Transcript Business 7e - Pride, Hughes, Kapor

Chapter Sixteen
Developing
Integrated
Marketing
Communications
Learning Objectives
1. Describe integrated marketing
communications.
2. Understand the role of promotion.
3. Explain the purposes of the three
types of advertising.
4. Describe the advantages and
disadvantages of the major advertising
media.
5. Identify the major steps in developing
an advertising campaign.
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Learning Objectives (cont’d)
6. Recognize the various kinds of
salespersons, the steps in the
personal-selling process, and the
major sales management tasks.
7. Describe sales promotion objectives
and methods.
8. Understand the types and uses of
public relations.
9. Identify the factors that influence the
selection of promotion mix ingredients.
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What Is Integrated Marketing
Communications?
• Coordination of promotion efforts for
maximum informational and persuasive
impact on customers
• Results in a consistent message to
customers, long-term customer relationships,
and the efficient use of promotional resources
– Mass media advertising has given way to targeted
promotional tools (e.g., cable TV, direct mail, and
the Internet)
– The overall cost of marketing communications has
risen significantly, pressuring managers to make
the most efficient use of marketing resources
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The Role of Promotion
• Promotion
– Communication about an organization and its
products that is intended to inform, persuade, or
remind target market members
• The Role of Promotion
– To facilitate exchanges directly or indirectly by
informing individuals, groups, or organizations and
influencing them to accept a firm’s products or to
have more positive feelings about the firm
• Convey product and service information directly to target
market segments
• Provide information to interest groups, regulatory
agencies, investors, and the general public
– To maintain positive relationships between a
company and various groups in the marketing
environment
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Information Flows Into and Out of an
Organization
• A promotional activity’s effectiveness
depends on the information available to
marketers
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin
Company, Adapted with permission.
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The Promotion Mix
• The particular combination of promotion
methods a firm uses to reach a target market
– Advertising
• A paid nonpersonal message communicated to a select
audience through a mass medium
– Personal selling
• Personal communication aimed at informing customers
and persuading them to buy a firm’s products
– Sales promotion
• The use of activities or materials as direct inducements
to customers or salespersons
– Public relations
• Communication activities used to create and maintain
favorable relations between an organization and various
public groups, both internal and external
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Possible Ingredients for an Organization’s
Promotion Mix
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright ©
2003 by Houghton Mifflin Company, Adapted with permission.
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Types of Advertising by Purpose
• Primary-Demand Advertising
– Used to increase demand for all brands of a product in
a specific industry
• Selective-Demand (Brand) Advertising
– Used to sell a particular brand of product
– Immediate-response advertising
• To persuade customers to buy the product within a short time
– Reminder advertising
• To keep the firm’s name fresh in the public’s mind
– Comparative advertising
• Compares specific characteristics of two or more brands to
show the advertiser’s brand is better
• Institutional advertising
– Designed to enhance a firm’s image or build its
reputation
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Growth of Advertising Expenditures and
Employment in Advertising
Source: Advertising Age, May 13, 2002; and U.S. Department of Labor, Bureau of Labor Statistics,
Employment and Earnings, April 2002.
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Advertising Media
• The forms of communication through which
advertising reaches its audience
• Newspapers
– Relatively inexpensive and timely; short life span
• Magazines
– Reach a specific market segment; more prestigious
than newspapers; high cost; lack of timeliness
• Direct Mail
– Most selective; effectiveness can be measured; email
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Advertising Media (cont’d)
• Yellow Pages Advertising
– Print and online; local; purchased for 1 year
• Out-of-Home Advertising
– Short promotional messages on billboards, posters,
signs, and vehicles; focuses on geographic area;
fairly inexpensive
• Television
– The primary medium for larger firms trying to reach
national or regional markets
– Network time; local time; sponsoring a show; spot
time; infomercials
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Advertising Media (cont’d)
• Radio
– Offers selectivity; most accessible medium; can be
less expensive than other media
• Internet
– Increasingly popular; can be expensive; potentially
large audience; can target precisely; effectiveness is
questionable
– Banner and button ads; sponsorship ads; keyword
ads; interstitials
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Distribution of Advertising Expenditures
among Various Advertising Media
Source: “Coen’s Spending Totals for 2001,” www.adage.com/datacenter.coms, May 13, 2002.
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Major Steps in Developing an
Advertising Campaign
1. Identify and Analyze the Target
Audience
2. Define the Advertising Objectives
3. Create the Advertising Platform
4. Determine the Advertising
Appropriation
5. Develop the Media Plan
6. Create the Advertising Message
7. Execute the Campaign
8. Evaluate Advertising Effectiveness
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Advertising Agencies
• Independent firms that plan, produce,
and place advertising for their clients
• Large agencies also help with sales
promotion and public relations
• Media usually pay a commission to
agencies
• Firms may use both in-house
advertising departments and an
independent agency
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Top 10 National Advertisers
1. General Motors Corp.
2. Procter & Gamble Co.
3. Ford Motor Co.
4. PepsiCo
5. Pfizer
6. DaimlerChrysler
7. AOL Time Warner
8. Philip Morris Cos.
9. Walt Disney Co.
10.Johnson & Johnson
Source: Advertising Age, June 24, 2002.
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Social and Legal Considerations in
Advertising
• Criticisms
– Advertising is wasteful
– Advertising is deceptive
• Benefits
– Advertising is the most effective and least
expensive means of communicating to a large
number of individuals and organizations
– Advertising encourages and is a means of
competition; it thus leads to new/better products,
more choice, lower prices
– Advertising revenues support our mass
communication media
– Advertising provides job opportunities
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Personal Selling
• The most adaptable promotion method
• The most expensive promotion method
• Kinds of salespersons
– Order getter
• Responsible for creative selling: selling a firm’s
products to new customers and increasing
sales to present customers
– Order taker
• Handles repeat sales in ways that maintain
positive relationships with customers
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Personal Selling
• Kinds of salespersons (cont’d)
– Sales support personnel
• Employees who aid in selling but are more involved in
locating prospects, educating customers, building
goodwill for the firm, and providing follow-up service
• Missionary salespersons
– Visit retailers to encourage an initial purchase of the
manufacturer’s products from wholesalers
• Trade salespersons
– Work with customers to promote and increase retail sales
of the manufacturer’s products
• Technical salespersons
– Assist current customers with technical matters related to
the manufacturer’s products
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The PersonalSelling Process
Source: William M. Pride and O.C. Ferrell, Marketing: Concepts and
Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin Company.
Adapted with permission.
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Managing Personal Selling
• Setting sales objectives
– Concrete, quantifiable terms
– Specified time period
– Specified geographic area
• Adjusting the size of the sales force to meet
changes in the firm’s marketing plan and the
marketing environment
• Attracting and hiring effective salespersons
• Training salespersons
• Compensating salespersons
• Motivating salespersons
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Sales Promotion
• Activities or materials that are direct
inducements to customers or salespersons
• Objectives
1. To draw new customers
2. To encourage trial of a new product
3. To invigorate the sales of a mature brand
4. To boost sales to current customers
5. To reinforce advertising
6. To increase traffic in retail stores
7. To steady irregular sales patterns
8. To build up reseller inventories
9. To neutralize competitive promotional efforts
10. To improve shelf space and displays
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Sales Promotion Methods
• Consumer sales promotion method
– Designed to attract consumers to particular retail
stores and to motivate them to purchase certain new
or established products
• Trade sales promotion method
– Designed to encourage wholesalers and retailers to
stock and actively promote a manufacturer’s product
• Factors influencing the choice of sales
promotion method
–
–
–
–
–
–
Objectives of the sales promotional effort
Product characteristics
Target market profile
Distribution channels
Availability of resellers
Competitive and regulatory forces in the environment
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Sales Promotion Methods (cont’d)
• Rebate
– A return of part of the purchase price of a product
• Coupon
– Reducing the purchase price of a particular item by a
stated amount at the time of purchase
• Sample
– A free product given to customers to encourage trial
• Premium
– A gift a producer offers to a customer in return for
buying its product
• Frequent-user incentives
– A program that rewards customers who engage in
repeat (frequent) purchases
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Sales Promotion Methods (cont’d)
• Point-of-purchase displays
– Promotional material in the retail store designed to
inform customers and encourage purchases
• Trade shows
– Industry-wide exhibits at which many sellers display
their products
• Buying allowance
– A temporary price reduction to resellers for
purchasing specified quantities of a product
• Cooperative advertising
– A manufacturer agrees to pay a certain amount of the
retailer’s media cost for advertising the
manufacturer’s product
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Public Relations
• A broad set of communication activities used
to create and maintain favorable relationships
between an organization and various public
groups, both internal and external
– Customers, employees, stockholders, suppliers,
educators, the media, government officials, society
in general
• Types of public relations tools
– Written and spoken communications
• Brochures, newsletters, company magazines, annual
reports, news releases, corporate-identity materials,
speeches
– Event sponsorship
• Special events such as concerts and charity functions
that the firm underwrites wholly or partially
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Public Relations (cont’d)
• Publicity
– Communication in news-story form about
an organization, its products, or both
•
•
•
•
News release
Feature article
Captioned photograph
Press conference
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The Uses of Public Relations
• To promote people, places, activities, ideas
• To enhance the reputation of the organization
by increasing awareness of company
products and activities
• To create specific positive company images
• To maintain the public visibility of the
company
• To reduce the effects of negative events on
the company’s reputation
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Promotion Planning
• Promotional campaign
– A plan for combining and using the four
promotional methods—advertising,
personal selling, sales promotion, and
public relations—in a particular promotion
mix to achieve one or more marketing
goals
• What will be the role of promotion in the overall
marketing mix?
• To what extent will each promotional method be
used in the promotion mix?
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Promotion and Marketing Objectives
• Providing product information to target
markets
• Increasing market share by convincing
new customers to purchase the product
• Positioning the product relative to the
images customers have of competing
products
• Stabilizing sales by increasing sales
during slack periods or for products that
are declining
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Developing the Promotion Mix
• Marketers may use several promotion
mixes at the same time for different
products
• The promotion mix ingredients depend
on
– Organizational resources and objectives
– Target market characteristics
– Product characteristics
– The cost and availability of promotional
methods
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