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
