1. Integrated Marketing Communications18
Integrated Marketing Communications

2. The Nature of Integrated Marketing Communications
Agenda
The Nature of Integrated Marketing Communications
The Role of Promotion
Objectives of Promotion
The Promotion Mix
Selecting Promotion Mix Elements
Criticisms and Defenses of Promotion
Copyright © Houghton Mifflin Company. All rights reserved.

3. What is “Integrated Marketing Communications”?
Coordination of promotion and other marketing efforts for maximum informational and persuasive effect
Major goal is to send a consistent message to customers
Copyright © Houghton Mifflin Company. All rights reserved.

4. What is “Integrated Marketing Communications”? (cont’d)
Reasons for acceptance of integrated communications
Decreased use of mass media advertising
Database marketing provides more precise targeting of customers
More broadly diversified suppliers of advertising
Increased management demands for returns on investments in marketing efforts
Copyright © Houghton Mifflin Company. All rights reserved.

5. Information Flows Are Important in Integrated Marketing Communications
FIGURE 18.1
Copyright © Houghton Mifflin Company. All rights reserved.

6. The Role of Promotion Promotion
Communication to build and maintain relationships by informing and persuading one or more audiences
Overall role of promotion is to help business by
building and enhancing customer relationships.
focusing customers on information about company activities and products.
promoting programs that help selected groups to build goodwill.
sponsoring special events that generate positive promotion of an organization and its brands.
Copyright © Houghton Mifflin Company. All rights reserved.

7. Objectives of Promotion
Create Awareness
Is crucial to initiating the product adoption process
Helps generate revenues to recoup R&D costs
Refresh interest in existing brands and products
Stimulate Demand
Primary demand is demand for a product category rather than for a specific brand
Selective demand is demand for a specific brand
Pioneer promotion is promotion that informs consumers about a new product
Copyright © Houghton Mifflin Company. All rights reserved.

8. Objectives of Promotion (cont’d)
Encourage Product Trial
Distributing product samples fosters consumer evaluation of a product.
Identify Prospects
Customer-response promotions generate sales leads.
Retain Loyal Customers
Frequent-user programs reward loyal customers.
Facilitate Reseller Support
Advertising by producers promotes sales for resellers.
Copyright © Houghton Mifflin Company. All rights reserved.

9. Objectives of Promotion (cont’d)
Combat Competitive Promotional Efforts
Promotions countering competitors’ own promotions
Reduce Sales Fluctuations
Promotion raises sales in off-peak sales periods.
Copyright © Houghton Mifflin Company. All rights reserved.

10. The Four Possible Elements of a Promotion Mix
FIGURE 18.3
Copyright © Houghton Mifflin Company. All rights reserved.

11. The Promotion Mix Advertising
A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media
Benefits
Extremely cost efficient (cost per person) in reaching a large audience
Repeatable several times and in several media markets
Adds value to a product and enhances a firm’s image
Copyright © Houghton Mifflin Company. All rights reserved.

12. Benjamin Moore Paints Uses Advertising to Promote Product Benefits
Image courtesy of Benjamin Moore & Co.
Copyright © Houghton Mifflin Company. All rights reserved.

13. Influential Forms of Media
3,000 U.S. adults were asked what forms of media
influence them most on grocery buying decisions.
Type of Media
Percentage most influenced
Advertising inserts/circulars
Television
Newspaper ads
Catalogs
Magazines
Direct mail
Radio
Internet
28%
22%
18% 6% 5% 4% 3% 1%
Source: Vertis, Inc., Baltimore, as reported in Marketing News, June 15,2004, p.4.
Copyright © Houghton Mifflin Company. All rights reserved.

14. U.S. Ad Spending Totals by Media
Medium
U.S. Ad Spending 2002 (in billions)
Direct mail
Newspapers
Broadcast television
Radio
Cable television
Yellow pages
Consumer magazines
Out of home
Internet
Business publications
$46.07
$44.03
$42.07
$18.88
$16.30
$13.78
$11.00
$5.18
$4.88
$3.98
Source: Advertising Age Fact Pack 2004 Edition, p.15.
Copyright © Houghton Mifflin Company. All rights reserved.

15. Top 10 Advertisers Company Ad Spending 2003 (in millions)
Procter & Gamble Co.
General Motors Corp.
Time Warner Inc.
Walt Disney Co.
DaimlerChrysler AG
Ford Motor Co.
Johnson & Johnson
Pfizer
Altria Group Inc.
Nissan Motor Co.
$2,807
$2,172
$1,533
$1,397
$1,344
$1,331
$1,186
$1,072
$1,059
$1,007
Source: “U.S. Advertising Spending Rose More than 5% in 2003, Nielsen Monitor-Plus Reports,” Nielsen Media Research, press release, February 19, 2004, Data based on spending estimates in the following media: Network TV, Spot TV, Syndicated TV, Hispanic TV, National/Local Magazine, Network/Spot Radio (19 markets), Outdoor, FSI (CPGs only), National/Local Newspapers (display ads only), National/Local Sunday Supplements.
Copyright © Houghton Mifflin Company. All rights reserved.

16. More Info . . .
Marketers that use television and radio commercials depend on organizations such as ACNielsen Corporation ( Although ACNielsen offers many research services, it’s best known for its international television audience ratings. Another important rating service is Arbitron ( which measures radio audiences in local markets across the U.S. The Audit Bureau of Circulations, known as the ABC, ( does the same for print publications.
Copyright © Houghton Mifflin Company. All rights reserved.

17. The Promotion Mix (cont’d)
Personal Selling
A paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
Advantages
Is a more specific form of advertising
Has greater impact on consumers
Provides immediate feedback
Limitations
Is an expensive form of advertising
Is labor intensive and time consuming
Copyright © Houghton Mifflin Company. All rights reserved.

18. The Promotion Mix (cont’d)
Public Relations
A broad set of communication efforts used to create and maintain favorable relationships between the organization and its stakeholders
Publicity is a nonpersonal communication in a news story form about an organization or its products, or both, transmitted through a mass medium for free
Copyright © Houghton Mifflin Company. All rights reserved.

19. The Promotion Mix (cont’d)
Sales Promotion
An activity or material that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespeople, or consumers
Copyright © Houghton Mifflin Company. All rights reserved.

20. Primary Factors Affecting the Choice of Promotion Mix Components
Promotional Resources,
Objectives, and Policies
Selection of
Promotion Mix
Components
Characteristics of
the Target Market
Cost and Availability
of Promotional Needs
Characteristics
of the Product
Primary Factors Affecting the Choice of Promotion Mix Components
Copyright © Houghton Mifflin Company. All rights reserved.

21. Selecting Promotion Mix Elements
Promotion Resources, Objectives, and Policies
A limited promotional budget affects the number and types of promotion mix components affordable to a firm.
Objectives and policies influence the types of promotion selected.
Characteristics of the Target Market
Market size, geographic distribution, and demographics help dictate the choice of promotion mix elements.
Copyright © Houghton Mifflin Company. All rights reserved.

22. Selecting Promotion Mix Elements (cont’d)
Characteristics of the Product
Copyright © Houghton Mifflin Company. All rights reserved.

23. Selecting Promotion Mix Elements (cont’d)
Costs and Availability of Promotional Methods
Large expenditures, large audience
Small, local efforts
Availability of advertising media, particularly in foreign countries
Availability of qualified sales personnel
Copyright © Houghton Mifflin Company. All rights reserved.

24. Selecting Promotion Mix Elements (cont’d)
Word-of-mouth communication has a strong impact on consumers’ buying tendencies.
Buzz marketing and viral advertising are marketers’ attempts to take advantage of word-of-mouth communications
Buzz marketing is an attempt to create a trend or acceptance of a product through word-of-mouth
Viral marketing is a strategy to get users of the Internet to pass on ads and promotions to others.
Copyright © Houghton Mifflin Company. All rights reserved.

25. Exercise
The promotion mix includes advertising, public relations, sales promotion, and personal selling. How would you classify each of the following promotion efforts?
McDonald’s uses television to tell consumers about free french fries with the purchase of a Big Mac.
A Toyota salesperson tells customers about the quality of Michelin tires.
This exercise should help students see that promotional efforts cannot always be easily and clearly classified into advertising, public relations, sales promotion, or personal selling. In the real business world, each category often overlaps with the others. The promotional efforts described in the exercise can be classified as follows:
Advertising and sales promotion
Personal selling
Publicity-based public relations
Personal selling and sales promotion
Copyright © Houghton Mifflin Company. All rights reserved.

26. Exercise (cont’d)
CNN has a story about Energizer’s latest ad campaign. The story features a commercial with the Energizer bunny.
Quaker Oats places an ad in Good Housekeeping magazine with a coupon attached.
A pharmaceutical salesperson leaves free samples with a physician.
Copyright © Houghton Mifflin Company. All rights reserved.

27. 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 stronger consumer demand that pulls products through the marketing channel
Copyright © Houghton Mifflin Company. All rights reserved.

28. Comparison of Push and Pull Promotional Strategies
FIGURE 18.4
Copyright © Houghton Mifflin Company. All rights reserved.

29. Criticisms and Defenses of Promotion
Is Promotion Deceptive?
Does Promotion Increase Prices?
Does Promotion Help Customers Without Costing Too Much?
Does Promotion Create Needs?
Should Potentially Harmful Products Be Promoted?
Copyright © Houghton Mifflin Company. All rights reserved.