Ch.16 - Integrated Marketing Communications (IMC)

geographic distribution (characteristics of target market)

- 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

Possible Objectives of Promotion

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

source

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

communication

A sharing of meaning through the transmission of information

introduction stage of product life cycle and promotion

Advertising plus personal selling and sales promotion is used to generate awareness for both business and consumer products

noise

Anything that reduces a communication's clarity and accuracy

combat competitive promotional efforts (objectives of promotion)

At times, a marketer's objective in using promotion is to offset or lessen the effect of a competitor's promotional or marketing programs - does not necessarily increase the organization's sales or market share, but it may prevent a sales or market share loss - A combative promotional objective is used most often by firms in extremely competitive consumer markets

identifying prospects (objectives of promotion)

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, e-mail, or personal contact by salespeople

coding process (encoding)

Converting meaning into a series of signs or symbols - When coding meaning into a message, the source must consider certain characteristics of the receiver or audience - When coding a meaning, a source needs to use signs or symbols that the receiver or audience uses to refer to the concepts the source intends to convey

decoding process

Converting signs and symbols into concepts and ideas

integrated marketing communications (IMC)

Coordination of promotion and other marketing efforts for maximum informational and persuasive impact on customers - Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective - also enable synchronization of promotion elements and can improve the efficiency and effectiveness of promotion budgets

cost of promotional methods

Costs of promotional methods are major factors to analyze when developing a promotion mix - 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 - Some forms of advertising are relatively inexpensive - Many small, local businesses advertise products through local newspapers, magazines, radio and television stations, outdoor displays, internet ads, and signs on mass transit vehicles

selective demand (stimulating demand)

Demand for a SPECIFIC BRAND - Requires singling out attributes important to potential buyers - Can be stimulated by: 1. Differentiating the product from competing brands in the minds of potential buyers 2. Increasing the number of product uses and promoting them through advertising campaigns, as well as through price discounts, free samples, coupons, consumer contests and games, and sweepstakes 3. Encouraging existing customers to use more of the product

creating awareness (objectives of promotion)

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 - For existing products, promotional efforts may aim to increase awareness of: - brands - product features - image related issues - operational characteristics

encouraging product trial (objectives of promotion)

If customers stall during the evaluation stage, marketers can use certain types of promotion—such as couples, free samples, and contests, all to encourage product trial in order to move them through the product adoption process

pull channel policy

Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel - Done primarily through advertising and sales promotion

selective distribution and promotion

Promotion mixes vary

new introductory promotion (stimulating demand)

Promotion that informs consumers about a new product

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

feedback

The receiver's response to a decoded message - Can be verbal and nonverbal - In interpersonal communication, this occurs through talking, teaching, smiling, nodding, eye movements, and other body movements and postures - could also be literal, in terms of sales or other actions we want the audience to make

product placement

The strategic location of products or product promotions within entertainment media content to reach the product's target market - In-program product placements have become a successful method of reaching consumers - At the end of a show or movie, watch out for the "Promotional Consideration" or "Promotional Partners" to tell you which brands are working with the show

audience

Two or more receivers that decode a coded message

advertising (promotion mix)

a PAID NONPERSONAL communication about an organization and its products transmitted to a target audience through mass media - is 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 - used to promote goods, services, ideas, issues, and people - being highly flexible, can reach an extremely large target audience or focus on a small, precisely defined segment

personal selling (promotion mix)

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

For low-priced convenience items, marketers use:

advertising

Generally, promotion mixes for consumer products concentrate on:

advertising

sales promotion (promotion mix)

an activity or material that acts as a direct inducement (think of this like inducing labor...it means we want you to take action NOW), offering added value or incentive for the product to resellers, salespeople, or customers - examples: - free samples - games - rebates (money back or a gift card to spend at the same retailer) - sweepstakes (draw a name out of a hat, totally by chance you will win, no purchase necessary often) - contests - premiums (free or below cost item like the prize in a Cracker Jack box or the free tote Victoria Secret gives you when you spent $75 this weekend) - coupons (most widely used promotional tool)

reinforcement advertising

assures current users that they have made the right brand choice and tells them how to get the most satisfaction from the product

Public relations appears in promotion mixes for both:

business and consumer products

advertising and sales promotions are used extensively for:

consumer convenience items

personal selling is used extensively for:

consumer durables - home appliances, automobiles, and houses

A combative promotional objective is used most often by firms in:

extremely competitive consumer markets

The problem of media availability becomes 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

Push and pull policies are NOT:

mutually exclusive; at times, an organization uses both simultaneously

publicity

nonpersonal communication in news-story form about an organization or its products, or both - transmitted through a mass medium at no charge - is a component of public relations

High-priced products call for:

personal selling

Generally, promotion mixes for business products concentrate on:

personal selling - Marketers of business products use some advertising and occasionally sales promotion to promote products

For maximum benefit from promotional efforts, marketers strive for:

proper planning, implementation, coordination, and control of communications

major goal of integrated marketing communications (IMC) is to:

send a consistent message to customers

intensive distribution and promotion

uses advertising, sales promotion

reduce sales fluctuations (objectives of promotion)

•A business cannot operate at peak efficiency when sales fluctuate widely - holidays - seasonal products - 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 of the demand - A company may advertise that customers can be better served by coming in on certain days

promotion mix

•A combination of promotional methods used to promote a specific product - 4 elements: 1. advertising 2. personal selling 3. public relations 4. sales promotion - goals and resources will help us decide what mix we will utilize - called a MIX for a reason...we can't rely solely on one promotional tool to do all the work

availability of promotional methods

•A consideration that marketers explore when formulating a promotion mix is the availability of promotional techniques - A firm may find that no available advertising medium effectively reaches a certain target market - The problem of media availability becomes 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

disadvantages of advertising

•Absolute dollar outlay can be high •Rarely provides rapid feedback •Often difficult to measure its effect on sales •Less persuasive than personal selling •Has a limited time exposure

the 4 elements of the promotion mix

•Advertising •Personal selling •Public relations •Sales promotion

demographic characteristics (characteristics of target market)

•Age, income, education, etc., may affect the types of promotional techniques a marketer selects, as well as the messages and images employed

For existing products, promotional efforts may aim to increase awareness of:

•Brands •Product features •Image-related issues (such as organizational size or socially responsive behavior) •Operational characteristics (such as store hours, locations, and credit availability)

promotion

•Communication to build and maintain relationships by informing and persuading one or more audiences - Many organizations spend considerable resources on this to build and enhance relationships with current and potential customers as well as other stakeholders

growth and maturity stages of product life cycle and promotion

•Consumer products require heavy emphasis on advertising - Business products often call for a concentration of personal selling and some sales promotion

primary demand (stimulating demand)

•Demand for a PRODUCT CATEGORY rather than a specific brand - ex. got milk ad campaign

size (characteristics of target market)

•If the size is LIMITED, the promotion mix will probably emphasize PERSONAL SELLING, which can be very effective for reaching small numbers of people •When a product's market consists of millions of customers, organizations rely on ADVERTISING AND SALES PROMOTION, because these methods reach masses of people at a low cost per person

advantages of personal selling

•Involves more specific communication than advertising •Has greater impact on customers •Provides immediate feedback Absolutely certainty the message was received

disadvantages of personal selling

•Is expensive •Dr. Hamwi tells us the estimate cost for an average sales call is $500!

advantages of advertising

•Is extremely cost-efficient when it reaches a vast number of people at a low cost per person •Lets the source repeat the message several times •Visibility gained from advertising can enhance an organization's image

retain loyal customers (objectives of promotion)

•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: 1. Frequent-user programs 2. Special offers for existing customers (like getting access to a sale sooner than other consumers) - marketers not only advertise loyalty programs but also use reinforcement advertising, which assures current users that they have made the right brand choice and tells them how to get the most satisfaction from the product

decline stage of product life cycle and promotion

•Marketers decrease all promotional activities, especially advertising

exclusive distribution and promotion

•Personal selling is used

push channel policy

•Promoting a product only to the next institution down the marketing channel - Normally stresses personal selling

selecting promotion mix factors

•Promotion resources, objectives, and policies •Characteristics of the target market •Push and pull channel policies •Cost and availability of promotional methods - Characteristics of the product

facilitate reseller support (objectives of promotion)

•Strong relationships with resellers are important to a firm's ability to maintain a sustainable competitive advantage - Various promotional methods can help an organization achieve this goal: 1. Co-op: Sharing a portion of retailers' advertising expenses for promoting the products 2. Providing wholesalers and retailers with special offers and buying allowances 3. Working with retailers in the presentation and promotion of the products

communications channel

•The medium of transmission that carries coded message from the source to the receiver - Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication

public relations (promotion mix)

•a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders - A component of public relations is publicity: - nonpersonal communication in news-story form about an organization or its products, or both - transmitted through a mass medium at no charge - should be viewed as an ONGOING PROGRAM rather than a set of tools to be used only during crises - uses a variety of tools: - annual reports - brochures - event sponsorships - sponsorship of socially responsible programs - publicity - news releases - press conferences - feature articles