Integrated Marketing Communications 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. Describe the role of sponsorships and direct marketing in integrated marketing communications. Contrast the two major alternative promotional strategies. Explain how marketers budget for and measure the effectiveness of promotion. Discuss the value of marketing communications.

Promotion Function of informing, persuading, and influencing the consumer’s purchase decision Marketing Communications Transmission from a sender to a receiver of a message dealing with the buyer-seller relationship

Integrated Marketing Communications Coordination of all promotional activities – media advertising, direct mail, personal selling, sales promotion, and public relations – to produce a unified customer-focused promotional message Importance of Teamwork IMC requires a total strategy including all marketing activities, not just promotion

Role of Databases in Effective IMC Programs With the growth of the Internet, marketers have been given the power to gather information faster and to organize it easier than ever before By sharing this knowledge appropriately among all relative parties, a firm can lay the foundation for a successful IMC program

The Communications Process An effective promotional message accomplishes three tasks: It gains the receiver’s attention It achieves understanding by both receiver and sender It stimulates the receiver’s needs and suggests an appropriate method of satisfying them

AIDA concept (Attention-Interest-Desire-Action) – an explanation of the steps through which an individual reaches a purchase decision Sender Encoding Channel Decoding Response Feedback Noise

Global Difficulties with the Communication Process In China: KFC’s slogan: “Finger lickin’ good” came out as “Eat your fingers off” Also in China: Coca-Cola had thousands of signs made using the translation: “Ke-kou-ke-la” Depending on the dialect this means . . . “Bite the wax tadpole,” or “Female horse stuffed with wax” In Taiwan: Pepsi’s slogan, “Come alive with the Pepsi generation” came out as “Pepsi will bring your ancestors back from the dead”

Objectives of Promotion Provide Information Increase Demand Differentiate the Product Accentuate the Product’s Value Stabilize Sales

Elements of the Promotional Mix Promotional mix: blend of personal selling and nonpersonal selling designed to achieve promotional objectives Personal selling: interpersonal promotional process involving a seller’s person-to-person presentation to a prospective buyer Nonpersonal selling includes: Advertising, Product placement, Sales promotion, Direct marketing, Public relations

Advertising Paid, nonpersonal communication through various media by a business firm, not-for-profit organization, or individual identified in the message with the hope of informing or persuading members of a particular audience Product Placement Marketer pays a motion picture or television program owner a fee to display his or her product prominently in the film or show

Sales Promotion Marketing activities that stimulates consumer purchasing (includes: displays, trade shows, coupons, premiums, contests, product demonstrations, and various nonrecurrent selling efforts) Trade promotion Direct Marketing Direct communications other than personal sales contact between buyer and seller, designed to generate sales, information requests, or store visits

Public relations: firm’s communications and relationships with its various publics Publicity: stimulation of demand for good, service, place, idea, person, or organization by unpaid placement of commercially significant news or favorable media presentations Guerilla Marketing: Unconventional, innovative, and low-cost marketing techniques designed to get consumers’ attention in unusual ways.

Sponsorships Provision of funds for a sporting or cultural event in exchange for a direct association with the events or activity Growth of Sponsorships How Sponsorship Differs from Advertising Sponsor’s degree of control, Nature of the message, Audience reaction Ambush marketing Assessing Sponsorship Results

Direct Marketing Communication Channels Telephone Direct Mail Television Newspaper Magazine Radio

Direct Mail Marketers combine information from internal and external databases, surveys, coupons, and rebates that require responses to provide information about consumer lifestyles, buying habits, and wants Catalogs Over 10,000 different consumer mail-order catalogs and thousands more for business-to- business sales are mailed each year generating over $57 million in consumer sales and $36 million in B2B sales

Telemarketing: promotional presentation involving the use of the telephone for outbound contacts by salespeople or inbound contacts initiated by customers who want to obtain information and place orders Direct Marketing via Broadcast Channels Broadcast direct marketing includes: Brief (30 to 90 and second) direct response ads on television or radio Home shopping channels like: Quality Value Channel (QVC) Home Shopping Network (HSN) Infomercial

Electronic Direct Marketing Channels Web advertising is an important component of electronic direct marketing E-mail direct marketing is a natural and easy extension of traditional direct mail marketing Other Direct Marketing Channels Print media is generally not as effective as Web marketing or telemarketing for direct marketers Magazine and newspaper ads with toll-free telephone numbers, kiosks, and other media are still useful in many situations

Developing an Optimal Promotional Mix Factors that influence the effectiveness of a promotional to mix: Nature of the market Nature of the product Stage in the product life-cycle Price Funds available for promotion

Pulling and Pushing Promotional Strategies Pulling strategy: promotional effort by a seller to stimulate demand among final users, who will then exert pressure on the distribution channel to carry the good or service, pulling it though the marketing channel Pushing strategy: promotional effort by a seller to members of the marketing channel intended to stimulate personal selling of the good or service, thereby pushing it through the marketing channel

Budgeting for Promotional Strategy Percentage-of-sales method Fixed-sum-per-unit method Meeting competition method Task-objective method

Measuring the Effectiveness of Promotion Two basic measurement tools: Direct sales results measures the effectiveness of promotion by revealing the specific impact on sales revenues for each dollar of promotional spending Indirect evaluation concentrates on quantifiable indicators of effectiveness like: Recall Readership

Measuring Online Promotions Early attempts at measuring online promotional efforts involved counting hits and visits Incorporating direct response and comparing different promotions for effectiveness Two major techniques for setting online advertising rates: Cost per impression (CPM) Cost per response (click-throughs)

The Value of Marketing Communications Social Importance Criticisms of promotional messages as tasteless and lacking any contribution to society sometimes ignore the fact that society provides no commonly accepted set of standards The one generally accepted standard in a market society is freedom of choice for the consumer Promotion has become an important factor in campaigns aimed at achieving socially oriented objectives like the elimination of drug abuse

Business Importance Promotional strategy has become increasingly important to both small and large firms Both business and nonbusiness enterprises recognize the importance of promotional efforts Economic Importance Effective promotion has allowed society to derive benefits not otherwise available Subsidizes the information contents of newspapers and the broadcast media