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1 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Integrated Marketing Communications ASHISH SINGH

Chapter 14: Integrated Marketing Communications:

2 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Chapter 14: Integrated Marketing Communications Objectives: Discuss the role of promotion in the marketing mix. Discuss the elements of the promotional mix. Describe the communication process. Explain the goal and tasks of promotion. Discuss the AIDA concept and its relationship to the promotional mix. Describe the factors that affect the promotional mix. Discuss the concept of integrated marketing communications.

Promotion:

3 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Inform Persuade Remind 1 Pontiac

Promotional Strategy:

4 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotional Strategy A plan for the optimal use of the elements of promotion: Advertising Public Relations Personal Selling Sales Promotion 1

The Role of Promotion:

5 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Overall Marketing Objectives Marketing Mix Product Distribution Promotion Price Target Market Promotional Mix Advertising Public Relations Personal Selling Sales Promotion Promotion Plan The Role of Promotion 1

Differential Advantage:

6 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Differential Advantage Unique Features Excellent Service Low Prices Rapid Delivery High Product Quality Features that Provide Differential Advantage 1

Promotional Mix:

7 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Advertising Public Relations Personal Selling Sales Promotion 2

Promotional Mix:

8 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning On Line http://www.nabiscoworld.com Promotional Mix Advertising Elements of the Promotional Mix Public Relations Personal Selling Sales Promotion 2

Advertising:

9 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. 2 Pepsi 1 Pepsi 2 Pepsi 3

Advertising Media:

10 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Media Traditional Advertising Media Electronic Advertising Media Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards Internet Electronic mail Interactive video 2 On Line http://www.olympics.org http://www.olympics.com

Advertising:

11 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advertising Advantages Reach large number of people Low cost per contact Can be micro- targeted Disadvantages Total cost is high 2

Public Relations:

12 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. 2

Public Relations:

13 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Public Relations Evaluates public attitudes Identifies areas of public interest Executes programs to “win” public Functions of Public Relations 2

Publicity:

14 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Publicity Public information about a company, good, or service appearing in the mass media as a news item. 2

Sales Promotion:

15 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. 2

Sales Promotion:

16 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion End Consumers Trade Customers Company Employees Sales Promotion Targets 2

Sales Promotion :

17 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons Popular Tools for Consumer Sales Promotion 2

Personal Selling:

18 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale. 2

Personal Selling:

19 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Personal Selling Traditional Selling Relationship Selling 2

Communication:

20 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Communication The process by which we exchange or share meanings through a common set of symbols. 3

Marketing Communication:

21 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Communication Categories of Communication Interpersonal Communication Mass Communication 3

The Communication Process:

22 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Communication Process As Senders As Receivers Inform Persuade Remind Develop messages Adapt messages Spot new communication opportunities 3

The Sender and Encoding:

23 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Sender and Encoding Sender Encoding The originator of the message in the communication process. The conversion of a sender’s ideas and thoughts into a message, usually in the form of words or signs. 3

The Communication Process:

24 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Communication Process Noise Sender Encoding Message Message Channel Message Channel Decoding Message Receiver 3

Characteristics of the Elements in the Promotional Mix:

25 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of the Elements in the Promotional Mix 3

Characteristics of Advertising:

26 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Advertising Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Advertising Indirect and non-personal Low Little Delayed One-way Yes Yes Fast Same message to all audiences 3

Characteristics of Public Relations:

27 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Public Relations Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, non-personal Moderate to low Little Delayed One-way No No Usually fast Usually no direct control 3

Characteristics of Sales Promotion:

28 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Yes Yes Fast Same message to varied target 3

Characteristics of Personal Selling:

29 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Yes Slow Tailored to prospect 3

Goals and Tasks of Promotion:

30 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informing Reminding Persuading Target Audience 4

Goals and Tasks of Promotion:

31 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informing Reminding Persuading Target Audience PLC Stages : Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity 4

Goals and Tasks of Promotion:

32 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Informative Objective Increase awareness Explain how product works Suggest new uses Build company image 4

Goals and Tasks of Promotion:

33 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Persuasion Objective Encourage brand switching Change customers’ perception of product attributes Influence buying decision Persuade customers to call 4

Goals and Tasks of Promotion:

34 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Goals and Tasks of Promotion Reminder Objective Remind customers that product may be needed Remind customers where to buy product Maintain customer awareness 4 On Line http://www.tide.com

The AIDA Concept:

35 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Attention Interest Desire Action 5

The AIDA Concept:

36 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The AIDA Concept A ttention I nterest D esire A ction 5 Taco Bell

AIDA and the Promotional Mix:

37 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning AIDA and the Promotional Mix Awareness Interest Desire Action Advertising Very effective Very effective Somewhat effective Not effective Public Relations Very effective Very effective Very effective Not effective Sales Promotion Somewhat effective Somewhat effective Very effective Somewhat effective Personal Selling Somewhat effective Very effective Very effective Very effective 5

Factors Affecting the Choice of Promotional Mix:

38 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Factors Affecting the Choice of Promotional Mix Nature of the Product Stage in PLC Target Market Factors Type of Buying Decision Promotion Funds Push or Pull Strategy 6

Nature of the Product:

39 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nature of the Product Product characteristics Business product vs. consumer product Costs and risks Social risk Factors that influence promotional mix 6

Stage in the Product Life Cycle:

40 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Stage in the Product Life Cycle Time Introduction Growth Maturity Decline Sales ($) 6

Product Life Cycle and the Promotional Mix:

41 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Product Life Cycle and the Promotional Mix Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising’ PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time 6

Target Market Characteristics:

42 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Target Market Characteristics FOR: Widely scattered market Informed buyers Repeat buyers Advertising Sales Promotion Less Personal Selling 6 On Line http://www.radioguide.com http://www.nytimes.com http://www.usatoday.com

Type of Buying Decision:

43 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Type of Buying Decision Advertising Sales Promotion Type of Buying Decision Affects Promotional Mix Choice Complex Routine Personal Selling Not Routine or Complex Advertising Public Relations 6

Available Funds:

44 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements 6

Push and Pull Strategies:

45 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Push and Pull Strategies Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Wholesaler demands product from manufacturer Orders to manufacturer PULL STRATEGY 6

Integrated Marketing Communications:

46 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Integrated Marketing Communications A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. IMC 7

IMC Popularity Growth:

47 Chap. 14 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning IMC Popularity Growth Proliferation of thousands of media choices Fragmentation of the mass market Slash of advertising spending in favor of promotional techniques 7

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