reps equal to each other to solve for the sales level (X)

30. MAKE-OR-BUY DECISION EXAMPLE
Commission X × +
Salary and Administration ( ) =
Cost of Company Sales Force =
Cost of Independent Sales Reps
Commission X × ( )
Setting the cost equations equal to each other solves for the break-even sales level: ( =
Commission X × +
Salary and Administration )
$500,000 + ×
0.03 ( ) X =
0.05 =
0.02 X
$500,000 = X
$25,000,000

31. MAKE-OR-BUY DECISION EXAMPLE
The break-even sales volume (X) at which the costs of a company sales force and independent sales representatives are equal is $25 million.
Cost of Independent Sales Reps =
Cost of Company Sales Force =
Break-even Sales Level (X)
$25,000,000
Company Sales Force
Use if expected sales volume is > $25 million
Independent Sales Reps
Use if expected sales volume is < $25 million

32. EXHIBIT 6.1: BREAK-EVEN CHART FOR COMPARING INDEPENDENT SALES REPRESENTATIVES AND A COMPANY SALES FORCE

33. MAKE-OR-BUY DECISION Advertising make-or-buy decisions:
Intermediaries (wholesalers, retailers, and dealers) may assume advertising costs and placement responsibilities
Example: In cooperative advertising, a manufacturer and intermediaries share the costs of advertising or sales promotion

34. PUSH VERSUS PULL COMMUNICATION STRATEGIES
Push Strategy
Pull Strategy
Wholesalers
Retailers
Producer
Consumers
Wholesalers
Producer
Consumers
Retailers
The offering is pushed through a marketing channel to buyers in a sequential fashion
Buyers demand the product from intermediaries, pulling the offering through a marketing channel

35. PUSH VERSUS PULL COMMUNICATION STRATEGIES
Push Strategy
Concentrates on building relationships with channel intermediaries
Advertisements are likely to appear in trade journals and magazines
Sales aids and contests used as incentives to gain shelf space and distribution
Personal selling emphasized with wholesalers and retailers

36. PUSH VERSUS PULL COMMUNICATION STRATEGIES
Push Strategy
Personal selling is used with resellers when:
An organization has easily identifiable buyers
The offering is complex
Buyers view the purchase as being risky
An offering is early in its life cycle
The firm has limited funds for direct-to-consumer advertising

37. PUSH VERSUS PULL COMMUNICATION STRATEGIES
Pull Strategy
Seeks to create initial interest for an offering among potential buyers who in turn demand it from intermediaries through the channel
Employs heavy consumer advertising, free samples, and coupons to stimulate consumer awareness and interest
Wholesalers and retailers must be willing and able to implement selling and sales promotion programs from manufacturers

38. PUSH VERSUS PULL COMMUNICATION STRATEGIES
Pull Strategy
An advertising opportunity exists for an offering when:
Favorable primary demand exists for an offering category
It can be significantly differentiated from its competitors
It has hidden qualities or benefits that can be portrayed effectively through advertising
There are strong emotional buying motives involved

39. MARKETING WEBSITES AND INTEGRATED MARKETING COMMUNICATIONS
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
MARKETING WEBSITES AND INTEGRATED MARKETING COMMUNICATIONS

40. Transactional Website
MARKETING WEBSITES AND IMC
Website
Is a place where a provider makes available information to Internet users
Marketing Website
Engages buyers/potential buyers in interactive communication to sell a firm’s offerings or move them closer to a purchase
Transactional Website
Is an electronic storefront that tries to convert online browsers into online buyers
Promotional Website
Promotes a firm’s offerings and provides information on how they are used and where they are purchased

41. Transactional Websites
MARKETING WEBSITES AND IMC
Transactional Websites
Feature well-known, branded offerings
Have a technological infrastructure designed to create a favorable shopping and buying experience
Are a form of direct distribution

42. MARKETING WEBSITES AND IMC
Promotional Websites
Engage visitors with an interactive experience involving games and contests
Provide prizes, such as electronic coupons
Generate awareness of, interest in, and trial of a firm’s offerings
Support a firm’s advertising program and traditional marketing channels
Are used for customer research and feedback

43. MARKETING WEBSITES AND IMC
Promotional Websites
Word of Mouth
Is a powerful information sources that involves brand and offering recommendations from friends
Buzz
Consists of word-of-mouth behavior
Is an Internet-enabled strategy to:
Encourage individuals to forward marketer-initiated messages to others via
Offer consumers incentives for referrals
Viral Marketing

44. MARKETING WEBSITES AND IMC
Promotional Websites
Are cost effective in the:
Early stages of the process-need recognition
Development of product specifications
Supplier search
Evaluation and selection of the buying process
Providing feedback on offering performance

45. COMMUNICATION MIX BUDGETING
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
COMMUNICATION MIX BUDGETING

46. COMMUNICATION MIX BUDGETING
Make the communication budget commensurate with the tasks required of the communication activities
The more important communication is in a marketing strategy, the larger the amount of funds that should be allocated to it
Set the budget so that the marginal costs of communication equals the marginal revenues resulting from it

47. Fixed Dollar Amount per Offering Unit
COMMUNICATION MIX BUDGETING
Budgeting Approaches
Percentage of Sales
Most widely used approach
Past or anticipated sales are used as the basis
When sales rise, communication expenses rise
Simple to calculate
Which comes first—sales or communication?
Is not flexible or market-oriented
Fixed Dollar Amount per Offering Unit
Budget equals the per-unit allocation multiplied by the number of units expected to be sold
Used by durable-goods manufacturers

48. COMMUNICATION MIX BUDGETING
Budgeting Approaches
Competitive Parity
Uses advertising share of voice
Expressed as a percentage of total advertising by all competitors in a market at a point in time
Balances the firm’s and competitors’ communication expenses
Employed in introducing a new offering for which maximum exposure is desired
Used by nonprofit organizations
All Available Funds
Objective- Task
Objectives are set for a communication program
Costs are based on the tasks to achieve the goals

49. COMMUNICATION MIX BUDGETING
Objective-Task
Involves three steps:
Define the communication objectives
Identify the tasks needed to attain the objectives
Estimate the costs associated with the performance of these tasks
Is the best but most difficult method to apply

50. COMMUNICATION BUDGET ALLOCATION
A communication budget must be allocated across a firms’ communication tools
As a percentage of their communication budget:
Marketers of consumer products and services spend more for advertising
Marketers of industrial products and services spend more for personal selling

51. COMMUNICATION BUDGET ALLOCATION
Six types of mass media to be selected:
Television
Radio
Newspapers
Outdoor
Magazines
Internet

52. COMMUNICATION BUDGET ALLOCATION
These media or channels, consists of:
Vehicles
Specific entities in which ads can appear
Mass-Appeal
Vehicles that appeal to a broad audience
Selective- Appeal
Vehicles that appeal to a narrow audience

53. COMMUNICATION BUDGET ALLOCATION
Media can also be:
Wholesaler
Reaching only one level of a marketing channel
Horizontal
Producer
-or-
Retailer
-or-
Ver t ical
Producer
Reaching more than one level of a marketing channel
Wholesaler
Retailer

54. COMMUNICATION BUDGET ALLOCATION
Media selection is based on these factors:
Cost
Expressed as cost per thousand (CPM) readers or viewers to facilitate cross-vehicle comparisons
Reach
The number of buyers potentially exposed to an advertisement in a particular vehicle
The number of times buyers are actually exposed to an ad in a given time period
Total exposure
Reach
Frequency = ×
Frequency
Audience
The more closely target market’s characteristics match those of a vehicle’s audience, the more appropriate it is

55. COMMUNICATION BUDGET ALLOCATION
Other media selection considerations:
The purpose of the ad (image building, etc.)
Ads emphasizing product needs:
Price and immediate purchase—place in newspapers
Products requiring color illustration and detailed explanation—place in magazines
The editorial climate of the vehicle
Offerings whose purchase is seasonal or geographical

56. COMMUNICATION BUDGET ALLOCATION
Media timing strategies include:
Blitz Strategy
Concentrating advertising dollars in a relatively short time period when new products or services are introduced
Continuity Strategy
Spending advertising dollars over the long term to maintain continuity
Pulse Strategy
Concentrating its advertising but also attempts to maintain some semblance of continuity

57. SALES FORCE BUDGET ALLOCATION: HOW MANY SALES REPS?= NS
Number of sales reps
Number of customers (actual or potential) LC NC FC TA
Necessary frequency of customer calls
Length of average customer call; includes travel time
Average available selling time per sales rep × = NS TA LC NC FC
Note: The time period is normally one business year.

58. SALES FORCE BUDGET ALLOCATION: HOW MANY SALES REPS?
Example: = NS
Number of sales reps
2,500 potential customers LC NC FC TA
4 customer calls per year
2 hours average customer call; includes travel time
1,340 average available selling time per sales rep = NS TA LC NC FC × = NS ×
2,500 4 2
1,340 =
15 sales reps needed NS

59. SALES FORCE BUDGET ALLOCATION
A sales force should be allocated based on:
Organization and marketing objectives
Offering characteristics
Competitor and industry practices
Have sales representatives specialize in:
Certain offerings
Customer types
Combination of these

60. EVALUATION AND CONTROL OF THE COMMUNICATION PROCESS
CHAPTER 6: INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
EVALUATION AND CONTROL OF THE COMMUNICATION PROCESS

61. EVALUATION AND CONTROL OF THE COMMUNICATION PROCESS
Continuously monitor the execution of any communication plan or strategy to ensure that the communication objectives (sales, profits, etc.) are being met
Use budgeting to add/delete funds for specific communication activities as a form of control
Use incremental analysis to evaluate and control advertising, personal selling, and expenditures

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