Instructor: Amir Ekhlassi (7) Integrated Marketing Communications: Advertising, Sales Promotion, and Public Relations Instructor: Amir Ekhlassi

The Marketing Communication Mix Advertising: any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Sales promotion: short-term incentives to encourage the purchase or sale of a product or service. Public relations: building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. ©Compiled by: Amir Ekhlassi

The Marketing Communication Mix (cont’d) Personal selling: personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Direct Marketing: direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Advertising Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. Beyond its reach, large-scale advertising says something positive about the seller’s size, popularity, and success. Because of advertising’s public nature, consumers tend to view advertised products as more legitimate. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Advertising (cont’d) Advertising is also very expressive – it allows the company to dramatize its products through the artful use of visuals, print, sound, and color. On the one hand, advertising can be used to build up a long-term image for a product (such as Coca-Cola ads). On the other hand, advertising can trigger quick sales (as when sears advertises a weekend sale). ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Advertising (cont’d) Advertising also has some shortcomings: Advertising is impersonal and cannot be as directly persuasive as can company salespeople. Advertising can carry on only a one-way communication with the audience. Advertising can be very costly. ©Compiled by: Amir Ekhlassi

Major decision in advertising Message decisions Message strategy Message execution Objectives setting Communication obj Sales obj Budget decisions Affordable approach Percent of sales Competitive parity Objective & task Campaign evaluation Communication Impact Sales impact Media decisions Reach, frequency, impact Major media types Specific media vehicles Media timing ©Compiled by: Amir Ekhlassi

1. Setting advertising objectives An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by primary purpose: Informative advertising (build primary demand, introducing new product) Persuasive advertising (build selective demand, comparative advertising: Directly or Indirectly) Reminder advertising (For mature products) ©Compiled by: Amir Ekhlassi

2. Setting the advertising budget It depends! One of the Hardest Marketing Decisions is How Much to Spend on Promotion. Affordable Objective-and-Task Percentage of Sales Competitive-Parity ©Compiled by: Amir Ekhlassi

2. Setting the advertising budget (cont’d) Affordable method: setting the promotion budget at the level management thinks the company can afford. (SMEs often use this method, overspending or underspending) Percentage-of-sales method: setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.(it wrongly views sales as the cause of promotion rather than as the result) ©Compiled by: Amir Ekhlassi

2. Setting the advertising budget (cont’d) Competitive – parity method: setting the promotion budget to match competitors’ outlays. Objective-and-task method: developing the promotion budget by: Defining specific objectives Determining the tasks that must be performed to achieve these objectives Estimating the costs of performing these tasks ©Compiled by: Amir Ekhlassi

3. Creating the advertising message The first step in creating effective message is to decide what general message will be communicated to consumers (message strategy) Developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Ideally, advertising message strategy will follow directly from the company’s broader positioning strategy. ©Compiled by: Amir Ekhlassi

3. Creating the advertising message (cont’d) The advertiser must next develop a compelling creative concept – or “big idea” that will bring the message strategy to life in a distinctive and memorable way. The creative concept may emerge as a visualization, a phrase, or a combination of the two. Advertising appeals should have three characteristics: Meaningful Believable Distinctive Watch: it keeps accurate time Swatch: style & fashion Rolex: Luxury & Status Hane: “buy cheap socks and you will pay through the toes” ©Compiled by: Amir Ekhlassi

3. Creating the advertising message (cont’d) Any message can be presented in different execution styles: Slice of life (one or more people using the product in a normal setting) Lifestyle Fantasy (Gap : Dream) Mood or image (Beauty, Love, Serenity) Musical (Jingle) Personality symbol Technical expertise Scientific evidence (Crest) Testimonial evidence or endorsement (highly believable or likable) ©Compiled by: Amir Ekhlassi

4. Selecting advertising media The major steps in media selection are: Deciding on reach, frequency, and impact Choosing among major media types Selecting specific media vehicles Deciding on media timing Illustration Headline The main block of text ©Compiled by: Amir Ekhlassi

4. Selecting advertising media (cont’d) Deciding on reach, frequency, and impact: Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average person in the target market is exposed to the message. Impact is the qualitative value of a message exposure through a given medium. ©Compiled by: Amir Ekhlassi

4. Selecting advertising media (cont’d) Choosing among major media types: The media habits of target consumer The nature of the product (fashion is best advertised in color magazine, automobile performance is best demonstrated on TV) Different types of messages Cost ©Compiled by: Amir Ekhlassi

4. Selecting advertising media (cont’d) In selecting media vehicles, the media planner should consider: Costs against the media vehicle’s audience quality (Baby lotion in New Parents not in Gentlemen’s Quarterly) Audience attention The vehicle’s editorial quality (wall street, time) ©Compiled by: Amir Ekhlassi

4. Selecting advertising media (cont’d) Deciding on media timing: Continuity Pulsing Hallmark: Seasonal Ad) The idea is to advertise heavily for a short period to build awareness that carries over to the next ad period. ©Compiled by: Amir Ekhlassi

5. Evaluation advertising The advertising program should evaluate both the communication effects and the sales effects of advertising regularly. Measuring the communication effects of an ad – copy testing – tells whether the ad is communicating well. The sales effect of advertising are often harder to measure than the communication effects. Sales are affected by many factors besides advertising – such as product features, price, and availability. ©Compiled by: Amir Ekhlassi

Sales promotion

©Compiled by: Amir Ekhlassi Sales promotion Sales promotion consists of short-term incentives to encourage purchase or sales of a product or service. Whereas advertising and personal selling offer reasons to buy a product or service, sales promotion offers reasons to buy now. Sales promotion are targeted toward: Final buyers (consumer promotions) Retailers and wholesalers (trade promotions) Business customers (business promotions) Member of the sales force (sales force promotion) ©Compiled by: Amir Ekhlassi

Sales promotion (cont’d) Several factors have contributed to the rapid growth of sales promotion: Inside the company, product managers face greater pressures to increase their current sales Externally, the company faces more competition and competing brands are less differentiated advertising efficiency has declined because of rising costs, media clutter, and legal restraints Consumers have become more deal oriented and ever-larger retailers are demanding more deals from manufacturers ©Compiled by: Amir Ekhlassi

Sales promotion (cont’d) Sales promotion objectives Consumer promotions Increase short-term sales Trade promotions Getting retailers to carry new items more inventory more shelf space to buy ahead Sales force promotion More sales force support ©Compiled by: Amir Ekhlassi

Sales promotion (cont’d) Consumer promotion tools Sample (most effective but most expensive, Ex: P&G www.pertplus.com) Coupons Cash refund (rebate): price reduction occurs after purchase rather than at the retail outlet Price packs (cents-off deals) Premiums Advertising specialties (63% of consumers in the USA) Patronage reward (Airlines, Baskin-Robbins) Point-of-purchase Contest Sweepstakes Games ©Compiled by: Amir Ekhlassi

Sales promotion (cont’d) Trade promotion tools Allowance Advertising allowance Display allowance Free goods Push money: cash or gifts to dealers or their sales forces to “push” the manufacturers’ goods. ©Compiled by: Amir Ekhlassi

PR PR PR PR PR PR PR Public Relations (PR)

©Compiled by: Amir Ekhlassi Public relations Bill Gates once famously said, “If I was down to my last dollar , I ‘d spend it on public relations.” The role of PR in a company’ marketing strategy is key in managing the image and reputation of businesses and basically there are 2 distinct approaches a PR consultant may use: Generating positive news stories that build the profile and increase awareness of brands, business and individuals. Responding to crisis, using the media to negate the impact of “bad press”. ©Compiled by: Amir Ekhlassi

©Compiled by: Amir Ekhlassi Public relations Public relations: building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. PR departments may perform any or all of the following functions: Press relations or press agentry product publicity Public affairs (building and maintaining national or local community relations) Lobbying Investor relations Development I New York ©Compiled by: Amir Ekhlassi

Public relations (cont’d) Major public relations tools: News Speeches Special events Written materials Audiovisual materials Corporate identity materials (Uniformity, company cars and trucks, business cards, signs, logos) Public service activities(companies can improve public goodwill by contributing money & time to public service activities. ) Web site (Ex: www.butterball.com in thanksgiving , 550,000 viewers) ©Compiled by: Amir Ekhlassi

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