chapter sixteen developing integrated marketing communications

Chapter Sixteen

Developing Integrated Marketing

Communications

Copyright © Houghton Mifflin Company. All rights reserved. 16 | 2

Learning Objectives

1. Describe integrated marketing communications.

2. Understand the role of promotion.

3. Explain the purposes of the three types of advertising.

4. Describe the advantages and disadvantages of the major advertising media.

5. Identify the major steps in developing an advertising campaign.


Learning Objectives (cont’d)

6. Recognize the various kinds of salespersons, the steps in the personal-selling process, and the major sales management tasks.

7. Describe sales promotion objectives and methods.

8. Understand the types and uses of public relations.

9. Identify the factors that influence the selection of promotion mix ingredients.


What Is Integrated Marketing Communications?

• Coordination of promotion efforts for maximum informational and persuasive impact on customers

• Results in a consistent message to customers, long-term customer relationships, and the efficient use of promotional resources− Mass media advertising has given way to targeted

promotional tools (e.g., cable TV, direct mail, and the Internet)

− The overall cost of marketing communications has risen significantly, pressuring managers to make the most efficient use of marketing resources


The Role of Promotion

• Promotion– Communication about an organization and its products

that is intended to inform, persuade, or remind target market members

• Role of promotion– To facilitate exchanges directly or indirectly by

informing individuals, groups, or organizations and influencing them to accept a firm’s products or to have more positive feelings about the firm

• Convey product and service information directly to target market segments

• Provide information to interest groups, regulatory agencies, investors, and the general public

– To maintain positive relationships between a company and various groups in the marketing environment


Information Flows Into andOut of an Organization

• A promotional activity’s effectiveness depends on the information available to marketers

Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company, Adapted with permission.


The Promotion Mix

• The particular combination of promotion methods a firm uses to reach a target market– Advertising

• A paid nonpersonal message communicated to a select audience through a mass medium

– Personal selling• Personal communication aimed at informing

customers and persuading them to buy a firm’s products

– Sales promotion• The use of activities or materials as direct

inducements to customers or salespersons

– Public relations• Communication activities used to create and maintain

favorable relations between an organization and various public groups, both internal and external


Possible Ingredients for an Organization’s Promotion Mix

Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company, Adapted with permission.


Types of Advertising by Purpose

• Primary-demand advertising– Used to increase demand for all brands of a product in a

specific industry• Selective-demand (brand) advertising

– Used to sell a particular brand of product– Immediate-response advertising

• To persuade customers to buy the product within a short time

– Reminder advertising• To keep the firm’s name fresh in the public’s mind

– Comparative advertising• Compares specific characteristics of two or more brands to

show the advertiser’s brand is better

• Institutional advertising– Designed to enhance a firm’s image or build its reputation


Advertising Spending by Media and Total Dollars Spent

Insert Figure 16.3, p.518


Advertising Media

• The forms of communication through which advertising reaches its audience

• Newspapers– Relatively inexpensive and timely; short life

span• Magazines

– Reach a specific market segment; more prestigious than newspapers; high cost; lack of timeliness

• Direct mail– Most selective; effectiveness can be

measured; email


Advertising Media (cont’d)

• Yellow pages advertising– Print and online; local; purchased for

1 year• Out-of-home advertising

– Short promotional messages on billboards, posters, signs, and vehicles; focuses on geographic area; fairly inexpensive

• Television– The primary medium for larger firms

trying to reach national or regional markets

– Network time; local time; sponsoring a show; spot time; infomercials


Advertising Media (cont’d)

• Radio– Offers selectivity; most accessible medium;

can be less expensive than other media

• Internet– Increasingly popular; can be expensive;

potentially large audience; can target precisely; effectiveness is questionable

– Banner and button ads; sponsorship ads; keyword ads; interstitials


Major Steps in Developing an Advertising Campaign

1. Identify and analyze the target audience

2. Define the advertising objectives

3. Create the advertising platform

4. Determine the advertising budget

5. Develop the media plan6. Create the advertising

message7. Execute the campaign8. Evaluate advertising

effectiveness


Advertising Agencies

• Independent firms that plan, produce, and place advertising for their clients

• Large agencies also help with sales promotion and public relations

• Media usually pay a commission to agencies

• Firms may use both in-house advertising departments and an independent agency


Top 10 National Advertisers

1. General Motors Corp.

2. Procter & Gamble Co.

3. Time Warner

4. Pfizer

5. SBC Communications

6. DaimlerChrysler

7. Ford Motor

8. Walt Disney Co.

9. Verizon Communications

10.Johnson & JohnsonSource: Advertising Age, June 27, 2005.


Social and Legal Considerations in Advertising

• Criticisms– Advertising is wasteful

– Advertising is deceptive

• Benefits– Advertising is the most effective and least expensive

means of communicating to a large number of individuals and organizations

– Advertising encourages and is a means of competition; it thus leads to new/better products, more choice, lower prices

– Advertising revenues support our mass communication media

– Advertising provides job opportunities


Personal Selling

• The most adaptable promotion method• The most expensive promotion method• Kinds of salespersons

– Order getter• Responsible for creative selling: selling a

firm’s products to new customers and increasing sales to present customers

– Order taker• Handles repeat sales in ways that

maintain positive relationships with customers


Personal Selling (cont’d)

• Kinds of salespersons (cont’d)– Sales support personnel

• Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service

• Missionary salespersons– Visit retailers to encourage an initial purchase of

the manufacturer’s products from wholesalers

• Trade salespersons– Work with customers to promote and increase

retail sales of the manufacturer’s products

• Technical salespersons– Assist current customers with technical matters

related to the manufacturer’s products


The Personal-Selling Process

Source: William M. Pride and O.C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company. Adapted with permission.


Managing Personal Selling

• Setting sales objectives– Concrete, quantifiable terms– Specified time period– Specified geographic area

• Adjusting the size of the sales force to meet changes in the firm’s marketing plan and the marketing environment

• Attracting and hiring effective salespersons

• Training salespersons• Compensating salespersons• Motivating salespersons


Sales Promotion

• Activities or materials that are direct inducements to customers or salespersons

• Objectives– To draw new customers– To encourage trial of a new product– To invigorate the sales of a mature brand– To boost sales to current customers– To reinforce advertising– To increase traffic in retail stores– To steady irregular sales patterns– To build up reseller inventories– To neutralize competitive promotional efforts– To improve shelf space and displays


Sales Promotion Methods

• Consumer sales promotion method– Designed to attract consumers to particular retail stores

and to motivate them to purchase certain new or established products

• Trade sales promotion method– Designed to encourage wholesalers and retailers to

stock and actively promote a manufacturer’s product• Factors influencing the choice of sales promotion

method– Objectives of the sales promotional effort– Product characteristics– Target market profile– Distribution channels– Availability of resellers– Competitive and regulatory forces in the environment


Sales Promotion Methods (cont’d)

• Rebate– A return of part of the purchase price of a product

• Coupon– Reducing the purchase price of a particular item by a

stated amount at the time of purchase• Sample

– A free product given to customers to encourage trial• Premium

– A gift a producer offers to a customer in return for buying its product

• Frequent-user incentives– A program that rewards customers who engage in

repeat (frequent) purchases


Sales Promotion Methods (cont’d)

• Point-of-purchase displays– Promotional material in the retail store designed to

inform customers and encourage purchases

• Trade shows– Industry-wide exhibits at which many sellers display

their products

• Buying allowance– A temporary price reduction to resellers for purchasing

specified quantities of a product

• Cooperative advertising– A manufacturer agrees to pay a certain amount of the

retailer’s media cost for advertising the manufacturer’s product


Public Relations

• A broad set of communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external– Customers, employees, stockholders, suppliers,

educators, the media, government officials, society in general

• Types of public relations tools– Written and spoken communications

• Brochures, newsletters, company magazines, annual reports, news releases, corporate-identity materials, speeches

– Event sponsorship• Special events such as concerts and charity functions

that the firm underwrites wholly or partially


Public Relations (cont’d)

• Publicity– Communication in news-story form about an

organization, its products, or both

News release

Feature article

Captioned photograph

Press conference


The Uses of Public Relations

• To promote people, places, activities, ideas• To enhance the reputation of the organization

by increasing awareness of company products and activities

• To create specific positive company images• To maintain the public visibility of the

company• To reduce the effects of negative events on

the company’s reputation


Promotion Planning

• Promotional campaign– A plan for combining and using the four

promotional methods—advertising, personal selling, sales promotion, and public relations—in a particular promotion mix to achieve one or more marketing goals

• What will be the role of promotion in the overall marketing mix?

• To what extent will each promotional method be used in the promotion mix?


Promotion and Marketing Objectives

• Providing product information to target markets

• Increasing market share by convincing new customers to purchase

• Positioning the product relative to the images customers have of competing products

• Stabilizing sales by increasing sales during slack periods or for products that are declining


Developing the Promotion Mix

• Marketers may use several promotion mixes at the same time for different products

• The promotion mix ingredients depend on– Organizational resources and objectives

– Target market characteristics

– Product characteristics

– The cost and availability of promotional methods

chapter sixteen developing integrated marketing communications

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