Download Chapter 18a - Integrated Marketing Communications & Direct

McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
THE COMMUNICATION PROCESS
• Integrated Marketing
Communications (IMC) – concept of
designing marketing communications
programs that coordinate all promotional
activities – advertising, personal selling,
sales promotion, public relations, and
direct marketing – to provide a consistent
message across all audiences
Slide 18-6
THE COMMUNICATION PROCESS
•
Communication – process of
conveying a message to others
1. Source – company or person who has
information to convey
2. Message – information sent a source
to a receiver in the communication
process
3. Channel of communication – means of
conveying the message (e.g.,
salesperson, advertising media, or
public relations tools)
Slide 18-6
THE COMMUNICATION PROCESS
•
Communication – process of
conveying a message to others
4. Receivers – consumers who read,
hear, or see the message sent by a
source
5. Encoding – process of having sender
transform an idea into a set of
symbols
6. Decoding – reverse of encoding
Slide 18-6
THE COMMUNICATION PROCESS
• Feedback
 Feedback Loop
 Response – impact message had on receiver’s
knowledge, attitudes, or behaviors
 Feedback – sender’s interpretation of the
Response and indicates whether the massage
was decoded and understood as intended
• Noise – extraneous factors that can work
against effective communication by distorting a
message or the feedback received
Slide 18-10
FIGURE 18-1 The communication process
consists of six key elements
18-6
PROMOTION
Promotion

An effort by marketers
to inform and remind
people in the target
market about products
and to persuade them
to participate in the
exchange
18-7
PROMOTION
• Promotional Mix – combination of
one or more of the communication
tools to:
– Inform prospective buyers about the
benefits of the product
– Persuade them to try it
– Remind them later about the benefits
they enjoyed using the product
Slide 18-6
PROMOTION
I.
Personal Selling (1)
II. Non-Personal Selling



Advertising (2)
Sales Promotion (3)
Public Relations (4)
Slide 18-6
THE PROMOTIONAL ELEMENTS
ADVERTISING
 Paid,
non-personal communication through
various media by organizations and individuals
who are in some way identified in the advertising
message
 Total
advertising volume exceeds $231 billion
yearly
THE PROMOTIONAL ELEMENTS
PERSONAL SELLING
 Face-to-Face
presentation and promotion of
products and services to help satisfy the needs
of customers and prospects
 Plus searching out prospects and providing
follow-up service
 Approximately 10% of total labor force is
employed in personal selling
 Average cost of a single sales call to B2B buyer
is about $400
THE PROMOTIONAL ELEMENTS
SALES PROMOTION
 Promotional
tool that simulates consumer
purchasing and dealer interest by means of
short-term activities
 Supplements personal selling, advertising, and
public relations
 Examples: free samples, prizes, contests, and
cents-off coupons
THE PROMOTIONAL ELEMENTS
PUBLIC RELATIONS
 Management
function that evaluates public
attitudes, identifies the policies and procedures
of an individual or an organization with the public
interest, and executes a program of action to
earn public understanding and acceptance
FIGURE 18-2 The five elements of the
promotional mix
18-14
THE PROMOTIONAL ELEMENTS
• Mass Selling
– Advertising, sales promotion, and direct
marketing
• Customized Interaction
– Personal selling
Slide 18-14
THE PROMOTIONAL ELEMENTS
• Advertising
 Paid Aspect
 Nonpersonal Component
• Personal Selling – two-way flow
 Wasted Coverage reduced
Slide 18-16
LO2
THE PROMOTIONAL ELEMENTS
PERSONAL SELLING

Personal Selling
• Wasted Coverage
• Advantages
• Disadvantages
18-17
LO2
THE PROMOTIONAL ELEMENTS
PUBLIC RELATIONS

Public Relations
• Publicity
• Advantages
• Disadvantages
18-18
THE PROMOTIONAL ELEMENTS
• Public Relations
 Public Relations – communications management
 Publicity – non-personal indirectly paid
• Sales Promotion – short-term inducement of
value offered to arouse interest in buying
– Used with advertising or personal selling
• Direct Marketing
Slide 18-18
LO2
THE PROMOTIONAL ELEMENTS
SALES PROMOTION AND DIRECT MARKETING

Sales Promotion
• Advantages
• Disadvantages

Direct Marketing
• Advantages
• Disadvantages
18-20
LO3
IMC—DEVELOPING THE
PROMOTIONAL MIX
THE PRODUCT LIFE CYCLE

Introduction Stage

Growth Stage

Maturity Stage

Decline Stage
18-21
FIGURE 18-3 Promotional tools used over
the product life cycle of Purina Dog Chow
18-22
IMC—DEVELOPING THE
PROMOTIONAL MIX
LO3
CHANNEL STRATEGIES

Push Strategy

Pull Strategy
• Directed-to-Consumer
18-23
FIGURE 18-5 A comparison of push and
pull promotional strategies
18-24
FIGURE 18-6 The promotion decision
process includes planning, implementation,
and evaluation
18-25
LO5
DIRECT MARKETING

The Growth of Direct Marketing

The Value of Direct Marketing
• Direct Orders
• Lead Generation
• Traffic Generation
18-26
FIGURE 18-8 Business use and response
rates of popular forms of direct marketing
18-27
Promotional Mix
The promotional mix is the combination of
one or more communication tools used to:
(1) inform prospective buyers about the
benefits of the product, (2) persuade them
to try it, and (3) remind them later about the
benefits they enjoyed by using the product.
18-28
Integrated Marketing
Communications (IMC)
Integrated marketing communications
(IMC) is the concept of designing
marketing communications programs
that coordinate all promotional activities—
advertising, personal selling, sales
promotion, public relations, and direct
marketing—to provide a consistent
message across all audiences.
18-29
Communication
Communication is the process
of conveying a message to others
and requires six elements:
a source, a message, a channel
of communication, a receiver,
and the processes of encoding
and decoding.
18-30
Source
A source is a company or person
who has information to convey
during the communication
process.
18-31
Message
A message consists of the
information sent by a source
to a receiver during the
communication process.
18-32
Channel of Communication
A channel of communication
is the means (e.g., a salesperson,
advertising media, or public
relations tools) of conveying a
message to a receiver during the
communication process.
18-33
Receivers
Receivers consists of consumers
who read, hear, or see the
message sent by a source during
the communication process.
18-34
Encoding
Encoding is the process of
having the sender transform an
idea into a set of symbols during
the communication process.
18-35
Decoding
Decoding is the process of
having the receiver take a set of
symbols, the message, and
transform them back to an idea
during the communication
process.
18-36
Field of Experience
Field of experience is a
mutually shared understanding
and knowledge that the a sender
and receiver apply to a message
so that it can be communicated
effectively during the
communication process.
18-37
Response
A response, in the feedback
loop, is the impact the message
had on the receiver’s knowledge,
attitudes, or behaviors during the
communication process.
18-38
Feedback
Feedback, in the feedback loop,
is the sender’s interpretation of
the response, which indicates
whether a message was decoded
and understood as intended
during the communication
process.
18-39
Noise
Noise consists of extraneous
factors that can work against
effective communication by
distorting a message or the
feedback received during the
communication process.
18-40
Advertising
Advertising is any paid form
of nonpersonal communication
about an organization, good,
service, or idea by an identified
sponsor.
18-41
Personal Selling
Personal selling consists of the
two-way flow of communication
between a buyer and seller, often
in a face-to-face encounter,
designed to influence a person’s
or group’s purchase decision.
18-42
Public Relations
Public relations is a form of
communication management that
seeks to influence the feelings,
opinions, or beliefs held by customers,
prospective customers, stockholders,
suppliers, employees, and other
publics about a company and its
products or services.
18-43
Publicity
Publicity is a nonpersonal,
indirectly paid presentation of an
organization, good, or service.
18-44
Sales Promotion
Sales promotion is a short-term
inducement of value offered to
arouse interest in buying a good
or service.
18-45
Direct Marketing
Direct marketing is a promotion
alternative that uses direct
communication with consumers
to generate a response in the
form of an order, a request for
further information, or a visit to
a retail outlet.
18-46
Push Strategy
A push strategy involves
directing the promotional mix to
channel members to gain their
cooperation in ordering and
stocking the product.
18-47
Pull Strategy
A pull strategy involves directing
the promotional mix at ultimate
consumers to encourage them
to ask the retailer for a product.
18-48
Hierarchy of Effects
The hierarchy of effects is the
sequence of stages a prospective
buyer goes through from initial
awareness of a product to eventual
action (either trial or adoption of the
product). The stages include
awareness, interest, evaluation,
trial, and adoption.
18-49
Percentage of Sales Budgeting
Percentage of sales budgeting
involves allocating funds to
promotion as a percentage of
past or anticipated sales, in terms
of either dollars or units sold.
18-50
Competitive Parity Budgeting
Competitive parity budgeting
involves allocating funds to promotion
by matching the competitor’s absolute
level of spending or the proportion
per point of market share. Also called
matching competitors or share of
market.
18-51
All-You-Can-Afford Budgeting
All-you-can-afford budgeting
involves allocating funds to
promotion only after all other
budget items are covered.
18-52
Objective and Task Budgeting
Objective and task budgeting
involves allocating funds to
promotion whereby the company:
(1) determines its promotion
objectives; (2) outlines the tasks to
accomplish these objectives; and
(3) determines the promotion cost of
performing these tasks.
18-53
Direct Orders
Direct orders is the result of
direct marketing offers that
contain all the information
necessary for a prospective buyer
to make a decision to purchase
and complete the transaction.
18-54
Lead Generation
Lead generation is the result of
a direct marketing offer designed
to generate interest in a product
or service and a request for
additional information.
18-55
Traffic Generation
Traffic generation is the
outcome of a direct marketing
offer designed to motivate people
to visit a business.
18-56