Dhruv Grewal Michael Levy Marketing Chapter 17 Integrated Marketing Communications Dhruv Grewal Michael Levy

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Volvo Introducing the new S60 required a new way of marketing Consumers felt Volvo was boring but safe Using IMC Volvo was able to demonstrate the new style elements The S60 was designed for performance and safety, so Volvo could not use its previous approach, which largely communicated, “We may be boxy, but we’re safe.” By ensuring the selected media played off one another, the car company and its advertiser created maximum impact. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Integrated Marketing Communications The goal of IMC is to ensure all the various marketing mix elements work together to deliver a consistent message. Therefore, IMC takes the best of each communications medium and combines it to achieve the most effective marketing communications campaign possible. Communication channel © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Communicating with Consumers: The Communication Process New media options fragment communications and make it more difficult and complex to reach the desired target audience. Ask students: What media do you use on a daily basis? This should lead to a discussion of new and alternative media. Marketers must understand how the communication process works and identify possible communication breakdowns. Group activity: Play the game of telephone. Start with a short message, verbally pass it around the room, and see what emerges. Sample phrase: I caught the train heading for Richmond but went to Richland instead. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Test Your Knowledge Which of the following is NOT considered a form of feedback? A) A customer’s purchase of an item B) A complaint or compliment C) The redemption of a coupon or rebate D) A customer telling their friend about a purchase Answer: D

How Consumers Perceive Communication Receivers decode messages differently Senders adjust messages according to the medium and receivers’ traits Marketers must remember that they do not have control over the decoding process, because each receiver decodes the message in his or her own way. Group activity: Identify advertisements or brand images that often result in different reactions from different consumers (e.g., ads for beer, cigarettes, and personal care products). Why do these ads generate differing responses? For example, a cigarette ad for smokers may arouse smokers and induce the desire for a cigarette. For former smokers it may induce a sense of loss. For non-smokers it may not illicit any emotion. Etc.   © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The AIDA Model The AIDA model provides a basis for understanding how marketing communications works. Ask students to pick a product. The decision to buy this product must be somewhat complex. Then walk them through AIDA using the accompanying slides.

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Awareness Senders first must gain the attention of the consumers A multichannel approach increases the likelihood the message will be received Discuss the now-famous Joe Camel study, which found a majority of three-year-old children were aware of Joe Camel, the spokescharacter for Camel cigarettes. The study’s authors suggested awareness would lead to smoking. Discuss whether awareness always translates to action; be sure to include the two intervening steps, interest and desire. Finally, note that in follow-up studies, preschoolers indicated they understood that cigarettes were adult products, and many were adamant that they would not smoke. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interest After the customer is aware, they must be persuaded The customer must want to further investigate the product/service Ask students: Other than purchase, what can IMC prompt consumers to do? Possible answers include behavioral changes (don’t drink and drive), attitude changes (that product is high quality), or physical actions (pick up the phone, log on to the Web site, volunteer). © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Desire I like it I want it! © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Purchase is just one type of action Discussion question Ask students: provide examples of products that they had IMC exposure to, but did not purchase immediately. Then ask students: which IMC exposure moved you to purchase? Of course, they won’t be able to answer that question What other actions can IMC ask consumers to take? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Lagged Effect Advertising does not always have an immediate impact Multiple exposures are often necessary It is difficult to determine which exposure led to purchase © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Entrepreneurial Marketing 17.1: Oxygen: The Network for Women What type of TV program do today’s women want? Oxygen is fun and entertaining but acknowledges women’s intelligence Uses IMC to deliver a consistent message about Oxygen When modern, busy women choose to watch television, they want a station that provides their entertainment preferences, including programming that is fun and entertaining and acknowledges their intelligence. Ask students: Do you ever watch this channel? What shows best fit its target market? Do any shows fail to be consistent with its IMC? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Elements of an Integrated Communication Strategy To get the right message to the right audience through the right medium, an IMC planner must understand how each medium communicates and how to combine it with other media to generate the most impact. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Most visible element of IMC Extremely effective at creating awareness and generating interest Chapter Eighteen covers advertising, the most visible element of IMC, in depth. Ask students: Think about how an advertisement has made you aware of or interested in a specific product. You can use students’ chosen advertisements as the basis for subsequent discussions. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Test Your Knowledge Since the 1990’s, advertising’s share of total promotional dollars has __________. A) risen B) fallen C) remained the same D) fluctuated wildly Answer: B

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Personal Selling Some products require the help of a salesperson More expensive than other forms of promotion Salespeople can add significant value, which makes the expense worth it Chapter Nineteen covers personal selling, the most costly form of IMC, in detail. Ask students: For what kind of purchases is personal selling most appropriate? Their answers should note that this form of IMC works best when the purchase is complicated, because the salesperson can customize the communication to meet the needs of that specific buyer and purchase situation, which other IMC elements cannot. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotions Can be aimed at both end user consumers or channel members Used in conjunction with other forms of IMC Can be used for both short-term and long-term objectives Chapter Eighteen covers sales promotion in detail. Remind students that sales promotions can be used in a wide variety of situations to stimulate demand among either end users or other channel members. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Direct Marketing Easily personalizable Growth of databases has fueled the growth of direct marketing New technologies have opened new direct marketing channels As advertising has declined as a percentage of the total communications budget, direct marketing has increased. Ask students: What characteristics of direct marketing might explain this increased popularity? Direct marketing allows marketers to personalize their message. This enables marketers to communicate with an audience that is more likely to respond to their efforts.   © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Test Your Knowledge What factor has enabled marketers to identify and track consumers over time and across purchase situations, contributing to the rapid growth of direct marketing? A) Online surveys B) The increased use of customer databases C) Infomercials D) Point-of-purchase displays Answer: B

Using M-Commerce for IMC How can firms use the new capabilities of mobile technology to deliver marketing communications? As mobile technology evolves, firms are becoming more sophisticated in how they use new capabilities to deliver marketing communications. Marketing communications can be delivered via text messaging and now making use of video functionality of new portable devices.   © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Case in Point: Warner Brother’s Studio 2.0 To use new capabilities of Mobile technology. Challenge Answer Results Warner Brother’s established Studio 2.0 to create short-form broadband and mobile content for marketers. Enables marketers to create entertainment/advertising content to be viewed online or via a mobile device. During the 2007 Super Bowl, Budweiser introduced Bud TV, downloadable content designed specifically for mobile devices such as iPods, cell phones, and PDAs. As technology changes, marketers must change and adapt to new communication methods. Anheuser Busch had signed on and launched BudTV during the 2007 Super Bowl.

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Public Relations (PR) “Free” media attention Importance of PR has grown as cost of other media has increased Consumers becoming more skeptical about marketing, PR becoming more important Ask students: Do you view PR as credible, because they are not “advertisements,” or not credible, because they come from the company? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin PR Toolkit Although the various tools in the PR toolkit work differently, the most common and visible is sponsorship. Firms choose sponsorship opportunities that appeal to their target market and are consistent with their branding message and strategy. Ask students: What corporate sponsorships represent consistent messages? Avon’s Pink Ribbon campaign is an excellent example of a PR campaign that is consistent across. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Test Your Knowledge What is the key benefit of public relations versus other forms of marketing communications? A) it is “free” B) it is often more credible C) can reinforce the advertising D) these are all benefits of PR Answer: D

Sponsorship in Motion What do sponsor’s do when top athletes change teams? Athletic clothing and equipment firms often sponsor popular athletes and their teams. What do these firms do when athletes change teams? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Case in Point: David Beckham and Adidas Keeping the brand name sponsorship consistent when top athletes change teams. Challenge Answer Results Adidas already has a $10m individual contract with David Beckham. Now he is moving to LA to play for the Galaxy, which it already sponsors the jerseys for. When David Beckham announced his move to Los Angeles, Adidas announced its plans to sponsor the Galaxy. Adidas already sponsors all the Major League Soccer team jerseys, but on the Galaxy jersey, its logo will be more prominent. Adidas has announced that it will take on more of a sponsorship role. The Adidas name and logo will be featured more prominently on team apparel.

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Electronic Media Corporate blogs Online games Many firms are still experimenting with blogs; in 2006 Wal-Mart got in trouble for failing to disclose a blog written by two cross-country travelers was sponsored by the retailer. Alltel uses text messaging to contact new subscribers and welcome them to the company. Ask students: What problems might firms that use text messaging to disseminate marketing communications face? Answer: There may be a backlash against the firm and the wireless provider if consumer phones are constantly flooded with such messages. How would you like to receive advertising text messages? Answer: A lot of folks do not want such messages. However, the instant-messaging generation is likely to be much more tolerant about it. Text messaging © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Results-Driven Elements: Planning for and Measuring IMC Success Understand the outcome they hope to achieve before they begin Short-term or long-term Should be explicitly defined and measured Ask students: How do firms determine whether their IMC strategy has worked? Answer: It depends on the IMC objective. If the objective is to create awareness for a new product, then the firm would measure increases in customer knowledge and awareness. If it were to generate sales, like an ad in the paper, then sales would be the objective measure. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Budget Objective-and-task method Rule-of-thumb methods Many IMC elements require significant expenditures, and firms are reluctant to invest in marketing communications without some guarantee of return. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Budget Ask students: How do you think firms set promotional budgets? How would you set one? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Test Your Knowledge In which rule-of-thumb method assumes communication expenses do not stimulate sales and profit? A) competitive parity B) frequency C) affordable budgeting D) percentage-of-sales Answer: C

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Measuring Success Frequency Reach Every communication may be measured in terms of reach and frequency. Remind students that because of the lagged effect, marketers must not only expose the target audience to the message but also ensure that it has multiple opportunities to view it. This combined measure is GRP. Gross rating points © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Online Measurements Web tracking software Online couponing Technology has introduced a host of new products for tracking online communications, as well as new communication formats. Group activity: List the types of information firms might gather from Web-tracking software, click-through tracking, online couponing, and online referrals. What can firms do with this information? Many firms use this type of information in direct mail or other campaigns, it can also be used to customize the website and to build a network of buyers that are interlinked.  Answer: Firms can use this type of information to better understand the consumer decision process and, their purchase patterns. This information can used to redesign the website, develop loyalty programs, and direct mail/e-mail campaigns Online referring © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Legal and Ethical Issues in IMC Commercial speech Non-Commercial speech Message with an economic motivation Must be fact based Examples: Advertising and direct marketing Message with no economic motivation Protected under the First Amendment Example: PR Most marketing communications are commercial speech, so they do not have the same level of protections as noncommercial free speech. Commercial speech is regulated, meaning that the firm engaging in it is responsible for the contents of the message. You might encourage students to discuss the implications of First Amendment rulings regarding what speech is regulated and what is not. What effects do these rulings have for marketing? In many instances the Courts will side with the marketer since most marketing communications are protected forms of commercial speech. In rare instances restrictions may be placed on where and how messages can be delivered. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Stealth Marketing Stealth marketing Viral marketing Your discussion of stealth marketing techniques and the associated controversy can lead directly into a discussion of Ethical Dilemma 17.1 Camera phones provide a whole new means by which consumers can transmit viral marketing messages. YouTube takes viral marketing to an entirely different level. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Ethical Dilemma 17.1: Is It Deception to Disguise the Message Sender? Marketers using websites to promote movies and TV shows The sites do not identify that they are promotional tools Is this deception? Ask students: Should marketers be required to disclose the purpose of their marketing communications? Do these messages deceive consumers? There is no correct answer to these questions; the creators of these sites argue that confusion and the resultant buzz ARE the point. So why should they tell consumers and ruin the fun? © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Chapter 17 Glossary Advertising: A paid form of communication from an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future. Communication channel: The medium—print, broadcast, the Internet—that carries the message. Direct marketing: Sales and promotional techniques that deliver promotional materials individually to potential customers. Frequency: Measure of how often the audience is exposed to a communication within a specified period of time. Gross rating points (GRP): Measure used for various media advertising—print, radio, or television; GRP = reach × frequency. Integrated marketing communications (IMC): Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact. Lagged effect: A delayed response to a marketing communication campaign. Objective-and-task method: An IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs. Personal selling: The two-way flow of communication between a buyer and a seller that is designed to influence the buyer’s purchase decision.

Chapter 17 Glossary (continued) Public relations (PR): The organizational function that manages the firm’s communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media. Reach: Measure of consumers’ exposure to marketing communications; the percentage of the target population exposed to a specific marketing communication, such as an advertisement, at least once. Rule-of-thumb methods: Budgeting methods that bases the IMC budget on either the firm’s share of the market in relation to competition, a fixed percentage of forecasted sales, or what is left after other operating costs and forecasted sales have been budgeted. Sales promotions: Special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays. Stealth marketing: A strategy to attract consumers using promotional tactics that deliver a sales message in unconventional ways, often without the target audience knowing that the message even has a selling intent. Viral marketing: A marketing phenomenon that encourages people to pass along a marketing message to other potential consumers.