© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 15: Integrated Marketing Communications Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives 1.Discuss the nature of integrated marketing communications. 2.Describe the process of communication. 3.Understand the role of promotion in the marketing mix. 4.Explain the objectives of promotion. 5.Understand the major elements of the promotion mix.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives 6.Describe the factors that affect the choice of promotion-mix elements. 7.Explore word-of-mouth communication and how it affects promotion. 8.Understand the criticisms and defenses of promotion.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Integrated Marketing Communications (IMC) Coordination of promotional efforts for maximum informational and persuasive impact on customers.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Communication Process Communication - A sharing of meaning Source - A person, group or organization that decodes a coded message Receiver - The individual, group or organization that decodes a coded message Coding process (Coding process )Coding process - Converting meaning into a series of signs or symbols

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Decoding the Message Communication channel - The medium of transmission that carries the coded message from the source to the receiver or audience Decoding process - Converting signs or symbols into concepts and ideas Noise - Anything that reduces a communication’s clarity and accuracy Feedback - The receiver’s response to a message Channel capacity - The limit on the volume of information a communication channel can handle effectively

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Communication Process

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Changing Sources of News and Information

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Promotion Communication to build and maintain relationships by informing and persuading one or more audiences Objectives for Promotion Marketers use advertising and other methods to achieve a variety of objectives.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Eight Promotional Objectives Promotion Create Awareness Stimulate Demand Encourage Product Trial Identify Prospects Retain Loyal Customers Facilitate Reseller Support Combat Competitive Promotional Efforts Reduce Sales Fluctuations

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Information Flows are Important in Integrated Marketing Communications

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Create Awareness Making customers aware of the product is crucial to initiating the product adoption process Selective Demand Gap, Inc. uses ads like this one to build selective demand for its Piperlime products, only available online.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Stimulate Demand Primary demand - Demand for a product category rather than for a specific brand Pioneer promotion - Promotion that informs consumers about a new product Selective demand - Demand for a specific brand

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Encourage Product Trial Designed to move customers through the product adoption process Techniques used: - Free samples - Coupons - Test drives/limited free-use - Contests - Games Encouraging Product Trial Papa John’s uses this special promotional offer to stimulate product trial.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Promotion Identify prospects - Identifying customers who are interested in the firm’s product and most likely to buy it Retain loyal customers - Maintaining long-term relationships is a major goal of most marketers Facilitate reseller support - Providing support to maintain sound working relationships Combat competitive promotional efforts - Using promotion to offset or lessen the effect of a competitor’s goals Reduce sales fluctuations - Generating sales during slow periods

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question Click on the Television below and watch the commercial. Of the objectives of promotion just covered, which do you think this advertisement is attempting to achieve?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Four Possible Elements of a Promotion Mix When an organization combines specific methods to manage the integrated marketing communications for a particular product, that combination constitutes the promotion mix for that product.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Advertising A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media Advertising Aimed at Prevention This ad focuses on one of the many health risks associated with secondhand smoke.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Personal Selling A paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation - Kinesic communication: Communicating through the movement of head, eyes, arms, hands, legs or torso - Proxemic communications: Communicating by varying the physical distance in personal selling situations - Tactile communications: Communicating through touching

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Public Relations A broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders - Public relations tools include: Annual reports Brochures Event sponsorship Sponsorship of socially responsible programs

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Sales Promotion Activity or material that acts as a direct inducement, offering added value or incentive for the product to reseller, salespeople or consumers Sales Promotion The coupon in this advertisement is a sales promotion technique.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Visit the Coca Cola Web Site by clicking on symbol below. After reviewing the Site, discuss any sales promotion example(s) you observed on the site. Discussion Question

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Selecting Promotion-Mix Elements Promotional Mix Resources, Objectives, Policies Characteristics of the Target Market Characteristics of the Product Cost and Availability of Promotional Methods Push and Pull Channel Policies An effective promotion mix requires the right combination of components:

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Promotion Mix Elements Resources, Objectives, and Policies – Basing mix on budget, goals, etc. Characteristics of the Target Market – Includes size, geographic distribution, and demographic characteristics Characteristics of the Product – Includes price and personal nature of the product Cost and Availability of Methods – Some promotion types are more expensive than others

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Push and Pull Channel Policies Push policy - Promoting a product only to the next institution down the marketing channel Pull policy - Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Comparison of Push and Pull Promotional Strategies

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Word-of-Mouth Communications and Social Media Word-of-mouth communication - Personal informal exchanges of information that customers share with one another about products, brands and companies Social media - Technology that links people to networks and allows exchanges of personal information, professional information and common interests

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Buzz and Viral Marketing Buzz marketing - An attempt to incite publicity and public excitement surrounding a product through a creative event Viral marketing - A strategy to get consumers to share a marketer’s message, often through or online video, in a way that spreads dramatically and quickly

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Product Placement The strategic location of products or product promotions within entertainment media, including television program content to reach the product’s target market Source: The Nielsen Company, March 5, 2009, April 10, 2009http://adage.com/madisonandvine/article?article_jd=135045,accessed

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Top 10 Shows with Product Placement Source: The Nielsen Company, March 5, 2009, April 10, 2009http://adage.com/madisonandvine/article?article_jd=135045,accessed

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Give an example of product placement that you have seen recently. Discussion Question

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Criticisms and Defenses of Promotion

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. After Reviewing This Chapter You Should: Understand the nature of integrated marketing communications. Know the process of communication. Understand the role of promotion in the marketing mix. Know the objectives of promotion. Understand the major elements of the promotion mix.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. After Reviewing This Chapter You Should: Be able to describe the factors that affect the choice of promotion-mix elements. Know about word-of-mouth communication and how it affects promotion. Understand the criticisms and defenses of promotion.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Key Concepts Integrated marketing communications Branded entertainment Communication Source Receiver Coding process Communications channel Decoding process Noise Feedback Channel capacity Promotion Primary demand Pioneer promotion Selective demand Promotion mix Kinesic communication Proxemic communication Tactile communication Push policy Pull policy Word-of-mouth communication Social media Buzz marketing Viral marketing Product placement