Chapter 15 Integrated Marketing Communications Principles of Contemporary Marketing Kurtz & Boone Chapter 15 Integrated Marketing Communications

Chapter Objectives Explain how integrated marketing communications relates to the development of an optimal promotional mix. Describe the communication process and how it relates to the AIDA concept. Explain how the promotional mix relates to the objectives of promotion. Identify the different elements of the promotional mix and explain how marketers develop an optimal promotional mix. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Chapter Objectives Describe the role of sponsorships and direct marketing in integrated marketing communications. Discuss the factors that influence the effectiveness of a promotional mix. Contrast pushing and pulling strategies. Explain how marketers budget for and measure the effectiveness of promotion. Discuss the value of marketing communications. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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The Communication Process Encoding - Translating a message into understandable terms Decoding - Receiver’s interpretation of a message Feedback - Receiver’s response to a message Noise - Any stimulus that distracts a receiver from receiving a message Channel - Medium through which a message is delivered Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Objectives of Promotion Provide information Increase demand Differentiate the product Accentuate the product’s value Stabilize sales Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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 Sponsorships Organizations provide money or in-kind resources to an event or activity in exchange for a direct association with that event or activity Sponsor purchases: Access to the event’s audience The image associated with the activity Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Direct Marketing Communications Channels Direct mail Catalogs Telemarketing Broadcast channels Electronic channels Print media Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Developing an Optimal Promotional Mix Factors influencing the effectiveness of a promotional mix: The nature of the market The nature of the product The stage in the product lifecycle The price The funds available for promotion Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Pulling and Pushing Promotional Strategies Pulling strategy - Promotional effort by the seller to stimulate final-user demand, which then exerts pressure on the distribution channel Pushing strategy - Promotional effort by the seller directed to members of the marketing channel rather than final users Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Budgeting for Promotional Strategy Promotional budgets may differ not only in amount but also in composition B2B markets allocate more to personal selling than advertising Reverse is true for consumer goods Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Measuring the Effectiveness of Promotion Direct sales results test - Based on the specific impact on sales revenues for each dollar of promotional spending Indirect evaluation - Concentrating on quantifiable indicators of effectiveness such as recall and readership Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Measuring Online Promotions Cost per impression - Relates the cost of an ad to every thousand people who view it Cost per response (click-through) - Relates the cost of an ad to the number of people who click it Conversion rate - Percentage of visitors to a Web site who make a purchase Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Social Importance What appeals to one group of consumers may seem tasteless to another One generally accepted standard in a market society is freedom of choice for the consumer Ad agencies donate expertise for public service announcements that promote social causes Promotion performs an informative and educational task crucial to the functioning of modern society Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Business Importance Long-term increase in funds allocated to promotion indicates faith in its ability to encourage attitude changes, brand loyalty, and additional sales Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Economic Importance Provides employment for millions of people Increases units sold and allows economies of scale in production process Lower units costs mean lower prices, which make a product available to more people Subsidizes information content of newspapers and broadcast media Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.