18 Integrated Marketing Communications. Copyright © Houghton Mifflin Company. All rights reserved.18 | 2 Agenda The Nature of Integrated Marketing Communications

1818Integrated Marketing

Communications

Copyright © Houghton Mifflin Company. All rights reserved. 18 | 2

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


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


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


Information Flows Are Important in Integrated Marketing Communications

FIGURE 18.1


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.


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


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.


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.


The Four Possible Elements of a Promotion Mix

FIGURE 18.3


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


Benjamin Moore Paints Uses Advertising to Promote Product Benefits

Image courtesy of Benjamin Moore & Co.


Influential Forms of Media

Type of Media Percentage most influenced

Advertising inserts/circulars

Television

Newspaper ads

Catalogs

Magazines

Direct mail

Radio

Internet

E-mail

28%

22%

18%

6%

5%

4%

3%

1%

1%

3,000 U.S. adults were asked what forms of media influence them most on grocery buying decisions.

Source: Vertis, Inc., Baltimore, as reported in Marketing News, June 15,2004, p.4.


U.S. Ad Spending Totals by Media

MediumU.S. Ad Spending 2002 (in billions)

Direct mail

Newspapers

Broadcast television

Radio

Cable television

Yellow pages

Consumer magazines

Out of home

Internet

Business publications

$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.


Top 10 AdvertisersCompany Ad Spending 2003 (in millions)

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.

$2,807

$2,172

$1,533

$1,397

$1,344

$1,331

$1,186

$1,072

$1,059

$1,007Source: “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.


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.

http://www.acnielsen.com/

http://www.arbitron.com/

http://www.accessabc.com/


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



• 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



• 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


Primary Factors Affecting the Choice of Promotion Mix Components

Promotional Resources,Objectives, and Policies

Promotional Resources,Objectives, and Policies

Selection ofPromotion MixComponents

Selection ofPromotion MixComponents

Characteristics ofthe Target Market

Characteristics ofthe Target Market

Cost and Availabilityof Promotional Needs

Cost and Availabilityof Promotional Needs

Characteristicsof the Product

Characteristicsof the Product


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.


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



• 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



• 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-of-mouth 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.


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.


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.


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


Comparison of Push and Pull Promotional Strategies

FIGURE 18.4


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?

Documents

18 Integrated Marketing Communications. Copyright © Houghton Mifflin Company. All rights reserved.18 | 2 Agenda The Nature of Integrated Marketing Communications