Chapter 13 Integrated Marketing Communications: Advertising, Sales Promotion, and Public Relations

Road Map: Previewing the Concepts Discuss the process and advantages of integrated marketing communication. Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix. Describe and discuss the major decisions involved in developing an advertising program. Explain how sales promotion campaigns are developed and implemented. Explain how companies use public relations to communicate with their publics.

American Standard Your mission – prepare a promotion campaign for American Standard’s line of toilets. Campaign materials – media ads, direct mailing, and personal contacts – to build sales and market share.

Marketing Communication Mix or Promotion Mix Advertising Sales Promotion Product’s Design Direct Marketing Product’s Price Stores that Sell the Product Personal Selling Public Relations Product’s Package

The Changing Communications Environment Market Fragmentation Led to Media Fragmentation Marketers Have Shifted Away From Mass Marketing Less Broadcasting 2 Factors are Changing the Face of Today’s Marketing Communications: Improvement in Information Technology Has Led to Segmented Marketing More Narrowcasting

The Need for Integrated Marketing Communications With Integrated Marketing Communications (IMC), the Company Carefully Integrates and Coordinates Its Many Communications Channels to Deliver a Clear, Consistent, and Compelling Message About the Organization and Its Products.

Integrated Marketing Communications (Fig. 13-1)

Setting the Overall Communication Mix Advertising Reaches Many Buyers, Repeats Message Many Times, Impersonal, Expensive Personal Selling Personal Interaction, Relationship Building, Most Expensive Promo Tool Sales Promotion Wide Assortment of Tools, Rewards Quick Response, Efforts Short-Lived Public Relations Very Believable, Dramatize a Company or Product, Underutilized Direct Marketing Nonpublic, Immediate, Customized, Interactive

Push versus Pull Promotion Strategy (Fig. 13-2)

Advertising Advertising is centuries old. U.S. advertisers spend in excess of $244 billion each year; worldwide spending exceeds $465 billion. Advertising is used by: Business firms, Nonprofit organizations, Professionals, and Social agencies.

Major Decisions in Advertising (Fig. 13-3)

Setting Advertising Objectives Informative Advertising Inform Consumers or Build Primary Demand i.e DVD Players Persuasive Advertising Build Selective Demand i.e Sony DVD Players Advertising Objective Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Comparative Advertising Compares One Brand to Another i.e. Avis vs. Hertz Reminder Advertising Keeps Consumers Thinking About a Product i.e. Coca-Cola

Discussion Questions Advertising objectives can be classified by primary purpose: to inform, persuade, or remind. Think of examples of ads that address each of these objectives. Using Table 13-1, discuss why your examples fit the chosen objective. This question asks the students to become involved in and make judgments of advertising objectives. Ask students to consider a variety of media formats (magazines, TV, radio, etc) to accomplish this objective or they can be instructed to “surf” the Web and investigate sites and then apply advertising objectives criteria to what they find. Table 13-1 provides several versions (within the major categories--to inform, to persuade, and to remind) that may be applied to the student’s advertisements. The students should be instructed to identify which of the sub-categories might apply.

Setting the Advertising Budget Methods of Setting the Advertising Budget for Each Product and Market. Affordable Based on What the Company Can Afford Objective-and-Task Based on Determining Objectives & Tasks, Then Estimating Costs Percentage-of-Sales Based on a Certain Percentage of Current or Forecasted Sales Competitive-Parity Based on the Competitors’ Promotion Budget

Developing Advertising Strategy Advertising Strategy Consists of Two Major Elements and Companies are Realizing the Benefits of Planning These Two Elements Jointly. Creating the Advertising Messages Selecting the Advertising Media

Creating the Advertising Message: Message Strategy Develop a Message Focus on Customer Benefits Creative Concept “Big Idea” Visualization or Phrase Advertising Appeals Meaningful, Believable & Distinctive

Developing Advertising Strategy: Message Execution Testimonial Evidence Slice of Life Scientific Evidence Typical Message Execution Styles Lifestyle Technical Expertise Fantasy Personality Symbol Mood or Image Musical

Advertising Strategy: Selecting Advertising Media Deciding on reach, frequency, and impact. Choosing among the major media types. Media habits of target customers, Nature of the product, Types and costs of messages. Selecting specific media vehicles. Specific media within each general media type. Deciding on media timing. Scheduling advertising over the course of a year.

Evaluating Advertising Advertising Program Evaluation Evaluating Advertising Communication Effects (Copy Testing) Is the Ad Communicating Well? Sales Effects Is the Ad Increasing Sales?

Other Advertising Considerations Sales Departments in Small Companies Advertising Departments in Larger Companies Advertising Agency Firm that Assists Companies in the Planning, Creation, & Implementation of Their Advertising Programs International Issues

What is Sales Promotion? Sales Promotion Offers Short-Term Incentives to Encourage Purchase or Sales of a Product or Service. Offers Reasons to Buy NOW.

Rapid Growth of Sales Promotion Sales promotion can take the form of consumer promotions, business promotions, trade promotions, or sales force promotions. Rapid growth in the industry has been achieved because: Product managers are facing more pressure to increase their current sales, Companies face more competition, Advertising efficiency has declined, Consumers have become more deal oriented.

Sales Promotion Objectives Consumer Promotions: increase short-term sales or help build long-term market share. Trade Promotions: get retailers to: carry new items and more inventory, advertise products, give products more shelf space, and buy product ahead. Sales Force: getting more sales support. In general, sales promotion should focus on consumer relationship building.

Major Consumer Sales Promotion Tools Sample Coupons Cash Refunds Price Packs Premiums Advertising Specialties Trial amount of a product Savings when purchasing specified products Refund of part of the purchase price Reduced prices marked on the label or package Goods offered free or low cost as an incentive to buy a product Articles imprinted with an advertiser’s name given as gifts

Major Consumer Sales Promotion Tools Patronage Rewards Cash or Other Award Offered for Regular Use of a Product Point-of-Purchase Displays or Demonstrations at the Point of Purchase Contest Consumers Submit an Entry to be Judged Sweepstakes Consumers Submit Their Names for a Drawing Games Consumers Receive Something Each Time They Buy Which May Help Them Win a Prize

Interactive Student Assignments Which of the sales promotion tools described in the chapter would be best for stimulating sales of the following products or services? Gummy Bears new Black Cherry flavor, Proctor & Gamble’s efforts to bundle laundry detergent and fabric softener together in a combined marketing effort, Outpost.com attempts to help consumers remember what it sells as well as its Web address. A brief summary of the primary chief function or characteristic of each of the consumer-promotion tools would be: Samples--offer to consumers of a trial amount of a product. Coupons--certificates that give buyers a saving when they purchase a specified product. Cash refund offers (rebates)--offers to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. Price packs (cents-off deals)--reduced prices that are marked by the producer directly on the label or package. Premiums--goods offered either free or at low cost as an incentive to buy a product. Advertising specialties--useful articles imprinted with an advertiser’s name that are given as gifts to consumers. Patronage rewards--cash or other rewards for the regular use of a certain company’s products or services. Point-of-purchase (POP) promotions--displays and demonstrations that take place at the point of purchase or sale. Contests, sweepstakes, and games--promotional events that give consumers the chance to win something (such as cash, trips, or goods) by luck or through extra effort. Students are free to choose from among the tools found in the list above. There really is no right or wrong answer (even though some choices or combinations are obviously better than others). Some suggestions that might be used to begin a discussion are as follows: Gummy Bears new Black Cherry flavor--samples, coupons, premiums, advertising specialties, point-of purchase, and contests, sweepstakes, and games. Proctor and Gamble decides to bundle laundry detergent and fabric softener together--coupons, price packs, premiums, and point-of-purchase. Outpost.com--advertising specialties, contests, sweepstakes, and games.

Major Trade Sales Promotion Tools Trade-Promotion Objectives Trade-Promotion Tools Discounts Allowances Persuade Retailers or Wholesalers to Carry a Brand Give a Brand Shelf Space Promote a Brand in Advertising Free Goods Push a Brand to Consumers Push Money Specialty Ad Items

Major Business Sales Promotion Tools Business-Promotion Objectives Business-Promotion Tools Conventions Trade Shows Sales Contests Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople

Developing the Sales Promotion Program Decide on the Size of the Incentive Set Conditions for Participation Developing the Sales Promotion Program Determine How to Promote and Distribute the Promotion Program Determine the Length of the Program Evaluate the Program

What is Public Relations? Public Relations Involves 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.

Major Public Relations Functions Press Relations or Agentry Product Publicity Public Affairs Lobbying Investor Relations Development Public Relations Departments May Perform Any or All of the Following Functions:

Major Public Relations Tools News Web Site Speeches Public Service Activities Special Events Corporate Identity Materials Written Materials Audiovisual Materials

Rest Stop: Reviewing the Concepts Discuss the process and advantages of integrated marketing communication. Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix. Describe and discuss the major decisions involved in developing an advertising program. Explain how sales promotion campaigns are developed and implemented. Explain how companies use public relations to communicate with their publics.