1. Chapter 18 Integrated Marketing Communications

2. Learning Objectives
Learning Objective 18.1 Identify the components of the communication process. Learning Objective 18.2 Explain the four steps in the AIDA model. Learning Objective 18.3 Describe the various integrative communication channels. Learning Objective 18.4 Explain the methods used to allocate the integrated marketing communications (IMC) budget. Learning Objective 18.5 Identify marketing metrics used to measure IMC success.
LO18-1 Identify the components of the communication process.
LO18-2 Explain the four steps in the AIDA model.
LO18-3 Describe the various integrative communication channels.
LO18-4 Explain the methods used to allocate the integrated marketing communications (IMC) budget.
LO18-5 Identify marketing metrics used to measure IMC success.

3. Pepsi “Say It With Pepsi”
It might seem, for example, that Pepsi is such a well-defined brand that its communications would be automatically consistent across marketing channels. But as sales in the North American soft drink market have stagnated in recent years, it has become ever more important for companies to create effective campaigns, seamlessly integrated across a wide variety of platforms..
Ask students Does Pepsi do an effective job of integrating its communication?
Website:
“Say It With Pepsi”
Source: Pepsico.com

4. Integrated Marketing Communications
Results
Communication channel
Customers
The goal of IMC is to ensure all the various marketing mix elements work together to deliver a consistent message. Therefore, IMC takes the best of each communications medium and combines it to achieve the most effective marketing communications campaign possible.
YouTube link:

5. Communicating with Consumers: The Communication Process
New media options fragment communications and make it more difficult and complex to reach the desired target audience.
Ask students: What media do you use on a daily basis?
This should lead to a discussion of new and alternative media.
Marketers must understand how the communication process works and identify possible communication breakdowns.
Group activity: Play the game of telephone. Start with a short message, verbally pass it around the room, and see what emerges.
Sample phrase: I caught the train heading for Richmond but went to Richland instead.
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6. How Consumers Perceive Communication
Receivers decode messages differently. Senders adjust messages according to the medium and receivers’ traits.
Marketers must remember that they do not have control over the decoding process, because each receiver decodes the message in his or her own way.
Group activity: Identify advertisements or brand images that often result in different reactions from different consumers (e.g., ads for beer, cigarettes, and personal care products). Why do these ads generate differing responses? For example, a cigarette ad for smokers may arouse smokers and induce the desire for a cigarette. For former smokers it may induce a sense of loss. For non-smokers it may not illicit any emotion.

7. The AIDA Model
The AIDA model provides a basis for understanding how marketing communications works.
Ask students to pick a product. The decision to buy this product must be somewhat complex. Then walk them through the AIDA model using the accompanying slides.

8. AIDA Model Where is this ad in the AIDA model?
Dogs and babies are very good at attracting awareness or advertisements.
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©2008 KCWW Reprinted with Permission

9. Awareness
Senders first must gain the attention. An omnichannel approach increases the likelihood the message will be received.
Discuss the now-famous Joe Camel study, which found a majority of three-year-old children were aware of Joe Camel, the spokes character for Camel cigarettes. The study’s authors suggested awareness would lead to smoking. Discuss whether awareness always translates to action; be sure to include the two intervening steps, interest and desire. Finally, note that in follow-up studies, preschoolers indicated they understood that cigarettes were adult products, and many were adamant that they would not smoke.

10. Interest
After awareness comes persuasion. The customer must want to further investigate the product/service.
There are several awareness metrics, including aided recall and top-of-mind awareness. Aided recall is when consumers indicate they know the brand when the name is presented to them. Top-of-mind awareness, the highest level of awareness, occurs when consumers mention a specific brand name first when they are asked about a product or service.

11. Desire I like it I want it
After the firm has piqued the interest of its target market, the goal of subsequent IMC messages should move the consumer from “I like it” to “I want it.”

12. Action
Purchase is just one type of action… What other actions can IMC ask consumers to take?
Ask students: Other than purchase, what can IMC prompt consumers to do?
Possible answers include behavioral changes (don’t drink and drive), attitude changes (that product is high quality), or physical actions (pick up the phone, log on to the website, volunteer).

13. The Lagged Effect
Advertising does not always have an immediate impact. Multiple exposures are often necessary. It is difficult to determine which exposure led to purchase.
Sometimes consumers don’t act immediately after receiving a marketing communication because of the lagged effect—a delayed response to a marketing communication campaign. Ask students: Provide examples of products that they had IMC exposure to, but did not purchase immediately. Then ask students: Which IMC exposure moved you to purchase?

14. PROGRESS CHECK (1 of 3)
What are the different steps in the communication process?
What is the AIDA model?
The sender, the transmitter, encoding, the communication channel, the receiver, noise, feedback loop
Awareness, interest, desire, action .

15. Elements of an Integrated Marketing Communication Strategy
To get the right message to the right audience through the right medium, an IMC planner must understand how each medium communicates and how to combine it with other media to generate the most impact.
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16. Advertising
Most visible element of IMC Extremely effective at creating awareness and generating interest
Chapter 19 covers advertising, the most visible element of IMC, in depth.
Ask students: Think about how an advertisement has made you aware of or interested in a specific product. You can use students’ chosen advertisements as the basis for subsequent discussions.
Ask students what “advertainment” might be. It is advertising that is focused on entertaining the end user. One of the earliest and best examples is Reebok’s Terry Tate ads. This YouTube link (always check before class) will show the original ad which was aired during the 2003 Super Bowl.
YouTube link:

17. Public Relations (PR)
“Free” media attention Importance of PR has grown as cost of other media has increased. Consumers becoming more skeptical about marketing, PR becoming more important.
Ask students: Do you view PR as credible, because they are not “advertisements,” or not credible, because they come from the company?

18. Sales Promotions
Can be aimed at both end user consumers or channel members Used in conjunction with other forms of IMC Can be used for both short-term and long-term objectives
Chapter 19 covers sales promotion in detail. Remind students that sales promotions can be used in a wide variety of situations to stimulate demand among either end users or other channel members. There are many websites that distribute coupons. This web link is for retailmenot.com, one of the more popular coupon sharing site.
Ask students how retailers feel about this. The positive is that they are able to reach price sensitive customers who would otherwise not find them. The problem is that some of these coupons are profitable because the target frequent and large receipt buyers and they are not the kind of person who is downloading from the site.
Website:
Retailmenot.com

19. Personal Selling
Some products require the help of a salesperson. More expensive than other forms of promotion Salespeople can add significant value, which makes the expense worth it.
Chapter 19 covers personal selling, the most costly form of IMC, in detail.
Ask students: For what kind of purchases is personal selling most appropriate? Their answers should note that this form of IMC works best when the purchase is complicated, because the salesperson can customize the communication to meet the needs of that specific buyer and purchase situation, which other IMC elements cannot.

20. Direct Marketing
Growing element of IMC Includes and mobile marketing Good for multicultural groups Database technology improves
As advertising has declined as a percentage of the total communications budget, direct marketing has increased.
Ask students: What characteristics of direct marketing might explain this increased popularity? Direct marketing allows marketers to personalize their message. This enables marketers to communicate with an audience that is more likely to respond to their efforts.  The text has some excellent examples of Calvin Klein, Hard Rock, Maytag, and T-Mobile successfully using mobile marketing.
Courtesy Global Spec, Inc

21. Websites Blogs Social Media
Online Marketing
Websites Blogs Social Media
These will be covered on the next several slides
Ask students: What problems might firms that use text messaging to disseminate marketing communications face?
Answer: There may be a backlash against the firm and the wireless provider if consumers’ phones are constantly flooded with such messages.
Ask students: How would you like to receive advertising text messages?
Answer: A lot of people do not want such messages. However, the instant-messaging generation is likely to be much more tolerant about it.

22. Websites What websites do you visit all the time? Why?
Probe to discover why students love these sites. They will say they are easy to use (good navigation), have good sales and specials (product decisions), and are fun (entertainment).

23. Social Media Advantages to firms? Challenges?
Social media is media content distributed through social interactions. Three social media sites are YouTube, Facebook, and Twitter.

24. PROGRESS CHECK (2 of 3)
What are the different elements of an IMC program?
1. Advertising, sales promotion, public relations and personal selling, electronic media, direct marketing.

25. Planning for and Measuring IMC Success
Understand the outcome the firm hopes to achieve Short-term or long-term Should be explicitly defined and measured
Ask students: How do firms determine whether their IMC strategy has worked?
Answer: It depends on the IMC objective. If the objective is to create awareness for a new product, then the firm would measure increases in customer knowledge and awareness. If the goal was to generate sales, like an ad in the paper, then sales would be the objective measure.

26. Setting and Allocating the IMC Budget
Rule-of-thumb methods Objective-and-task method
Many IMC elements require significant expenditures, and firms are reluctant to invest in marketing communications without some guarantee of return.

27. Rule of Thumb Methods (1 of 2)
Definition
Limitations
Competitive parity
The communication budget is set so that the firm’s share of communication expenses equals its share of the market.
Does not allow firms to exploit the unique opportunities or problems they confront in a market. If all competitors use this method to set communication budgets, their market shares will stay approximately the same over time.
Percentage-of-sales
The communication budget is a fixed percentage of forecasted sales.
Assumes the same percentage used in the past, or by competitors, is still appropriate for the firm. Does not take into account new plans (e.g., to
introduce a new line of products in the current year).
Ask students: How do you think firms set promotional budgets? How would you set one?

28. Rule of Thumb Methods (2 of 2)
Definition
Limitations
Available budget
Marketers forecast their sales and expenses, excluding communication, during the budgeting period. The difference between the forecast sales and expenses plus desired profit is reserved for the communication budget. That is, the communication budget is the money available after operating costs and profits have been budgeted.
Assumes communication expenses do not stimulate sales and profit.
Ask students: How do you think firms set promotional budgets? How would you set one?

29. Measuring Success Using Marketing Metrics
Reach Frequency Gross rating points Web tracking
Every communication may be measured in terms of reach and frequency. Remind students that because of the lagged effect, marketers must not only expose the target audience to the message but also ensure that it has multiple opportunities to view the message. This combined measure is GRP.

30. Search Engine Marketing
Clicks
Impressions
Click through rate
Return on investment
Transit, an upscale sneaker store in New York City modeled after vintage New York City subway trains
Ask students what Transit would want to measure if they were buying Google adwords for “sneaker store” and “NYC sneakers.” The metrics are on the following slide.

31. Transit ROMI Assessment
1. Keyword
2. Clicks
3. Marketing Expenditure
4. Sales
5. Gross Margin = Sales X Gross Margin % = Sales X 50 %
6. Gross Margin ($) (Col. 5) – Marketing Expenditure (Col 3)
7. ROMI = (Col. 6/Col. 3) X 100
Sneaker store
110
$10/day
$70/day
$35/day
$25
250%
New York City sneakers 40
$25/day
$80/day
$40/day
$15
60%
Imagine a hypothetical upscale sneaker store in New York City, called Transit, that is modeled after vintage New York City subway trains. The owner, Jay Oliver, has decided to concentrate his limited budget on a specific segment and use electronic media exclusively in his IMC program. Oliver must determine the best keywords to use for his sponsored link advertising program. Some potential customers might search using the keywords “sneakers,” “sneakers in New York City,” “athletic shoes,” or other such versions. Using a formula (given in the textbook), Oliver can determine an ad’s return on marketing investment (ROMI).
For the two keyword searches on the slide, Oliver finds how much the advertising cost him (Column 3), the sales produced as a result (Column 4), the gross margin in dollars (Column 5), and the ROMI (Column 7). For “sneaker store,” the Transit website had a lot more clicks (110) than the clicks received from “New York City sneakers” (40) (see Column 2). Even though the sales were lower for the keywords “sneaker store” at $35/day, versus $40/day for the keywords “New York City sneakers,” the ROMI was much greater for the “sneaker store” keyword combination. In the future, Oliver should continue this keyword combination, in addition to producing others that are similar to it, in the hope that he will attain an even greater return on investment.

32. Transit IMC goals and results
Communication Objective
Question
Before Campaign
Six Months After
One Year After
Awareness (% mentioning store)
What stores sell sneakers?
38%
46%
52%
Knowledge (5 giving outstanding rating for sales assistance)
Which stores would you rate outstanding on the following characteristics? 9 17 24
Attitude (% first choice)
On your next shopping trip for sneakers, which store would you visit first? 13 15 19
Visit (% visited store)
Which of the following stores have you been to? 8
To evaluate his IMC program, Oliver compares the results of the program with his objectives. To measure his program’s effectiveness, he conducted an inexpensive online survey using the questions on the slide, which shows the survey results for one year.
Ask students why this was important for Transit. They should comment that the click throughs tell us nothing about the attitude, only the actions of the consumer

33. Swiped: Identity Theft in America
Ask students if they are nervous to buy online? Have any of them ever had a problem with online theft?

34. PROGRESS CHECK (3 of 3)
Why is the objective-and-task method of setting an IMC budget better than the rule-of-thumb methods?
How do firms use GRP to evaluate the effectiveness of traditional media?
How would a firm evaluate the effectiveness of its Google advertising?
The objective-and-task method determines the budget required to undertake specific tasks to accomplish communication objectives.
When measuring IMC success, the firm should examine when and how often consumers have been exposed to various marketing communications. Marketing communications managers usually state their media objectives in terms of GRP, which represents reach multiplied by frequency (GRP = reach * frequency).
Using Google AdWords, a firm can assess the effectiveness of his advertising expenditures by measuring the reach, relevance and return on investment for each of the keywords that were used.

35. Marketing Chapter 18
The End
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