CHAPTER 14: Integrated Marketing Communications

three rule of thumb budgeting methods

- use prior sales and communication activities to determine the present communication budget

encoding

converting the sender's ideas into a message, which could be verbal, visual, or both - the most important facet of encoding is not what is sent but rather what is received e.g. Home Depot may take out full-page ads in every major newspaper proclaiming, "Amazing Father's Day Deals at 25 Percent Off!"

click-through tracking

how many times users click on banner advertising on websites

PR past

many companies used PR primarily to communicate with the news media, hoping their messages would be picked up

direct mail/email

targeted forms of communication distributed to a prospective consumer's mailbox or inbox - mailing lists are a critical component of direct mail (choose the wrong list and your promotion will be perceived as "junk mail" since the information and offer will not be targeted to the appropriate audience) - offers must be relevant to both consumers and to the product, and are important whether a company is promoting products to consumers or businesses

advertising schedule

the timing and duration of advertising

All marketing communications aim to achieve certain objectives

to inform, persuade, and remind customers (communication objectives also need to consider focus—e.g. does the company hope to stimulate demand for a new product or to increase awareness for the company in general?)

blogs

web pages that contain periodic posts - well-received blogs can communicate trends, promote special events, create positive word-of-mouth, connect customers by forming a community, increase sales, improve customer satisfaction because the company can respond directly to customers' comments, and develop a long-term relationship with the company - transparent nature and contain authors' honest observations, which can help customers determine their trust and loyalty levels - becoming more interactive as the communication between bloggers and customers has increased - corporate blogs are a new form of marketing communications

event sponsorship

when corporations support various activities (financially or otherwise), usually in the cultural or sports and entertainment sectors

forms of feedback

- a customer's purchase of the item - a complaint or compliment - the redemption of a coupon or rebate

percentage-of-sales budgeting limitations

- assumes the percentage used in the past or by competitors is still appropriate for the firm - does not take into account new plans

public relations objectives

- building and maintaining a positive image - handling or heading off unfavourable stories or events - maintaining positive relationships with the media

senders adjust messages according to the medium and the receivers' traits

- different media communicate in very different ways - marketers make adjustments to their messages and media depending on whether they want to communicate with suppliers, shareholders, customers, or the general public e.g. Kellogg's would not send the same message to its shareholders in a targeted email as it would to its consumers on Saturday morning TV

forms of direct marketing

- direct mail/email - catalogues - direct response TV - kiosks - personal selling

choosing the right medium

- each alternative has specific characteristics that make it suitable for meeting specific objectives - vary in their ability to reach the desired audience - vary in its reach and frequency - cost of each medium differs as well

receivers decode messages differently

- each receiver decodes a message in his or her own way, which is not necessarily the way the sender intended - the sender has little, if any, control over what meaning any individual receiver will take from the message

2) set objectives

- firms need to understand the outcome they hope to achieve before they begin - later serve as the yardstick against which success or failure is measured - can be short term (generating inquiries, increasing awareness, and prompting trial) - can be long term (increasing sales, market share, and customer loyalty)

mobile apps

- mobile marketing is marketing through wireless handheld devices - smartphones offer a kind of mobile computer with the ability to purchase merchandise

comparative parity budgeting limitations

- prevents firms from exploiting the unique opportunities or problems they confront in a market - if all competitors use this method, their market shares will stay about the same over time

the appeal

- rational appeal - emotional appeal

objective-and-task budgeting method process

- setting objectives - choosing media - determining costs must be repeated for each product (sum of all the individual communication plan budgets = total marketing communications budget)

four defining characteristics of direct marketing

- targeted - motivates an action - measurable - can provide information for the development of a marketing database

three components in any IMC strategy

- the consumer or target market - the channels or vehicles through which the message is communicated - the evaluation of the results of the communication

influences other than advertising on consumers' choices, purchase behaviour, and attitudes

- the level of competitors' advertising - economic conditions in the target market - sociocultural changes - the weather (advertisers must try to identify these influences and isolate those of the particular advertising campaign)

marketers also have to consider other factors, such as

- the nature of the market (consumer versus business) - the nature of the product (simple versus technologically complex) - the stage in the product life cycle

when selecting the various budgeting methods for marketing communications, firms must first consider

- the role that advertising plays in their attempt to meet their overall promotional objectives - advertising expenditures vary over the course of the PLC, with considerably higher levels of spending during the introduction stage - the nature of the market and the product influence the size of advertising budgets - the nature of the market (less money is spent on advertising in B2B marketing contexts than in B2C markets)

components of the communication process

- the sender - the transmitter - encoding - the communication channel - the receiver - noise - feedback loop

catalogues

- typically have been mailed, which can become an issue as a company grows - most companies with physical catalogues also offer online catalogues - important for companies with no bricks-and-mortar locations

When setting objectives, the overarching strategy used is one of push versus pull

- when advertising to consumers: objective = pull strategy (the goal is to get consumers to pull the product into the supply chain by demanding retailers carry it) - when advertising to wholesalers, distributors, or salespeople: objective = push strategy (designed to increase demand by pushing the product to consumers via distribution channels)

IMC tools

- work along a continuum from passive to interactive - can be used either offline or online advertising, personal selling, sales promotion, public relations, direct marketing, digital media

steps in planning an IMC campaign

1) 2) 3) 4) 5) 6) 7)

cause-related marketing

Commercial activity in which businesses and charities form a partnership to market an image, product, or service for their mutual benefit; a type of promotional campaign

1) identify target audience

Firms conduct research to identify their target audience, and then use the information they gain to set the tone for the advertising program and help them select the media they will use to deliver the message - target audience may or may not be the same as current users of the product

direct response TV

TV commercials or infomercials with a strong call to action, usually via toll-free number, return mail address, or website

IMC tools: digital media

Tools ranging from simple website content to far more interactive features such as corporate blogs, online games, text messaging, social media, and mobile apps

emotional appeal

aims to satisfy consumers' emotional desires rather than their utilitarian needs - use of emotion to create a bond between the consumer and the brand - emotions most often invoked in advertising: fear and appeal, but also safety, happiness, love (or sex), comfort, and nostalgia - companies must pay attention to cultural influences because humour is not perceived the same way across different cultural groups and sexual appeals are taboo in some cultures

3) determine budget

all the methods of setting a promotional budget have both advantages and disadvantages, so no one method should be used in isolation

feedback loop

allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly e.g. If Home Depot observes an increase in store traffic and sales, its managers know that their intended audience received the message and understood that there were great Father's Day bargains to be found in the store

objective-and-task budgeting method

an IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives

the transmitter

an agent or intermediary with which the sender works to develop the marketing communication such as a firm's creative department or an advertising agency e.g. Stanley develops advertising materials with its ad agency and provides the materials to Home Depot

noise

any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium, and it poses a problem for all communication channels - any difference between encoding (what the sender intends to say) and decoding (what the receiver hears) is probably due to noise e.g. Home Depot may choose to advertise in newspapers that its target market doesn't read, which means the rate at which the message is received by those to whom it has relevance has been slowed considerably

digital media

assessing the effectiveness of any digital communications efforts in an IMC campaign generally requires web tracking software to indicate how much time viewers spend on particular web pages and the number of pages they view

pre-testing

assessments performed before an ad campaign is implemented to ensure that the various elements are working in an integrated fashion and doing what they are intended to do

affordable budgeting limitations

assumes communication expenses do not stimulate sales and profits

mass media

channels ideal for reaching large numbers of anonymous audience members e.g. national newspapers, magazines, radio, and television

niche media

channels more focused and are generally used to reach narrower segments, often with unique demographic characteristics or interests - offer advertisers the opportunity to change and even personalize their messages, which is generally not an option with mass media e.g. cable TV, direct mail, and specialty magazines

pulsing advertising schedule

combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods e.g. IKEA advertises throughout the year but boosts its advertising expenditures to promote school supplies in August

PR present

connecting with consumers and interacting in the hopes of having a conversation

objective-and-task budgeting limitations

difficult to identify the specific tasks that will achieve the objectives - most difficult budgeting method

kiosks

digital kiosks can be used to facilitate the way services companies deliver their services to customers

how consumers perceive communication

each receiver may interpret the sender's message differently, and senders often adjust their message according to the medium used and the receivers' level of knowledge about the product or service

post-testing

evaluation of the campaign's impact after it has been implemented - advertisers assess the sales and/or communication impact of the advertisement or campaign

traditional media

firms use measures of frequency and reach to gauge consumers' exposure to marketing communications

gross rating points (GRP)

frequency x reach (when comparing the calculations, must refer to the same medium)

rational appeal

helps consumers make purchase decisions by offering factual information and strong arguments built around relevant issues that encourage consumers to evaluate the brand favourably on the basis of the key benefits it provides - focus on consumers' sense of reasoning, logic, and learning

frequency

how often the target audience is exposed to a communication within a specified period of time (for most products and situations, a single exposure to a communication is not enough to generate the desired response)

flighting advertising schedule

implemented in spurts, with periods of heavy advertising followed by periods of no advertising - products whose demand fluctuates e.g. tennis racquets, which manufacturers may advertise heavily in the months leading up to and during the summer

4) convey message

marketers determine what they want to convey about the product - the firm determines the key message it wants to communicate to the target audience - the firm decides what appeal would most effectively convey the message (these decisions must be considered simultaneously)

IMC tools: direct marketing

marketing that communicates directly with target customers to generate a response or transaction - greatest increase in aggregate spending recently - allows for personalization of the message, a key advantage - contains a variety of traditional and new forms of marketing communication initiatives (offline forms such as direct mail, direct response TV commercials (infomercials), catalogues, and kiosks, as well as online technologies such as email, mobile, and podcasts) - digital technologies have had a profound effect on direct marketing initiatives (e.g. email)

social media

media content distributed through social interactions - allow users to interact among themselves (e.g., form a community), as well as provide other like-minded consumers (i.e., members of their community) and marketers their thoughts and evaluations about a firm's products - facilitates the consumer decision process by encouraging need recognition, information search, alternative evaluation, purchase, and post-purchase reviews - used by marketers to engage their customers in a proactive dialogue

affordable budgeting method

method of determining a communications budget based on what is left over after other operating costs have been covered - marketers forecast their sales and expenses (excluding communications) during the budgeting period... forecasted sales - expenses + desired profit = budget = the money available after operating costs and profits

comparative parity budgeting method

method of determining a communications budget in which the firm's share of the communication expenses is in line with its market share

percentage-of-sales budgeting method

method of determining a communications budget that is based on a fixed percentage of forecasted sales (e.g. a company with $2.5 million in projected sales that allocated 3.5% to advertising would have a budget of $87500)

tracking

monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium

IMC tools: advertising

paid form of communication from an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future - the most visible of the IMC components - can be either offline or online and either passive or interactive (traditionally: advertising has been passive and offline; today: advertising is increasingly placed online and is interactive) - effective for creating awareness of a product or service and generating interest - remind consumers of existing brands - can entice consumers into a conversation with marketers, however, must break through other messages to reach its intended audience - share of total promotional dollars has fallen as the budgets for other forms of sales promotion (especially direct marketing and public relations) have increased

Integrated Marketing Communications (IMC)

promotion - encompasses a variety of communication disciplines—advertising, personal selling, sales promotion, public relations, direct marketing, and digital media—in combination to provide clarity, consistency, and maximum communicative impact

the message

provides the target audience with reasons to respond in the desired way - key benefits of the product - communicate the product's problem-solving ability clearly and in a compelling fashion - unique selling proposition (USP)

IMC programs

regard each of the firm's marketing communications elements as part of a whole - each of which offers a different means to connect with the target audience (this integration of elements provides the firm with the best means to reach the target audience with the desired message, and it enhances the value story by offering a clear and consistent message)

continuous advertising schedule

runs steadily throughout the year - products that are consumed continually at relatively steady rates and that require a steady level of persuasive or reminder advertising e.g. P&G advertises its Tide brand of laundry detergent continuously.

Direct marketing benefits to sellers

sellers - ability to sell to a much wider target audience than could be reached with traditional marketing channels - the cost of reaching consumers is much lower in comparison to personal selling or mass media advertising - marketers know who responds to their campaigns, allowing them to build rich databases that can be used to cross-sell, tailor offers, and create specific promotions geared to individual customers in future campaigns

IMC tools: sales promotions

special incentives or excitement-building programs that encourage the purchase of a product (e.g. such as coupons, rebates, contests, free samples, and point-of-purchase displays) - some offline (e.g., printed coupons or contest entries), - some online (e.g., e-coupons downloaded to a smartphone) - incentives designed for use in conjunction with other advertising or personal selling programs - many designed to build short-term sales (e.g. free samples or point-of-purchase displays) - others integral components of firms' CRM programs as means to build customer loyalty (e.g. contests and sweepstakes)

unique selling proposition (USP)

the common theme or slogan in an advertising campaign - communicates the unique attributes of the product and thereby becomes a snapshot of the entire campaign - must be not only unique to the brand, but also meaningful to the consumer - must be sustainable over time, even with repetition

5) evaluate and select media

the content of an advertisement is tied closely to the characteristics of the media that firms select to carry the message, and vice versa

7) assess impact using marketing metrics

the effectiveness of an advertising campaign must be assessed before, during, and after the campaign has run - each step in the IMC process can be measured to determine how effective it has been at motivating consumers to move to the next step in the buying process

the sender

the firm from which an IMC message originates - the sender must be clearly identified to the intended audience e.g. Home Depot working with one of its vendors, Stanley Tools Company, can send a message that it is having a special "Father's Day sale."

the communication channel

the medium—print, broadcast, the Internet—that carries the message e.g. Home Depot could transmit through TV, radio, and various print ads, and it realizes that the media chosen must be appropriate to connect itself (the sender) with its desired recipient. So Home Depot might advertise on channels such as HGTV and in magazines such as Canadian Homes & Cottages.

6) create communication

the message and appeal are translated creatively into words, pictures, colours, and/or music - advertisers must be careful not to let their creativity overshadow the message - the advertisement must be able to attract the audience's attention, provide a reason for the audience to spend its time viewing the advertisement, and accomplish what it set out to do - the execution style must match the medium and objectives

IMC tools: public relations (PR)

the organizational function that manages the firm's communications to achieve a variety of objectives - the free placement of a company's message in the media - relatively passive (customers do not have to take any action to receive it) - efforts span both offline and online media - Good PR has always been an important success factor (importance of PR has grown, as the cost of other forms of marketing communications has increased)

reach

the percentage of the target population exposed to a specific marketing communication, such as an advertisement, at least once

the receiver

the person who reads, hears, or sees and processes the information contained in the message or advertisement e.g. Home Depot wants its message received and decoded properly by people who are likely to shop in its stores (decoding: process by which the receiver interprets the sender's message)

media planning

the process of evaluating and selecting the media mix (the combination of the media used and the frequency of advertising in each medium) that will deliver a clear, consistent, compelling message to the intended audience e.g. Target may determine that a heavy dose of television, radio, print, and billboards is appropriate for the back-to-school selling season between August and September each year

media buy

the purchase of airtime or print pages - generally the largest expense in the advertising budget

IMC tools: personal selling

the two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision - various settings: face to face, video teleconferencing, on the telephone, or over the Internet - cost of communicating directly with a potential customer is quite high compared with other forms of promotion, but it is simply the best and most efficient way to sell certain products - salespeople simplify the buying process by providing information and services that save customers time and effort - sales representatives add significant value, which makes the added expense of employing them worthwhile

websites

used to build their brand image and educate customers about their products or services and where they can be purchased