imc -direct mkt
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19-1© 2000 McGraw-Hill Ryerson Limited
C H A P T E R N I N E T E E N
INTEGRATED MARKETINGMARKETING COMMUNICATIONS &DIRECT MARKETING
19-2© 2000 McGraw-Hill Ryerson Limited
AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:
� Explain the communication process andits elements.
� Understand the promotional mix and theuniqueness of each component.
� Select the promotional approachappropriate to a product�s life-cyclestage and characteristics.
19-3© 2000 McGraw-Hill Ryerson Limited
AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:
� Differentiate between the advantages of
push and pull strategies.
� Appreciate the value of an integrated
marketing communications approach.
� Understand the value of direct
marketing for consumers and sellers.
19-4© 2000 McGraw-Hill Ryerson Limited
Movies and Name Brand ProductsMovies and Name Brand ProductsBenefits accrue to both the movie studios and thecompany�s product or service when brandedproducts and services are featured in movies. Someexamples are American Online in You�ve Got theMail, BMW Z3 in James Bond�s Goldeneye, DunkinDonuts in Lethal Weapon 4, Aviator sunglasses inTop Gun, etc.
It�s not just movies. Other outlets include musicvideos, TV shows, and even other companiescommercials. Placement of products in the manymedia alternatives available today is becoming animportant part of marketing and promotion.
19-5© 2000 McGraw-Hill Ryerson Limited
Source
Channel of
Message
Communication
Encode ReceiverDecode
Noise
Noise
Feedback loop
Noise
Fields ofexperience
PP19�1 The Communication ProcessPP19�1 The Communication Process
19-6© 2000 McGraw-Hill Ryerson Limited
Errors in CommunicationErrors in CommunicationErrors in communication can happen in severalways:
1. the source may not adequately transform the abstract idea into an effective set of symbols,
2. a properly encoded message may be sent throughthe wrong channel and never make it to the receiver,
3. the receiver may not properly transform the set of symbols into the correct abstract idea, and
4. feedback may be so delayed or distorted that it isof no use to the sender.
19-7© 2000 McGraw-Hill Ryerson Limited
Concept CheckConcept Check1. What are the six elements required
for communication to occur.
2. A difficulty for Canadian companies
advertising in international markets is
that the audience does not share the
same ___________.
3. A misprint in a newspaper ad is an
example of ____________.
19-8© 2000 McGraw-Hill Ryerson Limited
PP19-2a The Promotional MixPP19-2a The Promotional MixPromotional Mass Versus
Element Customized Payment Strengths Weaknesses
Advertising Mass fees paid for - efficient means - high absolute
space or time for reaching costs
large numbers - difficult to
of people receive good
feedback
Personal Selling Customized fees paid to - immediate - extremely
salespeople as feedback expensive per
either salaries or - very persuasive exposure
commissions - can select - messages may
audience differ between
- can give complex salespeople
information
19-9© 2000 McGraw-Hill Ryerson Limited
PP19-2b The Promotional MixPP19-2b The Promotional MixPromotional Mass Versus
Element Customized Payment Strengths Weaknesses
Public Relations Mass no direct - often the most - difficult to get
payment credible source media
in consumer�s cooperation
mind
Sales Promotion Mass wide range of - effective at - easily abused
fees paid, changing - can lead to
depending on behaviour in promotion
promotion short run wars
selected - very flexible - easily
duplicated
19-10© 2000 McGraw-Hill Ryerson Limited
PP19-2c The Promotional MixPP19-2c The Promotional MixPromotional Mass Versus
Element Customized Payment Strengths Weaknesses
Direct Marketing Customized cost of - messages can be - declining
communication prepared customer
through mail, quickly response
telephone or - facilitates - database
computer relationship management
with customer is expensive
19-11© 2000 McGraw-Hill Ryerson Limited
Concept CheckConcept Check1. Explain the difference between
advertising and publicity when both
appear on television.
2. Which promotional element should be
offered only on a short-term basis?
3. Cost per contact is high with the
________ element of the promotional
mix.
19-12© 2000 McGraw-Hill Ryerson Limited
Integrating the Promotion MixIntegrating the Promotion Mix
In putting together the promotion mix, a marketer
must consider:
1. The balance of elements, such as which element
should be emphasized and to what extent; and
2. Because the various promotional elements are
often the responsibilities of different
departments, coordinating a consistent
promotional effort is necessary.
19-13© 2000 McGraw-Hill Ryerson Limited
Factors that Influence the Use of Promotional Tools
The Promotional MixThe Promotional Mix
AdvertisingAdvertising Personal selling
Personal selling
Public Relations
Public Relations
Sales promotion
Sales promotion
Balance considerations� Target audience� Product life cycle� Product characteristics� Stages of the buying decision� Channel strategies
Balance considerations� Target audience� Product life cycle� Product characteristics� Stages of the buying decision� Channel strategies
Integrated MarketingCommunications Program
Integrated MarketingCommunications Program
DirectMarketing
DirectMarketing
19-14© 2000 McGraw-Hill Ryerson Limited
The Target AudienceThe Target Audience
Promotional programs may bedirected at the ultimate consumer or an intermediary, or both.
19-15© 2000 McGraw-Hill Ryerson Limited
PP19-3 Promotional Tools used over the Product Life Cycle ofPP19-3 Promotional Tools used over the Product Life Cycle of Purina Puppy Chow Purina Puppy Chow
Introduction
Growth Maturity
Decline
To inform To persuade To remind
Stage ofproduct
lifecycle
Promotionalobjective
Promotionalactivity
� Publicity inveterinarymagazines
� Advertising� Salesforce calling� on intermediaries� Sales promotion
in form offree samples
� Personal sellingto intermediaries
� Advertising todifferentiatePuppy Chowattributes fromthose ofcompetingbrands
� Reminderadvertising
� Sales promotion inform of discountsand coupons
� Limited personalselling
� Direct mailreminders
� Littlemoneyspent onpromotion
19-16© 2000 McGraw-Hill Ryerson Limited
Product CharacteristicsProduct Characteristics
Three specific types of product characteristics to beconsidered:
1. Complexity of the product/service
2. Degree of risk represented by the product/ service purchase
a. financial risk
b. social risk
c. physical risk
3. Ancillary services with the product/service
19-17© 2000 McGraw-Hill Ryerson Limited
Stages of the Buying DecisionStages of the Buying Decision
The importance of the promotional
elements varies with the three stages
in a consumer�s purchase decision:
1. Prepurchase stage
2. Purchase stage
3. Postpurchase stage
19-18© 2000 McGraw-Hill Ryerson Limited
PP19-4PP19-4 How the Importance of Promotional Elements Varies How the Importance of Promotional Elements Varies During the Consumer�s Purchase Decision During the Consumer�s Purchase Decision
Prepurchase Purchase Postpurchase
Personal selling
Sales promotion
Advertising
Imp
orta
nce
of
pro
mot
ion
al t
ool
High
Low
Stage of consumer�s purchase decision
Direct Marketing
Public relations
19-19© 2000 McGraw-Hill Ryerson Limited
PP19�5 A Comparison of Push and Pull Promotional PP19�5 A Comparison of Push and Pull Promotional SstrategiesSstrategies
ManufacturerManufacturer
WholesalerWholesaler
RetailerRetailer
ConsumerConsumer
Flow ofpromotion;mainlypersonalsellingdirected tointermediaries
Flow ofdemand
stimulation
ManufacturerManufacturer
WholesalerWholesaler
RetailerRetailer
ConsumerConsumer
Flow ofpromotion;mainly advertisingdirected toconsumers
Flow ofdemand
stimulation
A. Push strategy B. Pull strategy
19-20© 2000 McGraw-Hill Ryerson Limited
Integrated Marketing Communications (IMC)Integrated Marketing Communications (IMC)
Integrated marketing communicationsrefers to the concept of designingmarketing communications programsthat coordinate all promotional activities-- advertising, personal selling, salespromotion, public relations, and directmarketing -- to provide a consistentmessage across all audiences.
19-21© 2000 McGraw-Hill Ryerson Limited
Integrated Marketing Communications (IMC)Integrated Marketing Communications (IMC)
Successful IMC programs use a process referred toas the IMC audit, which
a. analyzes the internal communication network ofthe company,
b. identifies key audiences,
c. evaluates customer databases,
d. assesses messages in recent ads, public relations releases, packaging, video news releases, signage,sales promotion pieces, and direct mail,
e. and determines managers� knowledge of IMC.
19-22© 2000 McGraw-Hill Ryerson Limited
Concept CheckConcept Check
1. For consumer products, why is advertising
emphasized more than personal selling?
2. Explain the differences between a push
strategy and a pull strategy.
3. Integrated marketing communications
provide a __________ message across all
audiences.
19-23© 2000 McGraw-Hill Ryerson Limited
PP19-6 The Promotion Decision ProcessPP19-6 The Promotion Decision Process
Corrective actions Corrective actions
PlanningDeveloping the Promotion Program- identify the target audience- specify the objectives- set the budget- select the right promotional elements- design the promotion- schedule the promotion
Implementation
Executing thepromotion program- pretest the promotion- carry out the promotion
Control
Evaluating thepromotion program- posttest the promotion- make needed changes
19-24© 2000 McGraw-Hill Ryerson Limited
The Consumer�s Hierarchy of EffectsThe Consumer�s Hierarchy of EffectsThe stages a prospective buyer goes through from initialawareness to eventual action are:1. Awareness. The consumer�s ability to recognize and remember the product or brand name.2. Interest. An increase in the consumer�s desire to learn about some of the features of the product or brand.3. Evaluation. The consumer�s appraisal of the product or brand on important attributes.4. Trial. The consumer�s actual first purchase and use of the product or brand.5. Adoption. Through a favourable experience on the first
trial, the consumer�s repeated purchase and use of theproduct or brand.
19-25© 2000 McGraw-Hill Ryerson Limited
Methods Used to Set the Promotion BudgetMethods Used to Set the Promotion Budget
1. Percentage of Sales
2. Competitive Parity
3. All-You-Can-Afford
4. Objective and Task
19-26© 2000 McGraw-Hill Ryerson Limited
PP19-7 The Objective and Task ApproachPP19-7 The Objective and Task ApproachOBJECTIVE
To increase awareness among university students for a new video
game. Awareness at the end of the semester should be 20
percent of all students from the existing 0 percent today.
TASKS COSTS
Advertisements once a week for a semester in 500 $280,000
university papers.
Direct-mail samples to student leaders on 500 50,000
university campuses
Sponsor a national contest for video-game players 100,000
Total Budget $430,000
19-27© 2000 McGraw-Hill Ryerson Limited
Executing and Evaluating the Promotion ProgramExecuting and Evaluating the Promotion Program
� The ideal execution of a promotion programinvolves pretesting each design before it isactually used to allow for changes andmodifications which will improve itseffectiveness.
� Posttests are recommended to evaluate theimpact of each promotion and thecontribution of the promotion towardachieving the program objectives.
19-28© 2000 McGraw-Hill Ryerson Limited
Concept CheckConcept Check
1. What are the characteristics of good
promotion objectives?
2. What are the weaknesses of the percentage
of sales budgeting approach?
3. How have advertising agencies changed to
facilitate the use of IMC programs?
19-29© 2000 McGraw-Hill Ryerson Limited
The Value of Direct Marketing - Visible IndicatorsThe Value of Direct Marketing - Visible Indicators
Visible Indicators of the Value of Direct Marketing
- about half of the Canadian population has ordered
merchandise by phone or mail
- millions of adults have purchased items from a TV
offer
- about 20% of all adults make catalogue purchaseseach year.
- millions of adults spends hours accessing onlineservices.
19-30© 2000 McGraw-Hill Ryerson Limited
The Value of Direct Marketing - Responses It GeneratesThe Value of Direct Marketing - Responses It Generates
� The value of direct marketing can be described interms of the responses it generates.
� Direct orders: the result of offers that contain all theinformation necessary for the prospective buyer tomake a decision to purchase and complete thetransaction.
� Lead generation: the result of an offer designed togenerate interest in a product or service and arequest for additional information.
� Traffic generation: the outcome of an offer designedto motivate people to visit a business
19-31© 2000 McGraw-Hill Ryerson Limited
Concept CheckConcept Check
1. The ability to design and use
direct marketing programs has
increased with the availability of
________ and _________.
2. What are the three types of
responses generated by direct
marketing activities?
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