C H A P T E R © 2007 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin An Overview Of Marketing Communications 16

16-2 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Learning Objectives After studying this chapter, you should be able to:  Discuss the objectives of marketing communications.  Understand the marketing communications mix and its role.  Explain the key elements of the marketing communications process.  Discuss the seven steps in the marketing communications planning process.  Demonstrate awareness of some of the key ethical and legal issues related to marketing communications.

16-3 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed FedExFedEx FedEx is a household name in the overnight shipping business, thanks in large part to its 50,000 delivery vehicles, or rolling billboards as one company executive describes them. So when the company pays millions to sponsor sports events and for naming rights to stadiums, it is not as interested in increasing exposure for its brand as it is in cultivating long-term relationships with key customers and contributing to a positive corporate image over time. Analysts estimate that for its role in sponsoring the FedEx Orange Bowl the company receives about $32 million in television exposure, a figure that FedEx officials discount deeply.

16-4 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Marketing Communications MarketingCommunicationsMix The marketing communications mix, sometimes referred to as the promotional mix, includes: advertising, public relations, sales promotion, personal selling, and direct marketing communications. MarketingCommunications Marketing communications, sometimes referred to as promotion, involve marketer initiated techniques directed to target audiences in an attempt to influence attitudes and behaviors.

16-5 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed The Roles of Marketing Communications Informing Persuading Reminding

16-6 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed The Marketing Communication Mix

16-7 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed The Marketing Communication Process

16-8 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Marketing Communications Planning There are seven key tasks in marketing communications planning: marketing plan review; situation analysis; communications process analysis; budget development; program development; integration and implementation of the plan; and monitoring, evaluating, and controlling the marketing communications program.

16-9 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Situation Analysis TheCompetitiveEnvironment TheEconomicEnvironment TheSocialEnvironment MarketingMixConsiderations

16-10 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Marketing Communication Objectives

16-11 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Budget Development Influences  Size of the company  Financial resources  Type of business  Market dispersion  Industry growth rate  Position in the marketplace Budgeting Methods  Percentage of Sales  Competitive Parity  All-You-Can-Afford  Objective-Task

16-12 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Advertising Expenditures By Industry (% of sales)

16-13 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Marketing Communications Implicit Implicit communications are messages connoted by the product itself, its price, or the places it is sold. Explicit Explicit communications convey a distinct, clearly stated message through personal selling, advertising, public relations, sales promotion, direct marketing, or some combination of these methods.

16-14 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed StrategiesStrategies PushStrategy PullStrategy Involves convincing intermediary channel members to “push” the product through the channel to the ultimate consumer. Attempts to get consumers to “pull” the product from the manufacturing company through the marketing channel. CombinationStrategy Aims marketing communications at both resellers and ultimate consumers.

16-15 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Monitoring, Evaluating, and Controlling Examples:  Monitor sales promotion by the number of coupons redeemed.  Measure the effectiveness of a new personal selling strategy by looking at the number of new accounts opened.  A firm might run tests to see if consumers noticed the ad.  Review sales results and attribute fluctuations in sales volume to MC.

16-16 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Ethical and Legal Considerations Advertising  Using deceptive advertising  Reinforcing unfavorable ethnic/racial/sex stereotypes  Encouraging materialism and excessive consumption Public relations  Lack of sincerity (paying lip service to worthwhile causes)  Using economic power unfairly to gain favorable publicity  Orchestrating news events to give false appearance of widespread support for corporate position

16-17 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Ethical and Legal Considerations Sales promotion  Offering misleading consumer promotions  Paying slotting allowances to gain retail shelf space  Using unauthorized mailing lists to reach consumers Personal selling  Using high-pressure selling  Failing to disclose product limitations/safety concerns  Misrepresenting product benefits Direct marketing communications  Invading privacy by telemarketing  Using consumer database information without authorization of consumers  Creating economic waste with unwanted direct mail

16-18 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Legal – But Ethical Some marketing communications may be technically legal but raise significant ethical questions:  Liquor industry now advertises on cable and local television stations.  Extensive promotion of higher-cost drugs when health care costs are spiraling out of control.  Heavy promotional allowances to pharmacies for agreement to push proprietary instead of generic drugs.

16-19 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed Effects of Globalization  Adjust the communications mix from country to country to avoid legal and ethical problems.  Differences in language, culture, legal and ethical norms, and availability of various media are usually significant.  Sales promotion techniques that involve contests and giveaways are regulated quite differently in various countries.  Effective advertising messages in one country may be offensive to residents of other countries.  What constitutes acceptable personal selling behavior also varies significantly across countries and cultures.

16-20 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5 th Ed SummarySummary After studying this chapter, you should be able to:  Discuss the objectives of marketing communications.  Understand the marketing communications mix and its role.  Explain the key elements of the marketing communications process.  Discuss the seven steps in the marketing communications planning process.  Demonstrate awareness of some of the key ethical and legal issues related to marketing communications.