Chapter Sixteen

1. Chapter Sixteen Developing Integrated Marketing Communications

2. What Is Integrated Marketing Communications? • Coordination of promotion efforts for maximum informational and persuasive impact on customers • Results in a consistent message to customers, long-term customer relationships, and the efficient use of promotional resources • Mass media advertising has given way to targeted promotional tools (e.g., cable TV, direct mail, and the Internet) • The overall cost of marketing communications has risen significantly, pressuring managers to make the most efficient use of marketing resources

3. The Promotion Mix • The particular combination of promotion methods a firm uses to reach a target market • Advertising • A paid nonpersonal message communicated to a select audience through a mass medium • Personal selling • Personal communication aimed at informing customers and persuading them to buy a firm’s products • Sales promotion • The use of activities or materials as direct inducements to customers or salespersons • Public relations • Communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external

4. Types of Advertising by Purpose • Primary-Demand Advertising • Used to increase demand for all brands of a product in a specific industry • Selective-Demand (Brand) Advertising • Used to sell a particular brand of product • Immediate-response advertising • To persuade customers to buy the product within a short time • Reminder advertising • To keep the firm’s name fresh in the public’s mind • Comparative advertising • Compares specific characteristics of two or more brands to show the advertiser’s brand is better • Institutional advertising • Designed to enhance a firm’s image or build its reputation

5. Growth of Advertising Expenditures and Employment in Advertising Source: Advertising Age, May 13, 2002; and U.S. Department of Labor, Bureau of Labor Statistics, Employment and Earnings, April 2002.

6. Advertising Media • The forms of communication through which advertising reaches its audience • Newspapers • Relatively inexpensive and timely; short life span • Magazines • Reach a specific market segment; more prestigious than newspapers; high cost; lack of timeliness • Direct Mail • Most selective; effectiveness can be measured; email

7. Advertising Media (cont’d) • Yellow Pages Advertising • Print and online; local; purchased for 1 year • Out-of-Home Advertising • Short promotional messages on billboards, posters, signs, and vehicles; focuses on geographic area; fairly inexpensive • Television • The primary medium for larger firms trying to reach national or regional markets • Network time; local time; sponsoring a show; spot time; infomercials

8. Advertising Media (cont’d) • Radio • Offers selectivity; most accessible medium; can be less expensive than other media • Internet • Increasingly popular; can be expensive; potentially large audience; can target precisely; effectiveness is questionable • Banner and button ads; sponsorship ads; keyword ads; interstitials

9. Distribution of Advertising Expenditures among Various Advertising Media Source: “Coen’s Spending Totals for 2001,” www.adage.com/datacenter.coms, May 13, 2002.

10. Top 10 National Advertisers • General Motors Corp. • Procter & Gamble Co. • Ford Motor Co. • PepsiCo • Pfizer • DaimlerChrysler • AOL Time Warner • Philip Morris Cos. • Walt Disney Co. • Johnson & Johnson Source: Advertising Age, June 24, 2002.

11. Social and Legal Considerations in Advertising • Criticisms • Advertising is wasteful • Advertising is deceptive • Benefits • Advertising is the most effective and least expensive means of communicating to a large number of individuals and organizations • Advertising encourages and is a means of competition; it thus leads to new/better products, more choice, lower prices • Advertising revenues support our mass communication media • Advertising provides job opportunities

12. Personal Selling • The most adaptable promotion method • The most expensive promotion method • Kinds of salespersons • Order getter • Responsible for creative selling: selling a firm’s products to new customers and increasing sales to present customers • Order taker • Handles repeat sales in ways that maintain positive relationships with customers

13. Personal Selling • Kinds of salespersons (cont’d) • Sales support personnel • Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service • Missionary salespersons • Visit retailers to encourage an initial purchase of the manufacturer’s products from wholesalers • Trade salespersons • Work with customers to promote and increase retail sales of the manufacturer’s products • Technical salespersons • Assist current customers with technical matters related to the manufacturer’s products

14. Sales Promotion • Activities or materials that are direct inducements to customers or salespersons • Objectives • To draw new customers • To encourage trial of a new product • To invigorate the sales of a mature brand • To boost sales to current customers • To reinforce advertising • To increase traffic in retail stores • To steady irregular sales patterns • To build up reseller inventories • To neutralize competitive promotional efforts • To improve shelf space and displays

15. Sales Promotion Methods (cont’d) • Rebate • A return of part of the purchase price of a product • Coupon • Reducing the purchase price of a particular item by a stated amount at the time of purchase • Sample • A free product given to customers to encourage trial • Premium • A gift a producer offers to a customer in return for buying its product • Frequent-user incentives • A program that rewards customers who engage in repeat (frequent) purchases

16. Sales Promotion Methods (cont’d) • Point-of-purchase displays • Promotional material in the retail store designed to inform customers and encourage purchases • Trade shows • Industry-wide exhibits at which many sellers display their products • Buying allowance • A temporary price reduction to resellers for purchasing specified quantities of a product • Cooperative advertising • A manufacturer agrees to pay a certain amount of the retailer’s media cost for advertising the manufacturer’s product

17. Public Relations • A broad set of communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external • Customers, employees, stockholders, suppliers, educators, the media, government officials, society in general • Types of public relations tools • Written and spoken communications • Brochures, newsletters, company magazines, annual reports, news releases, corporate-identity materials, speeches • Event sponsorship • Special events such as concerts and charity functions that the firm underwrites wholly or partially

18. Promotion Planning • Promotional campaign • A plan for combining and using the four promotional methods—advertising, personal selling, sales promotion, and public relations—in a particular promotion mix to achieve one or more marketing goals • What will be the role of promotion in the overall marketing mix? • To what extent will each promotional method be used in the promotion mix?

19. Promotion and Marketing Objectives • Providing product information to target markets • Increasing market share by convincing new customers to purchase the product • Positioning the product relative to the images customers have of competing products • Stabilizing sales by increasing sales during slack periods or for products that are declining

20. Developing the Promotion Mix • Marketers may use several promotion mixes at the same time for different products • The promotion mix ingredients depend on • Organizational resources and objectives • Target market characteristics • Product characteristics • The cost and availability of promotional methods