Developing Integrated Marketing Communications Chapter Sixteen Developing Integrated Marketing Communications

Learning Objectives Describe integrated marketing communications. Understand the role of promotion. Explain the purposes of the three types of advertising. Describe the advantages and disadvantages of the major advertising media. Identify the major steps in developing an advertising campaign. Copyright © Houghton Mifflin Company. All rights reserved.

Learning Objectives (cont’d) Recognize the various kinds of salespersons, the steps in the personal-selling process, and the major sales management tasks. Describe sales promotion objectives and methods. Understand the types and uses of public relations. Identify the factors that influence the selection of promotion mix ingredients. Copyright © Houghton Mifflin Company. All rights reserved.

What Is Integrated Marketing Communications? Coordination of promotion efforts for maximum informational and persuasive impact on customers Results in a consistent message to customers, long-term customer relationships, and the efficient use of promotional resources Mass media advertising has given way to targeted promotional tools (e.g., cable TV, direct mail, and the Internet) The overall cost of marketing communications has risen significantly, pressuring managers to make the most efficient use of marketing resources Copyright © Houghton Mifflin Company. All rights reserved.

The Role of Promotion Promotion Role of promotion Communication about an organization and its products that is intended to inform, persuade, or remind target market members Role of promotion To facilitate exchanges directly or indirectly by informing individuals, groups, or organizations and influencing them to accept a firm’s products or to have more positive feelings about the firm Convey product and service information directly to target market segments Provide information to interest groups, regulatory agencies, investors, and the general public To maintain positive relationships between a company and various groups in the marketing environment Copyright © Houghton Mifflin Company. All rights reserved.

Information Flows Into and Out of an Organization A promotional activity’s effectiveness depends on the information available to marketers Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company, Adapted with permission. Copyright © Houghton Mifflin Company. All rights reserved.

The Promotion Mix The particular combination of promotion methods a firm uses to reach a target market Advertising A paid nonpersonal message communicated to a select audience through a mass medium Personal selling Personal communication aimed at informing customers and persuading them to buy a firm’s products Sales promotion The use of activities or materials as direct inducements to customers or salespersons Public relations Communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external Copyright © Houghton Mifflin Company. All rights reserved.

Possible Ingredients for an Organization’s Promotion Mix Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company, Adapted with permission. Copyright © Houghton Mifflin Company. All rights reserved.

Types of Advertising by Purpose Primary-demand advertising Used to increase demand for all brands of a product in a specific industry Selective-demand (brand) advertising Used to sell a particular brand of product Immediate-response advertising To persuade customers to buy the product within a short time Reminder advertising To keep the firm’s name fresh in the public’s mind Comparative advertising Compares specific characteristics of two or more brands to show the advertiser’s brand is better Institutional advertising Designed to enhance a firm’s image or build its reputation Copyright © Houghton Mifflin Company. All rights reserved.

Advertising Spending by Media and Total Dollars Spent Insert Figure 16.3, p.518 Copyright © Houghton Mifflin Company. All rights reserved.

Advertising Media The forms of communication through which advertising reaches its audience Newspapers Relatively inexpensive and timely; short life span Magazines Reach a specific market segment; more prestigious than newspapers; high cost; lack of timeliness Direct mail Most selective; effectiveness can be measured; email Copyright © Houghton Mifflin Company. All rights reserved.

Advertising Media (cont’d) Yellow pages advertising Print and online; local; purchased for 1 year Out-of-home advertising Short promotional messages on billboards, posters, signs, and vehicles; focuses on geographic area; fairly inexpensive Television The primary medium for larger firms trying to reach national or regional markets Network time; local time; sponsoring a show; spot time; infomercials Copyright © Houghton Mifflin Company. All rights reserved.

Advertising Media (cont’d) Radio Offers selectivity; most accessible medium; can be less expensive than other media Internet Increasingly popular; can be expensive; potentially large audience; can target precisely; effectiveness is questionable Banner and button ads; sponsorship ads; keyword ads; interstitials Copyright © Houghton Mifflin Company. All rights reserved.

Major Steps in Developing an Advertising Campaign Identify and analyze the target audience Define the advertising objectives Create the advertising platform Determine the advertising budget Develop the media plan Create the advertising message Execute the campaign Evaluate advertising effectiveness Copyright © Houghton Mifflin Company. All rights reserved.

Advertising Agencies Independent firms that plan, produce, and place advertising for their clients Large agencies also help with sales promotion and public relations Media usually pay a commission to agencies Firms may use both in-house advertising departments and an independent agency Copyright © Houghton Mifflin Company. All rights reserved.

Top 10 National Advertisers General Motors Corp. Procter & Gamble Co. Time Warner Pfizer SBC Communications DaimlerChrysler Ford Motor Walt Disney Co. Verizon Communications Johnson & Johnson Source: Advertising Age, June 27, 2005. Copyright © Houghton Mifflin Company. All rights reserved.

Social and Legal Considerations in Advertising Criticisms Advertising is wasteful Advertising is deceptive Benefits Advertising is the most effective and least expensive means of communicating to a large number of individuals and organizations Advertising encourages and is a means of competition; it thus leads to new/better products, more choice, lower prices Advertising revenues support our mass communication media Advertising provides job opportunities Copyright © Houghton Mifflin Company. All rights reserved.

Personal Selling The most adaptable promotion method The most expensive promotion method Kinds of salespersons Order getter Responsible for creative selling: selling a firm’s products to new customers and increasing sales to present customers Order taker Handles repeat sales in ways that maintain positive relationships with customers Copyright © Houghton Mifflin Company. All rights reserved.

Personal Selling (cont’d) Kinds of salespersons (cont’d) Sales support personnel Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service Missionary salespersons Visit retailers to encourage an initial purchase of the manufacturer’s products from wholesalers Trade salespersons Work with customers to promote and increase retail sales of the manufacturer’s products Technical salespersons Assist current customers with technical matters related to the manufacturer’s products Copyright © Houghton Mifflin Company. All rights reserved.

The Personal-Selling Process Source: William M. Pride and O.C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company. Adapted with permission. Copyright © Houghton Mifflin Company. All rights reserved.

Managing Personal Selling Setting sales objectives Concrete, quantifiable terms Specified time period Specified geographic area Adjusting the size of the sales force to meet changes in the firm’s marketing plan and the marketing environment Attracting and hiring effective salespersons Training salespersons Compensating salespersons Motivating salespersons Copyright © Houghton Mifflin Company. All rights reserved.

Sales Promotion Activities or materials that are direct inducements to customers or salespersons Objectives To draw new customers To encourage trial of a new product To invigorate the sales of a mature brand To boost sales to current customers To reinforce advertising To increase traffic in retail stores To steady irregular sales patterns To build up reseller inventories To neutralize competitive promotional efforts To improve shelf space and displays Copyright © Houghton Mifflin Company. All rights reserved.

Sales Promotion Methods Consumer sales promotion method Designed to attract consumers to particular retail stores and to motivate them to purchase certain new or established products Trade sales promotion method Designed to encourage wholesalers and retailers to stock and actively promote a manufacturer’s product Factors influencing the choice of sales promotion method Objectives of the sales promotional effort Product characteristics Target market profile Distribution channels Availability of resellers Competitive and regulatory forces in the environment Copyright © Houghton Mifflin Company. All rights reserved.

Sales Promotion Methods (cont’d) Rebate A return of part of the purchase price of a product Coupon Reducing the purchase price of a particular item by a stated amount at the time of purchase Sample A free product given to customers to encourage trial Premium A gift a producer offers to a customer in return for buying its product Frequent-user incentives A program that rewards customers who engage in repeat (frequent) purchases Copyright © Houghton Mifflin Company. All rights reserved.

Sales Promotion Methods (cont’d) Point-of-purchase displays Promotional material in the retail store designed to inform customers and encourage purchases Trade shows Industry-wide exhibits at which many sellers display their products Buying allowance A temporary price reduction to resellers for purchasing specified quantities of a product Cooperative advertising A manufacturer agrees to pay a certain amount of the retailer’s media cost for advertising the manufacturer’s product Copyright © Houghton Mifflin Company. All rights reserved.

Public Relations A broad set of communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external Customers, employees, stockholders, suppliers, educators, the media, government officials, society in general Types of public relations tools Written and spoken communications Brochures, newsletters, company magazines, annual reports, news releases, corporate-identity materials, speeches Event sponsorship Special events such as concerts and charity functions that the firm underwrites wholly or partially Copyright © Houghton Mifflin Company. All rights reserved.

Public Relations (cont’d) Publicity Communication in news-story form about an organization, its products, or both News release Feature article Captioned photograph Press conference Copyright © Houghton Mifflin Company. All rights reserved.

The Uses of Public Relations To promote people, places, activities, ideas To enhance the reputation of the organization by increasing awareness of company products and activities To create specific positive company images To maintain the public visibility of the company To reduce the effects of negative events on the company’s reputation Copyright © Houghton Mifflin Company. All rights reserved.

Promotion Planning Promotional campaign A plan for combining and using the four promotional methods—advertising, personal selling, sales promotion, and public relations—in a particular promotion mix to achieve one or more marketing goals What will be the role of promotion in the overall marketing mix? To what extent will each promotional method be used in the promotion mix? Copyright © Houghton Mifflin Company. All rights reserved.

Promotion and Marketing Objectives Providing product information to target markets Increasing market share by convincing new customers to purchase Positioning the product relative to the images customers have of competing products Stabilizing sales by increasing sales during slack periods or for products that are declining Copyright © Houghton Mifflin Company. All rights reserved.

Developing the Promotion Mix Marketers may use several promotion mixes at the same time for different products The promotion mix ingredients depend on Organizational resources and objectives Target market characteristics Product characteristics The cost and availability of promotional methods Copyright © Houghton Mifflin Company. All rights reserved.