Principles of Marketing - UNBSJ BA 2303 Principles of Marketing - UNBSJ Integrated Marketing Communications and Direct Marketing Instructor – Terry Conrod

Learning Objectives BA 2303 Discuss integrated marketing communications and the communication process. Describe the promotional mix and the uniqueness of each component. Select the promotional approach appropriate to a product’s lifecycle and characteristics. Discuss the characteristics of push and pull strategies. Describe the elements of the promotion decision process. Explain the value of direct marketing for consumers and sellers.

The communication process BA 2303 The six elements required for communication to occur are: (1) source, (2) message, (3) channel of communication, (4) receiver, and (5/6) processes of encoding and decoding A difficulty for Canadian companies advertising in foreign markets is that the audience does not share the same Field of Experience

BA 2303 Promotional mix

THE PROMOTIONAL ELEMENTS BA 2303 THE PROMOTIONAL ELEMENTS Advertising Personal Selling Public Relations Publicity Sales Promotion Direct Marketing

BA 2303 Concept Check Explain the difference between advertising and publicity when both appear on television. Answer: Advertising on television is any paid form of non- personal communication about an organization, good, service, or idea by an identified sponsor. The space for the advertising message normally must be bought. Publicity on the other hand, is a non-personal, indirectly paid presentation of an organization, good, or service. A company does not pay for space in a mass medium but attempts to get the medium to run a favourable story on the company.

Sales promotions should be offered only on a short- term basis. Concept Check Which promotional element should be offered only on a short-term basis? Answer: Sales promotions should be offered only on a short- term basis.

Concept Check personal selling BA 2303 Concept Check Cost per contact is high with the ______________ element of the promotional mix. personal selling

INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX BA 2303 INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX The Target Audience The Product Life Cycle Introduction Stage Growth Stage Maturity Stage Decline Stage

Promotional tools used over the product life cycle of Purina Dog Chow BA 2303 Promotional tools used over the product life cycle of Purina Dog Chow During the introduction stage, the main goal is to inform. During the growth stage, the main goal is to persuade. During the maturity phase, the main goal is to remind. During the decline stage, little money is normally spent on promotion.

INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX BA 2303 INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX Product Characteristics Stages of the Buying Decision Prepurchase Stage Purchase Stage Postpurchase Stage

BA 2303 How the importance of promotional elements varies during the consumer’s purchase decision

INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX BA 2303 INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX Channel Strategies Push Strategy Pull Strategy Push strategy is directing the promotional mix to channel members or intermediaries to gain their co-operation in ordering and stocking a product. Pull strategy is directing the promotional mix at ultimate consumers to encourage them to ask the retailer for the product.

A comparison of push and pull promotional strategies BA 2303

DEVELOPING THE PROMOTION PROGRAM BA 2303 DEVELOPING THE PROMOTION PROGRAM Who is the target audience? What are: (1) the promotion objectives, (2) the amounts of money that can be budgeted for the promotion program, and (3) the kinds of promotion to use? Where should the promotion be run? When should the promotion be run?

The promotion decision process BA 2303 The promotion decision process

DEVELOPING THE PROMOTION PROGRAM BA 2303 DEVELOPING THE PROMOTION PROGRAM Identifying the Target Audience Specifying Promotion Objectives Hierarchy of effects (promotion elevates customer readiness to purchase) Setting the Promotion Budget Percentage of Sales Competitive Parity All-You-Can-Afford Objective and Task

The objective and task approach BA 2303

DEVELOPING THE PROMOTION PROGRAM BA 2303 DEVELOPING THE PROMOTION PROGRAM Selecting the Right Promotional Tools Designing the Promotion Scheduling the Promotion http://www.youtube.com/watch?v=njauitC80KE

EXECUTING AND EVALUATING THE PROMOTION PROGRAM BA 2303 EXECUTING AND EVALUATING THE PROMOTION PROGRAM Pre-test each design before it is actually used to allow for changes and modifications that improve its effectiveness. Post-tests are recommended to evaluate the impact of each promotion and the contribution of the promotion toward achieving the program objectives.

What are the characteristics of good promotions objectives? BA 2303 Concept Check What are the characteristics of good promotions objectives? Answer: "Good" promotion objectives should possess these characteristics: (1) Be designed for a well-designed for a well-defined target audience, (2) Be measurable, and (3) Cover a specified time period

What are the weaknesses of the percentage of sales budgeting approach? BA 2303 Concept Check What are the weaknesses of the percentage of sales budgeting approach? Answer: The major weakness of the percentage of sales budgeting approach is that there has to be a direct correlation between that sales and promotion.

BA 2303 Concept Check How have advertising agencies changed to facilitate the use of IMC programs? Answer: There has been a rise in the number of advertising agencies in response to the need for IMC programs. In addition, some of the largest agencies are adopting "total communications solutions" approaches.

DIRECT MARKETING The Growth of Direct Marketing BA 2303 DIRECT MARKETING The Growth of Direct Marketing The Value of Direct Marketing Direct orders Lead generation Traffic generation Technological, Global, and Ethical Issues in Direct Marketing

BA 2303 Concept Check The ability to design and use direct marketing programs has increased with the availability of ___________________ and the _________. customer databases Internet

The fastest growing direct market medium in Canada is the __________. BA 2303 Concept Check The fastest growing direct market medium in Canada is the __________. Internet

BA 2303 Concept Check What are the three types of responses generated by direct marketing activities? Answer: The three types of responses generated by direct marketing activities are: (1) Direct orders, (2) Lead generation, and (3) Traffic generation

BA 2303 Communication (1) The process of conveying a message to others, which requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding. (2) Online, the dialogue that unfolds between a website and its users.

BA 2303 Source A company or person who has information to convey.

BA 2303 Message The information sent by a source to a receiver in the communications process.

Channel of Communication BA 2303 Channel of Communication The means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver.

BA 2303 Receivers Consumers who read, hear, or see the message sent by a source in the communications process.

BA 2303 Encoding The process of having the sender transform an abstract idea into a set of symbols.

BA 2303 Decoding The process of having the receiver take a set of symbols, the message, and transform them back to an abstract idea.

BA 2303 Field of Experience Similar understanding and knowledge; to communicate effectively, a sender and a receiver must have a mutually shared field of experience.

BA 2303 Response (1) In behavioural learning, the action taken by a consumer to satisfy a drive. (2) In the feedback loop, the impact the message had on the receiver’s knowledge, attitudes, or behaviours.

BA 2303 Feedback The communication flow from receiver back to the sender that helps the sender know whether the message was decoded and understood as intended.

BA 2303 Noise Extraneous factors that can work against effective communication by distorting a message or the feedback received.

BA 2303 Advertising Any paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor.

BA 2303 Personal Selling The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.

BA 2303 Public Relations A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

BA 2303 Publicity A non-personal, indirectly paid presentation of an organization, good, or service.

BA 2303 Sales Promotion A short-term inducement of value offered to arouse interest in buying a good or service.

BA 2303 Direct Marketing Promotional element that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.

BA 2303 Promotional Mix The combination of one or more of the promotional elements a firm uses to communicate with consumers. The promotional elements include: advertising, personal selling, sales promotion, public relations, and direct marketing.

BA 2303 Push Strategy Directing the promotional mix to channel members to gain their co-operation in ordering and stocking a product.

BA 2303 Pull Strategy Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for the product.

Integrated Marketing Communications BA 2303 Integrated Marketing Communications The concept of designing marketing communications programs that co-ordinate all promotional activities to provide a consistent message across all audiences.

BA 2303 Hierarchy of Effects The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption.

Percentage of Sales Budgeting BA 2303 Percentage of Sales Budgeting Allocating funds to advertising as a percentage of past or anticipated sales, in terms of either dollars or units sold.

Competitive Parity Budgeting BA 2303 Competitive Parity Budgeting Matching the competitors’ absolute level of spending or the proportion per point of market share.

All-You-Can-Afford Budgeting BA 2303 All-You-Can-Afford Budgeting Allocating funds to promotion only after all other budget items are covered.

Objective and Task Budgeting BA 2303 Objective and Task Budgeting A budgeting approach whereby the company (1) determines its promotion objectives, (2) outlines the tasks to accomplish these objectives, and (3) determines the promotion cost of performing these tasks.

BA 2303 Direct Orders The result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase an complete the transaction.

BA 2303 Lead Generation The result of a direct marketing offer designed to generate interest in a product or a service, and a request for additional information.

BA 2303 Traffic Generation The outcome of a direct marketing offer designed to motivate people to visit a business.