1. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2007-2008 14 CHAPTER Integrated Marketing Communications

2. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

3. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

4. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Discuss the role of promotion in the marketing mix The Role of Promotion in the Marketing Mix LO 1

5. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

6. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

7. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

8. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 LO 1 Competitive Advantage Unique features Excellent service Low prices Rapid delivery High product quality

9. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 REVIEW LEARNING OUTCOME LO 1 The Role of Promotion in the Marketing Mix

10. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 Discuss the elements of the promotional mix The Promotional Mix LO 2

11. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

12. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

13. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

14. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

15. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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

16. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 LO 2 Beyond the Book Reality-Based Product Advertising  Jaguar is giving an $80,000 Jaguar XK to a select group of “beautiful people”—just to be seen in it  It is reality-based product placement—where real life blurs seamlessly into advertising  The success of the campaign is “how many people touch and see the car” SOURCE: Gina Chon, “Jaguar Tries a Living Product Placement,” Wall Street Journal, June 29, 2006, B1.

17. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 The Function of Public Relations LO 2  Maintain a positive image  Educate the public about the company’s objectives  Introduce new products  Support the sales effort  Generate favorable publicity

18. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Sales Promotion LO 2 Marketing activities— other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness. Sales Promotion Online http://www.nabiscoworld.com

19. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Sales Promotion LO 2 End Consumers End Consumers Trade Customers Company Employees Company Employees Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons

20. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Personal Selling LO 2 Planned presentation to one or more prospective buyers for the purpose of making a sale. Personal Selling Personal Selling

21. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Personal Selling LO 2 Traditional Selling Traditional Selling Relationship Selling Relationship Selling

22. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 REVIEW LEARNING OUTCOME LO 2 Elements of the Promotional Mix

23. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Describe the communication process Marketing Communication LO 3

24. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 LO 3 The process by which we exchange or share meanings through a common set of symbols. Online http://www.mcdonalds.com Communication

25. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 LO 3 Categories of Communication Categories of Communication Interpersonal Communication Interpersonal Communication Mass Communication Mass Communication Marketing Communication

26. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 LO 3 As SendersAs Receivers  Develop messages  Adapt messages  Spot new communication opportunities  Inform  Persuade  Remind Marketing Communication

27. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 LO 3 Noise Sender Encoding Message Feedback Channel Feedback Channel Message Channel Message Channel Decoding Message Decoding Message Receiver The Communication Process

28. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 LO 3 Characteristics of the Elements in the Promotional Mix

29. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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 Advertising Indirect and impersonal Low Little Delayed One-way Yes Fast Same message to all audiences Characteristics of the Elements in the Promotional Mix

30. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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 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

31. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. 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 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

32. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32 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

33. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 33 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.

34. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 34 REVIEW LEARNING OUTCOME LO 3 The Communication Process

35. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 35 Explain the goals and tasks of promotion The Goals and Tasks of Promotion LO 4

36. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 36 Goals and Tasks of Promotion LO 4 Online http://www.tide.com Informing Reminding Persuading Target Audience Target Audience

37. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 37 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

38. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 38 Goals and Tasks of Promotion LO 4  Increase awareness  Explain how product works  Suggest new uses  Build company image Informative Promotion

39. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 39 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

40. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 40 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

41. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 41 Discuss the AIDA concept and its relationship to the promotional mix Promotional Goals and the AIDA Concept LO 5

42. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 42 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

43. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 43 The AIDA Concept LO 5 http://www.nascar.com http://www.kelloggs.com Online Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing)

44. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 44 Biz Flix LO 5 About a Boy

45. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 45 REVIEW LEARNING OUTCOME LO 5 The AIDA Concept

46. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 46 Describe the factors that affect the promotional mix Factors Affecting the Promotional Mix LO 6

47. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 47 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

48. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 48 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

49. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 49 LO 6 Target Market Characteristics For…  Widely scattered market  Informed buyers  Brand-loyal repeat purchasers Advertising Sales Promotion Less Personal Selling

50. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 50 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

51. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 51 LO 6 Available Funds  Trade-offs with funds available  Number of people in target market  Quality of communication needed  Relative costs of promotional elements

52. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 52 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

53. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 53 REVIEW LEARNING OUTCOME LO 6 Factors Affecting Promotional Mix

54. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 54 Discuss the concept of integrated marketing communications Integrated Marketing Communications LO 7

55. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 55 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.

56. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 56 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

57. Chapter 14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 57 REVIEW LEARNING OUTCOME LO 7 Integrated Marketing Communications