1. 1Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Integrated Marketing Communications Prepared by Deborah Baker Texas Christian University Chapter 14

2. 2Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives 1.Discuss the role of promotion in the marketing mix. 2. Discuss the elements of the promotional mix. 3. Describe the communication process.

3. 3Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4. Explain the goal and tasks of promotion. 5. Discuss the AIDA concept and its relationship to the promotional mix. 6. Describe the factors that affect the promotional mix. 7.Discuss the concept of integrated marketing communications.

4. 4Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the role of promotion in the marketing mix. 1 1 On Line http://www.maxim-magazine.co.uk On Line http://www.maxim-magazine.co.uk

5. 5Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. 1 1

6. 6Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotional Strategy A plan for the optimal use of the elements of promotion:Advertising Public Relations Personal Selling Sales Promotion 1 1

7. 7Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Role of Promotion Overall Marketing Objectives Marketing Mix ProductProduct DistributionDistribution PromotionPromotion PricePrice Marketing Mix ProductProduct DistributionDistribution PromotionPromotion PricePrice Target Market Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Promotion Plan Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Promotion Plan 1 1

8. 8Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Differential Advantage Unique Features Excellent Service Low Prices Rapid Delivery High Product Quality Features that Provide Differential Advantage Advantage Features that Provide Differential Advantage Advantage 1 1

9. 9Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the elements of the promotional mix. 2 2

10. 10Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Advertising Public Relations Personal Selling Sales Promotion 2 2

11. 11Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning On Line http://www.nabiscoworld.com On Line http://www.nabiscoworld.com Promotional Mix Advertising Elements of the Promotional Mix Elements of the Promotional Mix Public Relations Personal Selling Sales Promotion 2 2

12. 12Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. 2 2

13. 13Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Media Traditional Advertising Media Traditional Advertising Media Electronic Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Electronic mail  Interactive video 2 2 On Line http://www.olympics.org http://www.olympics.com On Line http://www.olympics.org http://www.olympics.com

14. 14Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Advantages  Reach large number of people  Low cost per contact  Can be micro- targetedDisadvantages  Total cost is high 2 2

15. 15Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. 2 2

16. 16Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Public Relations Evaluates public attitudes Identifies areas of public interest Identifies areas of public interest Executes programs to “win” public Functions of Public Relations Functions of Public Relations 2 2

17. 17Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Publicity Public information about a company, good, or service appearing in the mass media as a news item. 2 2

18. 18Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. 2 2

19. 19Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion End Consumers End Consumers Trade Customers Company Employees Company Employees Sales Promotion Targets Targets 2 2

20. 20Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons Popular Tools for Consumer Sales Promotion Popular Tools for Consumer Sales Promotion 2 2

21. 21Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale. 2 2

22. 22Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Personal Selling TraditionalSellingTraditionalSellingRelationshipSellingRelationshipSelling 2 2

23. 23Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the communication process. 3 3

24. 24Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Communication The process by which we exchange or share meanings through a common set of symbols. 3 3

25. 25Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Communication Categories of Communication Categories of CommunicationInterpersonalCommunicationInterpersonalCommunicationMassCommunicationMassCommunication 3 3

26. 26Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Communication Process As Senders As Receivers  Inform  Persuade  Remind  Develop messages  Adapt messages  Spot new communication opportunities 3 3

27. 27Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Sender and Encoding Sender Encoding The originator of the message in the communication process. The conversion of a sender’s ideas and thoughts into a message, usually in the form of words or signs. 3 3

28. 28Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Communication Process Noise Sender Encoding Message Message Channel Message Channel Message Channel Message Channel Decoding Message Decoding Message Receiver 3 3

29. 29Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of the Elements in the Promotional Mix 3 3

30. 30Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Advertising Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility AdvertisingAdvertising Indirect and non-personal Low Little Delayed One-way Yes Fast Same message to all audiences 3 3

31. 31Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Public Relations Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, non-personal Moderate to low Little Delayed One-way No Usually fast Usually no direct control 3 3

32. 32Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target 3 3

33. 33Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect 3 3

34. 34Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the goal and tasks of promotion. 4 4

35. 35Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Target Audience 4 4

36. 36Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity 4 4

37. 37Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informative Objective  Increase awareness  Explain how product works  Suggest new uses  Build company image 4 4

38. 38Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Persuasion Objective  Encourage brand switching  Change customers’ perception of product attributes  Influence buying decision  Persuade customers to call 4 4

39. 39Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Reminder Objective  Remind customers that product may be needed  Remind customers where to buy product  Maintain customer awareness 4 4 On Line http://www.tide.com On Line http://www.tide.com

40. 40Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the AIDA concept and its relationship to the promotional mix. 5 5

41. 41Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. 5 5

42. 42Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The AIDA Concept A ttention I nterest D esire A ction 5 5

43. 43Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning AIDA and the Promotional Mix AwarenessInterestDesireActionAdvertising Very effective Very effective Somewhat effective Not effective PublicRelations Very effective Very effective Very effective Not effective SalesPromotion Somewhat effective Somewhat effective Very effective Somewhat effective PersonalSelling Somewhat effective Very effective Very effective Very effective 5 5

44. 44Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the factors that affect the promotional mix. 6 6 On Line http://www.nascar.com http://www.kelloggs.com On Line http://www.nascar.com http://www.kelloggs.com

45. 45Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Factors Affecting the Choice of Promotional Mix Nature of the Product Stage in PLC Target Market Factors Type of Buying Decision Promotion Funds Push or Pull Strategy 6 6

46. 46Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nature of the Product  Product characteristics Business product vs. consumer product  Costs and risks  Social risk Factors that influence promotional mix 6 6

47. 47Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Stage in the Product Life Cycle Time Introduction Growth Maturity Decline Sales ($) 6 6

48. 48Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Product Life Cycle and the Promotional Mix Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising’ PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time 6 6

49. 49Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Target Market Characteristics FOR:  Widely scattered market  Informed buyers  Repeat buyers Advertising Sales Promotion Less Personal Selling 6 6 On Line http://www.radioguide.com http://www.nytimes.com http://www.usatoday.com On Line http://www.radioguide.com http://www.nytimes.com http://www.usatoday.com

50. 50Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Type of Buying Decision Advertising Sales Promotion Type of Buying Decision AffectsPromotional Mix Choice Type of Buying Decision AffectsPromotional Mix Choice ComplexComplexRoutineRoutine Personal Selling Not Routine or Complex Not Routine or Complex Advertising Public Relations 6 6

51. 51Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Available Funds  Trade-offs with funds available  Number of people in target market  Quality of communication needed  Relative costs of promotional elements 6 6

52. 52Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Push and Pull Strategies Manufacturer promotes to wholesalerManufacturer wholesalerWholesaler retailerWholesaler retailerRetailer consumerRetailer consumerConsumer buys from retailerConsumer retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumerManufacturer consumerConsumerdemandsproduct from retailer Consumerdemandsproduct Retailerdemandsproduct from wholesaler Retailerdemandsproduct Wholesalerdemands product from manufacturerWholesalerdemands manufacturer Orders to manufacturer PULL STRATEGY 6 6

53. 53Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the concept of integrated marketing communications. 7 7

54. 54Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Integrated Marketing Communications A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. 7 7

55. 55Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning IMC Popularity Growth  Proliferation of thousands of media choices  Fragmentation of the mass market  Slash of advertising spending in favor of promotional techniques 7 7