24/10/20151 INTEGRATED MARKETING COMMUNICATIONS Dr. Vesselin Blagoev.

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INTEGRATED INTEGRATED MARKETING MARKETING

COMMUNICATIONSCOMMUNICATIONSDr. Vesselin Blagoev

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Communications MixCommunications MixWe call

Marketing communications mix or Promotion mix

the specific mix of advertising, sales promotion, personal selling, and public relations that a company uses to pursue its advertising and marketing objectives

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Promotion MixPromotion MixAdvertising

Agency, Media, Effectiveness

Public RelationsCompany image, Contributions,

Lobbing

Sales Promotion

Point-of-salesPackagingSamplesCouponsContests

Direct mail

Personal SellingSales force

ManagementControl

Promotionmix

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Marketing Marketing Communications SystemCommunications System

Producer

AdvertisingSales promotionPersonal sellingPublic relations

AdvertisingSales promotionPersonal sellingPublic relations

Middlemen

ConsumersWord ofmouthPublics

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Elements in the Elements in the Communication ProcessCommunication Process

Sender Encoding

Media

Message Decoding Receiver

Noise

Feedback Response

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Functions of AdvertisingFunctions of AdvertisingTo differentiate products from

their competitorsTo communicate product

informationTo urge product useTo expand product distributionTo increase brand preference

and loyaltyTo reduce overall sales costs

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How to classify advertisingHow to classify advertisingBy Media Used

A/ Print D/ Out of Home– Newspaper - Outdoor (posters,…) – Magazine - Transit (busses, trams)

B/ Electronic E/ Internet– Radio - Web sites, blogs,

podcasts– Television - E-mailing– Channels - Banners

C/ Direct Mail F/ Directories

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How to Classify AdvertisingHow to Classify AdvertisingBy Purpose

Product vs. Nonproduct (image oriented)

Commercial vs. NoncommercialPrimary demand vs. Selective

demand (for particular brand name)

Direct action vs. Indirect actionDirect – toll free phone numbers, coupons,

limited time offersIndirect – to build brand awareness

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AIDA ModelAIDA Model

Attention

Interest

Desire

Action

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Advertising ObjectivesAdvertising ObjectivesInformative advertising: for a new

product or feature, and to build a primary demandPersuasive advertising: to build

selective demand for a brand by persuading that it offers the best quality for money

Comparison advertising: one brand to another

Reminder advertising: think about the product

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Push and Pull StrategiesPush and Pull Strategies

Manufacturer

Wholesaler

Retailer

Consumer Consumer

Retailer

Wholesaler

Manufacturer

Pull Strategy Push Strategy

Pur

e F

orm

Pus

h

Mix

ed F

orm

Pus

h

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Buyer-Readiness StatesBuyer-Readiness States

Awareness Knowledge Liking

PurchaseConvictionPreference

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Current Consumer States Current Consumer States for Two Brandsfor Two Brands

100%market

100%market

100%market

Of these

80% aware

20% not aware

Of 80% aware

60% tried

40% did not try

20% satisfied

80% disappointed

Brand A

50% aware

50% not aware

50% tried

50% did not try

80% satisfied

Of these

Of 50% aware

Of those who tried

Of those who tried

Brand B

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Sales PromotionSales PromotionSales promotion (SP) consists of short-

term incentives to encourage purchase or sales of a product or service

Consumer promotion is SP designed to stimulate consumer purchasing

Trade promotion is SP designed to gain reseller support and to improve reseller selling efforts

Salesforce promotion is SP designed to motivate salesforce and make salesforce selling efforts more effective

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Consumer-Promotion ToolsConsumer-Promotion ToolsSamples: offers of a trial amount of a

productCoupons: certificates which give buyers

savings when they purchase specified products (over 220 billion coupons/year in the USA)

Rebates (Cash refund offers): like coupons except that the price reduction is done after the purchase and not in the retail outlet

Price packs (Cents-off deals): savings off regular price, marked by the producer on the label

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Consumer-Promotion ToolsConsumer-Promotion ToolsPremiums: goods offered either free or at low

price as an incentive to buy a product Patronage rewards: cash or other awards

for the regular use of a certain company’s products or services

Point-of-purchase (POP) promotions: displays, signs, posters and demonstrations at the point of sale

Contests and Games: give consumers the chance to win something by chance

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Trade-Promotion ToolsTrade-Promotion ToolsThey are mostly directed to the middle-

men (55%), than to consumers (45%):Straight Discounts (Price-off, Off-

invoice, Off-list): given by the producers for different reasons, often for a quantity of order

Advertising Allowances, or Display Allowances: they compensate the retailers for doing something, i.e. using special displays

Conventions, Trade Shows

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Personal sellingPersonal sellingThe work done by salesperson at different

positions: Deliver the product, such as bread, milk Inside order taker – department store

salesperson standing behind the counter Outside order taker – in the packing room Building goodwill or educating customers –

calling doctors on behalf of a pharmaceutical company

Technical knowledge – consulting the client Creative sale of tangible products – houses,

encyclopedia, or intangibles – insurance, or education

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Major Steps in Effective Major Steps in Effective Personal SellingPersonal Selling

Prospecting and qualifying

Presentation anddemonstration

Handlingobjections

Pre-approach

Closing

Approach

Follow-up

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Direct MarketingDirect MarketingTelemarketing: combines aspects of

advertising, marketing research and personal interview (telephone)

Relationship marketing: it costs 4-7 times as much to create a customer, as it does to maintain a customer

Integrated direct marketing (IDM): Marketing database

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Direct marketingDirect marketingMultiple-vehicle, multiple-stage campaign

Paid add

with a responsechannel

Direct mail

mechanism

Outbound telemarketing

Face-to-face

Sales call

Outbound TelemarketingOutbound TelemarketingA company who uses outbound calling as a way

to build a client base to sell a product or service is required by law to remove names from their contact list if the contact requests them to do so. It can be considered harassment under the statutes of law if a company repeatedly calls upon an individual or business for the purposes of solicitation once they have been asked to stop. 21/04/23 22

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Public RelationsPublic RelationsPress relations: Placing newsworthy

information into the news media to attract attention to a person, product, company

Product publicity: Publicizing specific products

Corporate communications: Creating communications to promote understanding of the firm or institution

Lobbying: Dealing with legislators and government officials to promote specific policy

Counseling: Advising managers about public issues and company positions and image

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Setting the Total Setting the Total Promotion Budget Promotion Budget

and Mixand Mix

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Relative Importance of Relative Importance of Promotion Tools in Promotion Tools in

Consumer vs. Industrial Consumer vs. Industrial MarketsMarkets

Advertising

Sales promotion

Personal selling

PR PR

Advertising

Sales promotion

Personal selling

Relative importance Relative importance

Consumer goods

Industrial goods

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How much to spend?How much to spend?

“I know that half of my advertising is wasted, but I don’t know which half. I spent $2 million for advertising, and I don’t know if that is half enough or twice too much.”

John Wanamaker

Department store magnate

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How much to spend?How much to spend?Promotion spending may be

20-30% of sales in the cosmetics industry and only 5-10% in the industrial machinery industry.

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Methods to set the Methods to set the Advertising BudgetAdvertising Budget

Affordable methodPercentage-of-Sales methodCompetitive-Parity methodObjective-and-Task Method

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Affordable methodAffordable methodSimpleIf the boss asks me how much we must

spend, and I answer a figure, given to me by the Finance Manager a day before, I am on a solid ground. I know that the boss will also call the Fin manager to ask him/her how much we can afford to spend this year.

Long-range planning is difficult

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Percentage-of-Sales MethodPercentage-of-Sales MethodPromotion spending is likely to vary with

what the company can affordIt helps to feel better the relationship

between the price, promotion, and salesIt supposedly creates competitive

stability – the direct competitors tend to spend a similar percentage of their sales on promotion

But …

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Percentage-of-Sales MethodPercentage-of-Sales MethodIt mistakenly views sales as the cause of

promotion, rather than as the resultThe budget is based on availability of

funds rather than on opportunitiesIt may prevent the increased spending

sometimes needed to turn falling sales around

Long-range planning is difficultNo other base for decision for the % but

the previous experience or competitors

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Competitive-Parity MethodCompetitive-Parity Method Some companies get industry

promotion-spending estimates from publications or other sources and set their budget on the industry average

First +: Competitors’ budgets represent the collective wisdom of the industry

Second +: Spending the same % helps to prevent promotion wars

Minus: Neither argument is valid

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Decoding in the Decoding in the Communication ProcessCommunication Process

Sender Encoding

Media

Message Decoding Receiver

Noise

Feedback Response