Integrated Marketing Communications Chapter Thirteen Ford Thunderbird Ad Integrated Marketing Communications

Chapter Objectives Discuss the concept and stages of Integrated Marketing Communication. Identify various marketing communication elements and the importance of AIDA. Discuss factors that impact the relative mix of communication elements in an Integrated Marketing Communication plan. Explain methods for measuring the effectiveness of marketing communication.

Integrated Marketing Communications The coordination and integration of all marketing communication tools, avenues, and sources within a company into a seamless program designed to maximize the communication impact on consumers, businesses, and other organization constituencies. Promotion: All forms of external communications directed toward consumers and businesses with an ultimate goal of developing customers. Reasons for Integrated Marketing Communication Customers are better informed. Customers are more price conscious. Customers are more demanding of quality and service. Customers want more convenience and faster delivery. Communication to four primary groups: Customers Channel members Employees Stakeholders

Communication Venues Advertising Sales/Trade promotion Personal selling Public relations Internet Database Direct marketing Traditional Approach radio, television, newspaper, and magazines Integrated Approach Internet, billboards, transit signs, and company stationery Advertising: Paid communication directed to customers and/or other stakeholders Public relations: Addresses issues faced by an organization and represents the organization to the public, media, and various stakeholders Publicity: An outcome of public relations that is produced by the news media and is not paid for or sponsored by the business Sales promotions: Incentives used to encourage end-users to purchase a product, e.g., coupons, premiums Trade promotions: Incentives directed toward channel members to encourage them to purchase, stock or push a product through the channel Personal selling: Direct communication between the buyer and seller with the express purpose of selling a product Database marketing: Collection, analysis, and use of large volumes of customer data to develop marketing programs and customer profiles Direct marketing: Promotion of a product directly from the manufacturer or producer to the buyer without any middlemen involved in the transaction Internet marketing: Promotion and sale of products through the Internet (more than 60% of Americans have Internet access)

The Communication Mix

Stages of Integrated Marketing Communications Identifying, coordinating, and managing all forms of external communication to bring all of the company’s brands and divisions under central control. Use same logos, themes, and colors (same message, same look). Extending the scope of communication to include everyone touched by the organization. Internal and External communication have to be consistent. Every person who comes in contact with the organization should see one overall theme. Databases are developed to include every customer's activities, purchases, and interactions with the company. Customers information is used to make product and promotion decisions. Establish “a customer value” for each customer. Customers are very different, e.g., some buy large quantities others not, some are loyal others are not. Use individualized marketing approaches that will maximize the return of effort.

The Communication Process Noise: different accessibility of medium, selective awareness, attention, reaction, action. Sender Recipient Purpose*: Persuasive Communication It is difficult to guarantee that the intended message of the sender is the perceived message of the recipient. AIDA – model Attention: Get awareness of your message. Interest: Get consumer to listen to message. Desire: Get consumer to want product + service + idea. Action: Get Consumer to purchase.

Aida Concept

Model of Communications “*Copy” Encoding Source Message *Informer *Presentation Noise Audience Medium Decoding *Receivers *Vehicle Low Involvement *Responses High Involvement Cognitive Cognitive Behavioral Affective Affective Behavioral

Communication Objectives Increase demand Use trade promotions (channel) Use sales promotions (consumers) Advertising and personal selling support Differentiate a product Avoid commodity status, price competition Benefits and product attributes Psychological superiority Personal selling Advertising Reduce purchase risk New products New customers Trade and sales promotions Provide information Advertising Personal selling Retail Field sales Build brand equity Essential for long-term survival Two foundations Quality Awareness Stimulate trial Sales promotions

Communication Objectives Summary Promotion Personal Advertising Trade Sales Selling Objective Increase demand M E E G Differentiate a product E P M E Provide information E P P E Build brand equity E P P M Reduce purchase risk P G G E Stimulate Trial M P E M E = Excellent, G = Good, M = Moderate, P = Poor

Impact of Promotional Mix Elements Personal Selling Sales Promotion I m p o r t a n c e Advertising Public Relations Awareness Interest Desire Action

Trustworthy Sources of Information Word-of-Mouth: Whether on-line or off-line, nationally or internationally, friends and family or strangers, word-of-mouth information is typically deemed more trustworthy than information generated by a marketer. This is one reason why marketers are currently exploring “social networks” as a means of message delivery.

Business versus Consumer Marketing Business Marketing: Relies more on personal selling and trade promotions (larger volume purchases) Consumer Marketing: Relies more on sales promotion and advertising

Push/Pull Marketing Strategies Push marketing strategy: The manufacturer attempts to push the product through the channels with the belief that if the product is available in retail outlets, consumers will purchase it. Pull marketing strategy: The manufacturer builds product demand at the consumer level with the belief that consumers will go to retailers and demand that the product be stocked.

Question: Does Tree Top use a push or a pull strategy? Answer: It uses a pull strategy, advertising their juice to parents, who then demand the product from retailers. Source: © Tree Top, Inc., 2002. Created by Cole & Weber / Red Cell, Seattle, WA.

Marketing Communication & the PLC Introduction Growth Maturity Decline Advertising Develop awareness *** Build industry demand *** Trade promotions Not effective Sales promotions Encourage trial usage *** Personal selling Good for b-to-b market *** Poor for consumer markets *** Advertising Develop brand name *** Develop brand awareness *** Trade promotions Customers are demanding product. Product is being pulled through channel. Sales promotions Consumer demand is already high. Personal selling Salespeople serve as order-takers. Differentiate brand *** Advertising Differentiate brand from competition *** Trade promotions Push product through channel *** Sales promotions Encourage consumers to purchase *** Personal selling Encourage salespeople to push brand *** Differentiate brand *** Advertising Demand is declining. New technology is replacing product. Trade promotions Ineffective in pushing product in channel Sales promotions Ineffective in stimulating demand Personal selling Market is shrinking and limited ***Indicates high expenditures

Communication Budget Methods Objective-and-task Percent-of-sales Comparative parity Executive-judgment All-you-can-afford

Measuring Communication Effectiveness - Is the sales growth or decline due to promotion, or is it attributable to other factors such as price, quality, or service? - Sales vs. Communication objectives/effects? Advertisement Evaluation Concept and Copy Tests Recall/Recognition and Attitude Tests Trade and Sales Promotion Evaluation Sales changes Inquiries Redemption/Response rates Personal Selling Evaluation Sales Number of new customers Customer retention Customer satisfaction

Global Communications Globally Integrated Marketing Communication is an international trend. The challenges to coordinate marketing efforts are the cultural difference. International companies have two strategies available: Standardization: The process of using the same product and marketing approach across countries Adaptation: The process of modifying the product and marketing approach for each country “Think globally but act locally.”