1. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin INTEGRATED MARKETING COMMUNICATIONS AND DIRECT MARKETING 18 C HAPTER

2. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Explain the communications process and its elements. Understand the promotional mix and the uniqueness of each component. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

3. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Select the promotional approach appropriate to a product’s life-cycle stage and characteristics. Differentiate between the advantages of push and pull strategies. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

4. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Appreciate the value of an integrated marketing communications approach Understand the value of direct marketing for consumers and sellers. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

5. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin INTEGRATED MARKETING COMMUNICATIONS MAKE MAGIC AT DISNEY INTEGRATED MARKETING COMMUNICATIONS AND DIRECT MARKETING

6. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin  Communications Communications  Source Source  Message Message  Channel of Communication Channel of Communication  Receivers Receivers THE COMMUNICATIONS PROCESS

7. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Encoding and DecodingEncodingDecoding  Field of experience Field of experience Feedback  Response Response Noise THE COMMUNICATIONS PROCESS

8. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the six elements required for communication to occur? A: Source, receiver, message, channel of communication, encoding, and decoding

9. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 2. A difficulty for U.S. companies advertising in international markets is that the audience does not share the same ________________. field of experience Concept Check

10. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3. A misprint in a newspaper ad is an example of _____. noise Concept Check

11. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Personal Selling Public Relations  Publicity Publicity Sales Promotion Direct Marketing THE PROMOTIONAL ELEMENTS

12. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. Explain the difference between advertising and publicity when both appear on television. A: Advertising space is paid for; thus the company controls what is said and when. This control does not exist with publicity since the company does not directly pay for the TV coverage.

13. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. Which promotional element should be offered only on a short-term basis? A: Sales promotion

14. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3. Cost per contact is high with the ______________ element of the promotional mix. personal selling Concept Check

15. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Target Audience The Product Life Cycle Introduction Stage Growth Stage Maturity Stage Decline Stage INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIXPROMOTIONAL MIX

16. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Product Characteristics Stages of the Buying Decision Prepurchase Stage Purchase Stage Postpurchase Stage INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX

17. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Channel Strategies Push Strategy Pull Strategy INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX

18. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Integrated Marketing Communications INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX

19. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. For consumer products, why is advertising emphasized more than personal selling? A: There is a large number of buyers.

20. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. Explain the differences between a push strategy and a pull strategy. A: In a push strategy, promotion is used to move the product through the channel by directing promotional activities at channel members. In a pull strategy, promotion stimulates end user demand to pull the product through the channel.

21. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3. Integrated marketing communi- cations programs provide a _________ message across all audiences. consistent Concept Check

22. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin DEVELOPING THE PROMOTION PROGRAM  Who is the target audience?  What are (1) the promotion objectives, (2) the amounts of money that can be budgeted for the promotion program, and (3) the kinds of promotion to use?  Where should the promotion be run?  When should the promotion be run?

23. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Identifying the Target Audience Specifying Promotion Objectives  Hierarchy of effects Hierarchy of effects Setting the Promotion Budget DEVELOPING THE PROMOTION PROGRAM

24. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Setting the Promotion Budget (cont) Percentage of Sales Competitive Parity All You Can Afford Objective and Task DEVELOPING THE PROMOTION PROGRAM

25. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Selecting the Right Promotional Tools Designing the Promotion Scheduling the Promotion EXECUTING AND EVALUATING THE PROMOTION PROGRAM DEVELOPING THE PROMOTION PROGRAM

26. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin EXECUTING AND EVALUATING THE PROMOTION PROGRAM

27. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the characteristics of good promotions objectives? A: They should (1) be designed for a well-defined target audience, (2) be measurable, and (3) cover a specified time period.

28. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What are the weaknesses of the percentage of sales budgeting approach? A: It implies that sales cause promotions; may cause a lag in budgets that are based on previous year’s figures, e.g. a low sales year would result in low advertising the next year when it should perhaps be higher; fails to consider the importance of promotion and company objectives.

29. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. How have advertising agencies changed to facilitate the use of IMC programs? A: Agencies such as J. Walter Thompson design integrated programs for a company. Although many agencies still have departments such as direct marketing, the trend is clearly toward a long-term perspective in which all forms of promotion are integrated.

30. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Growth of Direct Marketing DIRECT MARKETING

31. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Value of Direct Marketing  Direct orders Direct orders  Lead generation Lead generation  Traffic generation Traffic generation Technological, Global, and Ethical Issues in Direct Marketing DIRECT MARKETING

32. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 1. The ability to design and use direct marketing programs has increased with the availability of __________ and _________. computers Concept Check databases

33. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What are the three types of responses generated by direct marketing activities? A: Direct orders, lead generation, traffic generation

34. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin (1) The process of conveying a message to others, which requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding. (2) Online, the dialogue that unfolds between a website and its users. Communication

35. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A company or person who has information to convey. Source

36. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The information sent by a source to a receiver in the communications process. Message

37. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver. Channel of Communication

38. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Consumers who read, hear, or see the message sent by a source in the communications process. Receivers

39. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The process of having the sender transform an abstract idea into a set of symbols. Encoding

40. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The process of having the receiver take a set of symbols, the message, and transform them back to an abstract idea. Decoding

41. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Similar understanding and knowledge; to communicate effectively, a sender and a receiver must have a mutually shared field of experience. Field of Experience

42. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin (1) In behavioral learning, the action taken by a consumer to satisfy a drive. (2) In the feedback loop, the impact the message had on the receiver’s knowledge, attitudes, or behaviors. Response

43. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The communication flow from receiver back to the sender that helps the sender know whether the message was decoded and understood as intended. Feedback

44. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Extraneous factors that can work against effective communication by distorting a message or the feedback received. Noise

45. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Any paid form of nonpersonal commu- nication about an organization, good, service, or idea by an identified sponsor. Advertising

46. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision. Personal Selling

47. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services. Public Relations

48. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A nonpersonal, indirectly paid presentation of an organization, good, or service. Publicity

49. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A short-term inducement of value offered to arouse interest in buying a good or service. Sales Promotion

50. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Promotional element that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet. Direct Marketing

51. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The combination of one or more of the promotional elements a firm uses to communicate with consumers. The promotional elements include: advertising, personal selling, sales promotion, public relations, and direct marketing. Promotional Mix

52. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Directing the promotional mix to channel members to gain their cooperation in ordering and stocking a product. Push Strategy

53. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for the product. Pull Strategy

54. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences. Integrated Marketing Communications

55. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption. Hierarchy of Effects

56. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Allocating funds to advertising as a percentage of past or anticipated sales, in terms of either dollars or units sold. Percentage of Sales Budgeting

57. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Matching the competitors’ absolute level of spending or the proportion per point of market share. Competitive Parity Budgeting

58. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Allocating funds to promotion only after all other budget items are covered. All-You-Can-Afford Budgeting

59. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A budgeting approach whereby the company (1) determines its promotion objectives, (2) outlines the tasks to accomplish these objectives, and (3) determines the promotion cost of performing these tasks. Objective and Task Budgeting

60. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase an complete the transaction. Direct Orders

61. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The result of a direct marketing offer designed to generate interest in a product or a service, and a request for additional information. Lead Generation

62. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The outcome of a direct marketing offer designed to motivate people to visit a business. Traffic Generation