Download Chapter Sixteen

Chapter
Sixteen
Developing Integrated
Marketing
Communications
Learning Objectives
1. Describe integrated marketing
communications.
2. Understand the role of promotion.
3. Explain the purposes of the three types of
advertising.
4. Describe the advantages and disadvantages
of the major advertising media.
5. Identify the major steps in developing an
advertising campaign.
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Learning Objectives (cont’d)
6. Recognize the various kinds of
salespersons, the steps in the personalselling process, and the major sales
management tasks.
7. Describe sales promotion objectives and
methods.
8. Understand the types and uses of public
relations.
9. Identify the factors that influence the
selection of promotion mix ingredients.
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What Is Integrated Marketing
Communications?
• Coordination of promotion efforts for
maximum informational and persuasive
impact on customers
• Results in a consistent message to
customers, long-term customer relationships,
and the efficient use of promotional resources
− Mass media advertising has given way to targeted
promotional tools (e.g., cable TV, direct mail, and
the Internet)
− The overall cost of marketing communications has
risen significantly, pressuring managers to make
the most efficient use of marketing resources
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The Role of Promotion
• Promotion
– Communication about an organization and its products
that is intended to inform, persuade, or remind target
market members
• 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
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Information Flows Into and
Out of an Organization
• A promotional activity’s effectiveness
depends on the information available to
marketers
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin
Company, Adapted with permission.
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The Promotion Mix
• The particular combination of promotion methods a
firm uses to reach a target market
– 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
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Possible Ingredients for an
Organization’s Promotion Mix
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 13th ed. Copyright ©
2006 by Houghton Mifflin Company, Adapted with permission.
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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
• 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
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Advertising Spending by Media and Total
Dollars Spent
Insert Figure 16.3, p.518
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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; high cost; lack
of timeliness
• Direct mail
– Most selective; effectiveness can be
measured; email
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Advertising Media (cont’d)
• Yellow pages advertising
– Print and online; local; purchased for
1 year
• Out-of-home advertising
– Short promotional messages on
billboards, posters, signs, and
vehicles; focuses on geographic area;
fairly inexpensive
• Television
– The primary medium for larger firms
trying to reach national or regional
markets
– Network time; local time; sponsoring
a show; spot time; infomercials
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Advertising Media (cont’d)
• Radio
– Offers selectivity; most accessible medium;
can be less expensive than other media
• Internet
– Increasingly popular; can be expensive;
potentially large audience; can target
precisely; effectiveness is questionable
– Banner and button ads; sponsorship ads;
keyword ads; interstitials
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Major Steps in Developing an
Advertising Campaign
1. Identify and analyze the
target audience
2. Define the advertising
objectives
3. Create the advertising
platform
4. Determine the
advertising budget
5. Develop the media plan
6. Create the advertising
message
7. Execute the campaign
8. Evaluate advertising
effectiveness
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Advertising Agencies
• Independent firms that plan,
produce, and place
advertising for their clients
• Large agencies also help
with sales promotion and
public relations
• Media usually pay a
commission to agencies
• Firms may use both inhouse advertising
departments and an
independent agency
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Top 10 National Advertisers
1. General Motors Corp.
2. Procter & Gamble Co.
3. Time Warner
4. Pfizer
5. SBC Communications
6. DaimlerChrysler
7. Ford Motor
8. Walt Disney Co.
9. Verizon Communications
10. Johnson & Johnson
Source: Advertising Age, June 27, 2005.
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Social and Legal Considerations
in Advertising
• Criticisms
– Advertising is wasteful
– Advertising is deceptive
• Benefits
– Advertising is the most effective and least expensive
means of communicating to a large number of
individuals and organizations
– Advertising encourages and is a means of competition;
it thus leads to new/better products, more choice, lower
prices
– Advertising revenues support our mass communication
media
– Advertising provides job opportunities
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Personal Selling
• The most adaptable promotion method
• The most expensive promotion method
• Kinds of salespersons
– Order getter
• Responsible for creative selling: selling a
firm’s products to new customers and
increasing sales to present customers
– Order taker
• Handles repeat sales in ways that
maintain positive relationships with
customers
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Personal Selling (cont’d)
• Kinds of salespersons (cont’d)
– 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
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The Personal-Selling Process
Source: William M. Pride and O.C. Ferrell, Marketing: Concepts and
Strategies, 13th ed. Copyright © 2006 by Houghton Mifflin Company.
Adapted with permission.
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Managing Personal Selling
• Setting sales objectives
– Concrete, quantifiable terms
– Specified time period
– Specified geographic area
• Adjusting the size of the sales
force to meet changes in the
firm’s marketing plan and the
marketing environment
• Attracting and hiring effective
salespersons
• Training salespersons
• Compensating salespersons
• Motivating salespersons
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Sales Promotion
• Activities or materials that are direct inducements to
customers or salespersons
• Objectives
–
–
–
–
–
–
–
–
–
–
To draw new customers
To encourage trial of a new product
To invigorate the sales of a mature brand
To boost sales to current customers
To reinforce advertising
To increase traffic in retail stores
To steady irregular sales patterns
To build up reseller inventories
To neutralize competitive promotional efforts
To improve shelf space and displays
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Sales Promotion Methods
• Consumer sales promotion method
– Designed to attract consumers to particular retail
stores and to motivate them to purchase certain
new or established products
• Trade sales promotion method
– Designed to encourage wholesalers and retailers to
stock and actively promote a manufacturer’s product
• Factors influencing the choice of sales promotion
method
–
–
–
–
–
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Objectives of the sales promotional effort
Product characteristics
Target market profile
Distribution channels
Availability of resellers
Competitive and regulatory forces in the environment
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Sales Promotion Methods (cont’d)
• Rebate
– A return of part of the purchase price of a product
• Coupon
– Reducing the purchase price of a particular item by a
stated amount at the time of purchase
• Sample
– A free product given to customers to encourage trial
• Premium
– A gift a producer offers to a customer in return for
buying its product
• Frequent-user incentives
– A program that rewards customers who engage in
repeat (frequent) purchases
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Sales Promotion Methods (cont’d)
• Point-of-purchase displays
– Promotional material in the retail store designed to
inform customers and encourage purchases
• Trade shows
– Industry-wide exhibits at which many sellers display
their products
• Buying allowance
– A temporary price reduction to resellers for purchasing
specified quantities of a product
• Cooperative advertising
– A manufacturer agrees to pay a certain amount of the
retailer’s media cost for advertising the manufacturer’s
product
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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, society in
general
• Types of public relations tools
– Written and spoken communications
• Brochures, newsletters, company magazines, annual
reports, news releases, corporate-identity materials,
speeches
– Event sponsorship
• Special events such as concerts and charity functions
that the firm underwrites wholly or partially
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Public Relations (cont’d)
• Publicity
– Communication in news-story form about an
organization, its products, or both
News release
Feature article
Captioned photograph
Press conference
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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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Promotion Planning
• Promotional campaign
– A plan for combining and using the four
promotional methods—advertising, personal
selling, sales promotion, and public relations—
in a particular promotion mix to achieve one or
more marketing goals
• What will be the role of promotion in the overall
marketing mix?
• To what extent will each promotional method be
used in the promotion mix?
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Promotion and Marketing Objectives
• Providing product information to
target markets
• Increasing market share by
convincing new customers to
purchase
• Positioning the product relative
to the images customers have of
competing products
• Stabilizing sales by increasing
sales during slack periods or for
products that are declining
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Developing the Promotion Mix
• Marketers may use several promotion mixes
at the same time for different products
• The promotion mix ingredients depend on
–
–
–
–
Organizational resources and objectives
Target market characteristics
Product characteristics
The cost and availability of promotional
methods
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