Integrated Marketing Communications

© 2005 McGraw-Hill Ryerson Limited Chapter Objectives To review the various elements of the promotional mix: advertising, sales promotion, public relations, direct marketing, Internet marketing, and personal selling. To introduce the concept of integrated marketing communications (IMC) by considering its evolution, growth, importance, and a broader view. To examine how various marketing and promotional elements must be coordinated to communicate effectively with the IMC perspective. To summarize a model of the IMC planning process and examine the steps in developing a marketing communications program. © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Promotion “Coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or to promote an idea.” © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion Sales Promotion Publicity/Public Relations Publicity/Public Relations Personal Selling © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Advertising Non-personal communication Highly pervasive form of promotion  best known, most widely discussed. Used to create brand images and symbolic appeals for a company or brand. Ability to strike a responsive chord with consumers. © 2005 McGraw-Hill Ryerson Limited

Classifications of Advertising Consumers National Advertising National Advertising Retail/Local Advertising Retail/Local Advertising Primary vs. Selective Demand Advertising Primary vs. Selective Demand Advertising Business-to-Business Advertising Business-to-Business Advertising Organizations Professional Advertising Professional Advertising Trade Advertising © 2005 McGraw-Hill Ryerson Limited

An Example of “B-to-B” Advertising © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Direct Marketing Communication directly with target consumers to generate a response or transaction. © 2005 McGraw-Hill Ryerson Limited

Direct Marketing is Part of IMC Mail Direct Mail Internet Sales Direct Response Advertising Direct Response Advertising Direct Marketing Shopping Channels Shopping Channels Telemarketing Telemarketing Cataloging Catalogs © 2005 McGraw-Hill Ryerson Limited

Bose Uses Direct Response Advertising © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Internet Marketing Interactive media allow two-way communication. Users can participate in and modify the form and content of information they receive. © 2005 McGraw-Hill Ryerson Limited

Using the Internet as an IMC Tool Obtains Customer Database Information Educates or Informs Customers Communicates and Interacts With Buyers A Persuasive Advertising Medium Builds and Maintains Customer Relationships Provides Customer Service and Support A Sales Tool or an Actual Sales Vehicle Educates or Informs Customers A Persuasive Advertising Medium A Sales Tool or an Actual Sales Vehicle Relation to text This slide relates t material on pp. 20-21 which discusses interactive marketing and the Internet as IMC tools. Summary Overview The rapid changes in technology have led to dramatic growth of communications through interactive media, particularly the Internet. This communication medium is unique in that it allows for the back-and-forth flow of information in real time. Customers can perform a variety of functions on the Internet such as receive and alter information and images, make inquires, respond to questions, and, of course, make purchases. The Internet has changed the ways companies communicate to their customers as companies and organizations of all sizes have developed websites to promote their products and services. Use of this slide This slide can be used to show that the Internet has changed the way companies communicate with their customers. Because of its interactive nature, it is a very effective way to communicate with customers. Actually, it is a medium that can be used to execute all elements of the promotional mix. In addition to advertising, companies can offer sales promotion incentives such as coupons or contests, do direct marketing, and execute public relations, and personal selling functions via the Internet. Obtains Customer Database Information Communicates and Interacts With Buyers Provides Customer Service and Support © 2005 McGraw-Hill Ryerson Limited

American Airlines Encourages Customers to Do It All Online © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Sales Promotion Activities providing extra value or incentive to sales force or consumer. Activities can be consumer-oriented or trade-oriented. © 2005 McGraw-Hill Ryerson Limited

Sales Promotion Tools Consumer-oriented Trade-oriented Coupons Samples Allowances Premiums POP Displays Contests/Sweepstakes Training Programs Refunds/Rebates Bonus Packs Trade Shows Loyalty Programs Coop Advertising Events Consumer-oriented For end-users Trade-oriented For resellers © 2005 McGraw-Hill Ryerson Limited

Various Uses of Sales Promotion Introduce New Products Introduce New Products Get Existing Customers to Buy More Get Existing Customers to Buy More Combat Competition Attract New Customers Attract New Customers Sales Promotion Enhance Personal Selling Enhance Personal Selling Maintain Sales In Off Season Maintain Sales In Off Season Tie In Advertising & Personal Selling Increase Retail Inventories Tie In Advertising & Personal Selling Increase Retail Inventories © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion Sales Promotion Publicity/Public Relations © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Public Relations Evaluating public attitudes, identifying policies and procedures of individuals or organizations, and executing a program of action to gain public understanding and acceptance. © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Publicity Non-personal communications regarding an organization, product, service, or idea. Idea reaches public in a form not directly paid for by the company. More credible to consumers than other forms of promotion. © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Publicity Vehicles Feature Articles Feature Articles News Releases News Releases Interviews Interviews Publicity Vehicles Press Conferences Special Events Special Events © 2005 McGraw-Hill Ryerson Limited

Advertising Versus Publicity Factor Advertising Publicity Control Great Little Credibility Lower Higher Reach Measurable Undetermined Frequency Schedulable Uncontrollable Cost High/Specific Low/Unspecified Flexibility High Low Timing Specifiable Tentative © 2005 McGraw-Hill Ryerson Limited

Public Relations Tools Publicity Vehicles Publicity Vehicles Special Publications Special Publications Community Activities Community Activities Corporate Advertising Corporate Advertising Cause-related Marketing Cause-related Marketing Public Affairs Activities Public Affairs Activities Special Event Sponsorship © 2005 McGraw-Hill Ryerson Limited

DuPont Uses Public Relations to Enhance Its Corporate Image © 2005 McGraw-Hill Ryerson Limited

Basic Elements of the Promotional Mix Advertising Advertising Direct Marketing Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion Sales Promotion Publicity/Public Relations Publicity/Public Relations Personal Selling © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Personal Selling Person-to-person communication. Seller encourages prospective buyers to purchase company’s product/service or to act on an idea. Direct contact between buyer and seller gives communication flexibility to marketer. © 2005 McGraw-Hill Ryerson Limited

Participants in the Promotional Process Figure 1-3 © 2005 McGraw-Hill Ryerson Limited

Integrated Marketing Communications IMC coordinates various promotional elements and marketing activities which communicate with a firm’s customers to provide clarity, consistency, and maximum communications impact. Evolved as companies realized the need for strategic integration of promotional tools. © 2005 McGraw-Hill Ryerson Limited

Traditional Approach to Marketing Communications Publicity Point of Purchase Sales Promotion Media Adver- tising Packaging Special Events Relation to text This slide relates to material on pp. 9-11 of the text. Summary Overview This slide shows the traditional approach to advertising and promotion where many of the marketing and promotional functions were planned and managed separately with different budgets, different views of the market, and different goals and objectives. Many of the marketing activities such as package design, sales promotion, and direct marketing services were viewed as ancillary services and handled on a project basis rather than integrating them into the IMC program. Use of this slide This slide can be used to show the traditional approach to marketing communications that lacks coordination and consistency. The disconnected puzzle pieces are designed to demonstrate how traditional approaches to marketing communications often viewed the various IMC tools as separate pieces of the puzzle rather than having them all work together. Public Relations Direct Response Interactive Marketing Direct Marketing © 2005 McGraw-Hill Ryerson Limited

Contemporary IMC Approach Packaging Sales Promotion Direct Response Media Adver- tising Point of Purchase Public Relations Publicity Interactive Marketing Direct Marketing Special Events © 2005 McGraw-Hill Ryerson Limited

Reasons for the Growth of IMC Planning Efficiency and Effectiveness Consumer Adoption of Technology and Media Innovative Marketing Practices Shifting of marketing dollars Growth of the Internet Movement from advertising focus Growth of database marketing Shift in power © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Importance of IMC Consumer’s Point of View IMC helps link elements of promotional campaign to clearly and accurately represent the brand. Relationship Marketing Allows marketers to create, maintain, or enhance long-term relationships with customers or stakeholders. More cost-effective to retain customers than acquire new ones. © 2005 McGraw-Hill Ryerson Limited

Dell Focuses on Building a Relationship With Customers © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited A Broader View of IMC IMC can be expanded to consider all sources of brand or company contact by customer. A total marketing communications strategy recognizes how ALL marketing activities communicate with customers. Everything the company says and does needs to communicate a common theme. © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited IMC and Branding 2003 Brand Value (Billions of Dollars) Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind. 1. Coca-Cola $70.5 2. Microsoft $65.1 3. IBM $51.8 4. GE $42.3 5. Intel $31.1 6. Nokia $29.4 7. Disney $28.0 8. McDonald’s $24.7 9. Marlboro $22.2 10. Mercedes $21.4 IMC plays a major role in the process of developing and sustaining brand identity and equity. © 2005 McGraw-Hill Ryerson Limited

Communication Role of Product Decisions Product planning involves portraying the product as a bundle of benefits for consumers. Product Symbolism What a product or brand means to consumers. What consumers experience by purchasing or using the product. © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Product Symbolism © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Brand Equity Added value resulting from product’s image, customer attachment to product, and impressions of product differentiation. © 2005 McGraw-Hill Ryerson Limited

Packaging is More Than a Container © 2005 McGraw-Hill Ryerson Limited

Communication Role of Price Decisions Economic cost to consumers for all product benefits combined. Advertising and promotion reinforce consumer’s belief that product’s benefits or qualities accurately indicates the price decisions. © 2005 McGraw-Hill Ryerson Limited

Communication Role of Distribution Decisions Marketing Channels Interdependent organizations involved in making product or service available. Distribution strategy should take into account the communication objectives – has an impact on IMC program. What messages are conveyed by selling a product at Holt Renfrew instead of Wal-Mart? © 2005 McGraw-Hill Ryerson Limited

Promotional Management “Coordinating the promotional mix elements to develop a controlled, integrated program of effective marketing communications.” © 2005 McGraw-Hill Ryerson Limited

Promotional Management: Melitta Coffee Campaign Figure 1-5 © 2005 McGraw-Hill Ryerson Limited

© 2005 McGraw-Hill Ryerson Limited Review the IMC Plan 1. A detailed situation analysis 1. A detailed situation analysis 2. Specific marketing objectives 2. Specific marketing objectives 3. A marketing strategy and program 3. A marketing strategy and program 4. A program for implementing the strategy 4. A program for implementing the strategy 5. A process for monitoring and evaluating performance © 2005 McGraw-Hill Ryerson Limited

IMC Planning Model Promotional Program Situation Analysis Analysis of the Communications Process Budget Determination Develop Integrated Marketing Communications Programs Review of Marketing Plan Advertising Sales Promotion PR/ Publicity Personal Selling Direct Marketing Objectives Message Strategy Integration & Implementation of Marketing Communications Strategies Monitor, Evaluate & Control Promotional Program Internet/ Interactive © 2005 McGraw-Hill Ryerson Limited