Chapter 17 Evans Berman

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Copyright Atomic Dog Publishing, 2007

Chapter 17:Integrated Marketing

CommunicationsJoel R. Evans & Barry Berman

Marketing, 10e: Marketing in the 21st Century


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Chapter Objectives

To define promotion planning, show itsimportance, and demonstrate the value ofintegrated marketing communications

To describe the general characteristics of

advertising, public relations, personal selling, andsales promotion

To explain the channel of communication and howit functions

To examine the components of a promotion plan To discuss the global promotion considerations,

and the legal environment and criticisms anddefenses of promotion


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Planning the Promotion Effort

Advertising Public Relations

Sales Promotion Personal Selling

PROMOTION

MIX

Promotion is any communication used to inform, persuade, and/orremind people about an organizations or individuals goods,

services, image, ideas, community involvement, or impact onsociety.

Promotion planning is systematic decision making relating to allaspects of an organizations or individuals communication efforts.


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Word-of-Mouth Communication

Firms must identify and appealto opinion leaders those whoinfluence others decisions.

Word-of-mouthcommunication is the processby which people expressopinions and product-relatedexperiences to others.

Firms strive for sustained,positive word-of-mouthcommunication to enhancepopularity and success.


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Integrated Marketing Communications(IMC)

As defined by the American Association ofAdvertising Agencies, Integrated MarketingCommunications (IMC)recognizes the value of a

comprehensive plan that evaluates the strategicroles of a variety of communication disciplinesadvertising, public relations, personal selling, andsales promotionand combines them to provide

clarity, consistency, and maximumcommunication impact.


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Benefits of an IMC Approach

It is synergistic, taking into account the multiple ways toreach potential consumers. There is tactical consistency, whereby various promotion

tools complement each other.

There is interactivity with consumers, with messagesbetter tailored to specific market segments.

Every message positively influences the target audience. Promotion themes and differential advantages are

understood by all employees who interface with the

targeted audience. Advertising, public relations, sales, and sales promotion

personnel cooperate with one another.

Detailed data bases are maintained.


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Types of Promotion

Advertising Public Relations

Sales Promotion Personal Selling

PROMOTION

MIX



Advertising

Advertising is paid, nonpersonal communicationregarding goods, services, organizations, people,

places, and ideas that is transmitted through variousmedia by business firms, government and other

nonprofit organizations, and individuals who areidentified in the advertising message as the sponsor.The message is generally controlled by the sponsor.



Public Relations

Public relations includes any communication tofoster a favorable image for goods, services,

organizations, people, places, and ideas among theirpublics. It may be nonpersonal, personal, paid or

non-paid, and sponsor controlled or not controlled.Publicityis the form of public relations that entailsnonpersonal communication passed on via various

media but not paid for an identified sponsor.



Personal Selling

Personal selling involves oral

communication with one or moreprospective buyers by paid representatives

for the purpose of making sales.



Sales Promotion

Sales promotion involves paid marketingcommunication activities (other than advertising,

publicity, or personal selling) intended to stimulatepurchases and dealer effectiveness. Included aretrade shows, premiums, incentives, giveaways,

demonstrations, and other efforts.



Communication Factors

Source

Encoding

Message

Medium

Decoding

Receiver

Feedback

Noise

Person, company

Conversion to message

Content & symbols Personal or nonpersonal

Interpretation

Message recipient

Response/nonresponse

Distractions preventingmessage delivery



A Channel of Communication

Feedback

Source Encoding Message Medium Decoding Audience

Noise*

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*

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*

*

*

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Massed Versus Distributed Promotion

Jan Feb Mar April May June July Aug Sept Oct Nov DecMonth

MonthlyProm

otion

Expenditures

With a total promotion budget of $120,000, a hosiery manufacturer employsdistributed promotion and spends $10,000 each month throughout the year.

With the same budget, a toy maker uses massed promotions and spends$80,000 from November 1 through December 31 (the remaining $40,000 is

spent over the other 10 months). In both cases, monthly promotionexpenditures are linked to monthly sales.

$40,000

$10,000

$4,000

Massed promotion

Distributed promotion



Promotion Objectives

Promotion objectives canbe divided into twomain categories:stimulating demandand enhancingcompany image.

Product advertising

Institutionaladvertising

Stimulatingdemand

Enhancingcompany

image

To achievepromotional goals


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Promotion Goals and the Hierarchy-of-Effects Model (1)

The hierarchy-of-effects model

outlines sequential

short-term,intermediate, & long-term promotionalgoals for a firm to

pursue and works inconjunction with theconsumers decision

process.

1.

2.

3.

Stimulate purchase andretain desires

Develop positive attitudesand feelings

Provide information


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Obtain consumer product recognition, then gainconsumer knowledge of product attributes.

At the early stages of the model, when a goodservice is little known, primary demand should besought. Primary demand is for a product category.

Provide information1.


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Obtain favorable attitudes, then gain preference forthe companys brand(s) over those of the competition.

When preference is the goal, selective demand shouldbe sought. This is demand for a particular brand.

Develop positiveattitudes and feelings2.


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Obtain strong consumer preference, gain purchaseof good or service, encourage continued

purchases, and achieve brand loyalty.Sometimes, organizations may try to sustain or

revitalize interest in mature products and revertto a primary demand orientation.

Stimulate purchase andretain desires3.


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Promotion Budgeting Techniques

All-You-Can-Afford MethodFirm first allots funds for other elements of marketing;

remaining marketing funds then go to the promotion budget.

Incremental Method

A percentage is added to or subtracted from this years budgetto determine next years.

Competitive Parity MethodPromotion budget is raised or lowered according to competitors actions.

Percentage-of-Sales MethodPromotion budget is tied to sales revenue.

Objective-and-Task MethodFirm sets promotion goals, determines the activities needed to satisfy

them, and then establishes the proper budget.


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Contrasting Promotion Mixes

Consumers

Budget

Products

Competition

Media

Place ofPurchase

Advertising Dominates When

The market is large anddispersed, and finalconsumers are involved.

The budget is large enough tocover regular promotion inmass media.

Products are simple andinexpensive, and differentialadvantages are clear.

Competitors stress it in their

promotion mixes.

A wide range of media areavailable.

Customers are satisfied withself-service in stores or shopthrough the mall or theinternet..

The market is small andconcentrated, and organizationalconsumers are involved.

The budget is limited or tailoredto meet the needs of specificcustomers.

Products are complex andexpensive, and differentialadvantages are not obvious.

Competitors stress it in their

promotion mixes.

Media are unavailable orinefficient.

Customers expect sales assistanceand service in stores.

Personal Selling Dominates When


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The Promotion Mix Revisited

PROMOTION

MIX

The promotion budget impacts on the promotionmix. A comprehensive plan that evaluates thestrategic roles of a variety of communication

disciplines will lead to a well-coordinatedpromotion mix. The firm is then undertakingIntegrated Marketing Communications (IMC).


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Legal Environment of Promotion

Full disclosure requires that all datanecessary for a consumer to make asafe and informed decision beprovided in a message.

Substantiation requires a firm to beable to prove all the claims it makesin messages.

Under a cease-and-desist order, afirm must stop a deceptive practiceand modify a message accordingly.

Corrective advertising requires afirm to run new ads to correct thefalse impressions left by previousones.

Fines are dollar penalties fordeception.


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Criticisms and Defenses of Promotion

Promotion is the most heavily criticized area ofmarketing.

Industry trade groups have campaigned toimprove the overall image of promotion.


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Detractors Feel That Promotion

Creates an obsession with material possessions.

Is basically dishonest.

Raises the prices of goods and services.

Overemphasizes symbolism and status.

Causes excessively high expectations.


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Marketing Professionals Answer ThatPromotion

Responds to consumer desires for materialpossessions.

In affluent societies, these items are paid forwith discretionary earnings.

Is basically honest. The great majority ofcompanies abide by all laws and set strict self-regulation.

Increased consumer demand builds markets and

economies of scale. Keeps expectations high, thus sustaining

consumer motivation and worker productivity.


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Chapter Summary

This chapter defines promotion planning, shows itsimportance, and demonstrates the value ofintegrated marketing communications.

It describes the characteristics of advertising, publicrelations, personal selling, and sales promotion.

It explains the channel of communication and how itfunctions.

It examines the components of a promotion plan. It discusses global promotion considerations, the

legal environment. and criticisms and defenses ofpromotion.

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Chapter 17 Evans Berman