Chapter 19 Managing Integrated Marketing Communications by

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

Chapter Objectives In this chapter, we focus on three major questions: How does communication work? What are the major steps in developing an integrated marketing communications program? Who should be responsible for marketing communication planning?

The Marketing Communications Mix This CTR relates to the material on pp. 422-423. The Marketing Communications Mix Advertising Any Paid Form of Nonpersonal Presentation by an Identified Sponsor. Tools of The Marketing Communications Mix Advertising. Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising often utilizes mass media and may be adapted to take advantages of a given mediums strengths to convey information. Sales Promotion. Sales promotions consist of short-term incentives to encourage purchase of sales of a product or service. Limited time offers or dated coupons are common sales promotions. Public Relations. Public relations is an on-going process of building good relations with the various publics of the company. Key elements in the process are obtaining favorable publicity, building and projecting a good "corporate image," and designing an information support and response team to respond proactively to unfavorable rumors, stories, or events. Personal Selling. Personal selling describes the use of oral presentations in a conversation with one or more prospective buyers for the purposes of making a sale. Personal selling combines product information and benefits with the interpersonal dynamics of the sales person. Good interpersonal relationship skills and effective oral communication skills are needed for personal selling. Direct Marketing. Directed communications with carefully targeted individual consumers to obtain an immediate response. Sales Promotion Short-term Incentives to Encourage Trial or Purchase. Personal Selling Public Relations Protect and/or Promote Company’s Image/products. Personal Presentations. Direct Marketing Direct Communications With Individuals to Obtain an Immediate Response.

Elements in the Communication Process SENDER Media Message RECEIVER Encoding Decoding Noise Response Feedback

Figure 19.2: Steps in Developing Effective Communication

Effective Communications Step 1. Identifying the Target Audience Effective Communications Step 2. Determining the Communication Objectives Buyer Readiness Stages Awareness Knowledge Liking Preference Conviction Purchase

Response Hierarchy Models AIDA Model a Hierarchy-of- Effects Model b Innovation- Adoption Model c Communi- cations Model d Stages Cognitive stage Affective Behavior Attention Interest Desire Action Purchase Liking Preference Conviction Awareness Knowledge Awareness Trial Adoption Interest Evaluation Behavior Attitude Intention Exposure Reception Cognitive response

Step 3. Designing the Message Message Content Rational Appeals Emotional Appeals Moral Appeals Message Structure Draw Conclusions Argument Type Argument Order Message Format Layout, Words, & Sounds, Body Language Message Source Expertise, Trustworthiness, Congruity

Message Problems Selective Attention Selective Distortion Selective Retention

Step 4. Select Communications Channel Personal Communication Channels Nonpersonal Communication Channels

Step 5. Establish the Budget Affordable % Of Sales Competitive Parity Objective & Task

Public Relations & Publicity Step 6. Decide on Communications Mix Advertising Public, Pervasive, Expressive, Impersonal Sales Promotion Communication, Incentive, Invitation Public Relations & Publicity Credibility, Surprise, Dramatization Personal Selling Personal Confrontation, Cultivation, Response Direct Marketing Nonpublic, Customized, Up-to-Date, Interactive

Step 8. Manage the IMC Process Step 7. Measure Results Step 8. Manage the IMC Process

Factors in Developing Promotion Mix Strategies Type of Product/ Market Buyer/ Readiness Stage Push vs. Pull Strategy Product Life-Cycle Stage

Push Versus Pull Strategy Producer Interme- diaries Marketing activities End users Marketing activities Demand Push Strategy End users Marketing activities Producer Interme- diaries Demand Demand Pull Strategy

Figure 19.6: Cost-Effectiveness of Different Promotional Tools

Managing the Integrated Marketing Communications Process Integrated Marketing Communications (IMC)

Chapter 20 Managing Advertising, Sales Promotion, Public Relations, and Direct Marketing by

Chapter Objectives In this chapter, we focus on the following questions: What steps are involved in developing an advertising program? What explains the growing use of sales promotion, and how are sales-promotion decisions made? How can companies exploit the potential of public relations and publicity? How can companies use integrated direct marketing for competitive advantage? How can companies do effective e-marketing?

Major Decisions in Advertising Objectives Setting Major Decisions in Advertising Budget Decisions Message Decisions Media Decisions Campaign Evaluation

Advertising Objectives Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Informative Advertising Build Primary Demand Persuasive Advertising Build Selective Demand Comparison Advertising Compares One Brand to Another Reminder Advertising Keeps Consumers Thinking About a Product.

The Five Ms of Advertising Message Message generation Message evaluation and selection Message execution Social-responsibility review Media Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation Money Factors to consider: Stage in PLC Market share and con- sumer base Competition and clutter Advertising frequency Product substituta- bility Mission Sales goals Adver- tising objectives Measure- ment Communi- cation impact Sales

Advertising Budget Factors Market Share & Consumer Base Competition & Clutter Stage in the Product Life Cycle Advertising Frequency Product Substitutability

Figure 20.2: Relationship Among Trial, Awareness, and the Exposure Function

Profiles of Major Media Types Newspapers Advantages: Flexibility, timeliness; good local market coverage; broad acceptance, high believability Limitations: Short life; poor reproduction quality; small pass-along audience Television Advantages: Combines sight, sound, motion; high attention; high reach; appealing to senses Limitations: High absolute costs; high clutter; fleeting exposure; less audience selectivity Direct Mail Advantages: Audience selectivity; flexibility, no ad compe- tition within same medium; allows personalization Limitations: Relative high cost; “junk mail” image

Profiles of Major Media Types Radio Advantages: Mass use; high geographic and demographic selectivity; low cost Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences Magazines Advantages: High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership Limitations: Long ad purchase lead time; waste circulation; no guarantee of position Outdoor Advantages: Flexibility; high repeat exposure; low cost; low message competition Limitations: Little audience selectivity; creative limitations

Classification of Advertising Timing Patterns Concen- trated (1) (2) (3) Level Rising Falling Alternating (4) Continuous (8) (7) (6) (5) (9) Inter- mittent (10) (11) (12) Number of messages per month Month

Simplified Rating Sheet for Ads (Attention) How well does the ad catch the reader’s attention? __20 (Read-through) How well does the ad lead the reader to read further? __20 (Cognitive) How clear is the central message or benefit? __20 (Affective) How effective is the particular appeal? __20 (Behavior) How well does the ad suggest follow-through action? __20 Poor ad Mediocre Average Good Great 20 40 60 80 100 __Total

Advertising Strategy Message Execution Testimonial Evidence Slice of Life Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Lifestyle Typical Message Execution Styles Scientific Evidence Fantasy Technical Expertise Mood or Image Personality Symbol Musical

Advertising Evaluation Advertising Program Evaluation Advertising Evaluation Communication Effects Is the Ad Communicating Well? Sales Effects Is the Ad Increasing Sales?

Why the increase in Sales Promotion? Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter Retailer - scanner data, industry consolidation -MFGs want to break through Loyalty & Sensitivity & proliferation - we did that Frag - more media, more targeted Short-term&Account - US Business, stock mkt, not BE

Long-Term Promotional Allocation 10 20 30 40 50 60 1986 88 90 92 94 1996 Year %t of total - 3 yr.MA Trade Promo Media Adv Cons. Promo

Channels of Sales Promotions MANUFACTURER CONSUMER Consumer Promotions RETAILER Trade Promotions Push Pull Retail Promotions

Consumer Promotion Consumer-Promotion Objectives Consumer-Promotion Tools Entice Consumers to Try a New Product Point-of-Purchase Displays Premiums Price Packs Cash Refunds Coupons Samples Patronage Rewards Games Sweepstakes Contests Advertising Specialties Lure Customers Away From Competitors’ Products Get Consumers to “Load Up’ on a Mature Product Hold & Reward Loyal Customers Consumer Relationship Building

Trade Promotions Trade-Promotion Tools Trade-Promotion Objectives Specialty Advertising Items Contests Free Goods Buy-Back Guarantees Allowances Price-Offs Patronage Rewards Push Money Discounts Premiums Displays Persuade Retailers or Wholesalers to Carry a Brand Give a Brand Shelf Space Promote a Brand in Advertising Push a Brand to Consumers

Business-to-Business Promotion Business-Promotion Objectives Business-Promotion Tools Generate Business Leads Conventions Trade Shows Sales Contests Stimulate Purchases Reward Customers Motivate Salespeople

Major Public Relations Tools Web Site News Public Service Activities Speeches Corporate Identity Materials Father of PR was Edward Bernays, turns out he was Freud’s nephew! Value of some good brand publicity/movie placements: SPECIAL EVENTS: Reeses Pieces sales jumped 85% after E.T. Mumford High sold $1M in school shirts after Beverly Hills Cop CA. Raisin Board paid $25K for bus-stop sign and raisin eating scene in Back to the future. Coke and Pepsi scout out roles full time. Special Events Audiovisual Materials Written Materials

Direct Marketing The Growth of Direct Marketing Direct-Order Marketing Customer Relationship Marketing The Growth of Direct Marketing Market Demassification The Benefits of Direct Marketing Integrated Direct Marketing

Direct Marketing Major Channels for Direct Marketing Face-To-Face Selling Direct Mail New Forms of Mail Delivery Fax mail E-mail Voice mail

Direct Marketing Constructing a Direct-Mail Campaign Direct marketing has passed through a number of stages: Carpet bombing Database marketing Interactive marketing Real-time personalized marketing Lifetime value marketing Constructing a Direct-Mail Campaign Objectives Target Markets and Prospects Offer Elements Testing Elements Measuring Campaign Success: Lifetime Value

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 Other Media for Direct-Response Marketing Direct-response advertising At-home shopping channels Videotext and interactive TV Kiosk Marketing

Direct Marketing E-Marketing Permission Marketing Levels of Permission Marketing: No permission level Low permission level Medium permission level High permission level Transaction level E-Marketing Guidelines 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”