An Introduction to Integrated Marketing Communication

What is Promotion? Communication process in marketing It is used to create a favorable predisposition toward brand concept, services, idea, or person. Implementing the three other marketing mix factors Achieving market segmentation, product differentiation, and positioning Enhancing revenues and profits

Promotional Mix A blend of communication tools and activities used by a firm Advertising Sales Promotion Publicity/Public Relations Direct Marketing Interactive/Internet marketing Personal Selling

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

10 Leading Advertisers in the United States, 2006 RankAdvertiserAd Spending (Millions) 1Procter & Gamble4,898 2AT&T3,345 3General Motors Corp.3,296 4Time Warner3,089 5Verizon Communications2,822 6Ford Motor Co.2,577 7GlaxoSmithKline2,444 8Walt Disney Co.2,320 9Johnson & Johnson2,291 10Uniliver2,098

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Major Decisions in Advertising

Advertising Pros: Cost-effective for large audiences Differentiates between similar products, e.g. Marlboro. Marlboro Brand equity Empathizes with target audience Control of the message

Advertising Cons: Media and production costs On average, U.S. advertisers pay $332,000 to produce a single 30-second television commercial; Nike’s “The Wall” – $2,000, ,000 ～ 40,000/10sec. Effectiveness difficult to judge Credibility and image problems

Sales Promotion Activities that provide extra value or incentive to the sales force, distributors or the ultimate consumer and can stimulate immediate sales.

Sales Promotion Tools Consumer-oriented [For end-users] Trade-oriented [For resellers] Events Loyalty Programs Bonus Packs Refunds/Rebates Contests/Sweepstakes Premiums Samples Coupons Coop Advertising Cooperative Advertising Trade Shows Training Programs POP Displays Trade Allowances

Various Uses of Sales Promotion Introduce new products Get existing customers to buy more Attract new customers Maintain sales in off season Increase retail inventories Tie in advertising & personal selling Enhance personal selling Introduce new products Get existing customers to buy more Attract new customers Maintain sales in off season Increase retail inventories Tie in advertising & personal selling Enhance personal selling Sales Promotion Sales Promotion Combat Competition

Sales Promotion Pros: Extra incentive to consumer or retailer Appeals to price sensitive consumer Generates interest in product or ad Easier to measure, e.g Hello Kitty: revenue↑11.82%, profits↑29.33%. Cons: Short-run strategy Affects brand image, brand equity Stock problem

Public Relations Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. News stories, features, sponsorships, and events seem more real and believable to readers than ads do.

Public Relations Tools Corporate Advertising Cause-related Marketing Publicity Vehicles Community Activities Public Affairs Activities Special Publications Publicity Vehicles Community Activities Public Affairs Activities Special Publications Special Event Sponsorship

Public Relations Pros: Credibility Low cost News value generating word-of-mouth Cons: Lack of control Negative as well as positive

Publicity ( 公關宣傳 ) Nonpersonal communications regarding an organization, product, service, or idea not directly paid or run under identified sponsorship. It usually comes in the form of a news story, editorial, or announcement about an organization and/or its products and services.

Publicity Vehicles Interviews Feature Articles Feature Articles Special Events Special Events News Releases News Releases Feature Articles Feature Articles Special Events Special Events News Releases News Releases Publicity Vehicles Press Conferences Press Conferences

Advertising vs. Publicity Advertising Publicity Tentative Low Low/Unspecified Uncontrollable Great Lower Measurable Schedulable High/Specific High Specifiable Undetermined Higher Little Factor Control Credibility Reach Frequency Cost Flexibility Timing

Direct Marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Four characteristics: nonpublic, immediate, customized, and interactive.

Direct Marketing Direct Response Advertising Direct Response Advertising Direct Mail Direct Mail Catalogs Telemarketing Shopping Channels Shopping Channels Direct Mail Direct Mail Telemarketing Catalogs Shopping Channels Shopping Channels Direct Marketing Internet Sales Internet Sales

Direct Marketing Pros: Convenience for consumers Selectivity of audience Tailored/ customized communications Easier to measure effects Cons: Direct mail and telemarketing – too much “Junk mail” image

Personal Selling Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Pros: Communication flexibility Customized to consumer Feedback Specific targeting Cons: High cost per contact Not cost-effective for large audience Low consistency of message