© 2006 by Nelson, a division of Thomson Canada Limited /24/2015 Slides developed by: Peter Yannopoulos Chapter 12 Integrated Marketing Communications

© 2006 by Nelson, a division of Thomson Canada Limited 12-2 Integrated Marketing Communications Integrated marketing communications is the coordinated use of all promotion elements to communicate a consistent and unified message about a product in a cost-efficient way

© 2006 by Nelson, a division of Thomson Canada Limited 12-3 Setting the Communications Budget Establishing the Communication Objectives Identifying the Target Audience Determining the Communications Mix Designing an IntegratedMarketingCommunicationsMix Designing an Integrated Marketing Communications Plan

© 2006 by Nelson, a division of Thomson Canada Limited 12-4 Offensive Promotion Strategy Defensive Promotion Strategy Defensive and OffensivePromotionStrategies Defensive and Offensive Promotion Strategies

© 2006 by Nelson, a division of Thomson Canada Limited 12-5 Setting the Communications Budget Percentage of sales Competitive parity Objective and task All-you-can afford Setting the Communications Budget

© 2006 by Nelson, a division of Thomson Canada Limited 12-6 Choosing Between Advertising and Personal Selling AdvertisingStrategic FactorsPersonal Selling LargeNumber of end customersSmall LowCustomer information needs for making a purchase decisionHigh LowCustomer level of involvementHigh SmallOrder sizeLarge NoProduct is technical in nature or requires demonstrationYes LowProduct unit valueHigh One pricePricing strategyFlexible IndirectChannels of distributionDirect Create awareness Promotion objectivePrompt purchase LargeAdvertising budgetSmall

© 2006 by Nelson, a division of Thomson Canada Limited 12-7 Relative Roles of Advertising and Sales Promotion Product Life Advertising Sales Cycle Stage Promotions Introduction High High Growth/Shakeout Differentiated brand High Low Imitative brand Low High Maturity High brand loyalty High Low Low brand loyalty Low High Decline Discontinued Low

© 2006 by Nelson, a division of Thomson Canada Limited 12-8 Assessing the Role of Advertising in Target Audience Response TAR = A × C × R × I × IP × B Where: TAR = percentage of target audience who will purchase the brand A = percentage of target audience who are aware of the message C= percentage of those who are aware of and correctly comprehend the message R = percentage of those who comprehend the message and actually retained it I = percentage of those who have retained the message and are interested in the brand P = percentage of those who are interested in the brand and intend to purchase it B = percentage of those who intend to purchase the brand and actually buy it

© 2006 by Nelson, a division of Thomson Canada Limited 12-9 Underlying Causes of Low Levels of Purchase Poor ResponseMarketing ProblemUnderlying Cause Low awareness Poor comprehension Low retention Low interest Low intention to purchase Low purchase level Marketing communications Product Product positioning Price Transaction costs Distribution In-store placement Insufficient reach Insufficient frequency Incorrect media mix Incorrect media scheduling Insufficient frequency Poor ad copy Poor message execution Insufficient frequency Insufficient consumer benefits Product lacks desirable benefits Lack of product need High price High switching costs Inadequate distribution Lack of in-store visibility

© 2006 by Nelson, a division of Thomson Canada Limited Desirable Unique Believable Directed at a specific segment Criteria for EffectiveMessages Message Design – Criteria for Effective Messages Consistent

© 2006 by Nelson, a division of Thomson Canada Limited Media Plan Media mix Media scheduling Media Plan Media Plan

© 2006 by Nelson, a division of Thomson Canada Limited Media Scheduling Continuous PulsingFlightingBuild UpBuild Down

© 2006 by Nelson, a division of Thomson Canada Limited Frequency Reach Reach and Frequency Reach and Frequency

© 2006 by Nelson, a division of Thomson Canada Limited Reach Reach or coverage is the percentage of an audience’s members that are exposed to an advertisement

© 2006 by Nelson, a division of Thomson Canada Limited Frequency Frequency is the average number of times the members of the audience were exposed to an ad over the broadcast period

© 2006 by Nelson, a division of Thomson Canada Limited Minimum Effective Frequency Minimum effective frequency is the level of frequency at which advertising will begin to have a positive impact on the target audience

© 2006 by Nelson, a division of Thomson Canada Limited Techniques for Increasing Reach Roadblock technique Multiple content program technique Scatter technique Increasing Reach

© 2006 by Nelson, a division of Thomson Canada Limited Factors Influencing the Choice Between High and Low Frequency Higher Frequency FactorLower Frequency HighDegree of ad clutter in the chosen media Low LimitedMedium ability to hold audience interest Extensive HighMessage complexityLow Brand loyaltyHigh LowAudience involvementHigh StrongCompetitionWeak ShortPurchase cycleLong

© 2006 by Nelson, a division of Thomson Canada Limited Measuring Advertising Effectiveness Pre-testing research Post-testing research Measuring Ad Effectiveness

© 2006 by Nelson, a division of Thomson Canada Limited Skin resistance Facial expressions Eye movement tracking devices Focus groups Pre-testingresearchmethods Pre-testing Research Methods Muscle movement Voice pitch

© 2006 by Nelson, a division of Thomson Canada Limited Number of inquiries Number of hits Brand recall Ad recall or recognition Post-testingresearchmethods Post-testing Research Methods

© 2006 by Nelson, a division of Thomson Canada Limited Setting sales force objectives Structuring the sales force Sales force size Recruitment Sales Force Management Training and developing the sales force Sales force evaluation & control Compensating the sales force

© 2006 by Nelson, a division of Thomson Canada Limited Setting Sales Force Objectives In addition to the overall sales plans, sales managers and salespeople normally set specific objectives to be achieved by a salesperson Sales objectives must be motivational, measurable, realistic, and understandable In addition to the overall sales plans, sales managers and salespeople normally set specific objectives to be achieved by a salesperson Sales objectives must be motivational, measurable, realistic, and understandable

© 2006 by Nelson, a division of Thomson Canada Limited Market structure Complex structure Product structure Territorial structure Structuring the Sales Force Structuring the Sale Force

© 2006 by Nelson, a division of Thomson Canada Limited Incremental method Work load method Sales potential method SalesForceSize Sale Force Size

© 2006 by Nelson, a division of Thomson Canada Limited Combinations salary and commission Straight commission Straight salary SalesForceCompensation Compensating the Sales Force

© 2006 by Nelson, a division of Thomson Canada Limited Sales Promotions Consumer promotions Trade promotions Retailer promotions Sales Promotions

© 2006 by Nelson, a division of Thomson Canada Limited Advantages of Sales Promotions Create an urgency to purchase product Reward loyal customers Encourage repeat buying Encourage competitor customers to switch Break customer loyalty to competing brands Counteract competitive activity

© 2006 by Nelson, a division of Thomson Canada Limited Disadvantages of Sales Promotions Short-term impact Increase price sensitivity Decrease brand loyalty Forward buying Diversion Invite competitive retaliation They have become less effective

© 2006 by Nelson, a division of Thomson Canada Limited Evaluation of Sales Promotion Effectiveness Compare sales or market share before and after a sales promotion campaign Use scanner data

© 2006 by Nelson, a division of Thomson Canada Limited Public relations is concerned with building a favourable long-term image for the organization through a variety of activities such as financial support of social causes, corporate publications, and other events Public Relations

© 2006 by Nelson, a division of Thomson Canada Limited Publicity is part of public relations and it seeks to obtain favourable short-term press coverage for the organization Publicity

© 2006 by Nelson, a division of Thomson Canada Limited Event marketing Other forms of gaining publicity Press conferences Press releases Methods of Gaining Publicity Publicity Methods of Gaining Publicity