Download INTERGATED MARKETING COMMUNICATION This is also known

INTERGATED MARKETING COMMUNICATION
This is also known as a communication mix-also called a promotion mix and consists of the
specific blend of the advertising, sales promotion, public relations, personal selling and direct
marketing tools that a company uses to pursue its advertising and marketing objectives.
Importance of Promotion Mix
One of the importance of the Promotion mix is to build closer relationships with
customers in more narrowly defined micro markets as the mass markets fragment.
At the same time today’s information technology helps marketers to keep closer track of
customer needs and these newer technologies also provide new communication
avenues for reaching smaller customer segments with tailored messages.
All too often companies failed to integrate their various communications channels
resulting in consumer confusion, for instance, mass media advertisements say one
thing, a price promotion sends a different signal, a [product label creates still another
message, a company sales literature says something altogether and the company’s
website seems out of sync with everything else!
Hence IMC (Integrated Marketing Communication),a concept under which a company
carefully integrates and coordinates its many communications channels to deliver a
clear, consistent and compelling messages about the organization and its products.
Integrated promotion mix(communication) produces better communications consistency
and greater sales impact.
a. Advertising
It is any paid form of impersonal presentation and promotion of ideas, goods or services
by an identified sponsor.
Advantages
i.
It can reach masses of geographically dispersed buyers at a low cost per
exposure and it enables the seller to repeat a message many times.
ii.
Large-scale advertising also says something positive about the seller’s size,
popularity and success. They look more legitimate.
iii.
Advertising is very expensive and it allows the company to dramatize its products
through the artful use of visuals, print, sound and color.
iv.
It can trigger quick sales.
v.
It can build long-term image of the company.
Disadvantages
i.
It is impersonal and cannot be as directly persuasive as salesmanship.
ii.
It can carry only one-way communication with consumers/audience.
iii.
Audience has no obligation to pay attention or respond.
iv.
Though radio advertising may be cheaper, but TV advertisement can be
expensive.
Marketing management must make four important decisions when developing an
advertising program:
i.
Setting the advertising objectives
This means a specific task to be accomplished with a specific target audience during a
specific period of time. Advertising objectives can be classified by the primary purpose:
1. To inform, this also means informative advertising. It is used heavily when
introducing a new product category.
2. Persuade, this also means Persuasive advertising, here the company’s
objective is to build selective demand, and becomes more important as
competition increases. This goes along with comparative advertising
(comparing two brands).
3. Reminder advertising (to remind).It is important for mature products and
keeps the consumers thinking about the product. Expensive Coca Cola
television ads primarily remind people about the brand rather than informing
or persuading them.
ii.
Setting the advertising budget
There are four common methods of setting advertisement budgets:
1. Affordable Method, which implies setting the promotion budget at the
level management, thinks the company can afford. It tends to place
advertising last among spending priorities, even in situations in which
advertising is critical to firm’s success.
Some of the demerits of this method include: It ignores the effect of
promotion on sales, it tends to place advertising last among spending
priorities, and it leads to uncertain annual promotion budget which
makes long-range market planning difficult.
2. Percentage-of-sales Method; It involves setting their promotion
budget at a certain %age of current or forecasted sales or as a %age
of unit sales.
Some advantages include that it is simple to use and helps
management think about the relationship between promotion
spending, setting price and profit/unit. However disadvantages
include: it wrongly view sales as the cause of promotion rather than
result as the method is based on the availability of funds rather than
on opportunities: Budget varies from year to year and hence longterm planning is hard: It does not promise any specific percentage
except what has been done in the past or what competitors
3. Competitor-parity method
This involves setting the promotion budget to match competitors’ outlays. You monitor
competitor’s advertising or get industry spend estimates from trade publications. Some
advantages include that it represents collective wisdom of the industry, spending what
the competitors spend helps prevent promotion wars.
Disadvantages include, there is no evidence for believing that the competitor has better
idea, Companies differ greatly and each has its own special promotion needs, and there
is no evidence that budgets on that the method prevents promotion wars.
4. Objective and Task Method
This means developing the promotion budget by: a) defining specific objectives)
determining the tasks that must be performed to achieve these objectives, c) estimating
the costs of performing these tasks.
The disadvantages are that it is a difficult method, as it is hard to figure out which
specific tasks will achieve specific objectives.
In conclusion, no matter what method is used deciding how much to spend on
advertising is one of the hardest marketing decisions a company faces measuring the
results of advertising results of advertising spending and’ advertising return on
investment’ remains an inexact science.
iii.
Developing advertising strategy(message decisions and media decisions)
iv.
Evaluating advertising campaigns.
b. Personal Selling
It is the most effective tool especially in the building up buyer’s preferences, convictions
and actions. It involves interaction between two or more specific people, so each person
can observe the other’s needs and characteristics and make quick adjustments. The
effective
Personal selling means the personal presentation by the firm’s sales force for the
purpose of making sales and building customer relationship.
There effective salesperson keeps the customers’ interests at heart in order to build a
long-term relationship. The buyer usually to feel a great need to listen and respond even
if a polite “no, thanks you”
A salesperson is an individual acting for a company by performing one/more of the
following activities----prospecting, communicating, servicing and information gathering.
Sale Force management means the analysis planning, implementation and control of
sales force activities. It includes setting and designing sales force strategy and
structure, and recruiting, selecting, training, supervising, compensating and evaluating
the firm’s salespeople.
Designing Sales Force Strategy and Structure
There are several ways to structure a sales force:
i. Territory Sales Force-TSF
A sales organization that assigns each salesperson to an exclusive geographic territory
which the salesperson sells the company’s the company’s full line of products/services.
Travel expenses are relatively low as salespersons travel were limited area. The
Salesperson’s work is clearly defined by the organization and fixes accountability.TSF
increases the salesperson’s desire to build local business relationship.
ii. Product Sales Force Structure
A Sales force organization under which salespeople specialize in selling only a portion
of the company’s products/lines. It leads into problems when a major client (hospital)
has several salespeople from same company calling on them on the same day. The
benefits are that the salesperson gains better product knowledge and attention to
individual products.
iii. Customer Sales Force Structure
A sales force organization under which salespeople specialize in selling only to certain
customers or industries.
The Merits of this structure are that Organization becomes more customer-focused and
build closer relationship with key customers.
iv. Complex Sales Force
Where a company sells a wide variety of products or services to many types of
customers over a broad geographic area it combines several types of sales force
structures. Salespeople can be specialized by customer and territory, by product and
customer, or by product and territory, product or customer.
Other Personal Selling activities and issues include recruiting, training, compensating,
supervising and evaluating salespeople
Sales Force Size;
Once the company has set up its structure, it is ready to consider sales force size. Sales
forces may range in size from only a few salespeople to many tens of thousands.
The sales force constitutes one of the company’s most productive – and most
expensive-assets. Therefore increasing their number will increase both sales and costs.
One of the method used s the Workload Approach which entails several steps:
1. Using the method a company groups accounts into different classes
according to size, amount status, or other factors related in the
amount of effort required to maintain them.
2. Determine the number of salespeople needed to call on each class of
accounts, the desired number of times.
3. For example, the company might think as follows:
Suppose w had 200 Type A accounts and 400 Type B accounts.
Type A requires 36 calls a year
Type B requires 12 calls a year
In this case, the sales force’s workload-the number of calls it must make per year-is
9600(36*200)+(400*12)=7200+2400=9600
Suppose our average salesperson can make 1000 calls a year.
Thus the company needs 10 salespeople
=9600/1000=9.6
Sales promotion
They are short-term incentives to encourage the purchase or sale of a product or
service. It is targeted toward final buyers (consumer promotion),retailers and
wholesalers(trade promotions),business customers(business promotions) and members
of the sales force(sales force promotions).
Sales Promotion objectives vary with target groups:
i. With Consumers, which is supposed to increase short-term sales or help build
market share.
ii.
Trade, the aim is to get retailers to carry new items and more inventory, getting
them to advertise the product and give it more shelf space and getting them to
buy ahead.
iii.
Sales Force, it is used in order to get more sales support for current or new
products/getting salespeople to sign up new accounts.
Consumer Promotion Tools
This include samples, cash refunds, price Packs, premuims,advertising
speciallities,patronage rewards, point-of-purchase displays and demonstrations and
contests, sweepstakes and games.
Samples are offers of a trial amount of a product. Some samples are free, whereas for
others a company charges a small amount to offset its costs.
Coupons are certificates that give buyers a saving when they purchase specified
products. Most consumers love coupons. Coupons can stimulate sales of a mature
brand or promote trial of a new brand. Marketers are also cultivating new markets for
distributing coupons such as supermarkets shelf dispensers, electronic point-of-sale
coupon printers or ‘paperless coupon systems’
Cash refund offers (rebates), are like coupons except the price reduction occurs after
the purchase rather than at the retail outlets. The consumer sends a ‘proof of purchase’
to the manufacturer, who then refunds part of the purchase price by mail.
Price packs (cents-off deals), which the offer the consumers savings off the regular
price of the product. They are very effective in stimulating short-term sales. The reduced
prices marked by the producer directly on the label or package.
Premiums are gods offered either free or at low cost as incentive to buy a product. A
premium may come inside the pack (in-pack), outside the pack (on-pack) or through the
mail.
Advertising specialties/promotion products. These are useful articles, imprinted with
an advertiser’s name, logo, message that are given as gifts, to consumers. They include
T-shirts, apparel, pens, coffee, mugs, calendars, key rings mouse pads, matches,
goofballs and caps.
Patronage rewards are cash or other awards offered for the regular use of a certain
company’ products/services. For example airlines offer frequent flier plans awarding
points for miles traveled that can be turned into free airline trips or the Nakumatt loyalty
card.
Point of Purchase promotions (POP) promotions include displays and demonstrations
that take place at the point of sale. They include aisle displays, signs, posters and so on
received from the manufacturer’s every year.
Contests, sweepstakes and games give consumers the chance to win something
such as cash, trips or gods by luck or through extra effort.
Trade Promotion Tools
These are sales promotion tools used to persuade resellers to carry a brand, give it
shelf space, promote it in advertising and push it to customers. Shelf space is s scarce
these days that manufacturers often have to offer price-offs,allowances,buy-back
guarantees of free goods to retailers and wholesalers to get products on the shelf and
once there to keep them on it.
Many of the tools used for consumer promotions such as contest, premiums and
displays can be used as trade promotions:
1)
Manufacture
r’s may also offer straight discount off the list price, on each case purchased
during a stated period of time (also called a price-off).
2)
Manufacture
rs can offer allowance-usually so much money off a case in return to the retailer’s
agreement to feature the manufacturer’s product in a certain way.
3)
Free goods.
Manufacturers’ may offer free goods which are extra cases of merchandise, to
resellers who buy a certain quantity or who feature a certain flavor or size.
4)
Push
money. These are cash/gifts top dealers or their sales to “push” the
manufacturer’s goods.
5)
Specialty
advertising items: These are given to the retailers by the manufacturers and carry
the company’s calendars, pens, pencils, paperweights, memo pads and so on.
Business Tools
Sales Promotion tools used to generate business leads, stimulate purchases, reward
customers and motivate salespeople. Business tools includes many of the same tools
used for consumer/trade p[promotions.
However in addition, there are 2 more:
Conventions and trade shows. This provides that many vendors receive many
benefits such as opportunities to find new sales leads, contact customers, introduce
new products, meet new customers, sell more to present customers and educate
customers with publications and audiovisual materials.
Sales Contests: It is a contest for salespeople/dealers to motivate them to increase
their performance over a given period.
Sales contests have several benefits: motivate and recognize good company
performers-who receive trips, cash prizes, and also award points for performance which
the receiver can turn in for any of a variety and work best when tied to measurable and
achievable sales objectives.(such finding new accounts ,receiving old accounts or
increasing account profitability).
This is a SAMPLE (Few pages have been extracted from the
complete notes:-It’s meant to show you the topics covered in the full
notes and as per the course outline
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