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Chapter 8 – Integrated Marketing Communications

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Strategic Goals Of Marketing Communication

 Create awareness - More important for new products and brands

 Build positive images - Important for building (and maintaining) brand

 Identify prospects - more possible with more interactive marketing communications (like
internet banner ads).

 Build channel relationships - Some marketing efforts (particular promotions) require channel
communication and cooperation.

 Retain customers
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Promotional Mix

Concept refers to the combination and types of nonpersonal and personal communication the
organization puts forth during a specified period


Nonpersonal forms

 Advertising
 Paid form of nonpersonal communications transmitted through a mass medium to target
audience

 Sales promotion
 Activity or material offering a direct inducement for purchasing a product

 Public relations & Publicity

 Nonpersonal form of communication seeking to influence attitudes, feelings, and opinions

 Direct marketing
 Direct forms of communication with customers

Personal forms

 Personal selling
 Face-to-face communication with potential buyers to inform and persuade
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Integrated Marketing Approach

 Goal is to develop marketing communications programs that coordinate and integrate all
elements of the promotion mix to present a consistent message
 Seeks to manage all sources of brand or company contacts with existing and potential
customers

Potential buyers go through a process of:

1. Awareness of the product

2. Comprehension of what it can do and important features
3. Conviction that it has value for them
4. Ordering on the part of a sufficient number of potential buyers

How Various Promotion Tools Might Contribute to the Purchase of a Hypothetical Product

By knowing where customers are at each stage of the buying process, the company can better target
more appropriate advertising for that stage.

Firms should take into account three basic factors when devising its promotion mix:

1. The role of promotion in the overall marketing mix (don’t forget the other 3 P’s)

2. The nature of the product (old vs. new; standard vs. complex; simple vs. technical)

3. The nature of the market (growing vs. declining; cyclical vs. constant; emerging vs. mature)
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Advertising: Planning and Strategy

Objectives

 Generalist viewpoint – Concerned with sales, profits, and return on investment

 Middle viewpoint – Sees advertising as a competitive weapon

 Specialist viewpoint – Concerned with the effects of specific ads or campaigns

In the long run and often in the short run,

advertising is justified on the basis of the revenue it produces.

Therefore,

measures are needed to evaluate the “results” of a marketing communications program

(overall and individual components of the program).

So,

promotional objectives should include:

1. A target market statement

2. A statement identifying the specific aspect of the target market that is to change (perceptions,
attitudes, behavior, etc.)

3. A statement as to how long this change should take

4. A statement of the amount/degree of change required.

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Advertising Decisions

Key decisions to be made include:

1. Determining the size of the advertising budget (Expenditure Question)

2. Allocation of the advertising budget (Allocation Question)

Important to remember that brand equity, and consumer preference for brands, drive market share.
The Expenditure Question

 Percent of sales – A percentage figure is taken and applied to either past or future sales

 Per-unit expenditure – A fixed monetary amount is spent on advertising for each unit of the
product expected to be sold

 All you can afford – Advertising budget is established as a predetermined share of profits or
financial resources

 Competitive parity – Advertising budgets are based on those of competitors or other members
of the industry

 Research approach – Advertising budget is argued for and presented on the basis of research
findings. This can, and usually does, go with product test market activities.

 Task approach – Initially formulates the advertising goals (for example, amount of sales or
percentage market share) and defines the tasks to accomplish these goals. Management
determines how much it will cost to accomplish each task and adds up the total
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The Allocation Question:

Message Strategy

To be successful, the advertising campaign must:

 Say the right things

 Use the appropriate media, at the appropriate times, to reach the target market

To be effective, the advertising message should meet two general criteria:

1. It should take into account the basic principles of communication

2. It should be based upon a good theory of consumer motivation and behavior (chapter 3
consumer behavior)

1. The basic communication process involves three elements

a. Sender or source of the communication

b. Communication or message

c. Receiver or audience

 Encoding – Translating the product idea or marketing message into an effective ad

 Medium – The format that the advertisement uses (not in textbook)

 Decoding – Perceiving content of the message to be the same as the intended content

2. End goal of an advertisement and its associated campaign is to move the buyer to a decision to
purchase the advertised brand
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The Allocation Question:

Media Mix

 Reach – Number of different targeted audience members exposed at least once to the
advertiser’s message within predetermined time frame

 Average frequency – Number of times, on average, people are exposed to an ad within a given
time period

 Cost per thousand (CPM) – Generally refers to the dollar cost of reaching 1,000 prospects

 “Positive effects” theory – States that the more the viewers are involved in a television
program, the stronger they will respond to commercials

The marketer’s dilemma is to develop a media schedule that both

1. Exposes a sufficient number of targeted customers (reach) to the firm’s product

2. Exposes them enough times (average frequency) to the product to produce the desired effect
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Preparing the Advertising Campaign: The Eight-M Formula

Procedures for Evaluating Advertising Programs and Some Services Using the Procedures
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Sales Promotions

A direct inducement/incentive that offers extra value for the product to the salesforce, distributors, or
the ultimate consumer with the primary objective of creating "immediate" sales.

 It helps to increase sales through non-repetitive and one-time (short term) communication.
 Many sales promotions (trade and consumer) are offered and/or used at, or near, the time of
purchase.

a. Trade promotions – Aimed at distributors and retailers of products.

b. Consumer promotions – Aimed at final consumer.

 Push marketing strategies – Involve aiming promotional efforts at distributors, retailers, and
sales personnel to gain their cooperation in ordering, stocking, and accelerating the sales of a
product.

 Pull marketing strategies – Involve aiming promotional efforts directly at customers to

encourage them to ask the retailer for the product.

Push versus Pull Strategies in Marketing Communications

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Some Commonly Used Forms of Consumer Promotions

Some Commonly used Trade Promotions

Price Deals – Purchasers are offers discounts from the product’s regular price.

 Quantity Discount: A lower price based on volume purchased.

 Buy-back allowance: A discount is offered on the second purchase of a product, based on the
volume initially purchased. It is offered to encourage repurchase of a product immediately after
another trade deal.

Promotional Allowances – This refers to money given to the retailer/wholesaler with the intention that
this money be used for promotional purposes.

 Cooperative advertising program: This is money given to the retailer/wholesaler (usually a

percentage of product sales) in order to assist the retailer/wholesaler with their promotional
efforts.

Slotting Allowance - This is money given to the retailer wholesaler in order have the retailer put the
product on its shelves. This is usually a one-time fee and is generally not considered a promotional
allowance since its purpose is simply to get the product in the store and is not used for any type of
promotional effort.

Frequency Marketing Programs – Consumers are rewarded for purchases of products or services
over a sustained period of time
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Some Objectives of Sales Promotion

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Sales promotions can often

 Involve competitive retaliation

 Devalue image of promoted brand in consumer’s eyes

Not used as sole promotional tool due to its inability to

 Generate/Create long-term buyer commitment to a brand.

 Change, except temporarily, declining sales of a product.
 Convince buyers to purchase an unacceptable product.
 Make up for a lack of advertising or sales support.
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Public Relations

 News release or press release – Announcement regarding changes in organization or the

product line

 News conference – Meeting held for representatives of the media to announce major news
events

 (?) Sponsorship (?) – Providing support for and associating organization’s name with events,
programs, people

 Public service announcements – Many nonprofit organizations rely on the media to donate
time for advertising for contributions and donors

Advertising versus Public Relations

Question:

Is the communication paid for by the person/company that is the subject of the communication?

Direct Marketing (also referred to as Non-Store Retailing)

 Online
 Direct Mail
 Catalogs
 Direct Response Advertising
 (?) Personal Selling (?)

Direct Marketing versus Personal Selling Question:

Is the communication bi-directional before the decision to purchase is made?