1. Designing and Managing
Topic 10 Communicating customer value
Designing and Managing
Integrated Marketing
Communications

2. Objectives Introducing various promotion mix tools
Examining the rapidly changing communication environment and the need for integrated marketing communication
Discussing the steps in developing marketing communications

3. The Marketing Communications Mix
This CTR relates to the material on pp
The Marketing Communications Mix
Advertising
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor.
Tools of The Marketing Communications Mix
Advertising. Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising often utilizes mass media and may be adapted to take advantages of a given mediums strengths to convey information.
Sales Promotion. Sales promotions consist of short-term incentives to encourage purchase of sales of a product or service. Limited time offers or dated coupons are common sales promotions.
Public Relations. Public relations is an on-going process of building good relations with the various publics of the company. Key elements in the process are obtaining favorable publicity, building and projecting a good "corporate image," and designing an information support and response team to respond proactively to unfavorable rumors, stories, or events.
Personal Selling. Personal selling describes the use of oral presentations in a conversation with one or more prospective buyers for the purposes of making a sale. Personal selling combines product information and benefits with the interpersonal dynamics of the sales person. Good interpersonal relationship skills and effective oral communication skills are needed for personal selling.
Direct Marketing. Directed communications with carefully targeted individual consumers to obtain an immediate response.
Sales Promotion
Short-term Incentives to Encourage Trial or Purchase.
Personal Selling
Public Relations
Protect and/or Promote Company’s Image/products.
Personal Presentations.
Direct Marketing
Direct Communications With Individuals to Obtain an Immediate Response.

4. New marketing communications landscape(1)
Consumers are changing
Better informed and more communications empowered
Seek out information on their own; exchange brand-related information; or even create their own marketing messages

5. New marketing communications landscape(2)
Marketing strategies are changing
As mass markets have fragmented, marketers are shifting away from mass marketing.
Developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micro-markets.

6. Integrated marketing communication (IMC)
Carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.
Touch point (where the customer may encounter the company and its brands)
Think about all the ways you interact with companies such as Nike

7. Elements in the Communication Process
SENDER
Media
Message
RECEIVER
Encoding
Decoding
Response
Noise
Feedback

8. Communication process
Sender: the party sending the message to another party
Encoding: the process of putting though into symbolic form
Message: the set of symbols that the sender transmits
Media: the communication channels through which the message moves from sender to receiver
Decoding: the process by which the receiver assigns meaning to the symbols encoded by the sender
Receiver: the party receiving the message sent by another party
Response: the reactions of the receiver after being exposed to the message
Feedback: the part of the receiver’s response communicated back to the sender
Noise: the unplanned static or distortion during the communication process, which results in the receiver’s getting a different message than the one the sender sent.

9. Elements in the Communication Process
SENDER
Media
Message
RECEIVER
Encoding
Decoding
Response
Noise
Feedback

10. Case study: McDonald’s “I’m lovin’ it” campaign
Sender: McDonald’s
Encoding: McDonald’s advertising agency assembles words, sounds, and illustrations into an ad. That will convey the intended message.
Message: the actual McDonald’s ad
Media: television and the specific television programs that McDonald’s selects

11. Case study McDonald’s “I’m lovin’ it” campaign

12. Case study: McDonald’s “I’m lovin’ it” campaign
Receiver: the customer who watches the McDonald’s ad.
Decoding: a consumer watches the McDonald’s ad And interprets the words and images it contains.
Response: any of hundreds of possible responses, such as the consumer likes McDonald’s better, is more likely to eat at McDonald’s next time, hums the “I’m lovin’ it” jingle, or does nothing
Feedback: McDonald’s research shows that consumers are struck by and remember the ad, or consumers write
Noise: the consumer it distracted while watching the commercial misses its key points

13. Steps in developing effective marketing communications
Step 1. Identifying the Target Audience
Steps in developing effective marketing communications
Step 2. Determining the Communication Objectives
Buyer Readiness Stages
Awareness
Knowledge
Liking
Preference
Conviction
Purchase

14. Step 3. Designing the Message
Message Format
Layout,
Words, & Sounds,
Body Language
Message Structure
Draw Conclusions
Argument Type
Argument Order
Message Content
Rational Appeals
Emotional Appeals
Moral Appeals
What to say?
How to say?

15. Rational appeals: relate to the audience’s self-interest
Rational appeals: relate to the audience’s self-interest. They show that the product will produce the desired benefits.

16. Emotional appeals: stir up either negative or positive emotions that can motivate purchase.
e.g. love , joy, humor, fear and guilty

18. Moral appeals: direct the audience’s sense of what is “right” and “proper”.

19. Step 4. Select Communications Channel
Personal Communication
Channels
Face to face, on the phone, through mail or , internet ”chat”
Controlled by company Vs. WOM influence
Non-personal Communication
Channels
Major media, atmospheres, events

20. Step 5. selecting the message source Step 6. collecting feedback

21. Setting the promotion budget to match competitors’ outlays
Setting the total promotion budget
Affordable
Setting the promotion budget at the level management thinks the company can afford.
% Of Sales
Setting the promotion budget at a percentage of current or forecasted sales
Competitive
Parity
Setting the promotion budget to match competitors’ outlays
Objective & Task
Developing the budget by
defining specific objectives; (2) determining the tasks that must be performed to achieve these objectives and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

22. Decide on Communications Mix
Advertising
Public, Pervasive, Expressive, Impersonal
Sales Promotion
Communication, Incentive, Invitation
Public Relations & Publicity
Credibility, Surprise, Dramatization
Personal Selling
Personal Confrontation, Cultivation, Response
Direct Marketing
Nonpublic, Customized, Up-to-Date, Interactive

23. Factors in developing promotion mix strategies
Product Life-Cycle Stage
Type of Product/ Market
Push vs. Pull Strategy
Buyer/ Readiness Stage

24. Producer Marketing activities
Push Versus Pull Strategy
Producer
Interme-
diaries
Marketing
activities
End users
Reseller
Demand
Push Strategy
Pull Strategy
Producer Marketing activities

25. Major decisions in advertising
Objectives Setting
Budget Decisions
Message Decisions
Media Decisions
Campaign Evaluation

26. Advertising Objectives
Specific Communication Task
Accomplished with a Specific Target Audience
During a Specific Period of Time
Informative Advertising
Build Primary Demand
Persuasive Advertising
Build Selective Demand
Comparison Advertising
Compares One Brand to Another
Reminder Advertising
Keeps Consumers Thinking
About a Product.

27. The Five Ms of Advertising
Mission
Sales
goals
Adver-
tising
objectives
Money
Factors to
consider:
Stage in PLC
Market share
and con-
sumer base
Competition
and clutter
Advertising
frequency
Product
substituta-
bility
Message
Message generation
Message evaluation
and selection
Message execution
Social-responsibility
review
Media
Reach, frequency,
impact
Major media types
Specific media
vehicles
Media timing
Geographical
media allocation
Measure-
ment
Communi-
cation

28. Advertising Budget Factors
Stage in the
Product Life Cycle
Market Share &
Consumer Base
Competition &
Clutter
Advertising
Frequency
Product
Substitutability

29. Profiles of Major Media Types
Newspapers
Advantages: Flexibility, timeliness; good local market coverage;
broad acceptance, high believability
Limitations: Short life; poor reproduction quality; small
pass-along audience
Television
Advantages: Combines sight, sound, motion; high attention;
high reach; appealing to senses
Limitations: High absolute costs; high clutter; fleeting exposure;
less audience selectivity
Direct Mail
Advantages: Audience selectivity; flexibility, no ad compe-
tition within same medium; allows personalization
Limitations: Relative high cost; “junk mail” image

30. Profiles of Major Media Types
Radio
Advantages: Mass use; high geographic and demographic
selectivity; low cost
Limitations: Audio only; fleeting exposure; lower attention;
nonstandardized rates; fragmented audiences
Magazines
Advantages: High geographic and demographic selectivity;
credibility and prestige; high-quality reproduction;
long life; good pass-along readership
Limitations: Long ad purchase lead time; waste circulation;
no guarantee of position
Outdoor
Advantages: Flexibility; high repeat exposure; low cost;
low message competition
Limitations: Little audience selectivity; creative limitations

31. Classification of Advertising Timing Patterns
Month
Number of
messages
per month
Concen-
trated
(1)
(2)
(3)
Level
Rising
Falling
Alternating
(4)
Continuous
(8)
(7)
(6)
(5)
(9)
Inter-
mittent
(10)
(11)
(12)

32. Simplified Rating Sheet for Ads
(Attention) How well does the ad catch
the reader’s attention? __20
(Read-through) How well does the
ad lead the reader to read further? __20
(Cognitive) How clear is the
central message or benefit? __20
(Affective) How effective is
the particular appeal? __20
(Behavior) How well does the
ad suggest follow-through action? __20
Poor ad
Mediocre
Average
Good
Great 20 40 60 80
100
__Total

33. Advertising strategy message execution
Testimonial
Evidence
Slice of Life
Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest.
Lifestyle
Scientific
Evidence
Typical
Message
Execution
Styles
Fantasy
Technical
Expertise
Mood or
Image
Personality
Symbol
Musical

34. Advertising Evaluation
Advertising Program Evaluation
Communication Effects
Is the Ad Communicating Well?
Sales Effects
Is the Ad Increasing Sales?

35. Why the increase in Sales Promotion?
Growing retailer power
Declining brand loyalty
Increased promotional sensitivity
Brand proliferation
Fragmentation of consumer market
Short-term focus
Increased managerial accountability
Competition
Clutter
Retailer - scanner data, industry consolidation -MFGs want to break through
Loyalty & Sensitivity & proliferation - we did that
Frag - more media, more targeted
Short-term&Account - US Business, stock mkt, not BE

36. Channels of Sales Promotions
MANUFACTURER
RETAILER
Trade
Promotions
CONSUMER
Consumer
Push
Pull
Retail

37. Consumer-Promotion Objectives Consumer-Promotion Tools
Entice Consumers to
Try a New Product
Point-of-Purchase
Displays
Premiums
Price Packs
Cash Refunds
Coupons
Samples
Patronage Rewards
Games
Sweepstakes
Contests
Advertising
Specialties
Lure Customers Away
From Competitors’ Products
Get Consumers to “Load Up’
on a Mature Product
Hold & Reward Loyal
Customers
Consumer Relationship
Building

38. “Deal Proneness,” Liechtenstein, Burton, & Netemeyer
“Deal Proneness,” Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997
“Deal Proneness,” Liechtenstein, Burton, & Netemeyer
Examination of “deal proneness” among consumers in a supermarket setting
Surveys & Grocery Receipts used
Eight types of deals:
Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon
Cluster analysis yielded two interpretable results:
49% are “deal prone,” 51% not
24% High “Deal prone,” 50% intermediate, 26% deal insensitive
“Deal-proneness” a generalized construct - (crosses type of promotion)
Younger & Less educated more likely to be deal prone

39. Trade Promotions Trade-Promotion Tools Trade-Promotion Objectives
Specialty
Advertising
Items
Contests
Free Goods
Buy-Back
Guarantees
Allowances
Price-Offs
Patronage Rewards
Push Money
Discounts
Premiums
Displays
Persuade Retailers or
Wholesalers to Carry a Brand
Give a Brand Shelf Space
Promote a Brand in
Advertising
Push a Brand to Consumers

40. Business-to-Business Promotion
Business-Promotion Objectives
Business-Promotion Tools
Generate Business Leads
Conventions
Trade Shows
Sales Contests
Stimulate Purchases
Reward Customers
Motivate Salespeople

41. Major public relation tools
Special
Events
Written
Materials
Corporate
Identity
Speeches
News
Audiovisual
Public
Service
Activities
Web Site
Father of PR was Edward Bernays, turns out he was Freud’s nephew! Value of some good brand publicity/movie placements:
SPECIAL EVENTS:
Reeses Pieces sales jumped 85% after E.T.
Mumford High sold $1M in school shirts after
Beverly Hills Cop
CA. Raisin Board paid $25K for bus-stop sign and raisin eating scene in Back to the future.
Coke and Pepsi scout out roles full time.