Chapter 15 - Integrated Marketing Communications

Public Relations (PR)

- may be the responsibility of an individual or of a department within the organization, or the organization may hire an external public relations firm - viewed as an ongoing program rather than a set of tools to be used only during crises

Availability of Promotional Methods

-A firm may find no available advertising medium effectively reaches a certain target market. -Availability issues become more pronounced when marketers advertise in foreign countries. -Some media may not be available or are illegal. Regulations or standards for media content may be restrictive.

Identify prospects

-Certain types of promotional efforts aim to identify customers who are interested in the firm's product and are likely potential buyers -For example, a marketer may run a television advertisement encouraging the viewer to visit the company's website and share personal information in order to receive something of value from the company The organization can respond with phone calls, emails, or personal contact by salespeople

integrated marketing communications

-Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective -A major goal of integrated marketing communications is to send a consistent message to customers

Coding process

-The source must consider certain characteristics of the receiver or audience -The source needs to use signs or symbols that the receiver or audience uses to refer to the concepts the source intends to convey

- personal selling - public relations - sales promotion - advertising

4 possible elements of a promotion mix:

Promotion mix

A combination of promotional methods used to promote a specific product

publicity

A component of public relations is

availability of promotional techniques

A consideration that marketers explore when formulating a promotion mix

Source

A person, group, or organization with a meaning it tries to share with a receiver or an audience

-High-priced products call for personal selling. -For low-priced convenience items, marketers use advertising.

A product's price also influences the composition of the promotion mix:

Communication

A sharing of meaning through the transmission of information

Viral marketing

A strategy to get consumers to share a marketer's message, often through email or online videos, in a way that spreads dramatically and quickly

Buzz marketing

An attempt to incite publicity and public excitement surrounding a product through a creative event

Noise

Anything that reduces a communication's clarity and accuracy

Selective demand

Can be stimulated by: - Differentiating the product from competing brands in the minds of potential buyers - Increasing the number of product uses and promoting them through advertising campaigns, price discounts, free samples, coupons, consumer contests and games, and sweepstakes - Encouraging existing customers to use more of the product

Feedback

Can be verbal and nonverbal

Promotion

Communication to build and maintain relationships by informing and persuading one or more audiences

Coding process

Converting meaning into a series of signs or symbols

primary brand

Demand for a product category rather than for a specific brand

selective demand

Demand for a specific brand

Pull policy

Done primarily through advertising and sales promotion

encourage product trial

If customers stall during the evaluation stage, marketers can use certain types of promotion—free samples, coupons, test drives, or limited free-use offers, contests, and games—to encourage product trials in order to move them through the product adoption process

- laws, government regulations, and industry self-regulation have helped to decrease most intentionally deceptive promotion - customers may be unintentionally misled because some words have diverse meanings

Is promotion deceptive?

-Integrating and customizing marketing communications while protecting customer privacy has become a major challenge. -Through digital media, companies can provide product information and services that are coordinated with traditional promotional activities.

Marketers and customers have almost unlimited access to data about each other.

sales promotion

Marketers frequently rely on _______________________ to improve the effectiveness of other promotion-mix ingredients.

sales promotion

Marketers spend more on

Push policy

Normally stresses personal selling

word-of-mouth communication

Personal, informal exchanges of communication that customers share with one another about products, brands, and companies

-Mass media advertising is used less today than in the past because of high costs and unpredictable audiences. -Marketers take advantage of more precisely targeted promotional tools. -Database marketing and analytics allow marketers to target individual customers more precisely.

The concept of integrated marketing communications is increasingly effective.

Receiver

The individual, group, or organization that decodes a coded message

Channel capacity

The limit on the volume of information a communication channel can handle effectively

Communications channel

The medium of transmission that carries the coded message from the source to the receiver

Feedback

The receiver's response to a decoded message

changing as both information technology and customer interests become increasingly dynamic

The specific communication vehicles employed and the precision with which they are used

Product placement

The strategic location of products or product promotions within entertainment media content to reach the product's target market

audience

Two or more receivers

public relations

a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders.

cost

a major factor to analyze when developing a promotion mix

Advertising

a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media

personal selling

a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation

- annual reports - brochures - event sponsorships - sponsorship of socially responsible programs - publicity (news releases, press conferences)

activities in public relations

- cost-efficient - visibility gained can enhance organization's image

advertising advantages:

- absolute dollar outlay can be high - rarely provides rapid feedback - often difficult to measure effect on sales - less persuasive than personal selling

advertising disadvantages:

size of an organizational's promotional budget

affects the number and relative intensity of promotional methods included in a promotion mix

Integrated marketing communications

also, enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets

sales promotion

an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or customers

A product's use

can also affect the combination of promotional methods employed.

- size - geographic distribution - demographic characteristics

characteristics of the target market

Electronic word of mouth

communicating about products through websites, blogs, email, social networks, or online forums

- age, income, gender, education affect the messages and images employed

demographic characteristics

- many marketers capitalize on people's needs by basing their promotional appeals on these needs - they do not create these needs since if there were no promotion, people still have basic needs

does promotion create needs?

- because promotion creates awareness and visibility for products, it may contribute to materialism - sports, theater, art all contribute to it - though with no promotion, materialism still exists

does promotion encourage materialism?

- customers learn about products through promotion, allowing them to gain product information and make more intelligent buying decisions - promotion helps create competition

does promotion help customers without costing too much?

- when promotion stimulates demand, higher production levels may result in lower per-unit production costs which keeps prices lower - prices increase owing to the added costs of promotion, fuels price competition, which helps keep prices lower

does promotion increase prices?

- personal selling is more feasible if a company's customers are concentrated in a small area - when the company's customers are numerous and dispersed, regional or national advertising may be more practical

geographic distribution

•Most customers are likely to be influenced by friends and family members when they make purchases. •Research has identified a link between word-of-mouth communication and new-customer acquisition when there is customer involvement and satisfaction. •Effective marketers attempt to identify opinion leaders and encourage them to try their products in the hope that they will spread favorable publicity about them. •Consumers are more likely to share negative word-of-mouth information than positive word-of-mouth communication.

importance of word-of-mouth communication

Promotional Resources, Objectives, and Policies

influence the types of promotion selected

push and pull policies

not mutually exclusive; at times, an organization uses both simultaneously

Involves more specific communication than advertising; has a greater impact on customers; provides immediate feedback

personal selling advantages

1. create awareness 2. stimulate demand 3. encourage product trial 4. identify prospects 5. retain loyal customers 6. facilitate reseller support 7. combat competitive promotional efforts 8. reduce sales fluctuations

possible objectives of promotion

- free samples - games - rebates - sweepstakes - contests - premiums - coupons

sales promotions include:

Word of mouth

seems to be most effective for new-to-market and more expensive products

- in a society with commercial freedom of speech, there will be always diverse opinions - some critics say that unhealthy products shouldnt be promoted - some say that as long as it is legal to sell promoting is allowed

should potentially harmful be advertised?

- if size is limited, promotion mix will emphasize on personal smelling to reach small numbers of people - if the market has millions of customers, they rely on advertising and sales promotion

size of target market

Reduce sales fluctuations

•A business cannot operate at peak efficiency when sales fluctuate widely (holidays, seasonal products, economic changes, etc.). •Promotional activities are often designed to stimulate sales during slumps. -During peak periods, a marketer may refrain from advertising to prevent stimulating sales to the point at which the firm cannot handle all the demand. -A company may advertise customers can be better served by coming in on certain days.

Combat competitive promotional efforts

•At times, a marketer's objective in using promotion is to offset or lessen the effect of a competitor's promotional or marketing programs. •A combative promotional objective is used most often by firms in extremely competitive consumer markets.

create awareness

•For an organization that is introducing a new product or a line extension, making customers aware of the product is crucial to initiating the product adoption process. •Promotional efforts may aim to increase awareness of: -Brands -Product features -Image-related issues (such as ethical or socially responsive behavior) -Operational characteristics (such as store hours, locations, and credit availability)

promotion

•For maximum benefit from promotional efforts, marketers strive for proper planning, implementation, coordination, and control of communications. •Effective management of integrated marketing communication is based on information about and feedback from customers and the marketing environment, often obtained from an organization's marketing information system. •How successfully marketers use promotion to maintain positive relationships depends to some extent on the quantity and quality of information the organization receives. •Because customers derive information and opinions from many different sources, integrated marketing communications planning also takes into account informal methods of communication, such as word of mouth and independent information sources on the internet.

-Marketers of business products use some advertising and occasionally sales promotion to promote products. -Personal selling is used extensively for consumer durables, such as home appliances, automobiles, and houses, whereas consumer convenience items are promoted mainly through advertising and sales promotion. -Public relations appears in promotion mixes for business and consumer products.

•Generally, promotion mixes for business products concentrate on personal selling, whereas advertising plays a major role in promoting consumer goods.

costs

-National advertising and sales promotion require large expenditures. -However, if these efforts succeed in reaching extremely large audiences, the cost per individual reached may be quite small. -Many small, local businesses advertise products through local newspapers, magazines, radio and television stations, outdoor displays, internet ads, and signs on mass transit vehicles.

decoding process

Converting signs or symbols into concepts and ideas

integrated marketing communications

Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers

Pull policy

Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel

Push policy

Promoting a product only to the next institution down the marketing channel

new introductory promotion

Promotion that informs consumers about a new product

advertising

changing as consumers' mass media consumption habits are changing: -Consumers are striving to maximize their presence and impact through digital media. -Ads are being designed that cater to smaller, more personalized audiences. -Traditional media like newspapers are in a decline due to a drop in readership.

product placement

•In-program product placements have become a successful method of reaching consumers. •In general, the notion of product placement has not been favorably viewed in Europe and has been particularly controversial in the United Kingdom. •Supporting the use of product placement are findings that product placement can promote pro-social behavior such as healthy eating habits.

Retain loyal customers

•Maintaining long-term customer relationships is a major goal of most marketers -The costs of retaining customers are usually considerably lower than those of acquiring new ones -Retention techniques include frequent-user programs and special offers for existing customers

faciliate reseller support

•Strong reseller relationships are important to sustain a competitive advantage. •Various promotional methods can help an organization achieve this goal: -Sharing a portion of retailers' advertising expenses for promoting the products -Providing wholesalers and retailers with special offers and buying allowances -Working with retailers in the presentation and promotion of the products

-Kinesic communication - Communicating through the movement of head, eyes, arms, hands, legs, or torso -Proxemic communication - Communicating by varying the physical distance in face-to-face interactions -Tactile communication - Communication through touching

•When a salesperson and a customer meet face to face, they use several types of interpersonal communication: