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Marketing: Real People, Real Decisions
Integrated Marketing Communications and
Relationship Management
Chapter 16
Lecture Slides
Solomon, Stuart,
Carson, & Smith
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Marketing: Real People, Real Decisions
Chapter Learning Objectives
When you have completed your study of this chapter,
you should be able to:
• Explain integrated marketing
communications and its implementation,
and why some markers resist it.
• List, describe and contrast elements of the
communications mix.
• Explain the steps involved in developing
a communications plan.
• Explain the philosophy and practices of
relationship marketing.
• Explain the role of databases in
facilitating marketing communications
and relationship management.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Introduction to the Topic
• The next three chapters deal with the topic of promotion, with this
chapter covering overall strategy, and the others covering specific
topics within it in more detail.
• Promotion: the coordination of a
marketer’s communications efforts to
influence attitudes or behaviour toward
a product or service.
• Marketing communication:
informing consumers and customers
about the relative value of products,
and developing trust and other
relational bonds that facilitate ongoing
exchange relationships.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Integrated Communication Strategy
• Integrated marketing communications (IMC): a strategic
business process that marketers use to plan, develop, execute, and
evaluate coordinated, measurable, persuasive brand communication
programs over time with targeted audiences.
• The important thing to
understand about this concept
is the need for, and benefit of
consistency between
components of the program.
Communication Idea
• The question: how much
should an organization spend
on its integrated marketing
communications program,
and how do you know when
it is working?
Personal Selling
Advertising
Direct
Marketing
Public
Relations
©Copyright 2003 Pearson Education Canada Inc.
Sales
Promotion
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Marketing: Real People, Real Decisions
The Communications Mix
• Communications mix: the major elements of marketer-controlled
communications, including advertising, sales promotions, marketing
public relations, direct marketing, and personal selling.
• Some might argue that the Internet
belongs in that group as well.
• Advertising: non-personal, paid
communication from an identified
sponsor, primarily using mass media.
• Interactive marketing: two-way
communications, in which customized
marketing communications elicit a
measurable response from individual
customers. Also known as direct
marketing.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Communications Mix (continued)
• Personal selling: personal presentation by a firm’s sales force for
the purpose of making sales and building customer relationships.
• Characterized by:
– Direct contact with the buyer
– Two way communication
– Flexible message content
– Immediate feedback as to success
• Public relations: communication
strategies to build good relationships
with an organization’s publics.
• Publicity: unpaid communication
about an organization appearing in the
mass media.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
The Communications Mix (continued)
• Sales promotion: short-term incentives or programs to encourage
the trial, purchase or sale of a product or service.
– Contests, coupons, and rebates
– Information seminars, product
demonstrations, special events
– Specialty advertising
– Loyalty programs
• There are no shortage of ways to
spend money on sales promotionvirtually unlimited
• The questions are: what is the value,
and the impact on brand loyalty?
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Developing a Communications Plan
• Communications plan: A
framework that outlines the
strategies for developing,
implementing, and controlling the
firm’s communication activities.
Establish communication
objectives
Identify influence on the
communications mix
• Target audience: a highly
segmented group of people who
receive and respond similarly to
marketing messages.
Determine the total
communication budget
• Objectives:
–
–
–
–
–
create awareness
inform the market
create desire
encourage trial
build loyalty
Allocate to the
communication mix budget
Figure 16.2
Evaluate the effectiveness
of the communication mix
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Direction of Promotional Effort
• Companies have a number of ways to promote their products, but their
strategies will generally fall under one of the two methods below:
• Pull Strategy: moving products
Manufacturers
Wholesalers
Retailers
Consumers
through the channel by building desire
for the products among consumers, who
convince retailers to stock the items.
Use primarily advertising.
• Push strategy: moving products
through the channel by convincing
channel members to offer them. Use
primarily personal selling.
• Industrial products tend to follow the
push strategy, while consumer goods
tend to rely more on pull, although most
now use a combination of both.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Determining the Communications Budget
• Top-down budgeting techniques: allocation of the
promotion budget that is based on the total amount to be devoted to
marketing communications.
• Percentage-of-sales method: a method for promotion
budgeting, in which the promotion budget is based on last’s sales
or on estimates for this year’s sales.
• Bottom-up budgeting techniques: allocation of the
promotion budget that is based on identifying promotional goals
and allocating enough money to accomplish them.
• Objective-task method: a promotion budgeting method in
which an organization first defines the specific communication
goals it hopes to achieve and then tries to calculate what kind of
promotional efforts it must take to meet these goals.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Allocating the Communications Budget
• The amount of budget to be allocated to each of the different types of
communication will depend on:
• Organization factors: the company’s past history of spending,
how well it understands the effectiveness of different forms, the
agencies used, and the personal preferences of decision makers.
• Market potential: the size
of the target market(s) to be
communicated with.
• Market size: the size of
markets to be communicated in
will determine the costs of using
different media. Larger markets
will be more expensive and
favour mass media.
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Marketing: Real People, Real Decisions
Communication Theory
• Communications model: the elements necessary for meaning to
be transferred from a sender to a receiver.
• Encoding: the
process of
translating an idea
into a form of
communication that
will convey
meaning.
• Source: an
organization or
individual that sends
a message.
Message
Encoding
Decoding
Media
Source
Receiver
Noise
Feedback
©Copyright 2003 Pearson Education Canada Inc.
Response
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Marketing: Real People, Real Decisions
Communication Theory (continued)
• Message: the communication in physical form that goes from a
sender to a receiver.
• AIDA model: the
communication
goals of attention,
interest, desire, and
action.
Message
Encoding
Decoding
Media
• Medium: a
communications
vehicle through
which a message is
transmitted to a
target audience.
Source
Receiver
Noise
Feedback
©Copyright 2003 Pearson Education Canada Inc.
Response
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Marketing: Real People, Real Decisions
Communication Theory (continued)
• Receiver: the organization or individual that intercepts and
interprets the message.
• Noise: anything
that interferes with
effective
communication.
Message
Encoding
Decoding
Media
• Decoding: the
process by which a
receiver assigns
meaning to the
message.
• Feedback:
receivers’ reactions
to the message.
Source
Receiver
Noise
Feedback
©Copyright 2003 Pearson Education Canada Inc.
Response
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Marketing: Real People, Real Decisions
Relationship Marketing
• Relationship marketing: the philosophy and practice of
developing long-term relationships with key stakeholders.
• Customer relationship
marketing (CRM): relationship
marketing focused on delivering
customer satisfaction and improved
customer retention.
• Database marketing: the use of
direct marketing tools and techniques to
establish and develop ongoing customer
relationships.
• Database marketing can be used to locate
new customers, stimulate cross-selling,
and provide measurable results.
©Copyright 2003 Pearson Education Canada Inc.
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Marketing: Real People, Real Decisions
Famous Last Words…
• Promotion is how
organizations communicate
with their target markets
and all other interested
stakeholders.
• There are many ways to
communicate, the difficulty
is in determining the
effectiveness of monies
spent.
©Copyright 2003 Pearson Education Canada Inc.
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