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CHAPTER

NINETEEN

INTEGRATED MARKETING MARKETING COMMUNICATIONS & DIRECT MARKETING

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2000 McGraw-Hill Ryerson Limited

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

Explain the communication process and its elements. Understand the promotional mix and the uniqueness of each component. Select the promotional approach appropriate to a products life-cycle stage and characteristics.
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2000 McGraw-Hill Ryerson Limited

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

Differentiate between the advantages of push and pull strategies. Appreciate the value of an integrated marketing communications approach. Understand the value of direct marketing for consumers and sellers.
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2000 McGraw-Hill Ryerson Limited

Movies and Name Brand Products


Benefits accrue to both the movie studios and the companys product or service when branded products and services are featured in movies. Some examples are American Online in Youve Got the Mail, BMW Z3 in James Bonds Goldeneye, Dunkin Donuts in Lethal Weapon 4, Aviator sunglasses in Top Gun, etc. Its not just movies. Other outlets include music videos, TV shows, and even other companies commercials. Placement of products in the many media alternatives available today is becoming an important part of marketing and promotion.
2000 McGraw-Hill Ryerson Limited

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PP191 The Communication Process


Fields of experience

Noise
Channel of Message Communication

Source

Encode

Decode

Receiver

Noise

Feedback loop Noise


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Errors in Communication
Errors in communication can happen in several ways: 1. the source may not adequately transform the abstract idea into an effective set of symbols, 2. a properly encoded message may be sent through the wrong channel and never make it to the receiver, 3. the receiver may not properly transform the set of symbols into the correct abstract idea, and 4. feedback may be so delayed or distorted that it is of no use to the sender.
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Concept Check
1. 2. What are the six elements required for communication to occur. A difficulty for Canadian companies advertising in international markets is that the audience does not share the same ___________. A misprint in a newspaper ad is an example of ____________.
2000 McGraw-Hill Ryerson Limited

3.
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PP19-2a The Promotional Mix


Promotional Element Advertising Mass Versus Customized Mass Payment fees paid for space or time Strengths Weaknesses - efficient means - high absolute for reaching costs large numbers - difficult to of people receive good feedback fees paid to - immediate - extremely salespeople as feedback expensive per either salaries or - very persuasive exposure commissions - can select - messages may audience differ between - can give complex salespeople information

Personal Selling

Customized

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PP19-2b The Promotional Mix


Promotional Mass Versus Element Customized Public Relations Mass Payment no direct payment Strengths - often the most credible source in consumers mind - effective at changing behaviour in short run - very flexible Weaknesses - difficult to get media cooperation - easily abused - can lead to promotion wars - easily duplicated

Sales Promotion Mass

wide range of fees paid, depending on promotion selected

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PP19-2c The Promotional Mix


Promotional Mass Versus Element Customized Direct Marketing Customized Payment cost of communication through mail, telephone or computer Strengths Weaknesses - messages can be - declining prepared customer quickly response - facilitates - database relationship management with customer is expensive

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Concept Check
1. Explain the difference between advertising and publicity when both appear on television. Which promotional element should be offered only on a short-term basis? Cost per contact is high with the ________ element of the promotional mix.
2000 McGraw-Hill Ryerson Limited

2. 3.

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Integrating the Promotion Mix


In putting together the promotion mix, a marketer must consider: 1. The balance of elements, such as which element should be emphasized and to what extent; and 2. Because the various promotional elements are often the responsibilities of different departments, coordinating a consistent promotional effort is necessary.
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Factors that Influence the Use of Promotional Tools


The ThePromotional Promotional Mix Mix
Personal Personal selling selling Public Public Relations Relations Sales Sales promotion promotion Direct Direct Marketing Marketing

Advertising Advertising

Target Target audience audience Product Product life lifecycle cycle Product Product characteristics characteristics Stages Stagesof of the the buying buying decision decision Channel Channelstrategies strategies
Integrated Integrated Marketing Marketing Communications Communications Program Program

Balance Balance considerations considerations

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The Target Audience Promotional programs may be directed at the ultimate consumer or an intermediary, or both.

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PP19-3 Promotional Tools used over the Product Life Cycle of Purina Puppy Chow
Growth Stage of product life cycle Maturity Decline

Introduction

Promotional objective

To inform

To persuade

To remind Reminder Little advertising money Sales promotion in spent on form of discounts promotion and coupons Limited personal selling Direct mail reminders
2000 McGraw-Hill Ryerson Limited

Promotional activity

Publicity in Personal selling veterinary to intermediaries magazines Advertising to Advertising differentiate Salesforce calling Puppy Chow on intermediaries attributes from Sales promotion those of in form of competing free samples brands

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Product Characteristics
Three specific types of product characteristics to be considered: 1. Complexity of the product/service 2. Degree of risk represented by the product/ service purchase a. financial risk b. social risk c. physical risk 3. Ancillary services with the product/service
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Stages of the Buying Decision The importance of the promotional elements varies with the three stages in a consumers purchase decision: 1. Prepurchase stage 2. Purchase stage 3. Postpurchase stage
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PP19-4 How the Importance of Promotional Elements Varies During the Consumers Purchase Decision
High Importance of promotional tool Personal selling

Sales promotion

Direct Marketing
Public rel

ations

Advertising Prepurchase Purchase Postpurchase Stage of consumers purchase decision

Low

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PP195 A Comparison of Push and Pull Promotional Sstrategies A. Push strategy B. Pull strategy
Manufacturer Manufacturer
Flow of demand stimulation Flow of promotion; mainly personal selling directed to intermediaries

Manufacturer Manufacturer
Flow of demand stimulation

Wholesaler Wholesaler

Wholesaler Wholesaler

Flow of promotion; mainly advertising directed to consumers

Retailer Retailer

Retailer Retailer

Consumer Consumer
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Consumer Consumer
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Integrated Marketing Communications (IMC)

Integrated marketing communications refers to the concept of designing marketing communications programs that coordinate all promotional activities -- advertising, personal selling, sales promotion, public relations, and direct marketing -- to provide a consistent message across all audiences.
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Integrated Marketing Communications (IMC) Successful IMC programs use a process referred to as the IMC audit, which a. analyzes the internal communication network of the company, b. identifies key audiences, c. evaluates customer databases, d. assesses messages in recent ads, public relations releases, packaging, video news releases, signage, sales promotion pieces, and direct mail, e. and determines managers knowledge of IMC.
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Concept Check
1. 2. 3. For consumer products, why is advertising emphasized more than personal selling? Explain the differences between a push strategy and a pull strategy. Integrated marketing communications provide a __________ message across all
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audiences.
2000 McGraw-Hill Ryerson Limited

PP19-6 The Promotion Decision Process


Planning Developing the Promotion Program - identify the target audience - specify the objectives - set the budget - select the right promotional elements - design the promotion - schedule the promotion

Implementation Executing the promotion program - pretest the promotion - carry out the promotion

Control Evaluating the promotion program - posttest the promotion - make needed changes

Corrective actions

Corrective actions

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The Consumers Hierarchy of Effects


The stages a prospective buyer goes through from initial awareness to eventual action are: 1. Awareness. The consumers ability to recognize and remember the product or brand name. 2. Interest. An increase in the consumers desire to learn about some of the features of the product or brand. 3. Evaluation. The consumers appraisal of the product or brand on important attributes. 4. Trial. The consumers actual first purchase and use of the product or brand. 5. Adoption. Through a favourable experience on the first trial, the consumers repeated purchase and use of the product or brand.
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Methods Used to Set the Promotion Budget

1. 2. 3. 4.
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Percentage of Sales Competitive Parity All-You-Can-Afford Objective and Task


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PP19-7 The Objective and Task Approach


OBJECTIVE To increase awareness among university students for a new video game. Awareness at the end of the semester should be 20 percent of all students from the existing 0 percent today. TASKS Advertisements once a week for a semester in 500 university papers. Direct-mail samples to student leaders on 500 university campuses Sponsor a national contest for video-game players Total Budget
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COSTS $280,000 50,000 100,000 $430,000

2000 McGraw-Hill Ryerson Limited

Executing and Evaluating the Promotion Program

The ideal execution of a promotion program involves pretesting each design before it is actually used to allow for changes and modifications which will improve its effectiveness. Posttests are recommended to evaluate the impact of each promotion and the contribution of the promotion toward achieving the program objectives.
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Concept Check
1. What are the characteristics of good promotion objectives? 2. What are the weaknesses of the percentage of sales budgeting approach? 3.
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How have advertising agencies changed to facilitate the use of IMC programs?
2000 McGraw-Hill Ryerson Limited

The Value of Direct Marketing - Visible Indicators


Visible Indicators of the Value of Direct Marketing - about half of the Canadian population has ordered merchandise by phone or mail - millions of adults have purchased items from a TV offer - about 20% of all adults make catalogue purchases each year. - millions of adults spends hours accessing online services.
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The Value of Direct Marketing - Responses It Generates The value of direct marketing can be described in terms of the responses it generates. Direct orders: the result of offers that contain all the information necessary for the prospective buyer to make a decision to purchase and complete the transaction. Lead generation: the result of an offer designed to generate interest in a product or service and a request for additional information. Traffic generation: the outcome of an offer designed to motivate people to visit a business
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Concept Check 1. The ability to design and use direct marketing programs has increased with the availability of ________ and _________. What are the three types of responses generated by direct marketing activities?
2000 McGraw-Hill Ryerson Limited

2.

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