Integrated Marketing Communications

Integrated
Marketing
Communications
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter Overview
 Promotion:
Promotion function of informing,
persuading, and influencing the
consumer’s purchase decision
 Marketing Communications:
Communications
transmission from a sender to a receiver of
a message dealing with the buyer-seller
relationship
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 15-2
Integrated Marketing Communications
 Coordination of all promotional activities –

media advertising, direct mail, personal selling,
sales promotion, and public relations – to
produce a unified customer-focused
promotional message
Success of any IMC program depends
critically on identifying the members of an
audience and understanding what they want
 Importance of Teamwork
IMC requires a total strategy
including all marketing activities, not
just promotion
Successful implementation of IMC
requires that everyone involved in
every aspect of promotion – public
relations, advertising, personal
selling, and sales promotion –
function as a team
The Communications Process
 An effective promotional message

accomplishes three tasks:
It gains the receiver’s attention
It achieves understanding by both receiver
and sender
It stimulates the receiver’s needs and
suggests an appropriate method of
satisfying them
 AIDA concept (Attention-Interest-Desire-
Action) – an explanation of the steps through
which an individual reaches a purchase
decision
Sender
Encoding
Channel
Decoding
Response
Feedback
Noise
 Global Difficulties with the Communication
Process
In China: KFC’s slogan: “Finger lickin’ good” came
out as “Eat your fingers off”
Also in China: Coca-Cola had thousands of signs
made using the translation: “Ke-kou-ke-la”
 Depending on the dialect this means . . .
 “Bite the wax tadpole,” or
 “Female horse stuffed with wax”
In Taiwan: Pepsi’s slogan, “Come alive with the
Pepsi generation” came out as “Pepsi will bring your
ancestors back from the dead”
Objectives of Promotion
 Provide Information
Inform the market about the availability of a
particular good or service
 Increase Demand
Some promotions are aimed at increasing
primary demand, the desire for a general
product category
More promotions are aimed at increasing
selective demand, the desire for a specific
brand
 Differentiate the Product
Homogenous demand for many products
results when consumers regard the firm’s
output as virtually identical to its
competitors’– then, the firm has virtually no
control over marketing variables
 Accentuate the Product’s Value
Promotion can explain the greater ownership
utility of a product to buyers, thereby
accentuating its value and justifying a higher
price
 Stabilize Sales
For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular
demand
Stabilizing these variations is often
an objective of promotional
strategy
Elements of the Promotional Mix
 Promotional mix:
mix blend of personal selling
and nonpersonal selling designed to achieve
promotional objectives
Personal selling:
selling interpersonal
promotional process involving a seller’s
person-to-person presentation to a
prospective buyer
Nonpersonal selling includes: Advertising,
Product placement, Sales promotion, Direct
marketing, Public relations
 Advertising
Paid, nonpersonal communication through
various media by a business firm, not-for-profit
organization, or individual identified in the
message with the hope of informing or
persuading members of a particular audience
 Product Placement
Marketer pays a motion picture or television
program owner a fee to display his or her
product prominently in the film or show
 Sales Promotion
Marketing activities that stimulates
consumer purchasing (includes:
displays, trade shows, coupons,
premiums, contests, product
demonstrations, and various
nonrecurrent selling efforts)
Trade promotion
 Direct Marketing
Direct communications other than
personal sales contact between
buyer and seller, designed to
generate sales, information
requests, or store visits
 Public relations:
relations firm’s communications and
relationships with its various publics
 Publicity:
Publicity stimulation of demand for good,
service, place, idea, person, or organization by
unpaid placement of commercially significant
news or favorable media presentations
 Guerilla Marketing:
Marketing Unconventional,
innovative, and low-cost marketing
techniques designed to get consumers’
attention in unusual ways.
Sponsorships
 Provision of funds for a sporting or cultural

event in exchange for a direct association
with the events or activity
 Growth of Sponsorships
Sponsorship has grown rapidly during the
past 30 years
Corporate sponsorship spending has
increased faster than promotional outlays
for advertising and sales promotion
 How Sponsorship Differs from Advertising
Sponsor’s degree of control
Nature of the message
Audience reaction
Ambush marketing
 Assessing Sponsorship Results
Marketers utilize some of the same techniques
to measure both advertising and sponsorship
The differences between the two promotional
alternatives often necessitate some unique
research techniques
Despite the impressive visibility of special
events like soccer’s World Cup and football’s
Super Bowl, the demands do not necessarily
lead directly to increased sales or improved
brand awareness
Direct Marketing
 Few promotional mix elements are growing as
rapidly as direct marketing
Related overall spending total $1.7 trillion
 Direct Marketing Communication Channels
 Direct Mail
Marketers combine information from internal
and external databases, surveys, coupons,
and rebates that require responses to
provide information about consumer
lifestyles, buying habits, and wants
 Catalogs
Over 10,000 different consumer mail-order
catalogs and thousands more for business-
to- business sales are mailed each year
generating over $57 million in consumer
sales and $36 million in B2B sales
 Telemarketing:
Telemarketing promotional presentation
involving the use of the telephone for
outbound contacts by salespeople or
inbound contacts initiated by customers
who want to obtain information and place
orders
 Direct Marketing via Broadcast Channels
Broadcast direct marketing includes:
Brief (30 to 90 and second) direct response
ads on television or radio
Home shopping channels like:
 Home Shopping Network (HSN)
Infomercial: promotional presentation for
a single product running 30 minutes or
longer in a format that resembles a regular
television program
 Electronic Direct Marketing Channels
Web advertising is an important component
of electronic direct marketing
E-mail direct marketing is a natural and
easy extension of traditional direct mail
marketing
 Other Direct Marketing Channels
Print media is generally not as effective as
Web marketing or telemarketing for direct
marketers
Magazine and newspaper ads with toll-free
telephone numbers, kiosks, and other
media are still useful in many situations
Developing an Optimal Promotional Mix
 Factors that influence the effectiveness of

a promotional to mix:
Nature of the market
Nature of the product
Stage in the product life-cycle
Price
Funds available for promotion
 Nature of the market
 Personal selling may prove effective with a market
composed of a limited number of buyers
 Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
 Personal selling often works better for intermediary
target markets
 Nature of the product
 Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
 Consumer products are more likely to rely heavily on
advertising than are business products
 Stage in the product life-cycle
 Promotional mix must be tailored to the products stage
in the product life-cycle
 In the introductory stage, there is a heavy emphasis on
personal selling to the to the intermediaries
 However, advertising and sales promotion help to
create awareness and stimulate initial purchases
 In the growth and maturity stages, advertising gains
relative importance
 Personal selling efforts at marketing intermediaries to
expand distribution is continued
 In the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures
 Price
 Advertising dominates the promotional mix for low-
unit-value products due to the high personal contact
costs of personal selling
 Consumers a high-priced items like luxury cars expect
lots of well-presented information via videocassettes,
CDs, fancy brochures, and personal selling
 Funds available for promotion
 A critical element in the promotional strategy is the
size of the promotional budget
 While the cost-per-contact of a $2 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms
Influencing Factors Personal Selling Advertising
Nature of the market Limited number Large number
Number of buyers Concentrated Dispersed
Geographic Business purchaser Ultimate consumer
concentration
Type of customer
Nature of the product Custom-made, complex Standardized
Complexity Considerable Minimal
Service Business Consumer
requirements
Trade-ins common Trade-ins uncommon
Type of good or
service
Use of trade-ins
Stage in the product life Often emphasized at every stage; Often emphasized at every
cycle heavy emphasis in the introductory stage; heavy emphasis in the
and early growth stages in latter part of the growth stage,
acquainting marketing as well as the maturity and
intermediaries and potential early decline stages, to
consumers with the new good or persuade consumers to select
service specific brands
Price High unit value Low unit value

Pulling and Pushing
Promotional Strategies
 Pulling strategy:
strategy promotional effort by a
seller to stimulate demand among final users,
who will then exert pressure on the
distribution channel to carry the good or
service, pulling it though the marketing
channel
 Pushing strategy:
strategy promotional effort by a
seller to members of the marketing channel
intended to stimulate personal selling of the
good or service, thereby pushing it through
the marketing channel
Budgeting for Promotional Strategy
 Percentage-of-sales method
 Fixed-sum-per-unit method
 Meeting competition method
 Task-objective method
Method Description Example
Percentage-of-sales Promotional budget is set as a “Last year we spent $10,500 on promotion
method specified percentage of either past and had sales of $420,000. Next year we
or forecasted sales. expect sales to grow to $480,000, and we
are allocating $12,000 for promotion.”
Fixed-sum-per-unit Promotional budget is set as a “Our forecast calls for sales of 14,000
method predetermined dollar amount for units, and we allocate promotion at the rate
each unit sold or produced. of $65 per unit.”
Meeting Promotional budget is set to match “Promotional outlays average 4 percent of

competition method competitor’s promotional outlays on sales in our industry.”
either an absolute or relative basis.
Task-objective Once marketers determine their “By the end of next year, we want 75
method specific, promotional objectives, the percent of the area high-school students to
amount (and type) of promotional be aware of our new, highly automated
spending needed to achieve them is fast-food prototype outlet. How many
determined. promotional dollars will it take, and how
should they be spent?”
 Figure 15.9
Allocation of Promotional Budgets for consumer
Packaged Goods
Measuring the Effectiveness of Promotion
 Two basic measurement tools:
Direct sales results measures the effectiveness
of promotion by revealing the specific impact on
sales revenues for each dollar of promotional
spending
Indirect evaluation concentrates on quantifiable
indicators of effectiveness like:
 Recall - how much members of the target
market remember about specific products or
advertisements
 Readership – size and composition of a
message’s audience
 Measuring Online Promotions
Early attempts at measuring online promotional
efforts involved counting hits and visits
Incorporating direct response and comparing
different promotions for effectiveness
Two major techniques for setting online
advertising rates:
 Cost per impression (CPM), technique that
related the cost of an ad to every thousand
people who read it
 Cost per response (click-throughs), which
assumes that those who actually click on an
ad want more information

Integrated Marketing Communications

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Integrated

 Coordination of all promotional activities –

 An effective promotional message

 Provision of funds for a sporting or cultural

 Factors that influence the effectiveness of

Price High unit value Low unit value

 Meeting competition method

Meeting Promotional budget is set to match “Promotional outlays average 4 percent of

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