Integrated Marketing Communications and Relationship Management Chapter 16 Lecture Slides Solomon, Stuart, Carson, & Smith Your name here Course title/number Date

Chapter Learning Objectives When you have completed your study of this chapter, you should be able to: Explain integrated marketing communications and its implementation, and why some markers resist it. List, describe and contrast elements of the communications mix. Explain the steps involved in developing a communications plan. Explain the philosophy and practices of relationship marketing. Explain the role of databases in facilitating marketing communications and relationship management. http://www.ups.com/canada ©Copyright 2003 Pearson Education Canada Inc.

Introduction to the Topic The next three chapters deal with the topic of promotion, with this chapter covering overall strategy, and the others covering specific topics within it in more detail. Promotion: the coordination of a marketer’s communications efforts to influence attitudes or behaviour toward a product or service. Marketing communication: informing consumers and customers about the relative value of products, and developing trust and other relational bonds that facilitate ongoing exchange relationships. promotion p444 marketing communication p444 http://www.clarica.com/e/index.asp ©Copyright 2003 Pearson Education Canada Inc.

Integrated Communication Strategy Integrated marketing communications (IMC): a strategic business process that marketers use to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with targeted audiences. The important thing to understand about this concept is the need for, and benefit of consistency between components of the program. The question: how much should an organization spend on its integrated marketing communications program, and how do you know when it is working? Personal Selling Advertising Communication Idea integrated marketing communications p446 http://www.eurorscg.com/ Direct Marketing Sales Promotion Public Relations ©Copyright 2003 Pearson Education Canada Inc.

The Communications Mix Communications mix: the major elements of marketer-controlled communications, including advertising, sales promotions, marketing public relations, direct marketing, and personal selling. Some might argue that the Internet belongs in that group as well. Advertising: non-personal, paid communication from an identified sponsor, primarily using mass media. Interactive marketing: two-way communications, in which customized marketing communications elicit a measurable response from individual customers. Also known as direct marketing. communications mix p447 advertising p448 interactive marketing p449 http://www.malaysiaairlines.com.my/ ©Copyright 2003 Pearson Education Canada Inc.

The Communications Mix (continued) Personal selling: personal presentation by a firm’s sales force for the purpose of making sales and building customer relationships. Characterized by: Direct contact with the buyer Two way communication Flexible message content Immediate feedback as to success Public relations: communication strategies to build good relationships with an organization’s publics. Publicity: unpaid communication about an organization appearing in the mass media. personal selling p449 public relations p450 publicity p450 http://www.mastercard.com/mcweb/index.jsp ©Copyright 2003 Pearson Education Canada Inc.

The Communications Mix (continued) Sales promotion: short-term incentives or programs to encourage the trial, purchase or sale of a product or service. Contests, coupons, and rebates Information seminars, product demonstrations, special events Specialty advertising Loyalty programs There are no shortage of ways to spend money on sales promotion- virtually unlimited The questions are: what is the value, and the impact on brand loyalty? sales promotion p450 http://www.isp.org.uk/ ©Copyright 2003 Pearson Education Canada Inc.

Developing a Communications Plan Establish communication objectives Communications plan: A framework that outlines the strategies for developing, implementing, and controlling the firm’s communication activities. Identify influence on the communications mix Target audience: a highly segmented group of people who receive and respond similarly to marketing messages. Objectives: create awareness inform the market create desire encourage trial build loyalty Determine the total communication budget communications plan p451 target audience p451 objectives p452-3 Allocate to the communication mix budget Evaluate the effectiveness of the communication mix Figure 16.2 ©Copyright 2003 Pearson Education Canada Inc.

Direction of Promotional Effort Companies have a number of ways to promote their products, but their strategies will generally fall under one of the two methods below: Pull Strategy: moving products through the channel by building desire for the products among consumers, who convince retailers to stock the items. Use primarily advertising. Push strategy: moving products through the channel by convincing channel members to offer them. Use primarily personal selling. Industrial products tend to follow the push strategy, while consumer goods tend to rely more on pull, although most now use a combination of both. Manufacturers Wholesalers Retailers pull strategy p454 push strategy p454 Consumers ©Copyright 2003 Pearson Education Canada Inc.

Determining the Communications Budget Top-down budgeting techniques: allocation of the promotion budget that is based on the total amount to be devoted to marketing communications. Percentage-of-sales method: a method for promotion budgeting, in which the promotion budget is based on last’s sales or on estimates for this year’s sales. Bottom-up budgeting techniques: allocation of the promotion budget that is based on identifying promotional goals and allocating enough money to accomplish them. Objective-task method: a promotion budgeting method in which an organization first defines the specific communication goals it hopes to achieve and then tries to calculate what kind of promotional efforts it must take to meet these goals. top-down budgeting techniques p455 percentage of sales method p455 bottom-up budgeting technique p456 objective and task method p456 ©Copyright 2003 Pearson Education Canada Inc.

Allocating the Communications Budget The amount of budget to be allocated to each of the different types of communication will depend on: Organization factors: the company’s past history of spending, how well it understands the effectiveness of different forms, the agencies used, and the personal preferences of decision makers. Market potential: the size of the target market(s) to be communicated with. Market size: the size of markets to be communicated in will determine the costs of using different media. Larger markets will be more expensive and favour mass media. organizational factors p457 market potential p457 market size p457 http://www.nascar.com/ ©Copyright 2003 Pearson Education Canada Inc.

©Copyright 2003 Pearson Education Canada Inc. Communication Theory Communications model: the elements necessary for meaning to be transferred from a sender to a receiver. Encoding: the process of translating an idea into a form of communication that will convey meaning. Source: an organization or individual that sends a message. Message Encoding Decoding Media Source Receiver communications model p459 encoding p459 source p459 Noise Feedback Response ©Copyright 2003 Pearson Education Canada Inc.

Communication Theory (continued) Message: the communication in physical form that goes from a sender to a receiver. AIDA model: the communication goals of attention, interest, desire, and action. Medium: a communications vehicle through which a message is transmitted to a target audience. Message Encoding Decoding Media Source Receiver message p460 AIDA model p460 medium p460 Noise Feedback Response ©Copyright 2003 Pearson Education Canada Inc.

Communication Theory (continued) Receiver: the organization or individual that intercepts and interprets the message. Noise: anything that interferes with effective communication. Decoding: the process by which a receiver assigns meaning to the message. Feedback: receivers’ reactions to the message. Message Encoding Decoding Media Source Receiver receiver p461 noise p461 decoding p461 feedback p461 Noise Feedback Response ©Copyright 2003 Pearson Education Canada Inc.

Relationship Marketing Relationship marketing: the philosophy and practice of developing long-term relationships with key stakeholders. Customer relationship marketing (CRM): relationship marketing focused on delivering customer satisfaction and improved customer retention. Database marketing: the use of direct marketing tools and techniques to establish and develop ongoing customer relationships. Database marketing can be used to locate new customers, stimulate cross-selling, and provide measurable results. relationship marketing p462 customer relationship marketing (CRM) p462 database marketing p464 http://www.harryrosen.com ©Copyright 2003 Pearson Education Canada Inc.

©Copyright 2003 Pearson Education Canada Inc. Famous Last Words… Promotion is how organizations communicate with their target markets and all other interested stakeholders. There are many ways to communicate, the difficulty is in determining the effectiveness of monies spent. ©Copyright 2003 Pearson Education Canada Inc.