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Integrated Marketing Communications Chapter 14 Prepared by Deborah Baker Texas Christian University Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 1 Learning Objectives 1. Discuss the role of promotion in the marketing mix. 2. Discuss the elements of the promotional mix. 3. Describe the communication process. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 2 Learning Objectives (continued) 4. Explain the goal and tasks of promotion. 5. Discuss the AIDA concept and its relationship to the promotional mix. 6. Describe the factors that affect the promotional mix. 7. Discuss the concept of integrated marketing communications. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 3 1 Learning Objective On Line http://www.maxim-magazine.co.uk Discuss the role of promotion in the marketing mix. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 4 1 Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 5 1 Promotional Strategy A plan for the optimal use of the elements of promotion: Advertising Public Relations Personal Selling Sales Promotion Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 6 1 The Role of Promotion Overall Marketing Objectives • • • • Marketing Mix Product Distribution Promotion Price Target Market Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotional Mix •Advertising •Public Relations •Personal Selling •Sales Promotion Promotion Plan 7 1 Differential Advantage High Product Quality Rapid Delivery Features that Provide Differential Advantage Low Prices Excellent Service Unique Features Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 8 2 Learning Objective Discuss the elements of the promotional mix. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 9 2 Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. 10 2 Promotional Mix On Line http://www.nabiscoworld.com Advertising Elements of the Promotional Mix Public Relations Personal Selling Sales Promotion Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 11 2 Advertising Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 12 2 Advertising Media On Line http://www.olympics.org http://www.olympics.com Traditional Advertising Media Electronic Advertising Media Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards Internet Electronic mail Interactive video Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 13 2 Advertising Advantages Disadvantages Reach large number of people Total cost is high Low cost per contact Can be microtargeted Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 14 2 Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 15 2 Public Relations Functions of Public Relations Executes programs to “win” public Evaluates public attitudes Identifies areas of public interest Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 16 2 Publicity Public information about a company, good, or service appearing in the mass media as a news item. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 17 2 Sales Promotion Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 18 2 Sales Promotion Sales Promotion Targets End Consumers Company Employees Trade Customers Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 19 2 Sales Promotion Free samples Contests Premiums Trade Shows Popular Tools for Consumer Sales Promotion Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Vacation Giveaways Coupons 20 2 Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 21 2 Personal Selling Traditional Selling Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Relationship Selling 22 3 Learning Objective Describe the communication process. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 23 3 Communication The process by which we exchange or share meanings through a common set of symbols. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 24 3 Marketing Communication Categories of Communication Interpersonal Communication Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Mass Communication 25 3 The Communication Process As Senders As Receivers Inform Develop messages Persuade Adapt messages Remind Spot new communication opportunities Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 26 3 The Sender and Encoding Sender The originator of the message in the communication process. Encoding The conversion of a sender’s ideas and thoughts into a message, usually in the form of words or signs. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 27 3 The Communication Process Noise Sender Encoding Message Message Channel Decoding Message Receiver Message Channel Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 28 3 Characteristics of the Elements in the Promotional Mix Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 29 3 Characteristics of Advertising Advertising Communication Mode Indirect and non-personal Communication Control Low Feedback Amount Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Message Flexibility Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Fast Same message to all audiences 30 3 Characteristics of Public Relations Public Relations Communication Mode Communication Control Feedback Amount Usually indirect, non-personal Moderate to low Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control No Sponsor Identification No Reaching Large Audience Message Flexibility Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Usually fast Usually no direct control 31 Characteristics of Sales Promotion 3 Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Usually indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Message Flexibility Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Fast Same message to varied target 32 3 Characteristics of Personal Selling Personal Selling Communication Mode Direct and face-to-face Communication Control High Feedback Amount Much Feedback Speed Message Flow Direction Immediate Two-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Message Flexibility Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Slow Tailored to prospect 33 4 Learning Objective Explain the goal and tasks of promotion. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 34 4 Goals and Tasks of Promotion Informing Reminding Target Audience Persuading Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 35 4 Goals and Tasks of Promotion Informing PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity Reminding PLC Stages: Maturity Target Audience Persuading Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 36 4 Goals and Tasks of Promotion Informative Objective Increase awareness Explain how product works Suggest new uses Build company image Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 37 4 Goals and Tasks of Promotion Persuasion Objective Encourage brand switching Change customers’ perception of product attributes Influence buying decision Persuade customers to call Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 38 4 Goals and Tasks of Promotion Reminder Objective Remind customers that product may be needed Remind customers where to buy product Maintain customer awareness On Line http://www.tide.com Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 39 5 Learning Objective Discuss the AIDA concept and its relationship to the promotional mix. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 40 5 The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 41 5 The AIDA Concept Action Desire Interest Attention Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 42 5 AIDA and the Promotional Mix Awareness Interest Desire Action Advertising Very effective Very effective Somewhat effective Not effective Public Relations Very effective Very effective Very effective Not effective Sales Promotion Somewhat effective Somewhat effective Very effective Somewhat effective Personal Selling Somewhat effective Very effective Very effective Very effective Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 43 6 Learning Objective On Line http://www.nascar.com http://www.kelloggs.com Describe the factors that affect the promotional mix. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 44 Factors Affecting the Choice of Promotional Mix 6 Nature of the Product Stage in PLC Target Market Factors Type of Buying Decision Promotion Funds Push or Pull Strategy Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 45 6 Nature of the Product Factors that influence promotional mix Product characteristics • Business product vs. consumer product Costs and risks Social risk Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 46 6 Stage in the Product Life Cycle Sales ($) Maturity Introduction Growth Decline Time Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 47 Product Life Cycle and the Promotional Mix Sales ($) 6 Maturity Introduction Growth Decline Time Light Heavy use of Advertising; Advertising; prePR for introduction awareness; publicity sales promotion for trial Advertising’ PR, brand loyalty; personal selling for distribution Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Ads decrease; sales promotion; personal selling; reminder & persuasive AD/PR decrease; limited sales promotion; personal selling for distribution 48 6 Target Market Characteristics On Line http://www.radioguide.com http://www.nytimes.com http://www.usatoday.com FOR: Widely scattered market Informed buyers Repeat buyers Advertising Sales Promotion Less Personal Selling Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 49 6 Type of Buying Decision Routine Type of Buying Decision Affects Promotional Mix Choice Advertising Sales Promotion Advertising Not Routine or Complex Public Relations Complex Personal Selling Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 50 6 Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 51 6 Push and Pull Strategies PUSH STRATEGY Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer Orders to manufacturer PULL STRATEGY Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Wholesaler demands product from manufacturer Orders to manufacturer Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 52 7 Learning Objective Discuss the concept of integrated marketing communications. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 53 Integrated Marketing Communications 7 A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 54 7 IMC Popularity Growth Proliferation of thousands of media choices Fragmentation of the mass market Slash of advertising spending in favor of promotional techniques Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 55