Managing Integrated Marketing Communications Kolter and Keller Ch Managing Integrated Marketing Communications Kolter and Keller Ch. 17 and18

Kotler on Marketing Integrated marketing communications is a way of looking at the whole marketing process from the viewpoint of the customer.

Marketing Communications Mix Different tools serve different purposes... …but boundaries blurred Advertising Sales promotion Direct marketing Personal selling Publicity and PR Sponsorship

Marketing Communications Mix non-personal communication by an identified sponsor, transmitted to target audience via (mass) media Advertising creating, developing direct relationships with individual customers short-term incentives to encourage sales Sales promotion Direct marketing etc.. Personal selling Publicity and PR Sponsorship Making“news”; building goodwill, understanding between organisations & publics Informing, persuading potential customers through personal communication supporting event, person, etc, to enhance sponsor’s awareness, image, etc.

Advertising Advertising has been used for centuries. U.S. advertisers spend more than $237 billion each year; worldwide spending approaches $470 billion. Advertising is used by: Business firms Nonprofit organizations Professionals Social agencies Government

Advertising Advertising plays a pivotal role in world commerce and in the way we experience and live our lives. It is part of our language and our culture…It is both a complex communication process and a dynamic business process. O’Guinn et al (2003) Advertising and Integrated Brand Promotion, Ohio: South-Western, p8

Selecting Advertising Media How many exposures, E*, will produce audience awareness A* depends on the exposures’: Reach Percentage of people exposed to ad Frequency Number of times a person is exposed to ad Media Impact The qualitative value of a message exposure through a given medium

Deciding on Media and Measuring Effectiveness Total Number of Exposures (E) E = R x F where R = reach, F = frequency Known as Gross Rating Points (GRP) Weighted Number of Exposures (WE) WE = R x F x I where R = reach, F = frequency, I = average impact

Figure 18.2: Relationship Among Trial, Awareness, and the Exposure Function

Sales promotion A diverse collection of incentive tools, mostly short-term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade (Kotler 2003:609)

Role of Sales Promotion Encourages consumers to try coupons, price reductions, samples, competitions etc switch coupons, price reductions, free gifts, extra product etc buy more extra product, price reductions, premiums, loyalty programs etc buy more price reductions, free gifts, etc evenly Encourages trade to stock stock more display/promote discounts, allowances, bonuses, gifts, competitions, etc.

Table 18-5: Major Consumer-Promotion Tools Samples: Offer of a free amount of a product or service delivered door to door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer. Coupons: Certificates entitling the bearer to a stated saving on the purchase of a specific product: mailed, enclosed in other products or attached to them, or inserted in magazines and newspaper ads. Cash Refund Offers (rebates): Provide a price reduction after purchase rather than at the retail shop: consumer sends a specified “proof of purchase” to the manufacturer who “refunds” part of the purchase price by mail. Price Packs (cents-off deals): Offers to consumers of savings off the regular price of a product, flagged on the label or package. A reduced-price pack is a single package sold at a reduced price (such as two for the price of one). A banded pack is two related products banded together (such as a toothbrush and toothpaste). See text for complete table

A Magazine Ad with Coupon

Direct marketing An interactive marketing system that uses one or more communications media to effect a measurable response and/or transaction at any location, forming a basis for creating and further developing an ongoing direct relationship between an organisation and its customers. (adapted from DMA, Kotler 2003; Brassington & Pettit 2003)

Using Lists and Data to Identify Markets Known circumstances Specific behaviour Similarity to existing customers

Direct Marketing Catalog Marketing Telemarketing and M-Commerce Inbound telemarketing Outbound telemarketing Four types of telemarketing: Telesales Telecoverage Teleprospecting Customer service and technical support

Direct Marketing Kiosk Marketing E-Marketing Other Media for Direct-Response Marketing Direct-response advertising At-home shopping channels Videotext and interactive TV Kiosk Marketing E-Marketing Give the customer a reason to respond Personalize the content of your e-mails Offer something the customer could not get via direct mail Make it easy for the customer to “unsubscribe”

Brassington & Pettit (2003) / BDS Sponsorship …a business relationship between a provider of funds, resources or services and an individual, event or organization which offers in return some rights and association that may be used for commercial advantage Brassington & Pettit (2003) / BDS Sponsorship

Table 18.8: Major Tools in Marketing PR Public Relations Major Decisions in Marketing PR Table 18.8: Major Tools in Marketing PR Publications: Companies rely extensively on published materials to reach and influence their target markets. These include annual reports, brochures, articles, company newsletters and magazines, and audiovisual materials. Events: Companies can draw attention to new products or other company activities by arranging special events like news conferences, seminars, outings, trade shows, exhibits, contests and competitions, and anniversaries that will reach the target publics. Sponsorships: Companies can promote their brands and corporate name by sponsoring sport and cultural events and highly regarded causes. News: One of the major tasks of PR professionals is to find or create favorable news about the company, its products, and its people, and get the media to accept press releases and attend press conferences. See text for complete table

Common Communication Platforms (Table 17.1) Advertising Sales Promotion Public Relations Personal Selling Direct Marketing Print and broadcast ads Contests, games, sweepstakes, lotteries Press kits Sales presentation Catalogs Packaging-outer Premiums and gifts Speeches Sales meetings Mailings Packaging inserts Sampling Seminars Incentive programs Telemarketing Motion pictures Fairs and trade shows Annual reports Samples Electronic shopping

A Model of Communication (Figure 17.2) field of experience field of experience Message Source encodes decodes Receiver feedback noise Source: adapted from W. Schramm (1971) “How communication works”, in Schramm & Roberts (eds), The process and elements of mass communication

The Communication Process Target audience may not receive the intended message for any of three reasons (p. 500): Selective attention Selective distortion Selective retention

Figure 17.4: Steps in Developing Effective Communication

Developing Effective Communications Identify the Target Audience Image analysis Familiarity scale Favorability scale Never Heard of Heard of Only Know a Little Bit Know a Fair Amount Know Very Well Very Unfavorable Somewhat Unfavorable Indifferent Somewhat Favorable Very favorable

Figure 17.5: Familiarity-Favorability Analysis

Example: Images of Three Hospitals (Semantic Differential Scales)

Developing Effective Communications Determine the Communication Objective Cognitive Affective Behavioral Response-hierarchy models

Developing Creative Strategy

Figure 17.3: Response Hierarchy Models

Developing Effective Communications Hierarchy-of effects model Awareness Knowledge Liking Preference Conviction Purchase

Developing Effective Communications Design the Message AIDA model Gain attention Hold interest Arouse desire Elicit action Message Content Rational appeals Emotional appeals Moral appeals

Developing Effective Communications Message Structure Message Format Message Source Factors underlying source credibility Expertise Trustworthiness Principle of congruity

Developing Effective Communications Select the Communication Channels Personal Communication Channels Advocate channels Expert channels Social channels

Developing Effective Communications Establish the Total Marketing Communications budget Affordable Method Percentage-of-Sales Method Competitive-Parity Method

Deciding on the Marketing Communications Mix The Promotional tools Advertising General Qualities: Public presentation Pervasiveness Amplified expressiveness Impersonality Sales Promotion Benefits: Communication Incentive Invitation

Deciding on the Marketing Communications Mix Public Relations and Publicity Distinctive qualities: High credibility Ability to catch buyers off guard Dramatization Personal Selling Personal confrontation Cultivation Response

Deciding on the Marketing Communications Mix Direct Marketing Distinctive qualities: Nonpublic Customized Up-to-date Interactive

Media Planning and Analysis Different types of medias used: Newspapers Magazines Radio and television Satellite and cable Direct Mail The internet Other (billboards, cinemas, trucks, ships, etc)

Table 18.1: Profiles of Media Types Deciding on Media and Measuring Effectiveness Choosing Among Major Media Types Table 18.1: Profiles of Media Types Medium Advantages Limitations Newspapers Flexibility; timeliness; good local market coverage; broad acceptance; high believability Short life; poor reproduction quality; small “passalong” audience Television Combines sight, sound, and motion; appealing to the senses; high attention; high reach High absolute cost; high clutter; fleeting exposure; less audience selectivity Direct mail Audience selectivity; flexibility; no ad competition within the same medium; personalization Relatively high cost; “junk mail” image See text for complete table

Product Placement

Cost-Effectiveness of Different Promotional Tools

Factors influencing choice of mix organisational resources and objectives push / pull strategy preferences cost, availability of options nature of target market and product

Integrated marketing communications …the whole is greater than the sum of the parts ...so maximise the management of brand information using every point of contact with consumers

Discussion Question While traditional communication methods make measurement of results difficult, Internet communications offer different, more immediate measures. How can analysis of web site visitors’ behavior be used to evaluate the effectiveness of a company’s marketing communications strategy?

Discussion Question Many companies offer free samples as part of a promotional campaign. This approach extends beyond the grocery store or retail outlet into large organizations like universities. Can you identify any products or services that are provided to students or faculty at your school as part of a promotional campaign?