Download Marketing 12e - Pride and Ferrell

18
Integrated Marketing
Communications
Agenda
• The Nature of Integrated Marketing
Communications
• The Role of Promotion
• Objectives of Promotion
• The Promotion Mix
• Selecting Promotion Mix Elements
• Criticisms and Defenses of Promotion
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What is “Integrated Marketing
Communications”?
• Integrated Marketing Communications
– Coordination of promotion and other
marketing efforts for maximum
informational and persuasive effect
– Major goal is to send a consistent
message to customers
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What is “Integrated Marketing
Communications”? (cont’d)
• Integrated Marketing Communications
(cont’d)
– Reasons for acceptance of integrated
communications
• Decreased use of mass media advertising
• Database marketing provides more precise
targeting of customers
• More broadly diversified suppliers of
advertising
• Increased management demands for returns
on investments in marketing efforts
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Information Flows Are Important in
Integrated Marketing Communications
FIGURE 18.1
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The Role of Promotion
• Promotion
– Communication to build and maintain
relationships by informing and persuading one or
more audiences
– Overall role of promotion is to help business by
• building and enhancing customer relationships.
• focusing customers on information about company
activities and products.
• promoting programs that help selected groups to build
goodwill.
• sponsoring special events that generate positive
promotion of an organization and its brands.
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Objectives of Promotion
• Create Awareness
– Is crucial to initiating the product adoption process
– Helps generate revenues to recoup R&D costs
– Refresh interest in existing brands and products
• Stimulate Demand
– Primary demand is demand for a product category
rather than for a specific brand
– Selective demand is demand for a specific brand
– Pioneer promotion is promotion that informs consumers
about a new product
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Objectives of Promotion (cont’d)
• Encourage Product Trial
– Distributing product samples fosters consumer
evaluation of a product.
• Identify Prospects
– Customer-response promotions generate sales
leads.
• Retain Loyal Customers
– Frequent-user programs reward loyal customers.
• Facilitate Reseller Support
– Advertising by producers promotes sales for
resellers.
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Objectives of Promotion (cont’d)
• Combat Competitive Promotional Efforts
– Promotions countering competitors’ own
promotions
• Reduce Sales Fluctuations
– Promotion raises sales in off-peak sales
periods.
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The Four Possible Elements of a
Promotion Mix
FIGURE 18.3
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The Promotion Mix
• Advertising
– A paid nonpersonal communication about an
organization and its products transmitted to a
target audience through mass media
– Benefits
• Extremely cost efficient (cost per person) in reaching a
large audience
• Repeatable several times and in several media markets
• Adds value to a product and enhances a firm’s image
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Benjamin Moore
Paints Uses
Advertising to
Promote Product
Benefits
Image courtesy of Benjamin Moore & Co.
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Influential Forms of Media
3,000 U.S. adults were asked what forms of media
influence them most on grocery buying decisions.
Type of Media
Advertising inserts/circulars
Television
Newspaper ads
Catalogs
Magazines
Direct mail
Radio
Internet
E-mail
Percentage most influenced
28%
22%
18%
6%
5%
4%
3%
1%
1%
Source: Vertis, Inc., Baltimore, as reported in Marketing News, June 15,2004, p.4.
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U.S. Ad Spending Totals by Media
Medium
Direct mail
Newspapers
Broadcast television
Radio
Cable television
Yellow pages
Consumer magazines
Out of home
Internet
Business publications
U.S. Ad Spending
2002 (in billions)
$46.07
$44.03
$42.07
$18.88
$16.30
$13.78
$11.00
$5.18
$4.88
$3.98
Source: Advertising Age Fact Pack 2004 Edition, p.15.
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Top 10 Advertisers
Company
Procter & Gamble Co.
General Motors Corp.
Time Warner Inc.
Walt Disney Co.
DaimlerChrysler AG
Ford Motor Co.
Johnson & Johnson
Pfizer
Altria Group Inc.
Nissan Motor Co.
Ad Spending 2003 (in millions)
$2,807
$2,172
$1,533
$1,397
$1,344
$1,331
$1,186
$1,072
$1,059
$1,007
Source: “U.S. Advertising Spending Rose More than 5% in 2003, Nielsen Monitor-Plus Reports,” Nielsen Media Research, press release, February 19, 2004,
www.nielsenmedia.com. Data based on spending estimates in the following media: Network TV, Spot TV, Syndicated TV, Hispanic TV, National/Local Magazine, Network/Spot
Radio (19 markets), Outdoor, FSI (CPGs only), National/Local Newspapers (display ads only), National/Local Sunday Supplements.
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More Info . . .
• Marketers that use television and radio
commercials depend on organizations such
as ACNielsen Corporation
(www.acnielsen.com). Although ACNielsen
offers many research services, it’s best
known for its international television audience
ratings. Another important rating service is
Arbitron (www.arbitron.com/), which
measures radio audiences in local markets
across the U.S. The Audit Bureau of
Circulations, known as the ABC,
(www.accessabc.com) does the same for
print publications.
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The Promotion Mix (cont’d)
• Personal Selling
– A paid personal communication that seeks to
inform customers and persuade them to purchase
products in an exchange situation
– Advantages
• Is a more specific form of advertising
• Has greater impact on consumers
• Provides immediate feedback
– Limitations
• Is an expensive form of advertising
• Is labor intensive and time consuming
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The Promotion Mix (cont’d)
• Public Relations
– A broad set of communication
efforts used to create and
maintain favorable relationships
between the organization and its
stakeholders
– Publicity is a nonpersonal communication
in a news story form about an organization
or its products, or both, transmitted
through a mass medium for free
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The Promotion Mix (cont’d)
• Sales Promotion
– An activity or material that acts as a direct
inducement, offering added value or
incentive for the product, to resellers,
salespeople, or consumers
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Primary Factors Affecting the Choice of
Promotion Mix Components
Promotional Resources,
Objectives, and Policies
Characteristics of
the Target Market
Selection of
Promotion Mix
Components
Characteristics
of the Product
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Cost and Availability
of Promotional Needs
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Selecting Promotion Mix Elements
• Promotion Resources, Objectives, and
Policies
– A limited promotional budget affects the number
and types of promotion mix components
affordable to a firm.
– Objectives and policies influence the types of
promotion selected.
• Characteristics of the Target Market
– Market size, geographic distribution, and
demographics help dictate the choice of
promotion mix elements.
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Selecting Promotion Mix Elements (cont’d)
• Characteristics of the Product
Method
Product
Personal
Selling
Business products
Consumer durables
Exclusive distribution, high-priced products
Late life-cycle business products
Advertising
Consumer goods
Seasonal products
Highly personal products
Intensively distributed, low-priced convenience items
Early life-cycle products
Mature life-cycle consumer nondurables
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Selecting Promotion Mix Elements (cont’d)
• Costs and Availability of Promotional
Methods
– Large expenditures, large audience
– Small, local efforts
– Availability of advertising media,
particularly in foreign countries
– Availability of qualified sales personnel
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Selecting Promotion Mix Elements (cont’d)
• Word-of-mouth communication has a strong
impact on consumers’ buying tendencies.
– Buzz marketing and viral advertising are
marketers’ attempts to take advantage of word-ofmouth communications
– Buzz marketing is an attempt to create a trend or
acceptance of a product
through word-of-mouth
– Viral marketing is a strategy
to get users of the Internet to
pass on ads and promotions
to others.
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Exercise
The promotion mix includes
advertising, public relations, sales
promotion, and personal selling. How
would you classify each of the
following promotion efforts?
1. McDonald’s uses television to tell
consumers about free french fries with the
purchase of a Big Mac.
2. A Toyota salesperson tells customers
about the quality of Michelin tires.
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Exercise (cont’d)
3. CNN has a story about Energizer’s latest
ad campaign. The story features a
commercial with the Energizer bunny.
4. Quaker Oats places an ad in Good
Housekeeping magazine with a coupon
attached.
5. A pharmaceutical salesperson leaves
free samples with a physician.
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Push and Pull Channel Policies
• Push Policy
– Promoting a product only to the next
institution down the
marketing channel
• Pull Policy
– Promoting a product
directly to consumers to
develop stronger consumer demand that
pulls products through the marketing
channel
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Comparison of Push and Pull Promotional
Strategies
FIGURE 18.4
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Criticisms and Defenses of Promotion
• Is Promotion Deceptive?
• Does Promotion Increase Prices?
• Does Promotion Help Customers
Without Costing Too Much?
• Does Promotion Create Needs?
• Should Potentially Harmful Products Be
Promoted?
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