2. © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Marketing Management, 8e Chapter Eight Integrated Marketing Communications: Advertising, Sales Promotion, Public Relations, and Direct Marketing Key Words / Outline Advertising, Sales promotion, Public relations, Direct marketing, Personal selling, Marketing communications, Creating awareness Aiding comprehension, Developing conviction, Percent of sale, Over unit expenditure, Competitive parity, The task approach, Pull strategy, Push strategy, Trade promotion, Frequency marketing program

3. 8 - 3 Strategic Goals Of Marketing Communication Create awareness Build positive images Identify prospects Build channel relationships Retain customers

4. 8 - 4 Promotional Mix Promotional mix incorporates the combination and types of non-personal and personal communication the organization employs during a specified period Non-personal communication Advertising Sales promotion Public relations Direct marketing Personal communication Personal selling

5. 8 - 5 Promotional Mix Advertising -Strengths Efficient for reaching many buyers simultaneously Effective way to create image of the brand Flexible Variety of media to choose from -Weaknesses Reaches many people who are not potential buyers Ads are subject to criticism Exposure time is short People tend to screen out advertisements Total cost is high

6. 8 - 6 Promotional Mix Personal selling -Strengths Salespeople can be persuasive and influential Two-way communication allows for questions and other feedback Message can be targeted to specific individuals weaknesses -Weaknesses Cost per contact is high Salespeople may be hard to recruit and motivate Presentation skills may vary between salespeople

7. 8 - 7 Promotional Mix Sales promotion -Strengths Supports short-term price reductions designed to stimulate debate Variety of sales promotion tools available Effective in changing short-term behavior Easy link to other communications -Weaknesses Risk inducing brand-loyal customers to stock up while not inducing others Impact may be limited to short-term Price-related sales promotion may hurt brand image Easy for competitors to copy

8. 8 - 8 Promotional Mix Public relations -Strengths Total cost may be low Media-generated stories seen as more credible than marketer- sponsored messages -Weaknesses Media may not cooperate Heavy competition for media attention Marketer has little control over the message

9. 8 - 9 Promotional Mix Direct marketing -Strengths Message can be customized and prepared quickly Can facilitate a relationship with customer -Weaknesses Managing and maintaining accurate database can be costly Often low customer response

10. 8 - 10 Buyer Impact Potential buyers go through a process -Awareness of the product -Comprehension of what it can do and important features -Conviction that it has value for them -Ordering on the part of a sufficient number of potential buyers

11. 8 - 11 Using Integrated Marketing Communication Traditional approach – Focus on -Making Transactions -Customers -Independent brand messages -Mass media – monologue with customers -Product claims -Adjusting prior year’s plan -Functional department planning and monitoring -Communication specialists -Mass marketing and customer acquisition -Stable of agencies

12. 8 - 12 Using Integrated Marketing Communication Integrated approach – Focus on -Building/nourishing relationships -All stakeholders in the organizations -Strategic consistency on brand messages -Interactivity – dialogue with customers -Corporate mission marketing -Zero-based campaign planning -Cross-functional planning and monitoring -Creating core competencies -Building and managing databases to retain customers -One communication management agency

13. 8 - 13 Buyer Impact

14. 8 - 14 Advertising Approaches The generalist viewpoint is primarily concerned with sales, profits, and return on investment The middle viewpoint sees advertising as a competitive weapon The specialist viewpoint is concerned with the effects of specific ads or campaigns

15. 8 - 15 Developing Advertising Objectives Does advertising aim at immediate sales? Does advertising aim at near-term sales? Does advertising aim at building long-range customer franchise? Does advertising aim at helping increase sales? Does advertising aim at some specific step that leads to sale?

16. 8 - 16 Developing Advertising Objectives How important are supplementary benefits of advertising? Should advertising impart information needed to consummate sales and build customer satisfaction? Should advertising build confidence and goodwill for the corporation? What kind of images does the company wish to build?

17. 8 - 17 Budgeting Approach Percent of sales Per-unit expenditure All you can afford Competitive parity The research approach The task approach

18. 8 - 18 The Eight-M Formula Who will manage the advertising program? Budget on advertising as opposed to other forms of communication To whom should the advertising be directed? What should the ads says about the product? Types of combination of media to be used Longevity of the ads before changing ads or themes Timing factor for the ad to appear during the course of campaign Measuring the effectiveness of the campaign and how the campaign be evaluated and controlled

19. 8 - 19 Budget Allocation A successful campaign has two related tasks -Message strategy: Say the right things in ads itself -Media mix: Use the appropriate media in right amounts at the right time to reach the target market

20. 8 - 20 Budget Allocation: Message Strategy Who the firm’s customers and potential customers are; their demographic and psychological characteristics? How many such customers there are? How much of the firm’s type and brand of the product are they currently buying and can reasonably be expected in the future? Which individuals, other than customers and potential customers, influence purchasing decisions?

21. 8 - 21 Budget Allocation: Message Strategy Where customers buy the firm’s brand product? When customers buy and frequency of purchase? Which competitive brands they buy and frequency of purchase? How do they use the product? Why they buy particular types and brands of products?

22. 8 - 22 Budget Allocation: Media Mix Measures of media effectiveness include -Reach – number of targeted audience members exposed at least once to the advertiser’s message -Frequency – number of times they are exposed -Cost per thousand – based on a number of visits (to a website, for example)

23. 8 - 23 Media Review Newspapers -Advantages Flexible and timely Intense coverage of local markets Broad acceptance and use High believability of printed word -Disadvantages Short life Read hastily Small “pass-along” audience

24. 8 - 24 Media Review Radio -Advantages Mass use Audience selectivity via station format Low cost Geographic flexibility -Disadvantages Audio presentation only Less attention than TV Chaotic buying Short life

25. 8 - 25 Media Review Outdoor -Advantages Flexible Relative absence of competing advertisements Repeat exposure Relatively inexpensive -Disadvantages Creative limitations Many distractions for viewer Public attack (ecological) No selectivity of audience

26. 8 - 26 Media Review Television -Advantages Combination of sight, sound and motion Appeals to senses Mass audience coverage Psychology of attention -Disadvantages Insecurity of audience retention Fleeting impressions Short life Expensive

27. 8 - 27 Media Review Magazines -Advantages High geographic and demographic selectivity Psychology of attention Quality of reproduction Pass-along readership -Disadvantages Long closing periods Some waste circulation No guarantee of position

28. 8 - 28 Media Review Direct mail -Advantages Audience selectivity Flexible No competition from competing advertisements Personalized -Disadvantages Relatively high cost Consumers often pay little or no attention to direct mail

29. 8 - 29 Media Review Internet -Advantages Interactive Low cost per exposure Ads can be placed in interest sections Timely High information content possible New favorable medium -Disadvantages Low attention getting Short message life Readers selects exposure May be perceived as intruding Subject to download speeds

30. 8 - 30 Evaluation Procedures Specific advertisements -Recognition tests -Recall tests -Opinion tests -Theatre tests Specific advertising objectives -Awareness -Attitude -Motivational impact -Intention to buy -Market test

31. 8 - 31 Sales Promotion Effective sales promotion moves consumers to -Obtain a trial product -Consider new or improved product -Repeat or increase current usage -Come into a retail stores -Expand the total number of users of an established product lines

32. 8 - 32 Sales Promotion An effective sales promotion motivates salespeople by -Motivating sales force -Educating the sales force about product improvements -Stabilizing a fluctuating sales pattern An effective sales promotion motivates resellers to -Increase inventories -Obtain displays and other support products -Improve product distribution -Obtain more and better shelf life

33. 8 - 33 Push Versus Pull Marketing

34. 8 - 34 Push Versus Pull Marketing

35. 8 - 35 Trade Promotion Rationale To convince retailer’s to carry the manufacturer’s products To reduce the manufacturer’s and increase the distributors or retailer’s inventories To support advertising and consumer sales promotion To encourage retailers to give the product more favorable shelf space To serve as a reward for past sales efforts

36. 8 - 36 Consumer Promotion Rationale To induce the customer to try the product To reward customers for brand loyalty To encourage the customer to trade up or try larger sizes of the product To stimulate repeat purchases To react to competitor efforts To reinforce other selling efforts

37. 8 - 37 Consumer Promotion Rationale

38. 8 - 38 PR/Publicity News release or press release News conference Sponsorship Public service announcements (PSA)

39. 8 - 39 Direct Marketing Online Direct Mail Catalogs Direct Response Personal Selling