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Pride I Hughes I Kapoor
Chapter
16
Developing
Integrated
Marketing
Communications
PowerPoint Presentation by Charlie Cook
Copyright © by Houghton Mifflin Company. All rights reserved.
Seventh Edition
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.
Copyright © by Houghton Mifflin Company. All rights reserved.
16–2
The Promotion Mix: An Overview
• Promotion mix
– The particular combination of promotion methods a firm uses to
reach a target market. The mix typically consists of:
• 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.
Copyright © by Houghton Mifflin Company. All rights reserved.
16–3
Possible Ingredients for an Organization’s
Promotion Mix
Depending on the type of
product and target market
involved, two or more of
these ingredients are
used in the promotion
mix.
Advertising
Public
relations
Personal
selling
Sales
promotion
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 2000e.
Copyright © 2000 by Houghton Mifflin Company, Adapted with permission.
Copyright © by Houghton Mifflin Company. All rights reserved.
Figure 16.2
16–4
Advertising
• 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—designed 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.
Copyright © by Houghton Mifflin Company. All rights reserved.
16–5
Growth of Advertising Expenditures and
Employment in Advertising
1972
Total advertising expenditures
and employment in advertising
have been increasing for several
decades.
116,000
$29 billion
1977
132,000
$39 billion
1982
159,000
Number of people employed
$67 billion
Amount of money spent
1987
212,000
$110 billion
1992
232,000
$131 billion
1999
290,000
$215 billion
Source: Reprinted with permission from the May 22, 2000 issue of Advertising
Age. Copyright © Crain Communications, Inc., 2000; and U.S. Department of
Labor Bureau of Labor Statistics, Employment and Earnings, April 2000, p. 74.
Copyright © by Houghton Mifflin Company. All rights reserved.
Figure 16.3
16–6
Advertising (cont’d)
• 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; allows for high-quality reproduction; lack of timeliness.
– Direct-mail advertising—promotional material mailed directly to
individuals.
– Outdoor advertising—short promotional messages on billboards,
posters, and signs.
– Television advertising—the primary medium for larger firms whose
objective is to reach national or regional markets.
– Radio advertising—offers selectivity based on a station
programming format targeted to specific groups of listeners.
– Internet advertising—increasingly popular new medium that
reaches target audiences through unique new methods such as banner
and button ads, sponsorship ads, keyword ads, and e-mail messages
with CPM rates comparable to other media.
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16–7
Distribution of Advertising Expenditures among
Various Advertising Media
Television
23.4% ($50.4 billion)
Newspapers
21.7% ($46.6 billion)
Direct mail
Radio
Yellow Pages
Magazines
19.2% ($41.4 billion)
8.0% ($17.2 billion)
5.9% ($12.7 billion)
5.3% ($11.4 billion)
Internet
0.9% ($1.9 billion)
Outdoor
0.8% ($1.7 billion)
Other
In 1999 just over 45
percent of all advertising
dollars were spent on
newspaper and television
advertising.
14.8% ($31.8 billion)
Source: Reprinted with permission from the May 22, 2000 issue of Advertising
Age. Copyright © Crain Communications, Inc., 2000.
Copyright © by Houghton Mifflin Company. All rights reserved.
Figure 16.4
16–8
Advertising Expenditures and Sales Volume of
the Top Ten National Advertisers
Rank Company
Advertising
Expenditures
(in millions)
Sales
(in millions)
Advertising
Expenditures
as Percentage
of Sales
1
General Motors Corp.
$4,040.4
$130,073.0
3.12
2
Procter & Gamble Co.
2,611.8
20,038.0
13.03
3
Philip Morris Cos.
2,201.6
40,287.0
5.46
4
Pfizer
2,142.4
9,896.0
21.65
5
AT&T Corp.
1,950.9
62,391.0
3.13
6
DaimlerChrysler
1,804.1
82,699.1
2.18
7
Ford Motor Co.
1,639.8
112,420.0
1.46
8
Sears, Roebuck & Co.
1,505.2
36,938.0
4.07
9
PepsiCo
1,315.7
11,772.0
11.18
10
Verizon Communications
1,312.7
58,759.0
2.23
Source: Reprinted with permission from the September 25, 2000 issue of
Advertising Age, p. 52 and S52. Copyright Crain Communications, Inc., 2000.
Copyright © by Houghton Mifflin Company. All rights reserved.
Table 16.1
16–9
Personal Selling
• Kinds of salespersons
– Order getter—a salesperson who is responsible for creative
selling: selling the firm’s products to new customers and
increasing sales to present customers.
– Order taker—a salesperson who handles repeat sales in ways that
maintain positive relationships with customers.
– 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.
Copyright © by Houghton Mifflin Company. All rights reserved.
16–10
Sales Promotion Methods
• Consumer sales
promotion method
– A method designed to
attract consumers to
particular retail stores and
to motivate them to
purchase certain new or
established products.
• Trade sales promotion
method
– A method designed to
encourage wholesalers and
retailers to stock and
actively promote a
manufacturer’s product.
Copyright © by Houghton Mifflin Company. All rights reserved.
• 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
16–11
Sales Promotion Methods (cont’d)
• Important sales promotion methods
–
–
–
–
–
–
–
–
–
Rebate—returning part of the purchase price.
Coupon—reducing the purchase price at the time of purchase.
Sample—a free product to encourage customer trial.
Premium—a gift offered to customers for buying the product.
Frequent-user incentives—a program that rewards customers’
repeat (frequent) purchases of the product.
Point-of-purchase displays—promotional material in the retail
store designed to inform customers and encourage purchases.
Trade shows—industry-wide exhibits of sellers’ products
Buying allowance—a temporary price reduction to resellers for
purchasing specified quantities of a product.
Cooperative advertising—the seller pays a portion of the retailer’s
advertising costs for advertising the seller’s product.
Copyright © by Houghton Mifflin Company. All rights reserved.
16–12
Public Relations
• 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, and society in general
• Types of public relations tools
– Written and spoken communications
• Brochures, newsletters, company magazines, annual reports,
press releases, and speeches
– Event sponsorship
• Special events such as concerts and charity functions that the firm
underwrites wholly or partially
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16–13
Public Relations (cont’d)
• Publicity
– Communication in news-story form about an organization, its
products, or both.
• News release—a typed page about 300 words long provided by
the organization to the media as a form of publicity.
• Feature article—a piece (up to 3,000 words) prepared by the
organization for inclusion in a particular publication.
• Captioned photograph—a picture accompanied by a brief
explanation.
• Press conference—a meeting at
which invited media personnel hear
important news announcements
and receive supplementary textual
materials and photographs.
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16–14
Public Relations (cont’d)
• 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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16–15