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INTEGRATED MARKETING COMMUNICATIONS Promotion represents the fourth element of the marketing mix and consists of: 1) advertising; 2) personal selling; 3) sales promotion; 4) public relations; and 5) direct marketing. The promotional mix is the combination of one or more of the communication Tools to: 1) inform prospective buyers about the benefits of the product; 2) persuade them to try it; and 3) remind them later about the benefits they enjoyed by Using the product. Integrated Marketing Communications (IMC) is the concept of designing marketing Communications programs that coordinate all promotional activities. I The Communications Process Communication is the process of conveying a message to others and requires six elements: a source, a message, a channel of communication, a receiver and the processes of encoding and decoding. Source is a company or person who has information to convey A message is the information sent by the source A channel of communication is the means (salesperson, advertisement, article in newspaper Receivers are consumers who read, hear, or see the message sent by the source. Encoding - the sender transforms an idea into a set of symbols. Decoding - the receiver takes a set of symbols, the message, and transforms them back to an idea according to a frame of reference. (attitudes, values, and beliefs) Feedback - is the sender’s interpretation of the response and indicates whether the message was decoded and understood as intended. Noise or clutter - factors that distort a message, get in the way of a message being received. II Promotional Elements Advertising, sales promotion, and public relations use mass selling because they are used with groups of prospective buyers. Personal selling, telemarketing, direct marketing and interactive marketing are considered customized selling because they are customized for specific customers. A. Advertising - a paid, nonpersonal communication from an identified sponsor using mass media to persuade or influence an audience. 1. Space for advertising must be bought 2. Advertising involves mass media, hence nonpersonal Advantages: Can reach a mass audience, introduce new products, can remind/reinforce, advertiser can control what is said, when it is said, and to whom it is targeted. Disadvantages: Costs to produce and place a message are expensive The lack of direct feedback makes is difficult to know if and how well the message was received. B. Personal Selling - is the two-way flow of communication between a buyer and seller designed to influence a person’s or group’s purchase decision. Personal selling is usually face to face. Advantages: A salesperson can control to whom a presentation is made so wasted coverage, those outside of the target audience, can be reduced. The seller can see or hear the potential buyer’s reaction to the message and if the feedback is unfavorable, the salesperson can modify the message. Disadvantages: Flexibility - different salespeople can change the message so no consistent communication is given to all customers. On a cost-per-contact basis, it is generally the most expensive promotional element. C. Public Relations - a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services. Public Relations includes: 1) special events; 2) lobbying efforts; 3) annual reports; 4) press conferences; 5) image management; 6) publicity Publicity - is the nonpersonal, indirectly paid presentation of an organization, good or service and can take the form of a news story, editorial or product announcement. Advantages: Credibility - people tend to believe media reports Cost - can cost considerably less than paid advertising Disadvantages: Sender’s lack of control over what is said, to whom or when can get dropped at the last minute because a bigger story comes into the media. D. Sales Promotion - is a short term inducement of value offered to arouse interest in buying a good or service. Sales promotions are offered to intermediaries as well as to ultimate consumers. Advantages: The short term nature of the program, such as a coupon or sweepstakes with an expiration date, often increases sales during the time the program is in effect. Disadvantages: Sales gains are often temporary and drop off after it ends Used continuously sales promotions lose their effectiveness. customers delay their purchase until a coupon is offered. E. Direct Marketing - uses direct communication to generate a response in the form of an order, a request for further information, or a visit to a retail outlet. The communication can take many forms: direct mail, Catalogs, telemarketing, direct response advertising, and online marketing. Advantages: Great targeting Measurability Disadvantages: Requires a comprehensive and up to date database, which is expensive acquire and time consuming to maintain. III Developing the Promotional Mix Different promotional tools are used depending on 1) The target audience; 2) The objectives; 3) budget; 4) Timing; 5) Stage in the product life cycle and 6) channel strategy. A. Channel Strategies Controlling the marketing channel is often difficult for manufacturers, Promotional strategies can assist in moving a product through it Based on two types of strategies. 1. Push - directs the promotional mix to channel members to Gain their cooperation in ordering and stocking the product. The goal is to get channel members to push the product to Their customers. 2. Pull - directs promotional mix at ultimate consumers to Encourage them to ask the retailer for a product. IV Developing an IMC Program Promotion decisions must be made carefully using a systematic Approach. A. The first decision is to identify your target audience/s the group of prospective buyers toward which your promotion program will be directed. B. After the target audience is identified, a decision must be reached on what the promotion should accomplish. Consumers respond in terms of a hierarchy of effects, which is a sequence of stages a prospective buyer goes through from initial awareness to action. 1. Awareness - recognize and remember a brand 2. Interest - A consumer’s desire to learn more 3. Trial - consumer’s first actual purchase 4. Adoption - consumer’s repeated purchase C. Setting the Promotional Budget Different methods are used: 1. Percentage of Sales - a percentage of past or anticipated sales 2. Competitive - budget matches a competitors 3. All you can afford 4. Objective and Task D. Selecting the Right Tools The promotion mix can vary from a simple program Using a single tool to a comprehensive program Using all tools. E. Designing the Promotion F. Scheduling the Promotion V Executing and Evaluating the Promotional Program * Pretesting * Posttesting IV Direct marketing Direct Marketing is a promotional element that uses Direct communication with consumers to encourage them To place an order, request more information, or visit a store. Direct marketing includes: direct mail, catalogs, direct response ads, telemarketing, and interactive marketing. A. The Value of Direct Marketing * Consumers can order goods or services by phone, Mail, and online from anywhere and at anytime Sellers can measure if their offer worked, can Continuously make new offers, can generate leads, Drive traffic to their stores B. Technological, Global, and Ethical Issues in Direct Marketing Databases are the result of organizations’ efforts to collect Demographic, media, and consumption profiles of Customers so that direct marketing tools can be directed at Specific customers Technology deregulation and improved payment systems May help the global growth of direct marketing. Ethical Issues 1. How much information should a company have about An individual 2. Spam - Can Spam - opt out options 3 Telemarketing guidelines - do not call registry, minors, Must state who you are, etc.