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of MARKETING Chapter 19 Integrated Marketing Communications Applications Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Objectives 1. Identify the categories of advertisements. 2. Identify and discuss the main advertising media. 3. Describe the process of creating an advertisement. 4. Explain public relations and its functions. 5. Discuss sales promotion and its various elements. 6. Classify the three basic types of selling. 7. Outline the seven steps in the sales process. 8. Specify the functions of sales management. 19-1 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.1 19 The Top Ten Advertising Sectors in Canada, 2001 RANK SECTOR EXPENDITURES($) 1 2 Retail Automotive: Cars; Mini Vans; Trucks; Vans; Dealer Food Entertainment Financial Services and Insurance Services Local Automotive Dealer Advertising Travel and Transportation Restaurants and Catering Services Telecommunications Media 997 261 000 3 4 5 6 7 8 9 10 19-2 Chapter 918 069 000 367 684 000 350 814 000 319 020 000 318 679 000 241 485 000 233 162 000 212 010 000 202 364 000 Source:Copyright © Nielsen Media Research Limited, 2002. Reprinted by permission. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Figure 19.1 Chapter 19 The Process of Creating an Advertisement Research Inputs • Consumer research • Product research • Market analysis • Competitive situation Strategic Decisions Tactical Decisions • Setting objectives • Defining target markets • Determining budgets • Deciding message strategy • Establishing controls • Writing and producing ads • Selecting and scheduling media 19-3 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Categories of Advertisements • • • • • Informative Product Persuasive Product Reminder-oriented Product Retail Institutional 19-4 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Product Advertising • Nonpersonal selling of a particular good or service. 19-5 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Informative Product Advertising • Advertising that seeks to develop demand through presenting factual information on the attributes of a product or service. 19-6 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Persuasive Product Advertising • Advertising that emphasizes using words or images to try to create an image for a product and to influence attitudes about it. 19-7 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Reminder-Oriented Product Advertising • Advertising whose goal is to reinforce previous promotional activity by keeping the product or service name in front of the public. 19-8 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Cooperative Advertising • The sharing of advertising costs between the retailer and the manufacturer. 19-9 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Institutional Advertising • Promoting a concept, idea, or philosophy, or the goodwill of an industry, company, or organization. 19-10 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Figure 19.2 Chapter 19 Relationship between Advertising and the Product Life Cycle Growth Maturity Decline Sales Introduction Informative Advertising 19-11 Persuasive Advertising Reminder-Oriented Advertising Time Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Comparative Advertising • Advertising that makes direct promotional comparisons with competitive brands. 19-12 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Celebrity Marketing • Having celebrities lend their name and influence to the promotion of a product. 19-13 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Role Model Marketing • Marketing technique that associates a product with the positive perception of a type of individual or role. 19-14 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Buzz Marketing • Giving a significant person in a social system a product to use in the hope that others will see and want to buy the product. 19-15 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Media Selection • • • • Television Newspapers Radio Magazines • Direct Mail • Internet Advertising • Outdoor Advertising 19-16 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.3 Chapter 19 Advantages and Disadvantages of Various Advertising Media (1 of 3) MEDIUM ADVANTAGES DISADVANTAGES Television Advertising •Demonstration ability •Intrusion value •Ability to generate excitement •One-on-one reach •Ability to use humour •Effective with salesforce and trade •Ability to achieve impact •Rapidly escalating cost •Erosion of viewing audiences •Audience fractionalization •Zipping and zapping •Clutter Newspaper Advertising •Audience in appropriate mental frame to process messages •Mass audience coverage •Flexibility •Ability to use detailed copy •Timelines •Clutter •Not a highly selective medium •Higher rates for occasional advertisers •Mediocre reproduction quality •Complicated buying for national advertiser •Changing composition of readers 19-17a Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.3 Chapter 19 Advantages and Disadvantages of Various Advertising Media (2 of 3) MEDIUM ADVANTAGES DISADVANTAGES Radio Advertising •Ability to reach segmented audiences •Advertising Intimacy •Economy •Short lead times •Transfer of imagery from TV •Use of local personalities •Clutter •No visuals •Audience fractionalization •Buying difficulties Magazine Advertising •Some magazines reach large audiences •Selectivity •Long life •High reproduction quality •Ability to present detailed information •Authoritative conveying of information •High involvement potential •Not intrusive •Long lead times •Clutter •Somewhat limited geographic options •Variability of circulation patterns by market 19-17b Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.3 MEDIUM 19 Advantages and Disadvantages of Various Advertising Media (3 of 3) ADVANTAGES DISADVANTAGES Direct Mail •Selectivity; Intense coverage •Speed •Flexibility of format •Complete information; personalization •High cost per person •Dependence on quality of mailing list •Consumer resistance Internet •Ability to reach segmented audiences Advertising •Ability to change message quickly •High user interest in medium •Use of colour and limited motion graphics •Ability to bridge to extensive message and to advertiser’s Web site •Broad reach and high frequency levels Outdoor Advertising •Geographic flexibility •Low cost per thousand •Prominent brand identification •Opportune purchase reminder 19-17c Chapter •Limited initial message length •Clutter •Uncertain effectiveness of new medium •Consumer resistance •Concern about security of information •Nonselectivity •Short exposure time •Difficult to measure audience size •Environmental problems Source: Adapted from Advertising, Promotion, and Supplemental Aspects of Integrated Marketing Communications 4th ed., by Terrance A. Shimp. Copyright © 1997, pp. 324-325. Reprinted with permission of South-Western, a division of Thomson Learning: www.thomsonrights.com. Fax 800-730-2215. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Figure 19.3 Net Advertising Revenues by Medium Internet 1% Other 0.5% Television 26% Dailies 18% Direct Mail 12.5% Radio 11% Yellow Pages 11% Community Newspapers 9% Magazines 5% Trade Publications 3% Outdoor 3% 19-18 Source: Canadian Media Directors’ Council, Media Digest 1998-99, p. 11. Publication can be accessed on-line at http://www.marketingmag.ca Data compiled from Statistics Canada, CRTC, CAN, CCNA,/Les Hebdos du Quebec, Magazines Canada, CARD CAN, TeleDirect, Canada Post, IAB and Industry estimates. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Advertising Agency • A marketing specialist firm that assists the advertiser in planning and preparing its advertisements. 19-19 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Assessing the Effectiveness of an Advertisement • Pretesting The assessment of an advertisement’s effectiveness before it is actually used. • Post-testing The assessment of advertising copy after it has been used. 19-20 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Direct Response Marketing • An interactive system of marketing that uses one or more advertising media to effect a measurable response directly to the advertiser. 19-21 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.5 19 Comparison of Direct Response Marketing and General Advertising DIRECT RESPONSE MARKETING GENERAL ADVERTISING • •Mass selling. Buyers are identified as broad groups sharing common demographic and psychographic characteristics. • • 19-22 Chapter Selling to individuals. Customers are often identifiable by name, address, and purchase behaviour. Products may have added value or service. Distribution is an important product benefit. • The medium is the marketplace. • Marketer controls product until delivery. • Advertising is used to motivate an immediate order or inquiry. • Repetition is used in ad. • Consumers feel a high perceived risk -product is bought unseen. Recourse is distant. •Product benefits do not always include convenient distribution channels. •The retail outlet is the marketplace. •Marketer may lose control as product enters distribution channel. •Advertising is used for cumulative effect over time to build image, awareness, loyalty, or benefit recall. Purchase action is deferred. •Repetition is used over time. •Consumers feel less risk -- have direct contact with the product and direct recourse. Source: Reprinted from Bob Stone, Successful Direct Marketing Methods, 5th ed. (Lincolnwood, IL: NTC Publishing Group, 1994). Used with permission of NTC/Contemporary Publishing Group, Inc. Copyright The McGraw-Hill Companies, Inc. Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Point-of-Purchase Advertising • Displays and demonstrations that seek to promote the product at a time and place closely associated with the actual decision to buy. 19-23 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Specialty Advertising • Sales promotion medium that uses useful articles to carry the advertiser’s name, address, and advertising message. 19-24 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Loyalty Program • A program that gives rewards, such as points or free air miles, with each purchase in order to stimulate repeat business. 19-25 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Trade Show • An organized exhibition of products based on a central theme. 19-26 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Public Relations • The component of marketing communications that focuses on fostering goodwill between a company and its various publics. 19-27 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Publicity • Normally unpaid communication that disseminates positive information about company activities and products. 19-28 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Table 19.6 Chapter 19 Factors Affecting the Importance of Personal Selling in the Promotional Mix PERSONAL SELLING IS LIKELY TO BE MORE IMPORTANT WHEN ADVERTISING IS LIKELY TO BE MORE IMPORTANT WHEN Consumer is Geographically concentrated, relatively small in number Geographically dispersed, relatively large in number Product is Expensive, technically complex, custom-made, requires special handling, frequently involves trade-ins Inexpensive, simple to understand, standardized, requires no special handling, requires no trade-ins Price is Relatively high Relatively low Channels are Relatively short Relatively short 19-29 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Categories of Personal Selling • Order Processing • Creative Selling • Missionary Selling 19-30 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Order Processing • Selling at the wholesale and retail levels; involves identifying customer needs, pointing out these needs to the customer, and completing the order. 19-31 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Creative Selling • Selling that involves making the buyer see the worth of the item. 19-32 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Missionary Selling • Selling that emphasizes the firm’s goodwill and providing customers with technical or operational assistance. 19-33 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 The Sales Process 1. 2. 3. 4. 5. 6. 7. Prospecting and Qualifying Approach Presentation Demonstration Handling Objections Closing Follow-up 19-34 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Prospecting and Qualifying • Prospecting – Identifying potential customers. • Qualifying – Determining that the prospect is really a potential customer. 19-35 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Approach • The initial contact between the salesperson and the prospective customer. 19-36 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Presentation • The act of giving the sales message to a prospective customer. 19-37 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Demonstration • Actions which supplement, support, and reinforce what the salesperson has told the prospect. 19-38 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Objection • Reveals a customer’s interest in a product and can be used as a cue to provide additional information. 19-39 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Closing and Follow-Up • Closing – The act of asking the prospect for an order. • Follow-Up – The post-sales activities that often determine whether a person will become a repeat customer. 19-40 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Sales Management • Securing, maintaining, motivating, supervising, evaluating, and controlling the field sales force. 19-41 Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Integrated Marketing Communications Applications Chapter 19 Sales Management - Seven Basic Managerial Functions 1. 2. 3. 4. 5. 6. 7. Recruitment and Selection Training Organization Supervision Motivation Compensation Evaluation and Control 19-42 Copyright © 2003 by Nelson, a division of Thomson Canada Limited.