©2003 South-Western Chapter 12 Version 3e1 chapter Integrated Marketing Communications 12 Prepared by Deborah Baker Texas Christian University

©2003 South-Western Chapter 12 Version 3e2 chapter Learning Objectives 12 1.Discuss the role of promotion in the marketing mix. 2. Discuss the elements of the promotional mix. 3. Describe the communication process.

©2003 South-Western Chapter 12 Version 3e3 chapter Learning Objectives (continued) Explain the goal and tasks of promotion. 5. Discuss the AIDA concept and its relationship to the promotional mix. 6. Describe the factors that affect the promotional mix. 7.Discuss the concept of integrated marketing communications.

©2003 South-Western Chapter 12 Version 3e4 Learning Objective 1 1 Discuss the role of promotion in the marketing mix.

©2003 South-Western Chapter 12 Version 3e5 Promotion 1 1 Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response.

©2003 South-Western Chapter 12 Version 3e6 Promotional Strategy 1 1 A plan for the optimal use of the elements of promotion:Advertising Public Relations Personal Selling Sales Promotion

©2003 South-Western Chapter 12 Version 3e7 The Role of Promotion 1 1 Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Promotion Plan Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Promotion Plan Overall Marketing Objectives Marketing Mix ProductProduct DistributionDistribution PromotionPromotion PricePrice Marketing Mix ProductProduct DistributionDistribution PromotionPromotion PricePrice Target Market

©2003 South-Western Chapter 12 Version 3e8 Differential Advantage Unique Features Excellent Service Low Prices Rapid Delivery High Product Quality Features that provide Differential Advantage Advantage Features that provide Differential Advantage Advantage 1 1

©2003 South-Western Chapter 12 Version 3e9 Learning Objective 2 2 Discuss the elements of the promotional mix.

©2003 South-Western Chapter 12 Version 3e10 Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Advertising Public Relations Personal Selling Sales Promotion 2 2

©2003 South-Western Chapter 12 Version 3e11 Promotional Mix Advertising Elements of the Promotional Mix Elements of the Promotional Mix Public Relations Personal Selling Sales Promotion 2 2

©2003 South-Western Chapter 12 Version 3e12 Advertising Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. 2 2

©2003 South-Western Chapter 12 Version 3e13 Advertising Media Traditional Advertising Media Traditional Advertising Media Electronic Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Computer modems  Fax machines 2 2

©2003 South-Western Chapter 12 Version 3e14 Advertising Advantages  Ability to reach large number of people  Cost per contact is low  Can be micro-targetedDisadvantages  Total cost is high 2 2

©2003 South-Western Chapter 12 Version 3e15 Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. 2 2

©2003 South-Western Chapter 12 Version 3e16 Public Relations Evaluates public attitudes Identifies areas of public interest Identifies areas of public interest Executes programs to “win” public Functions of Public Relations Functions of Public Relations 2 2

©2003 South-Western Chapter 12 Version 3e17 Publicity 2 2 Public information about a company, good, or service appearing in the mass media as a news item.

©2003 South-Western Chapter 12 Version 3e18 Sales Promotion 2 2 Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness.

©2003 South-Western Chapter 12 Version 3e19 Sales Promotion End Consumers End Consumers Trade Customers Company Employees Company Employees Sales Promotion Targets Targets 2 2

©2003 South-Western Chapter 12 Version 3e20 Sales Promotion Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons Popular Tools for Consumer Sales Promotion Popular Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 12 Version 3e21 Personal Selling 2 2 Planned presentation to one or more prospective buyers for the purpose of making a sale.

©2003 South-Western Chapter 12 Version 3e22 Personal Selling Traditional Selling Traditional Selling Relationship Selling Relationship Selling 2 2

©2003 South-Western Chapter 12 Version 3e23 Learning Objective Describe the communication process. 3 3

©2003 South-Western Chapter 12 Version 3e24 Communication 3 3 The process by which we exchange or share meanings through a common set of symbols.

©2003 South-Western Chapter 12 Version 3e25 Marketing Communication Categories of Communication Categories of Communication InterpersonalCommunicationInterpersonalCommunicationMassCommunicationMassCommunication 3 3

©2003 South-Western Chapter 12 Version 3e26 The Communication Process As Senders As Receivers  Inform  Persuade  Remind  Develop messages  Adapt messages  Spot new communication opportunities 3 3

©2003 South-Western Chapter 12 Version 3e27 The Sender and Encoding 3 3 Sender The originator of the message in the communication process. Encoding The conversion of a sender’s ideas and thoughts into a message, usually in the form of words or signs.

©2003 South-Western Chapter 12 Version 3e28 The Communication Process Noise Sender Encoding Message Message Channel Message Channel Message Channel Message Channel Decoding Message Decoding Message Receiver 3 3

©2003 South-Western Chapter 12 Version 3e29 Characteristics of Advertising Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility AdvertisingAdvertising Indirect and non-personal Low Little Delayed One-way Yes Fast Same message to all audiences 3 3

©2003 South-Western Chapter 12 Version 3e30 Characteristics of Public Relations 3 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, non-personal Moderate to low Little Delayed One-way No Usually fast Usually no direct control

©2003 South-Western Chapter 12 Version 3e31 Characteristics of Sales Promotion 3 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually Indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target

©2003 South-Western Chapter 12 Version 3e32 Characteristics of Personal Selling 3 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect

©2003 South-Western Chapter 12 Version 3e33 Learning Objective Explain the goal and tasks of promotion. 4 4

©2003 South-Western Chapter 12 Version 3e34 Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Target Audience 4 4

©2003 South-Western Chapter 12 Version 3e35 Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity 4 4

©2003 South-Western Chapter 12 Version 3e36 Goals and Tasks of Promotion Informative Objective Increase awareness Explain how product works Suggest new uses Build company image 4 4

©2003 South-Western Chapter 12 Version 3e37 Goals and Tasks of Promotion Persuasion Objective Encourage brand switching Change customers’ perception of product attributes Influence buying decision Persuade customers to call 4 4

©2003 South-Western Chapter 12 Version 3e38 Goals and Tasks of Promotion Reminder Objective Remind customers that product may be needed Remind customers where to buy product Maintain customer awareness 4 4

©2003 South-Western Chapter 12 Version 3e39 Learning Objective Discuss the AIDA concept and its relationship to the promotional mix. 5 5

©2003 South-Western Chapter 12 Version 3e40 The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. 5 5

©2003 South-Western Chapter 12 Version 3e41 The AIDA Concept A ttention I nterest D esire A ction 5 5

©2003 South-Western Chapter 12 Version 3e42 AIDA and the Promotional Mix AwarenessAwarenessInterestInterestDesireDesireActionActionAdvertising Very effective Very effective Somewhat effective Not effective Not effective PublicRelationsPublicRelations Very effective Very effective Very effective Very effective Very effective Very effective Not effective Not effective SalesPromotion Somewhat effective Somewhat effective Very effective Very effective Very effective PersonalSelling Somewhat effective Very effective Very effective Somewhat effective Somewhat effective 5 5

©2003 South-Western Chapter 12 Version 3e43 Learning Objective 6 6 Describe the factors that affect the promotional mix.

©2003 South-Western Chapter 12 Version 3e44 Factors Affecting the Promotional Mix Nature of Product Stage in PLC Target Market Factors Type of Buying Decision Promotion Funds Push or Pull Strategy FactorsAffecting Choice of Promotional Mix FactorsAffecting Choice of Promotional Mix 6 6

©2003 South-Western Chapter 12 Version 3e45 Nature of the Product 6 6  Product characteristics –Business product vs. consumer product  Costs and risks  Social risk Factors that influence promotional mix

©2003 South-Western Chapter 12 Version 3e46 Stage in the Product Life Cycle 6 6 Time Introduction Growth Maturity Decline Sales ($)

©2003 South-Western Chapter 12 Version 3e47 Product Life Cycle and the Promotional Mix Light Advertising, pre- introduction Publicity Heavy use of advertising, PR for awareness; sales promotion for trial AD/PR decrease Limited Sales Promotion, Personal Selling for distribution Ads decrease. Sales Promotion, Personal Selling Reminder & Persuasive Advertising, PR, Brand loyalty Personal Selling for distribution Introduction Growth Maturity Decline Sales ($) Time 6 6

©2003 South-Western Chapter 12 Version 3e48 Target Market Characteristics 6 6 FOR:  Widely scattered market  Informed buyers  Repeat buyers Advertising Sales Promotion Less Personal Selling

©2003 South-Western Chapter 12 Version 3e49 Type of Buying Decision Advertising Sales Promotion Type of Buying Decision affectsPromotional Mix Choice Type of Buying Decision affectsPromotional Mix Choice ComplexComplexRoutineRoutine Personal Selling Not Routine or Complex Not Routine or Complex Advertising Public Relations 6 6

©2003 South-Western Chapter 12 Version 3e50 Available Funds  Trade-offs with funds available  Number of people in target market  Quality of communication needed  Relative costs of promotional elements 6 6

©2003 South-Western Chapter 12 Version 3e51 Push and Pull Strategies Manufacturer promotes to wholesalerManufacturer wholesalerWholesaler retailerWholesaler retailerRetailer consumerRetailer consumerConsumer buys from retailerConsumer retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumerManufacturer consumerConsumerdemandsproduct from retailer Consumerdemandsproduct Retailerdemandsproduct from wholesaler Retailerdemandsproduct Wholesalerdemands product from manufacturerWholesalerdemands manufacturer Orders to manufacturer PULL STRATEGY 6 6

©2003 South-Western Chapter 12 Version 3e52 Learning Objective Discuss the concept of integrated marketing communications. 7 7

©2003 South-Western Chapter 12 Version 3e53 Integrated Marketing Communications A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. 7 7

©2003 South-Western Chapter 12 Version 3e54 IMC Popularity Growth 7 7  Proliferation of thousands of media choices  Fragmentation of the mass market  Slash of advertising spending in favor of promotional techniques