McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Advertising, Sales Promotion, Public Relations, Direct Marketing, Personal Selling,

McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved

Advertising, Sales Promotion, Public Relations, Direct Marketing, Advertising, Sales Promotion, Public Relations, Direct Marketing, Personal Selling, Integrated Marketing Communications, Personal Selling, Integrated Marketing Communications,

Awareness, Comprehension, Conviction, Ordering, Percent of Awareness, Comprehension, Conviction, Ordering, Percent of Sales, Per-Unit expenditure, All You Can Afford, Competitive Sales, Per-Unit expenditure, All You Can Afford, Competitive

Parity, The Research and Task Approaches, Encoding, Decoding, Parity, The Research and Task Approaches, Encoding, Decoding, Reach, Average Frequency, Push and Pull Strategies, Trade Reach, Average Frequency, Push and Pull Strategies, Trade

Promotions, Consumer Promotions, Frequency Marketing Promotions, Consumer Promotions, Frequency Marketing ProgramsPrograms

Integrated Marketing Communications: Integrated Marketing Communications: Advertising, Sales Promotion, Public Advertising, Sales Promotion, Public Relations, and Direct MarketingRelations, and Direct Marketing

Chapter 8Chapter 8

Key TermsKey Terms

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Strategic Goals Of Marketing Strategic Goals Of Marketing CommunicationCommunication

Create awarenessCreate awareness Build positive imagesBuild positive images Identify prospectsIdentify prospects Build channel relationshipsBuild channel relationships Retain customersRetain customers

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Promotional MixPromotional Mix

Concept refers to the combination and types of Concept refers to the combination and types of nonpersonal and personal communication the nonpersonal and personal communication the organization puts forth during a specified periodorganization puts forth during a specified period

Nonpersonal formsNonpersonal forms AdvertisingAdvertising Sales promotionSales promotion Public relationsPublic relations Direct marketingDirect marketing

Personal formsPersonal forms Personal sellingPersonal selling

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Promotional MixPromotional Mix

Advertising – Paid form of nonpersonal Advertising – Paid form of nonpersonal communications transmitted through a mass medium communications transmitted through a mass medium to target audienceto target audience

Sales promotion – Activity or material offering a direct Sales promotion – Activity or material offering a direct inducement for purchasing a productinducement for purchasing a product

Public relations – Nonpersonal form of communication Public relations – Nonpersonal form of communication seeking to influence attitudes, feelings, and opinionsseeking to influence attitudes, feelings, and opinions PublicityPublicity

Direct marketing – Direct forms of communication with Direct marketing – Direct forms of communication with customerscustomers

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Promotional MixPromotional Mix

Personal selling – Face-to-face communication Personal selling – Face-to-face communication with potential buyers to inform and persuadewith potential buyers to inform and persuade

Firms should take into account three basic factors Firms should take into account three basic factors when devising its promotion mix:when devising its promotion mix: The role of promotion in the overall marketing mixThe role of promotion in the overall marketing mix The nature of the productThe nature of the product The nature of the marketThe nature of the market

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Integrated Marketing ApproachIntegrated Marketing Approach

Goal is to develop marketing communications Goal is to develop marketing communications programs that coordinate and integrate all elements of programs that coordinate and integrate all elements of the promotion mix to present a consistent messagethe promotion mix to present a consistent message

Seeks to manage all sources of brand or company Seeks to manage all sources of brand or company contacts with existing and potential customerscontacts with existing and potential customers

Potential buyers go through a process ofPotential buyers go through a process of Awareness of the productAwareness of the product Comprehension of what it can do and important featuresComprehension of what it can do and important features Conviction that it has value for themConviction that it has value for them Ordering on the part of a sufficient number of potential Ordering on the part of a sufficient number of potential

buyersbuyers

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Integrated Marketing ApproachIntegrated Marketing Approach

How Various Promotion Tools Might Contribute to the Purchase How Various Promotion Tools Might Contribute to the Purchase of a Hypothetical Productof a Hypothetical Product

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Some Differences between Traditional Marketing Some Differences between Traditional Marketing Communication Efforts and Integrated Marketing Communication Efforts and Integrated Marketing

CommunicationsCommunications

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Advertising: Planning and StrategyAdvertising: Planning and Strategy

ObjectivesObjectives Generalist viewpoint – Concerned with sales, profits, and Generalist viewpoint – Concerned with sales, profits, and

return on investmentreturn on investment Middle viewpoint – Sees advertising as a competitive Middle viewpoint – Sees advertising as a competitive

weaponweapon Specialist viewpoint – Concerned with the effects of Specialist viewpoint – Concerned with the effects of

specific ads or campaignsspecific ads or campaigns In the long run and often in the short run, advertising is In the long run and often in the short run, advertising is

justified on the basis of the revenue it producesjustified on the basis of the revenue it produces Approach that aids intelligent decision making is neededApproach that aids intelligent decision making is needed

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Developing Advertising Objectives: Developing Advertising Objectives: Nine QuestionsNine Questions

Does the advertising aim at immediate sales?Does the advertising aim at immediate sales? Does the advertising aim at near-term sales?Does the advertising aim at near-term sales? Does the advertising aim at building a long-range Does the advertising aim at building a long-range

consumer franchise?consumer franchise? Does the advertising aim at helping increase sales?Does the advertising aim at helping increase sales? Does the advertising aim at some specific step that Does the advertising aim at some specific step that

leads to a sale?leads to a sale?

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Developing Advertising Objectives: Developing Advertising Objectives: Nine QuestionsNine Questions

How important are supplementary benefits of How important are supplementary benefits of advertising?advertising?

Should the advertising impart information needed to Should the advertising impart information needed to consummate sales and build customer satisfaction?consummate sales and build customer satisfaction?

Should advertising build confidence and goodwill for the Should advertising build confidence and goodwill for the corporation?corporation?

What kind of images does the company wish to build?What kind of images does the company wish to build?

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Advertising DecisionsAdvertising Decisions

Key decisions to be made includeKey decisions to be made include Determining the size of the advertising budgetDetermining the size of the advertising budget Allocation of the advertising budgetAllocation of the advertising budget

Important to remember that brand equity and consumer Important to remember that brand equity and consumer preference for brands drive market sharepreference for brands drive market share

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The Expenditure QuestionThe Expenditure Question

Percent of sales – A percentage figure is taken and Percent of sales – A percentage figure is taken and applied to either past or future salesapplied to either past or future sales

Per-unit expenditure – A fixed monetary amount is Per-unit expenditure – A fixed monetary amount is spent on advertising for each unit of the product spent on advertising for each unit of the product expected to be soldexpected to be sold

All you can afford – Advertising budget is established All you can afford – Advertising budget is established as a predetermined share of profits or financial as a predetermined share of profits or financial resourcesresources

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The Expenditure QuestionThe Expenditure Question

Competitive parity – Advertising budgets are based Competitive parity – Advertising budgets are based on those of competitors or other members of the on those of competitors or other members of the industryindustry

Research approach – Advertising budget is argued for Research approach – Advertising budget is argued for and presented on the basis of research findingsand presented on the basis of research findings

Task approach – Initially formulates the advertising Task approach – Initially formulates the advertising goals and defines the tasks to accomplish these goalsgoals and defines the tasks to accomplish these goals Management determines how much it will cost to Management determines how much it will cost to

accomplish each task and adds up the totalaccomplish each task and adds up the total

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Preparing the Advertising Campaign:Preparing the Advertising Campaign:The Eight-M FormulaThe Eight-M Formula

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The Allocation Question: Message The Allocation Question: Message StrategyStrategy

To be effective, the advertising message should meet To be effective, the advertising message should meet two general criteriatwo general criteria It should take into account the basic principles of It should take into account the basic principles of

communicationcommunication It should be predicated upon a good theory of consumer It should be predicated upon a good theory of consumer

motivation and behaviormotivation and behavior The basic communication process involves three The basic communication process involves three

elementselements Sender or source of the communicationSender or source of the communication Communication or messageCommunication or message Receiver or audienceReceiver or audience

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The Allocation Question: Message The Allocation Question: Message StrategyStrategy

Encoding – Translating the product idea or marketing Encoding – Translating the product idea or marketing message into an effective admessage into an effective ad

Decoding – Perceiving content of the message to be Decoding – Perceiving content of the message to be the same as the intended contentthe same as the intended content

A relationship between advertising and consumer A relationship between advertising and consumer behavior existsbehavior exists

End goal of an advertisement and its associated End goal of an advertisement and its associated campaign is to move the buyer to a decision to campaign is to move the buyer to a decision to purchase the advertised brandpurchase the advertised brand

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The Allocation Question: Media MixThe Allocation Question: Media Mix

Cost per thousand – Generally refers to the dollar Cost per thousand – Generally refers to the dollar cost of reaching 1,000 prospectscost of reaching 1,000 prospects ““Positive effects” theory – States that the more the Positive effects” theory – States that the more the

viewers are involved in a television program, the viewers are involved in a television program, the stronger they will respond to commercialsstronger they will respond to commercials

Reach – Number of different targeted audience Reach – Number of different targeted audience members exposed at least once to the advertiser’s members exposed at least once to the advertiser’s message within predetermined time framemessage within predetermined time frame

Average frequency – Number of times, on average, Average frequency – Number of times, on average, people are exposed to an ad within a given time people are exposed to an ad within a given time periodperiod

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The Allocation Question: Media MixThe Allocation Question: Media Mix

The marketer’s dilemma is to develop a media The marketer’s dilemma is to develop a media schedule that bothschedule that both Exposes a sufficient number of targeted customers Exposes a sufficient number of targeted customers

(reach) to the firm’s product(reach) to the firm’s product Exposes them enough times (average frequency) to the Exposes them enough times (average frequency) to the

product to produce the desired effectproduct to produce the desired effect

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Procedures for Evaluating Advertising Programs and Procedures for Evaluating Advertising Programs and Some Services Using the ProceduresSome Services Using the Procedures

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Sales PromotionsSales Promotions

Push marketing strategies – Involve aiming Push marketing strategies – Involve aiming promotional efforts at distributors, retailers, and sales promotional efforts at distributors, retailers, and sales personnel to gain their cooperation in ordering, personnel to gain their cooperation in ordering, stocking, and accelerating the sales of a productstocking, and accelerating the sales of a product

Pull marketing strategies – Involve aiming promotional Pull marketing strategies – Involve aiming promotional efforts directly at customers to encourage them to ask efforts directly at customers to encourage them to ask the retailer for the productthe retailer for the product

Trade sales promotions – Aimed at distributors and Trade sales promotions – Aimed at distributors and retailers of productsretailers of products

Consumer promotions – Fulfill several distinct Consumer promotions – Fulfill several distinct objectives for the manufacturerobjectives for the manufacturer

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Sales PromotionsSales Promotions

Example of Sales Promotion ActivitiesExample of Sales Promotion Activities

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Sales PromotionsSales Promotions

Push versus Pull Strategies in Marketing CommunicationsPush versus Pull Strategies in Marketing Communications

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Sales PromotionsSales Promotions

Some Commonly Used Forms of Consumer PromotionsSome Commonly Used Forms of Consumer Promotions

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Sales PromotionsSales Promotions

Sales promotions can oftenSales promotions can often Involve competitive retaliationInvolve competitive retaliation Devalue image of promoted brand in consumer’s eyesDevalue image of promoted brand in consumer’s eyes

Not used as sole promotional tool due to its inability toNot used as sole promotional tool due to its inability to Always generate long-term buyer commitment to a brandAlways generate long-term buyer commitment to a brand Change, except temporarily, declining sales of a productChange, except temporarily, declining sales of a product Convince buyers to purchase an unacceptable productConvince buyers to purchase an unacceptable product Make up for a lack of advertising or sales supportMake up for a lack of advertising or sales support

Frequency marketing programs – Consumers are Frequency marketing programs – Consumers are rewarded or purchases of products or services over a rewarded or purchases of products or services over a sustained period of timesustained period of time

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Some Objectives of Sales PromotionSome Objectives of Sales Promotion

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Public RelationsPublic Relations

News release or press release – Announcement News release or press release – Announcement regarding changes in organization or the product lineregarding changes in organization or the product line

News conference – Meeting held for representatives News conference – Meeting held for representatives of the media to announce major news eventsof the media to announce major news events

Sponsorship – Providing support for and associating Sponsorship – Providing support for and associating organization’s name with events, programs, peopleorganization’s name with events, programs, people

Public service announcements – Many nonprofit Public service announcements – Many nonprofit organizations rely on the media to donate time for organizations rely on the media to donate time for advertising for contributions and donorsadvertising for contributions and donors

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Direct MarketingDirect Marketing

OnlineOnline Direct MailDirect Mail CatalogsCatalogs Direct Response AdvertisingDirect Response Advertising Personal SellingPersonal Selling