Chapter Ten Integrating Marking Communications

10-2 Learning Objectives 1.Describe the process of customer relationship management 2.Integrated Marketing Communication Strategy What is IMC The IMC Planning Process Communication Tool Kit Achieving Customer Retention through Communication 3.Budgeting for Communication

10-3 Four Steps in the CRM Process Segment & Profile the Market Implement Evaluate Design Communication and Pricing Strategy

10-4 The Customer Relationship Management Process 1.Segment & profile the market Create segments by grouping similar customers together Based on how the customer wants to interact (e.g., order over web; salesperson; direct mail; ) 2.Design a communication strategy Involves multiple channels of communication (direct mail, , print ads, trade shows, and even field sales efforts) 3.Implement the strategy 4.Evaluate Is continuous Companies evaluate results against goals to provide grist for the next iteration IMC is an important part of the overall CRM process

10-5 What Is IMC? IMC is strategic, two-way communication targeted to specific customers and their needs, all coordinated through a variety of media. Employs a variety of media Emphasizes coordinated, 2-way communications What distinguishes IMC from other communication approaches? IMC focus on the coordination of a variety of media capable of reaching a specific target market with a targeted message. The unique strengths of each medium are utilized in a conscious effort to achieve synergy and engage the targeted customer in strategic two- way communications.

10-6 What Is IMC? Understanding of IMC 1.It aims to meet the information needs of the buyer; 2.It is strategic in that the content and delivery of all messages are the result of an overall plan; Messages across all communication channels work together to create the appropriate position and result in the right action Delivery of messages is synchronized so that synergy can be reached Integrating communications is an attempt to achieve synergy 3.It provides for a uniform message delivered through all company media (advertising, selling effort, direct mail and trade show…); 4.It provides two-way dialogue between supplier-customer how will we communicate with our customers How do our customers want to communicate with us

10-7 The Continuous IMC Planning Process Set Goals Determine Communication Elements Create Message Place Messages in Media Measure Results Make Adjustments

10-8 Setting Goals IMC goals vs. strategic marketing goals: IMC goals are derived from, and supportive of, the firm’s strategic goals Goal setting process: Determining the audience – Who is the audience? Deciding what the marketer wants the audience to get out of the communication – What should the communication say and do? Hierarchy of Effects Model-AIDA sets forth a series of steps the consumer must go through en route to purchase -Consumers must first be made aware of the product & its benefits; -Hopefully, a sig. number will be sufficiently interested to be receptive to – or seek out more information; -Additional information will produce desire to act; -And finally, the consumer will, in fact, take the proposed action. Helps guide message content according to the stage attained in a market or segment

10-9 Action Desire Interest Awareness Hierarchy of Effects Model - AIDA

10-10 Communication Toolkit - elements 1.Advertising - Directed to a general audience, primarily through trade publications, the web, television, radio, billboards 2.Direct Marketing - Directed to a specific audience to generate leads and generate sales through the mail, by fax or Internet and catalogs 3.Public Relations - Focuses on relationships to create goodwill and support relationships 4.Trade Shows - Exhibits and demonstrates products and services in a public venue with personal interaction 5.Telemarketing - Inbound and outbound electronic communication allowing greater feedback opportunities 6.Personal Selling - Adaptable selling method established by one-on-one contact 7.Marketing Research - Capturing information that will enable stronger customer relationships

10-11 The Roles of Advertising Create or Strengthen Image Create Favorable Climate for Salespeople Generate Sales Leads Close Sales

10-12 Create Message 1.Recall what the communications plan is trying to say 2.Understand what buyers already think and do, what information buyers need, and what competitive actions are currently (or could be) undertaken

10-13 Achieving Customer Retention through Communication 1.Communicate proactively and regularly to your customers 2.Make dialogue easy to initiate by your customers, making it easy for customers to communicate with the firm 3.Make it easy to respond to your communication efforts – ensuring the firm respond quickly to its customers inquiries/requests

10-14 Budgeting for Communications 1.Where marketing communication dollars are spent 2.Budgets should be part of the planning process 3.Budgeting is a form of control; forces planning discipline and forces attention upon the resources required for the plan

10-15 Where MC Dollars Are Spent 24.8% 10.8% 18.0% 16.9% Direct Marketing 4.4% Market Research Online Marketing Premiums & Incentives Public Relations 4.2% 4.3% 5.8% 3.1% Sales Force Management 7.7% Other Advertising Trade Shows Sales Promotion

10-16 The Budget Breakdown Method ( Allocates Total Available Budget ) TOTAL AVAILABLE BUDGET FUNDS Trade Show Mail Radio Magazines Newspaper Internet Sales Force Allocated to:

10-17 The Budget Buildup ( Creates Total Budget ) Trade Shows Mail Radio Magazines Newspaper Internet Sales Force How Much is Needed for Objective Creates Total Budget

10-18 Budgeting for Communications 1.The Budget Breakdown Method The total communications budget is developed before budgets are created for its individual components Found on the idea that past/expected sales should determine present marketing communication budgets Doesn’t involve planning and coordination; may encourage myopia; may breed inertia and may lead to occasional exigencies 2.The Budget Buildup (objective-and-task method) Strategy precedes budgeting: defining objectives; determining strategy and estimating costs The budgeting process is less of a hindrance; the ability to better examine the effectiveness of a strategy Consistent with the use of integrated communications: the goals set for the IMC logically serves as the starting point for determining the funds needed