Chap013

CHAPTERCHAPTERCHAPTER

Integrated Marketing Communications: Promotional Strategy, Advertising, Sales Promotion, and Public Relations

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Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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LEARNING OBJECTIVES

Appreciate the significance of the concept of Integrated Marketing Communications (IMC) and its impact on marketing management.

Identify the elements of the promotion mix and the pros and cons of each element.

Connect the concept of the communication process model and the AIDA model to important issues in promotional strategy.

Describe the components of the marketing manager’s role in promotional strategy.

Understand key concepts of advertising, sales promotion, and public relations as they pertain to marketing management.

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INTRODUCTION TO PROMOTION AND INTEGRATED MARKETING

COMMUNICATIONSPromotion involves various forms of

communication to inform, persuade, or remind.

Promotion mix

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THE RISE OF INTEGRATED MARKETING COMMUNICATIONS (IMC)

IMC is a strategic approach to communicating the brand and company message to targeted customers in ways that are clear, concise, and consistent and yet are customizable as needed to maximize the impact on a particular audience.

IMC Decision MakingEXHIBIT 13.3

Advertising

Personal Selling

Direct and Interactiv

e Marketing

Public Relations

Sales Promotion

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INTRODUCTION TO PROMOTION AND INTEGRATED MARKETING

COMMUNICATIONSIMC and the Promotion Mix

◦ What kinds of decisions are involved in developing and executing IMC strategy?

Illustrative Factors Influencing IMC StrategyEXHIBIT 13.4

Source: Reprinted from David W. Cravens and Nigel F. Piercy, Strategic Marketing, 8th ed, 2006. Copyright © 2006 The McGraw-Hill Companies Inc.

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Selected Pros and Cons of Individual Promotion Mix Elements

EXHIBIT 13.5

Promotion Mix Element Pros Cons

Advertising Many media choices Efficiently reach large numbers of customers Great creative flexibility

Shotgun approach reaches many outside the target

Oversaturation of ads lessens impact High production costs

Sales Promotion Stimulates purchase directly through incentive to buy

Serves as an effective accompaniment to other promotion forms

Can lead customers to continually wait for the next coupon, rebate, etc.

Brand may be impacted by price-cutting image

Public Relations Unpaid communication seen as more credible than paid forms

Association of offering with quality media outlet enhances brand

Low control of how the message turns out Highly labor intensive cost of mounting PR

campaigns

Personal Selling Strong two-way communication of ideas Directly ease customer confusion and persuade

purchase

Very expensive cost per customer contact Salesperson may go “off message” from brand

in order to secure the sale

Direct and Interactive Marketing

Message customization without high costs of personal selling

Strong relationship building especially when customer can control the interaction

SPAM and other unwanted correspondence when targeting is poorly executed

Reliance on CRM and database marketing requires constant updating

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INTRODUCTION TO PROMOTION AND INTEGRATED MARKETING

COMMUNICATIONSIMC and the Promotion Mix

◦ In a push strategy, the focus is on the channel of distribution and in getting the offering into the channel.

◦ In a pull strategy, the focus shifts to stimulating demand for an offering directly from the end user.

Push and Pull Promotional StrategiesEXHIBIT 13.6

ProviderChannelMembers

EndUser

Channel members do their own advertising and selling to users

Push the offering through personal selling, and sales promotion

ProviderEnd User

Channel Members

Demand by end users trickles up through the channel, pulling product from the provider

Provider creates demand by end users through promoting directly to them

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INTRODUCTION TO PROMOTION AND INTEGRATED MARKETING

COMMUNICATIONSInternal Marketing and IMC

◦ Internal marketing is the application of marketing concepts and strategies inside an organization.

◦ When properly armed, employees can articulate what the firm and its offerings stand for in ways that nobody else can.

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HIERARCHY OF EFFECTS MODEL

Buyers often pass through purchase decision processes in three steps:

1. cognitive (learn)

2. affective (feel)

3. behavioral (do)

AIDA ModelEXHIBIT 13.7

Attention

Interest

Desire

Action

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Appropriateness of Promotion Mix Elements at AIDA StagesEXHIBIT 13.8

▲ = Generally Least Appropriate for Use▲▲▲ = Generally Most Appropriate for Use

PromotionMix Element

AttentionStage

InterestStage

DesireStage

ActionStage

Advertising ▲▲▲ ▲▲▲ ▲▲ ▲

Sales Promotion ▲▲ ▲▲ ▲▲▲ ▲▲▲

Public Relations ▲▲▲ ▲▲▲ ▲▲ ▲

Personal Selling ▲ ▲▲ ▲▲▲ ▲▲▲

Direct and Interactive Marketing

▲ ▲▲ ▲▲▲ ▲▲

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

Identify Targets for Promotion

Establish Goals for Promotion

Goals for PromotionEXHIBIT 13.10

Goal One: To Inform

• Indicate features when introducing new products or making product modifications

• Provide explanation of product functionality

• Articulate what a company and its brands stand for in order to develop a clear image

• Discuss various uses and applications for the product

Goal Two: To Persuade

• Impact customer perceptions of a product, especially in comparison to competitor’s products

• Get customers to try a product, hopefully resulting in a more permanent switch from a competitor

• Influence customers to purchase right now due to some strong benefit or need

• Drive customers to seek more information online or through a salesperson

Goal Three: To Remind

• Maintain a customer relationship with a brand

• Provide impetus for purchase based on some impending event

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

Select the Promotion Mix

◦ Nature of the Offering

◦ Stage of the Offering in the Product Life Cycle

Promotion Mix Decisions across The PLCEXHIBIT 13.11

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

Select the Promotion Mix

◦ Nature of the Market Level of heterogeneity of target customers

Level of geographic dispersion of target customers

Type of purchase decision to be made

Level and type of competition

◦ Available Budget

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

Develop the Message

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THE MARKETING MANAGER’S ROLE IN PROMOTIONAL STRATEGY

Select Media for Use in Promotion

Prepare Promotion Budget

Establish Measures of Results

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ADVERTISING

Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising wearout.

Beyond a certain ad spending level, diminishing returns tend to set in.

Market share stops growing – or even begins to decline – despite continued spending.

◦ Advertising Response Function

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TYPES OF ADVERTISING

Institutional Advertising

Product Advertising

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ADVERTISING EXECUTION AND MEDIA TYPES

Reach

Frequency

Advertising execution

Common Approaches to Advertising ExecutionEXHIBIT 13.13

Slice of Life Portrays regular people in everyday settings. The college student doing laundry with Tide in the Laundromat.

Humor Gains attention and interest through humorous portrayal. Budweiser’s famous frogs are not soon forgotten.

Mood/Affect Sets a positive tone around the offering. Sandals Resorts provide visual images to back their theme of “Luxury Included.”

Research Based Often used in comparative ads, a brand provides scientific evidence of its superiority. Listerine Whitening Strips dissolve faster than Crest Whitestrips.

Demonstration Physically shows how the product works. Efferdent tablets dropped into a glass of water to clean dentures.

Musical Uses music or a specific song to connect directly to a brand or product. Mazda’s famous “Zoom, zoom, zoom” jingle became an integral part of their advertising.

Endorser Connects a celebrity, actor posing as an authority figure (with appropriate disclaimer), company officer, or everyday consumer with the product to sanction and support its use. Sally Field endorsing Boniva, the anti-osteoporosis drug.

Lifestyle Portraying ways a product will connect with a target customer’s lifestyle. Dodge Ram pickup trucks navigating through the back roads of .

Fantasy Creation Offers a fantasy look at how it might be if a customer purchases the product. Lamisil for toenail fungus portrays an idyllic social life for users once they stamp out that pesky fungus.

Animation and Animal

An animated character or an animal is featured in the ads, sometimes as a spokesperson. The GEICO Gecko.

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Pros and Cons of Key Advertising MediaEXHIBIT 13.14

Type of Media PROS CONS

Television Combines multimedia Appeals to multiple senses Works for both mass coverage or selected

markets Infomercial option

Impressions are fleeting Short shelf life Din (clutter) of competing ads TiVo effect – cutting out ads High cost

Radio Quick placement and high message immediacy

Easy selectivity by market and station programming

Low cost Geographic flexibility

Audio only Short shelf life Din of competing ads

Newspapers Flexible Timely Highly credible medium

Short shelf life Big city and national papers can be very

costly Poor reproduction quality, especially in color Low pass-along rate

Magazines Many titles, offers high geographic, demographic, and lifestyle selectivity

Good reproduction quality and color High pass-along rate

Long lead time for ad placement due to production

Final location of ad within the publication often cannot be guaranteed

Outdoor Repeat exposure in heavy traffic areas Relatively low cost Fewer competing ads Easy geographic targeting

Space and structure limits creative execution

Sometimes requires longer than desired commitments to a location

Public discontent over environmental clutter

Direct Mail High audience selectivity Creates feel of one-to-one marketing Flexible

Overuse and “junk mail” image Too many competing ads Relatively high cost

Internet Interactive capabilities Flexible Timely Low cost per exposure

Reader in control of exposure (click-through)

SPAM Variations in connectivity speed and

computers

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THE ROLE OF THE CREATIVE AGENCY

Advertising and PR are among the most outsourced functions in marketing, and with good reason.

Most organizations naturally focus on their own product or service expertise, thus developing sufficient internal expertise

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SALES PROMOTION

Sales Promotion to Consumers

Sales Promotion to Channel Members

◦ Trade Show

◦ Cooperative Advertising and Promotion

Consumer Sales Promotion OptionsEXHIBIT 13.15

Sales Promotion Approach Description Comments Example

Product sampling A physical sample of the product is given to consumers.

Excellent for inducing trial. Sample can be received by mail or in a store.

Gillette sends out a free razor to induce switching from an older model.

Coupons An instant price reduction at point of sale, available in print media, online, or in-store.

Coupons usage is generally down among consumers. Still a good inducement to “buy now.”

Inside the free razor you received from Gillette you find a coupon for $1.00 off the purchase of your next pack of blades.

Rebates A price reduction for purchase of a specific product during a specific time period.

Possibly instant at point of sale, but more frequently requires submission and delay in processing.

Sharpe offers a $100 rebate through Best Buy for purchase of a flat screen television during the month of February.

Contests and sweepstakes

Appeal to consumers’ sense of fun and luck. May suggest a purchase but legally must be offered without a purchase requirement.

Contests require some element of skill beyond mere chance. Sweepstakes are pure chance.

McDonald’s famous Monopoly game – the more you eat, the more you play (and vice-versa!).

Premiums Another product offered free for purchasing the brand targeted in the promotion.

Gives the customer a bonus for purchase. Products may be complementary or unrelated.

Burger King offers the latest Spider Man toy with purchase of a meal.

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Consumer Sales Promotion OptionsEXHIBIT 13.15

Sales Promotion Approach Description Comments Example

Multiple-purchase offers

Incentive to buy more of the brand at a special price.

Typically “buy 2, get 1 free” or similar.

Centrum Vitamin offer – buy a bottle of 100, get an extra mini-bottle of 20.

Point-of-purchase materials

Displays set up in a retail store to support advertising and remind customers to purchase

Especially good at driving purchase toward a featured brand in a product category at the store aisle.

Standup display and front window poster in Blockbuster of the latest DVD release.

Product placements

Having product images appear in movies, on television, or in photographs in print media.

Strong connections with the show or story, as well as to any associated celebrities.

Coca-Cola cups always on the desks of the American Idol judges.

Loyalty programs Accumulate points for doing business with a company. Designed to strengthen long-term customer relationships and reduce switching.

Especially popular among the airline and hospitality industry. Credit cards providers often facilitate.

American Airlines AAdvantage program, facilitated by CitiCard MasterCard and American Express cards.

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PUBLIC RELATIONS (PR)

PR is a systematic approach to influencing attitudes, opinions, and behaviors of customers and others.

PR is often executed through publicity, which is an unpaid and relatively less personal form of marketing communications usually through news stories and mentions at public events.

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MAJOR RESPONSIBILITIES OF A PR DEPARTMENT

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PUBLIC RELATIONS

Gaining Product Publicity and Buzz

Securing Event Sponsorships

Crisis Management