Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Dana Freeman, B-books, Ltd. Lamb, Hair, McDaniel CHAPTER Integrated Marketing Communications

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 2 Learning Outcomes Discuss the role of promotion in the marketing mix Discuss the elements of the promotional mix Describe the communication process Explain the goal and tasks of promotion LO 1 LO 2 LO 3 LO 4

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 3 Learning Outcomes Discuss the AIDA concept and its relationship to the promotional mix Describe the factors that affect the promotional mix Discuss the concept of integrated marketing communications LO 5 LO 6 LO 7

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 4 Discuss the role of promotion in the marketing mix The Role of Promotion in the Marketing Mix LO 1

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 5 LO 1 The Role of Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Promotion

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 6 LO 1 The Role of Promotion A plan for the optimal use of the elements of promotion:  Advertising  Public Relations  Sales Promotion  Personal Selling Promotional Strategy Promotional Strategy Competitive Advantage

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 7 LO 1 The Role of Promotion in the Marketing Mix Overall Marketing Objectives Marketing Mix Product Place Promotion Price Marketing Mix Product Place Promotion Price Target Market Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 8 LO 1 Competitive Advantage Unique features (Subway) Excellent service Low prices Rapid delivery (Jimmy John’s) High product quality (Pananra)

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 9 REVIEW LEARNING OUTCOME LO 1 The Role of Promotion in the Marketing Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 10 Discuss the elements of the promotional mix The Promotional Mix LO 2

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 11 The Promotional Mix LO 2 Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals.  Advertising  Public Relations  Sales Promotion  Personal Selling Promotional Mix Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 12 The Promotional Mix LO 2 Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. Advertising

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 13 Advertising Media LO 2 Traditional Advertising Media New Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Banner ads  Viral marketing  E- mail  Interactive video

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 14 Advertising LO 2 Advantages Disadvantages  Reach large number of people  Low cost per contact  Can be micro- targeted  Total cost is high  National reach is expensive for small companies

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 15 Public Relations LO 2 The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. Public Relations Public Relations

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 16 The Function of Public Relations i.e. Coke’s “Live It” LO 2  Maintain a positive image  Educate the public about the company’s objectives  Introduce new products  Support the sales effort  Generate favorable publicity

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 17 Sales Promotion LO 2 Marketing activities— other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness. Sales Promotion Online

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 18 Sales Promotion LO 2 End Consumers End Consumers Trade Customers Company Employees Company Employees Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 19 Personal Selling LO 2 Planned presentation to one or more prospective buyers for the purpose of making a sale. Personal Selling Personal Selling

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 20 Personal Selling LO 2 Traditional Selling (Car dealer) Traditional Selling (Car dealer) Relationship Selling (Mary Kay) Relationship Selling (Mary Kay)

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 21 REVIEW LEARNING OUTCOME LO 2 Elements of the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 22 Describe the communication process Marketing Communication LO 3

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 23 LO 3 The process by which we exchange or share meanings through a common set of symbols. Online Communication

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 24 LO 3 Categories of Communication Categories of Communication Interpersonal Communication (face to face; watch Reactions) Interpersonal Communication (face to face; watch Reactions) Mass Communication Mass Communication Marketing Communication

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 25 LO 3 As SendersAs Receivers  Develop messages  Adapt messages  Spot new communication opportunities  Inform  Persuade  Remind Marketing Communication

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 26 LO 3 Noise Sender (Absolut) Sender (Absolut) Encoding Message (“in an Absolute world) Encoding Message (“in an Absolute world) Feedback Channel Feedback Channel Message Channel (ads) Message Channel (ads) Decoding Message (understand?) Decoding Message (understand?) Receiver (target market) Receiver (target market) The Communication Process

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 27 LO 3 Characteristics of the Elements in the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 28 LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Advertising Indirect and impersonal Low Little Delayed One-way Yes Fast Same message to all audiences Characteristics of the Elements in the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 29 LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, impersonal Moderate to low Little Delayed One-way No Usually fast Usually no direct control Characteristics of the Elements in the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 30 LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and impersonal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target Characteristics of the Elements in the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 31 LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect Characteristics of the Elements in the Promotional Mix

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 32 The Impact of Blogging LO 3 Sponsored by a company or one of its brands and maintained by one or more of the company’s employees. Noncorporate Blogs Corporate Blogs Corporate Blogs Independent and not associated with the marketing efforts of any particular company or brand.

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 33 REVIEW LEARNING OUTCOME LO 3 The Communication Process Message to be conveyed Encode message Receive message Transmit message Decode message Message that was understood Sender Feedback channel Receiver Message channel

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 34 Explain the goals and tasks of promotion The Goals and Tasks of Promotion LO 4

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 35 Goals and Tasks of Promotion LO 4 Online Informing Reminding Persuading Target Audience Target Audience

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 36 Goals and Tasks of Promotion LO 4 Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 37 Goals and Tasks of Promotion LO 4  Increase awareness  Explain how product works  Suggest new uses  Build company image Informative Promotion

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 38 Goals and Tasks of Promotion LO 4  Encourage brand switching  Change customers’ perceptions of product attributes  Influence immediate buying decision  Persuade customers to call Persuasive Promotion

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 39 Goals and Tasks of Promotion LO 4  Remind customers that product may be needed  Remind customers where to buy product  Maintain customer awareness Reminder Promotion

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 40 Discuss the AIDA concept and its relationship to the promotional mix Promotional Goals and the AIDA Concept LO 5

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 41 The AIDA Concept LO 5 Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. A ttention I nterest D esire A ction A ttention I nterest D esire A ction AIDA Concept AIDA Concept

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 42 The AIDA Concept LO Online Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing)

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 43 REVIEW LEARNING OUTCOME LO 5 The AIDA Concept

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 44 Describe the factors that affect the promotional mix Factors Affecting the Promotional Mix LO 6

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 45 LO 6 Factors Affecting the Choice of Promotional Mix Nature of the product Stage in PLC Target market factors Type of buying decision Promotion funds Push or pull strategy

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 46 LO 6 Stage in the Product Life Cycle Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 47 LO 6 Target Market Characteristics For…  Widely scattered market  Informed buyers  Brand-loyal repeat purchasers Advertising Sales Promotion Less Personal Selling

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 48 LO 6 Type of Buying Decision Advertising Sales Promotion Routine Personal Selling Neither Routine nor Complex Neither Routine nor Complex Advertising Public Relations Print Advertising Complex

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 49 LO 6 Available Funds  Trade-offs with funds available  Number of people in target market  Quality of communication needed  Relative costs of promotional elements

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 50 LO 6 Push and Pull Strategies Manufacturer promotes to wholesaler Manufacturer promotes to wholesaler Wholesaler promotes to retailer Wholesaler promotes to retailer Retailer promotes to consumer Retailer promotes to consumer Consumer buys from retailer Consumer buys from retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumer Manufacturer promotes to consumer Consumer demands product from retailer Consumer demands product from retailer Retailer demands product from wholesaler Retailer demands product from wholesaler Wholesaler demands product from manufacturer Wholesaler demands product from manufacturer Orders to manufacturer PULL STRATEGY

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 51 REVIEW LEARNING OUTCOME LO 6 Factors Affecting Promotional Mix Promotional Mix % Advertising % Public Relations % Sales Promotion % Personal Selling Nature of the product Product life cycle Target market character- istics Type of buying decision Funds available Push or pull strategy

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 52 Discuss the concept of integrated marketing communications Integrated Marketing Communications LO 7

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 53 Integrated Marketing Communications LO 7 Integrated Marketing Communications Integrated Marketing Communications The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer.

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 54 IMC Popularity Growth LO 7  Proliferation of thousands of media choices  Fragmentation of the mass market  Slash of advertising spending in favor of promotional techniques that generate immediate response Online

Chapter 14Copyright ©2010 Cengage Learning Inc. All rights reserved 55 REVIEW LEARNING OUTCOME LO 7 Integrated Marketing Communications