1. Integrated Marketing Communications and Relationship Management
Chapter 16
Lecture Slides
Solomon, Stuart, Carson, & Smith
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2. 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.
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3. 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
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4. 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
Direct
Marketing
Sales
Promotion
Public
Relations
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5. 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
©Copyright 2003 Pearson Education Canada Inc.

6. 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
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7. 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
©Copyright 2003 Pearson Education Canada Inc.

8. 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.

9. 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
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10. 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
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11. 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
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12. ©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
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13. 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.

14. 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.

15. 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
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16. ©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.