Integrated Marketing Communications

Integrated
Marketing
Communications
Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter Overview
Promotion:
Promotion function of informing,
persuading, and influencing the
consumers purchase decision
Marketing Communications:
Communications
transmission from a sender to a receiver
of a message dealing with the buyerseller relationship
Integrated Marketing Communications

Coordination of all promotional activities
media advertising, direct mail, personal
selling, sales promotion, and public relations
to produce a unified customer-focused
promotional message
Success of any IMC program depends
critically on identifying the members of an
audience and understanding what they
want
Importance of Teamwork
IMC requires a total strategy
including all marketing activities, not
just promotion
Successful implementation of IMC
requires that everyone involved in
every aspect of promotion public
relations, advertising, personal
selling, and sales promotion
function as a team
The Communications Process

An effective promotional message
accomplishes three tasks:
It gains the receivers attention
It achieves understanding by both receiver
and sender
It stimulates the receivers needs and
suggests an appropriate method of
satisfying them
AIDA concept (Attention-Interest-DesireAction) an explanation of the steps through

which an individual reaches a purchase
decision
Sender
Encoding
Channel
Decoding
Response
Feedback
Noise
Global Difficulties with the Communication

Process
In China: KFCs slogan: Finger lickin good
came out as Eat your fingers off
Also in China: Coca-Cola had thousands of
signs made using the translation: Ke-kou-ke-la
Depending on the dialect this means . . .
Bite the wax tadpole, or
Female horse stuffed with wax
In Taiwan: Pepsis slogan, Come alive with the
Pepsi generation came out as Pepsi will bring
your ancestors back from the dead
Objectives of Promotion
Provide Information
Inform the market about the availability of a
particular good or service
Increase Demand
Some promotions are aimed at increasing
primary demand, the desire for a general
product category
More promotions are aimed at increasing
selective demand, the desire for a specific
brand
Differentiate the Product

Homogenous demand for many products
results when consumers regard the firms
output as virtually identical to its
competitors then, the firm has virtually no
control over marketing variables
Accentuate the Products Value
Promotion can explain the greater ownership
utility of a product to buyers, thereby
accentuating its value and justifying a higher
price
Stabilize Sales
For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular
demand
Stabilizing these variations is often
an objective of promotional
strategy
Elements of the Promotional Mix

Promotional mix:
mix blend of personal selling
and nonpersonal selling designed to achieve
promotional objectives
Personal selling:
selling interpersonal
promotional process involving a sellers
person-to-person presentation to a
prospective buyer
Nonpersonal selling includes:
Advertising, Product placement, Sales
promotion, Direct marketing, Public
relations
Advertising
Paid, nonpersonal communication through
various media by a business firm, not-for-profit
organization, or individual identified in the
message with the hope of informing or
persuading members of a particular audience
Product Placement
Marketer pays a motion picture or television
program owner a fee to display his or her
product prominently in the film or show
Sales Promotion
Marketing activities that stimulates
consumer purchasing (includes:
displays, trade shows, coupons,
premiums, contests, product
demonstrations, and various
nonrecurrent selling efforts)
Trade promotion
Direct Marketing
Direct communications other than
personal sales contact between
buyer and seller, designed to
generate sales, information
requests, or store visits
Public relations:
relations firms communications and
relationships with its various publics
Publicity:
Publicity stimulation of demand for good,
service, place, idea, person, or organization
by unpaid placement of commercially
significant news or favorable media
presentations
Guerilla Marketing:
Marketing Unconventional,
innovative, and low-cost marketing
techniques designed to get consumers
attention in unusual ways.
Sponsorships
Provision of funds for a sporting or cultural
event in exchange for a direct association
with the events or activity
Growth of Sponsorships
Sponsorship has grown rapidly during the
past 30 years
Corporate sponsorship spending has
increased faster than promotional outlays
for advertising and sales promotion
How Sponsorship Differs from Advertising
Sponsors degree of control
Nature of the message
Audience reaction
Ambush marketing
Assessing Sponsorship Results

Marketers utilize some of the same
techniques to measure both advertising
and sponsorship
The differences between the two
promotional alternatives often necessitate
some unique research techniques
Despite the impressive visibility of special
events like soccers World Cup and
footballs Super Bowl, the demands do not
necessarily lead directly to increased sales
or improved brand awareness
Direct Marketing
Few promotional mix elements are growing as
rapidly as direct marketing
Related overall spending total $1.7 trillion
Direct Marketing Communication Channels
Direct Mail
Marketers combine information from internal
and external databases, surveys, coupons,
and rebates that require responses to
provide information about consumer
lifestyles, buying habits, and wants
Catalogs
Over 10,000 different consumer mail-order
catalogs and thousands more for businessto- business sales are mailed each year
generating over $57 million in consumer
sales and $36 million in B2B sales
Telemarketing:
Telemarketing promotional presentation
involving the use of the telephone for
outbound contacts by salespeople or
inbound contacts initiated by customers
who want to obtain information and place
orders
Direct Marketing via Broadcast Channels

Broadcast direct marketing includes:
Brief (30 to 90 and second) direct response
ads on television or radio
Home shopping channels like:
Home Shopping Network (HSN)
Infomercial: promotional presentation for
a single product running 30 minutes or
longer in a format that resembles a regular
television program
Electronic Direct Marketing Channels

Web advertising is an important
component of electronic direct marketing
E-mail direct marketing is a natural and
easy extension of traditional direct mail
marketing
Other Direct Marketing Channels
Print media is generally not as effective as
Web marketing or telemarketing for direct
marketers
Magazine and newspaper ads with toll-free
telephone numbers, kiosks, and other
media are still useful in many situations
Developing an Optimal Promotional Mix

Factors that influence the effectiveness of
a promotional to mix:
Nature of the market
Nature of the product
Stage in the product life-cycle
Price
Funds available for promotion
Nature of the market

Personal selling may prove effective with a market
composed of a limited number of buyers
Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
Personal selling often works better for intermediary
target markets
Nature of the product
Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
Consumer products are more likely to rely heavily on
advertising than are business products
Stage in the product life-cycle

Promotional mix must be tailored to the products
stage in the product life-cycle
In the introductory stage, there is a heavy emphasis
on personal selling to the to the intermediaries
However, advertising and sales promotion help to
create awareness and stimulate initial purchases
In the growth and maturity stages, advertising gains
relative importance
Personal selling efforts at marketing intermediaries to
expand distribution is continued
In the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures
Price
Advertising dominates the promotional mix for lowunit-value products due to the high personal contact
costs of personal selling
Consumers a high-priced items like luxury cars expect
lots of well-presented information via videocassettes,
CDs, fancy brochures, and personal selling
Funds available for promotion
A critical element in the promotional strategy is the
size of the promotional budget
While the cost-per-contact of a $2 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms
Influencing Factors
PersonalSelling
Advertising
Natureofthemarket
Numberofbuyers
Geographic
concentration
Typeofcustomer
Natureoftheproduct
Complexity
Service
requirements
Typeofgoodor
service
Useoftradeins
Stageintheproductlife
cycle
Limitednumber
Concentrated
Businesspurchaser
Largenumber
Dispersed
Ultimateconsumer
Custommade,complex
Considerable
Business
Tradeinscommon
Standardized
Minimal
Consumer
Tradeinsuncommon
Oftenemphasizedateverystage;
heavyemphasisintheintroductory
andearlygrowthstagesin
acquaintingmarketing
intermediariesandpotential
consumerswiththenewgoodor
service
Oftenemphasizedatevery
stage;heavyemphasisinthe
latterpartofthegrowthstage,
aswellasthematurityand
earlydeclinestages,to
persuadeconsumerstoselect
specificbrands
Price
Highunitvalue
Lowunitvalue
Pulling and Pushing

Promotional Strategies
Pulling strategy:
strategy promotional effort by a
seller to stimulate demand among final users,
who will then exert pressure on the
distribution channel to carry the good or
service, pulling it though the marketing
channel
Pushing strategy:
strategy promotional effort by a
seller to members of the marketing channel
intended to stimulate personal selling of the
good or service, thereby pushing it through
the marketing channel
Budgeting for Promotional Strategy

Percentage-of-sales method
Fixed-sum-per-unit method
Meeting competition method
Task-objective method
Method
Description
Example
Percentageof
salesmethod
Promotionalbudgetissetasa
Lastyearwespent$10,500on
specifiedpercentageofeitherpast promotionandhadsalesof$420,000.
orforecastedsales.
Nextyearweexpectsalestogrowto
$480,000,andweareallocating$12,000
forpromotion.
Fixedsumper
unitmethod
Promotionalbudgetissetasa
predetermineddollaramountfor
eachunitsoldorproduced.
Ourforecastcallsforsalesof14,000
units,andweallocatepromotionatthe
rateof$65perunit.
Meeting
competition
method
Promotionalbudgetissetto
matchcompetitorspromotional
outlaysoneitheranabsoluteor
relativebasis.
Promotionaloutlaysaverage4percent
ofsalesinourindustry.
Taskobjective
method
Oncemarketersdeterminetheir
specific,promotionalobjectives,
theamount(andtype)of
promotionalspendingneededto
achievethemisdetermined.
Bytheendofnextyear,wewant75
percentoftheareahighschoolstudents
tobeawareofournew,highly
automatedfastfoodprototypeoutlet.
Howmanypromotionaldollarswillit
take,andhowshouldtheybespent?
Figure 15.9
Allocation of Promotional Budgets for consumer
Packaged Goods
Measuring the Effectiveness of Promotion

Two basic measurement tools:
Direct sales results measures the
effectiveness of promotion by revealing the
specific impact on sales revenues for each
dollar of promotional spending
Indirect evaluation concentrates on
quantifiable indicators of effectiveness like:
Recall - how much members of the target
market remember about specific products
or advertisements
Readership size and composition of a
messages audience
Measuring Online Promotions

Early attempts at measuring online promotional
efforts involved counting hits and visits
Incorporating direct response and comparing
different promotions for effectiveness
Two major techniques for setting online
advertising rates:
Cost per impression (CPM), technique that
related the cost of an ad to every thousand
people who read it
Cost per response (click-throughs), which
assumes that those who actually click on an
ad want more information

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Integrated

Integrated Marketing Communications

The Communications Process

AIDA concept (Attention-Interest-DesireAction) an explanation of the steps through

Global Difficulties with the Communication

Differentiate the Product

Elements of the Promotional Mix

Assessing Sponsorship Results

Direct Marketing via Broadcast Channels

Electronic Direct Marketing Channels

Developing an Optimal Promotional Mix

Nature of the market

Stage in the product life-cycle

Pulling and Pushing

Budgeting for Promotional Strategy

Measuring the Effectiveness of Promotion

Measuring Online Promotions

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