1. MARKETING MANAGEMENT 12 th edition 17 Designing and Managing Integrated Marketing Communications KotlerKeller

2. 17-2 Chapter Objectives ♦What is the role of marketing communications? ♦How do marketing communications work? ♦What are the major steps in developing effective communications? ♦What is the communications mix and how should it be set? ♦What are the critical elements in measuring and managing integrated marketing communications?

3. 17-3 ROLE OF MARKETING COMMUNICATIONS The means by which firms attempt to inform, persuade, and remind The means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell. Advertising Print and broadcast ads Packaging inserts TV and Motion pictures Brochures and booklets Posters Billboards POP displays Logos Videotapes Sales Promotion Contests, games, sweepstakes Premiums Sampling Trade shows, exhibits Coupons Rebates Entertainment Continuity programs Events/ Experiences Sports Entertainment Festivals Arts Causes Factory tours Company museums Street activities Public Relations Press kits Speeches Seminars Annual reports Charitable donations Publications Community relations Lobbying Personal Selling Sales presentations Sales meetings Incentive programs Samples Fairs and trade shows Direct Marketing Catalogs Mailings Telemarketing Electronic shopping TV shopping Fax mail E-mail Voice mail Marketing communications activities must be integrated to deliver a consistent message and achieve the strategic positioning objective. Multiple exposures, variable exposure options, fulfillment and consistency create desired influence on components of brand equity. Communications mix and resource allocation necessary to maximize Influence on brand equity Components of Multiple Components of Multiple Consumer Response Models Hierarchy of Effects Hierarchy of Effects Cognitive Awareness Attention Knowledge Affective Interest Liking Desire Behavior Action Trial Purchase Stages Results

4. 17-4 Steps in Developing Effective Communications Identify target audience Determine objectives Design communications Select channels Establish budget Decide communications mix Manage IMC Measure results

5. 17-5 Steps in Developing Effective Communications Identify Target Audience ►Market Segmentation ►Target Market Selection ► ►Market Opportunity ► ►Strengths / Weaknesses ► ►Competition / Threats ► ►Resource Requirements Determine Objectives ►Category Need - Isolate significant indigenous need of target audience ►Brand Awareness - Create desired level of differentiated brand recognition ►Brand Attitude - Clarify differentiation – problem solved / opportunity created ►Purchase Intention - Action desired ► ►Current Customers ► ►New Customers ► ►Company Image ► ►Familiarity & Attitude Communication Objectives Can Be Set At Any Level On the Hierarchy-of-Effects Table – Three Stages / Multiple Effects TO INFLUENCE BEHAVIOR MUST DEFINE MUST DEFINE

6. 17-6 Steps in Developing Effective Communications Design Communications Formulating the Communications to Achieve Desired Behavior Requires: ►Message Strategy - What to say / content: benefit message relative to points of parity or differentiation ►Creative Strategy - How to say it / way of elaborating: Informational (rational), Transformational (emotional) ►Message Source - Who should say it / Company or Agent (celebrity person): expert, trustworthy, likable Select Channels Determine the Type of Communications Medium Used by the Company or Agent (i.e. celebrity) ►Personal Channels - People to people: advocates (chosen), experts (independent), social (word of mouth) ►NonPersonal Channels - Media: print, broadcast, network, electronic, and display - Sales Promotions: consumer, trade, business and sales-force - Sales Promotions: consumer, trade, business and sales-force - Events and Experience: sports, arts, entertainment, cause events (sponsorship) - Events and Experience: sports, arts, entertainment, cause events (sponsorship) - Public Relations: managed communications to employees, customers & the media - Public Relations: managed communications to employees, customers & the media Integrated Channels - i.e. (Mass) media promotes ideas that affect opinion leaders attitudes adopted by others

7. 17-7 Steps in Developing Effective Communications Establish Budget ►Affordable Method - based on individual perceptions of affordability ►Percentage-of-Sales Method - percentage of sales price based on affordability relationship of desired profit margins calculated on desired transaction prices desired profit margins calculated on desired transaction prices ►Competitive Parity Method - percentage of sales relative to competitor percentage of sales ►Objective-and-Task Method - varies by cost of activities designed to achieve specific market objectives Ignores impact of promotions on sales ♦Establish the market share goal. ♦Determine the percentage that should be reached. ♦Determine the percentage of aware prospects that should be persuaded to try the brand. ♦Determine the number of advertising impressions per 1% trial rate. ♦Determine the number of gross rating points that would have to be purchased. ♦Determine the necessary advertising budget on the basis of the average cost of buying a GRP. Theory: the total communication budget should be in an amount where the marginal profit from the last communication dollar just spent equals the marginal profit from the from the last communication dollar just spent equals the marginal profit from the best non-communication dollar spent. best non-communication dollar spent.

8. 17-8 Decide Communications Mix Steps in Developing Effective Communications The company must allocate the budget over the six major modes of communications ►Advertising: ►Advertising: used to build long term image with large group of dispersed buyers ♦Pervasiveness – brief, repetitious, comprehensive message ♦Amplified expressiveness – multi stimuli dramatization ♦Impersonality – audience ease, no-obligation response ►Sales Promotion: ►Sales Promotion: used to draw stronger, quicker buyer responses (opportunities, problem solving) ♦ ♦Communication – attention getting ♦ ♦Incentive – value additives to induce action ♦ ♦Invitation – solicits action now ►Public Relations and Publicity: ►Public Relations and Publicity: used to deliver high impact, comprehensive messages ♦ ♦High credibility – news stories and features create more perception of authenticity than ads ♦ ♦Catch buyers off guard – no sales people or advertisinments ♦ ♦Dramatization – better opportunity for drama ►Events and Experiences: ►Events and Experiences: enhanced prospect interaction ♦ ♦Relevant - prospect choice because of pertinence ♦ ♦Involving - personal involvement and active engagement ♦ ♦Implicit – soft sell comfort environment ►Direct Marketing: ►Direct Marketing: direct mail, telemarketing, internet ♦ ♦Customized - addressed to the individual ♦ ♦Up-to-date – current and quick-turn-around ♦ ♦Interactive – message is changeable based on customer response ►Personal Selling: ►Personal Selling: most affective at last stages of sales process ♦ ♦Personal interaction - spontaneous reaction flexibility ♦ ♦Cultivation – development of personal relationships ♦ ♦Response – creates subliminal obligation on the part if the buyer Factors in Setting the Marketing Communications Mix ♦Type of Product Market - consumer versus industrial markets (promotions versus personal selling) ♦Buyer Readiness Stage - awareness, interest, conviction, order, reorder (advertising for awareness, personal selling for ordering) ♦Product life Cycle Stage - advertising and events in introductory stage versus promotions in decline stage

9. 17-9 Measure Results Steps in Developing Effective Communications ►Questionnaires & Surveys ►Time of Interest, Trial and Order ►Pertinent Period of Measurement To Measure Effectiveness of All Six Means of Effective Communication

10. 17-10 Steps in Developing Effective Communications Managing IMC ►Process That Assures Consistent, Timely and Focused Messaging Across All Six Means of Marketing Communications Marketing Communications ►Maximizes ROI for Single-Vehicle, Single Stage as Well as Multiple Vehicle-Multiple Stage Campaigns (TV and Print Ads paired with On-Line Ads, etc.) Stage Campaigns (TV and Print Ads paired with On-Line Ads, etc.) ►Enhanced Use of Promotion Agencies, Public Relations Firms, Package-Design Consultants, Web Site Developers and Direct-Mail Houses Web Site Developers and Direct-Mail Houses ►Dedicated Executive Brand Management Function Owns IMC Management ►Dedicated Resources and Funding Allocated to IMC in Conjunction with Enterprise Market Strategies Market Strategies