copyright © 2006 by south-western, a division of thomson learning, inc. all rights reserved....

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Chapter 15Chapter 15

Integrated Integrated Marketing Marketing

CommunicationsCommunications

15-2Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Chapter ObjectivesChapter Objectives1. Explain how integrated marketing communications relates

to the development of an optimal promotional mix.2. Describe the communication process and how it relates to

the AIDA concept.3. Explain how the promotional mix relates to the objectives

of promotion.4. Identify the different elements of the promotional mix and

explain how marketers develop an optimal promotional mix.

5. Describe the role of sponsorships and direct marketing in integrated marketing communications.

6. Contrast the two major alternative promotional strategies.7. Explain how marketers budget for and measure the

effectiveness of promotion.8. Discuss the value of marketing communications.


PromotionPromotionFunction of informing, persuading, and

influencing the consumer’s purchase decision

Marketing CommunicationsMarketing CommunicationsTransmission from a sender to a

receiver of a message dealing with the buyer-seller relationship


Integrated Marketing CommunicationsIntegrated Marketing Communications

Coordination of all promotional activities – media advertising, direct mail, personal selling, sales promotion, and public relations – to produce a unified customer-focused promotional message

Importance of TeamworkImportance of TeamworkIMC requires a total strategy including

all marketing activities, not just promotion


Role of Databases in Effective IMC Role of Databases in Effective IMC ProgramsProgramsWith the growth of the Internet,

marketers have been given the power to gather information faster and to organize it easier than ever before

By sharing this knowledge appropriately among all relative parties, a firm can lay the foundation for a successful IMC program


The Communications ProcessThe Communications Process

An effective promotional message accomplishes three tasks:It gains the receiver’s attentionIt achieves understanding by both

receiver and senderIt stimulates the receiver’s needs and

suggests an appropriate method of satisfying them


AIDA conceptAIDA concept (Attention-Interest-Desire-Action) – an explanation of the steps through which an individual reaches a purchase decisionSenderEncodingChannelDecodingResponseFeedbackNoise


Global Difficulties with the Communication Process In China: KFC’s slogan: “Finger lickin’ good” came

out as “Eat your fingers off”Also in China: Coca-Cola had thousands of signs

made using the translation: “Ke-kou-ke-la”Depending on the dialect this means . . . “Bite the wax tadpole,” or “Female horse stuffed with wax”

In Taiwan: Pepsi’s slogan, “Come alive with the Pepsi generation” came out as “Pepsi will bring your ancestors back from the dead”


Objectives of PromotionObjectives of Promotion

Provide InformationProvide Information Increase DemandIncrease Demand Differentiate the ProductDifferentiate the Product Accentuate the Product’s ValueAccentuate the Product’s Value Stabilize SalesStabilize Sales

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Elements of the Promotional MixElements of the Promotional Mix

Promotional mixPromotional mix: blend of personal selling and nonpersonal selling designed to achieve promotional objectivesPersonal sellingPersonal selling: interpersonal

promotional process involving a seller’s person-to-person presentation to a prospective buyer

Nonpersonal sellingNonpersonal selling includes: Advertising, Product placement, Sales promotion, Direct marketing, Public relations

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AdvertisingAdvertisingPaid, nonpersonal communication through

various media by a business firm, not-for-profit organization, or individual identified in the message with the hope of informing or persuading members of a particular audience

Product PlacementProduct PlacementMarketer pays a motion picture or

television program owner a fee to display his or her product prominently in the film or show

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Sales PromotionSales PromotionMarketing activities that stimulates

consumer purchasing (includes: displays, trade shows, coupons, premiums, contests, product demonstrations, and various nonrecurrent selling efforts)

Trade promotion Direct MarketingDirect Marketing

Direct communications other than personal sales contact between buyer and seller, designed to generate sales, information requests, or store visits

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Public relationsPublic relations: firm’s communications and relationships with its various publics

PublicityPublicity: stimulation of demand for good, service, place, idea, person, or organization by unpaid placement of commercially significant news or favorable media presentations

Guerilla MarketingGuerilla Marketing: Unconventional, innovative, and low-cost marketing techniques designed to get consumers’ attention in unusual ways.

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SponsorshipsSponsorships

Provision of funds for a sporting or cultural event in exchange for a direct association with the events or activity

Growth of SponsorshipsGrowth of Sponsorships How Sponsorship Differs from AdvertisingHow Sponsorship Differs from Advertising

Sponsor’s degree of control, Nature of the message, Audience reaction

Ambush marketing Assessing Sponsorship ResultsAssessing Sponsorship Results

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Direct Marketing Communication ChannelsDirect Marketing Communication Channels

Telephone

Direct Mail

Television

Newspaper

Magazine

Radio

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Direct Mail Direct Mail Marketers combine information from

internal and external databases, surveys, coupons, and rebates that require responses to provide information about consumer lifestyles, buying habits, and wants

CatalogsCatalogsOver 10,000 different consumer mail-order

catalogs and thousands more for business-to- business sales are mailed each year generating over $57 million in consumer sales and $36 million in B2B sales

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TelemarketingTelemarketing: promotional presentation involving the use of the telephone for outbound contacts by salespeople or inbound contacts initiated by customers who want to obtain information and place orders

Direct Marketing via Broadcast ChannelsDirect Marketing via Broadcast ChannelsBroadcast direct marketing includes:Brief (30 to 90 and second) direct

response ads on television or radioHome shopping channels like:

Quality Value Channel (QVC)Home Shopping Network (HSN)

Infomercial

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Electronic Direct Marketing ChannelsElectronic Direct Marketing ChannelsWeb advertising is an important

component of electronic direct marketingE-mail direct marketing is a natural and

easy extension of traditional direct mail marketing

Other Direct Marketing ChannelsOther Direct Marketing ChannelsPrint media is generally not as effective as

Web marketing or telemarketing for direct marketers

Magazine and newspaper ads with toll-free telephone numbers, kiosks, and other media are still useful in many situations

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Developing an Optimal Promotional MixDeveloping an Optimal Promotional Mix

Factors that influence the effectiveness of a promotional to mix:Nature of the marketNature of the productStage in the product life-cyclePriceFunds available for promotion

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Pulling and PushingPulling and PushingPromotional StrategiesPromotional Strategies

Pulling strategyPulling strategy: promotional effort by a seller to stimulate demand among final users, who will then exert pressure on the distribution channel to carry the good or service, pulling it though the marketing channel

Pushing strategyPushing strategy: promotional effort by a seller to members of the marketing channel intended to stimulate personal selling of the good or service, thereby pushing it through the marketing channel

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Budgeting for Promotional StrategyBudgeting for Promotional Strategy

Percentage-of-sales method

Fixed-sum-per-unit method

Meeting competition method

Task-objective method

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Measuring the Effectiveness of PromotionMeasuring the Effectiveness of Promotion

Two basic measurement tools:Direct sales results measures the

effectiveness of promotion by revealing the specific impact on sales revenues for each dollar of promotional spending

Indirect evaluation concentrates on quantifiable indicators of effectiveness like:RecallReadership

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Measuring Online PromotionsMeasuring Online PromotionsEarly attempts at measuring online

promotional efforts involved counting hits and visits

Incorporating direct response and comparing different promotions for effectiveness

Two major techniques for setting online advertising rates:Cost per impression (CPM)Cost per response (click-throughs)

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The Value of Marketing CommunicationsThe Value of Marketing Communications

Social ImportanceSocial ImportanceCriticisms of promotional messages as

tasteless and lacking any contribution to society sometimes ignore the fact that society provides no commonly accepted set of standards

The one generally accepted standard in a market society is freedom of choice for the consumer

Promotion has become an important factor in campaigns aimed at achieving socially oriented objectives like the elimination of drug abuse

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Business ImportanceBusiness ImportancePromotional strategy has become

increasingly important to both small and large firms

Both business and nonbusiness enterprises recognize the importance of promotional efforts

Economic ImportanceEconomic ImportanceEffective promotion has allowed society to

derive benefits not otherwise availableSubsidizes the information contents of

newspapers and the broadcast media

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