MKTG 300 Chapter 18

Setting and Allocating the IMC Budget

1. Objective and task method 2. Rule of thumb methods -No one method should be used in isolation

The Communication Process

1. Sender (Firm) 2. Transmitter 3. Communications channel (Media) 4. Receiver (Consumer decodes message)

Elements of an IMC strategy

1. The consumer 2. The channels through which the message is communicated 3. The evaluation of the results of the communication

Online Marketing

1. Websites 2. Blogs 3. Social Media

Gross Rating Points

= Reach x Frequency -Can refer to print, radio, or television

Return on Marketing Investment (ROMI)

= [(gross margin - marketing expenditure) / marketing expenditure] x 100

AIDA Model

A common model of the series of mental stages through which consumers move as a result of marketing communications: Awareness leads to Interests, which lead to Desire, which leads to Action 1. Awareness 2. Interests 3. Desire 4. Action -At each stage, the consumer makes judgments about whether to take the next step in the process -AKA: The think, feel, do model -Consumers go through all the steps, but may not always follow the same order

Lagged Effect

A delayed response to a marketing communication campaign -It generally takes several exposures to a campaign before a consumer fully processes its image

Brand Awareness

A potential customer's ability to recognize or recall that the brand name is a particular type of retailer or product/service

Search Engine Marketing (SEM)

A type of web advertising whereby companies pay for keywords that are used to catch consumers' attention while browsing a search engine -Ex: "Sneakers," "athletic shoes," etc.

Desire

After the firm has piqued the interest of its target market, the goal of subsequent IMC messages should move the consumer from "I like it" to "I want it" -Ex: Lucy Hale will increase tour demand by being on Good Morning America -Ex: Stouffer's aims to enhance consumers' desire through its food truck initiatives, which offer free samples of various frozen entrees, dressed up with extra ingredients, to show families how delicious a frozen dinner can be with just a few extra steps

Feedback Loop

Allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly -Ex: Customer purchase, use of a Pepsi emoji, complaint, tweet, etc.

Objective-and-Task Method

An IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs

Transmitter

An agent or intermediary with which the sender works to develop the marketing communications; for example, a firm's creative department or an advertising agency Ex: Pepsi has developed new mobile and social media tools, websites, and apps to highlight the new beverage with the assistance of its MARKETING DEPARTMENT

Noise

Any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium; a problem for all communication channels -Ex:Pepsi advertising in the newspaper, which its target market does not read -Difference between the encoding and decoding is noise

Communicating with Customers

As the number of communication media have increased, the task of understanding how best to to reach target consumers has become far more complex

Rule-of-Thumb Method

Budgeting methods that base the IMC budget on either the firm's share of the market in relation to competition, a fixed percentage of forecasted sales, or what is left after other operating costs and forecasted sales have been budgeted

Blog (Weblog)

Contains periodic posts on a common web page. A well-received blog can communicate trends, announce special events, create positive word of mouth, connect customers by forming a community, allow the company to respond directly to customers' comments, and develop a long-term relationship with the company -Can determine trust and loyalty levels -More interactive nowadays

Encoding

Converting the sender's ideas into a message, which could be verbal, visual, or both -Ex: Pepsi emojis signal fun times and activities during which people might be likely to drink carbonated beverages; grinning face with sunglasses and headphones - as if they were at the beach

Relevance

Describes how useful an ad message is to the consumer doing the search -Ex: Google provides a measure of relevance through its AdWords system using a quality score - which measures how relevant a keyword is to an ad's text and to a user's search query - want a high score

Senders Adjust Messages According to the Medium and Receivers' Traits

Different media communicate in varied ways, so marketers make adjustments to their messages and media depending on whether they want to communicate with suppliers, shareholders, customers, the general public, or even specific segments of those groups -Ex: Pepsi has solicited the talents of celeberities who are likely to appeal to various customer segments

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

How Consumers Perceive Communication

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

Measuring Success Using Marketing Metrics

Each step in the IMC process can be measured to determine how effective it has been in motivating consumers to move to the next step in the buying process -Firms must invest in the marketing communications campaign with the idea that it may not reach its full potential for some time due to the lagged effect

Websites

Firms have increased their emphasis on communicating with customers through their websites. They use their websites to build their brand image and educate customers about their products or services as well as where they can be purchased -Ex: Office Depot hosts a Business Resource Center for its business customers that provides advice, product knowledge, and connections to networking contacts in other businesses -Firms also operate websites devoted to community building

Goals

Firms need to understand the outcome they hope to achieve before they begin - can be short term or long term -Should be explicitly defined and measured

Frequency

How often the audience is exposed to a communication within a specified time

Direct Marketing

Marketing that communicates directly with target customers to generate a response or transaction - contains a variety of traditional and new forms of marketing communication initiatives -Traditional: mail and catalogs -Direct marketing also includes e-mail and mobile marketing -Technology can act as a way to inform customers of their order, promotions, receipts, and also acts as a payment medium

Mobile Marketing

Marketing through wireless handheld devices -Marketing success rests on integrating marketing communications with fun, useful apps that are consistent with these consumer attitudes toward mobile devices

Web-Tracking Software

Measures how much time viewers spend on particular web pages, the number of pages they view, how many times users click banner ads, which website they came from, and so on -Ex: Google Analytics -Ex: Facebook helps companies see who has been visiting their fan pages, what those people are doing on the fan pages, and who is clicking their advertisements

Aided Recall

Occurs when consumers indicate they know the brand when the name is presented to them

Planning for and Measuring IMC Success

Once marketers set strategic goals, they can set the budget for the campaign and choose the marketing metrics they will use to evaluate whether it has achieved its strategic objectives

Interest

Once the consumer is aware that the company/product exists, communication must work to increase the consumer's interest level -It isn't enough to let people know that the product exists; consumers must be persuaded that it is a product worth investigating

Social Media

Refers to online and mobile technologies that distribute content to facilitate interpersonal interactions -Most popular: YouTube, Facebook, and Twitter -Social media helps facilitate the consumer decision process

Integrated Marketing Communications (IMC)

Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact.

Sales Promotions

Special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays -Often used in conjunction with other advertising or personal selling programs -Ex: Free samples build short term sales -Ex: Contests and sweepstakes build loyalty

Sender

The firm from which an IMC message originates; the sender must be clearly identified to the intended audience Ex: Pepsi's identity remains clear and obvious even through their emoji campaign by using similar colors and logo schemes

Channels Used in an Integrated Marketing Communications Strategy

The goal of IMC is to use the channels in conjunction so that the sum exceeds the total of the individual channels; however, advances in technology have led to a variety of new and traditional media channel options, all of which vie for consumers' attention -Print media has also grown and become more specialized -This has caused many firms to shift their promotional dollars from advertising to direct marketing, website development, product placements, and other forms of promotion, all in search of the best way to deliver messages to their target audiences

Top-of-Mind Awareness

The highest level of awareness, occurs when consumers mention a specific brand name first when they are asked about a product or service Ex: Harley-Davidson has top-of-mid awareness if a consumer responds "Harley," when asked about motorcycles -Built with memorable names/symbols that are repeatedly exposed to customers

Communication Channel

The medium—print, broadcast, the Internet, etc.—that carries the message -Ex: Pepsi could transmit through tv, radio, etc. -The media chosen must be appropriate to connect the sender with the desired recipients

Click-Through Rate (CTR)

The number of times a user clicks on an online ad divided by the number of impressions

Impressions

The number of times an advertisement appears in front of the user

Public Relations (PR)

The organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media -Passive in that customers do not have to take any action to receive it -Generates free media attention

Reach

The percentage of the target market that will be exposed to a specific marketing communication, such as an advertisement, at least once

Receiver

The person who reads, hears, or sees and processes the information contained in the message or advertisement -Ex: Pepsi wants its message received and decoded properly by teens, young adults, and families

Advertising

The placement of announcements and persuasive messages purchased in any form of mass media by businesses who seek to inform and/or persuade members of a target market about their products, services, organizations, or ideas -Passive -A 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 -Extremely effective for creating awareness of a product or service and generating interest - must break through clutter

Decoding

The process by which the receiver interprets the sender's message

Personal Selling

The two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision -Can be face-to-face, video teleconferencing, on the telephone, or over the internet -Communicating directly with customers is the best and most efficient way to sell products/services - saves customer time and effort

Action

The ultimate goal of any form of marketing communication is to drive the receiver to action -As long as the message has caught consumers' attention and made them interested enough to consider the product as a means to satisfy a specific desire of theirs, they likely will act on that interest -Ex: Thus, Stouffer's likely hands out coupons for its products from its food trucks, to help push customers to make the purchase during their next trip to the grocery store

Traditional Media

When measuring IMC success, the firm should examine when and how often consumers have been exposed to various marketing communications

Web-Based Media

While the percentage increase of digital ad spending to total spending is slowing somewhat, the absolute and relative share of digital ad spending to total spending continues to increase

Social Shoppng

the use of internet to communicate about product preferences with other shoppers -Ex: Uses CRM system, e-mailing customers about new products, encouraging blogs, etc.