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Agribusiness project

INTEGRATED MARKETING COMMUNICATIONS


Trainer: Vladimir Pandurov
Learning Objectives
( day 1)

1. Discuss the concept of integrated


marketing communications - IMC

2. Discuss the elements of the IMC


(promotional) mix.

3. Describe the communication process.


Learning Objectives
( day 1)

4. Explain the goal and tasks of promotion.

5. Discuss the AIDA concept and its


relationship to the IMC mix.

6. Describe the factors that affect the IMC


mix.

7. Describe the IMC planning process.

8. Approaches to Determining
the Promotional Budget
Learning Objective 1

Discuss the concept of integrated


marketing communications - IMC
IMC definition(s) 1

Integrated Marketing Communications (IMC):


“is the coordination and integration of all marketing
communications tools, avenues, and sources within a
company into a seamless program that maximizes the
impact on consumer and other end users at a minimal
cost.”
Clow and Baack, 2004, p.8

– The concept under which a company integrates and


coordinates its many communications channels to
deliver a clear, consistent, and compelling message
about the organization and its products

Source: Marketing: An
introduction, Armstrong & Kotler
IMC definition(s) 1

The specific mix of advertising, personal selling, sales promotion,


and public relations a company uses to pursue its advertising and
marketing objectives.
Kotler

“IMC is capable of enhancing the holistic consumer


experience and creating a holistic brand value structure,
which can unite the consumer’s sensory, emotional, social
and intellectual experiences in a new and positive way.”
Tsai (2005)
IMC definition(s) 1
Integrated Marketing Communications

• Integrated Marketing Communications is the


integrated areas of marketing, advertising, sales
promotion, and public relations.
• There is a need for communications cross training as
a basic requirement to function as a practitioner.
The Need for Integrated
Marketing Communications 1
• The Marketing Communications Environment is
Changing:
– Mass markets have fragmented, causing marketers to
shift away from mass marketing
• Media fragmentation is increasing as well
– Improvements in information technology are facilitating
segmentation
- Increasingly difficult to target audiences & communicate
effectively
Consumers no longer passive recipients
They demand more than information
From a myriad of sources
The Need for Integrated
Marketing Communications 1
– Conflicting messages from different sources or promotional
approaches can confuse company or brand images
– The problem is particularly prevalent when functional specialists
handle individual forms of marketing communications
independently
– The Web alone cannot be used to build brands; brand awareness
potential is limited
– Best bet is to wed traditional branding efforts with the interactivity
and service capabilities of online communications
– Web efforts can enhance relationships
The Reason for Integrated
Marketing Communications 1

• A shifting of marketing dollars from media


advertising to other forms of promotion,
particularly consumer and trade-oriented sales
promotions.
– A movement away from relaying on advertising-focused
approaches, which emphasize mass media such as network
television and national magazines, to solve communication
problems.
– A shift in marketplace power from manufacturers to
retailers.
The Reason for Integrated
Marketing Communications 1

– The rapid growth and development of database


marketing.
– Demands for greater accountability from
advertising agencies and changes in the way
agencies are compensated.
– The rapid growth of the Internet, which is
changing the very nature of how companies do
business and the ways they communicate and
interact with consumers.
Traditional Approach to
Marketing Communications 1

Sales
Publicity Promotion
Point of
Purchase

Media Packaging
Special Adver-
Events tising Direct
Response
Public
Relations
Interactive
Direct Marketing
Marketing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin


Contemporary
IMC Approach 1

Sales Direct
Packaging
Promotion Response

Media
Point of
Purchase Adver-
Public
tising Relations
Publicity

Interactive
Marketing Direct
Special
Marketing
Events

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin


Traditional
Mass Marketing 1
Communication Model
IMC Communication Model
1
Some Differences between
Traditional Marketing
Communication Efforts and IMC
1
Marketing Revolution
and Shifting Tides 1
From Toward
Media
Media Advertising
Advertising Multiple
Multiple Forms
Forms of
of Communication
Communication

Mass
Mass Media
Media Specialized
Specialized Media
Media

Manufacturer
Manufacturer Dominance
Dominance Retailer
Retailer Dominance
Dominance

General
General Focus
Focus Data
Data Based
Based Marketing
Marketing

Low
Low Agency
Agency Accountability
Accountability Greater
Greater Agency
Agency Accountability
Accountability

Traditional
Traditional Compensation
Compensation Performance
Performance Based
Based Compensation
Compensation

Limited
Limited Internet
Internet Availability
Availability Widespread
Widespread Internet
Internet Availability
Availability
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
IMC - The Customer’s
Perspective 1

• Integrated marketing means approaching


communication issues from the customer’s perspective

– Consumers do not separate promotional material or


newspaper advertising or community responsiveness into
separate compartments

– They lump everything together to make judgments about


services and organizations
IMC - The Customer’s
Perspective 1

1. Integrated marketing communication is not about ads,


direct e-mail pieces, or public relations projects

– It is about understanding the consumer and what the consumer


actually responds to

– In other words, behavioral change is the communicators’ mission

– If the customer does not act, the communicator – and the


communication have failed
IMC - The Customer’s
Perspective 1

2. Organization can not succeed without good


relationship with their publics

– Organizations need relationships with their customers that


go beyond the pure selling of a product or service

– They need to build relationships

– As the world becomes more competitive in everything,


relationship building becomes more critical
IMC - The Customer’s
Perspective 1

3. Integrated marketing communications require


collaboration on strategy

– Not just on execution

– The entire communication function must be part of the


launch of a product, service, campaign or issue from its
inception

– Communicators must participate in the planning of a


campaign, not just in the implementation of
communication vehicles
IMC - The Customer’s
Perspective 1

4. Strategic plans must be clear on the role that each discipline


is to play in solving the problem

– The roles of advertising, marketing and public relations are different

– None of them can do everything by itself

– Therefore, although advertising might control the message

– Marketing and product promotion might provide support

– It is public relations that should provide credibility for the product


and even more important for the organization
IMC - The Customer’s
Perspective 1

5. Public relations is about relationships

– Public relations professionals can become proprietors of integrated


marketing communications

– The essence of public relations is building relationship between


institutions and its publics

– Public relations professionals more than any others, should lead the
integrated marketing initiative

– Such an understanding is pivotal to the successful rendering of


integrated marketing communications
IMC - The Customer’s
Perspective 1

6. To be players in integrated marketing communication,


public relations professionals need to practice more than
the craft of public relations

– Public relations people must expand their horizons, increase their


knowledge of their discipline

– Seek out and participate in interdisciplinary skills building

– Public relations professionals must approach their task to enhance


customer relationship through a strategy of total communication
Case Study
BMW MINI
Canada

• Marketing the anything-but-ordinary • Traditional print and outdoor


car presented big challenges. advertising followed next: “parks as
• The MINI is a tiny but potent car faster than a Ferrari”, “Onramps are
that has a retro 60s look. foreplay”, and “The world is your go-
• kart track”.
Canadians tend to be serious about
their cars. • Ads were placed everywhere
• The marketing team concluded that • Edgy and humorous TV spots were
In Canada the car performance also used.
was the main attribute to stress. • Other components: “Velocity” parties,
• BMW choose Taxi as its advertising online contests, driving events, and
agency. investments in showroom
improvements.
• Taxi created an integrated strategy • Hip dealerships were selected and
with unified brand personality: “The trained in a new soft-sell approach.
MINI is an individualistic, high-
performance, premium vehicle • Product placement in the remake of
that’s fun to drive.” The Italian Job, online marketing, and
publicity.
• The campaign began with a 60-
second movie theatre spot called • Finally word of mouth.
“Anthem”. • The campaign was a huge success
and annual sales goals were
exceeded.
14-25
Creative
Outdoor Communication 1
Humor
Learning Objective 2

Discuss the elements


of the IMC mix
(promotional mix).
The IMC mix 2
Advertising
Advertising

Direct
Direct Marketing
Marketing

Interactive/
Interactive/
Internet
Internet Marketing
Marketing

Sales
Sales Promotion
Promotion

Publicity/Public
Publicity/Public
Relations
Relations

Personal
Personal Selling
Selling
The IMC mix 2
Advertising

Impersonal, one-way
mass communication
about a product or
organization that is
paid for by a marketer.
The IMC mix 2
Advertising Media

Traditional
Traditional Electronic
Electronic
Advertising
Advertising Media
Media Advertising
Advertising Media
Media
 Television  Internet
 Radio  Computer modems
 Newspapers  Fax machines
 Magazines
 Books
 Direct mail
 Billboards
 Transit cards
The IMC mix 2
Advertising
Advantages Disadvantages

• Ability to reach large • Total cost is high


number of people
• Impersonal; one-way
• Cost per contact is low communication
(no feedback from
• Ability to repeat message audience)
with frequency

• Can be micro-targeted
Creative
Outdoor Communication
DEVELOPING AN
ADVERTISING CAMPAIGN 2

Design
Creative
Strategy

Evaluate
Select Determine Determine
Advertising
Target Advertising Advertising
Effective-
Market Objectives Budget
ness

Select &
Schedule
Media
ADVERTISING
STRATEGY 2
• MESSAGE STRATEGIES
 Objective vs. Subjective Messages
 Comparative Message Techniques
 Emotional Techniques: Mood, Fear, Humor
 Celebrity Endorsements vs. Non-Celebrity Images

• MEDIA STRATEGIES
 Broadcast: Television, Radio
 Print: Newspapers, Magazines, Journals
 Specialized: Outdoor, Transit, Direct Mail, Internet
ADVERTISING
STRATEGY 2

• RELATIVE STRENGTHS AND WEAKNESSES OF


STRATEGIES
 Effectiveness and Efficiency: Reach and
Frequency
 Target Capabilities
 Cost
 Believability
 Appropriateness for Message (Image, Details)
ADVERTISING
STRATEGY 2
Reach & Frequency

• Reach: number of different target consumers who


are exposed to a message at least once during a
specific period of time
• Frequency: number of times an individual is exposed
to a given message during a specific period of time
• Cost per contact: cost of reaching one member of
the target market
– Allows comparison across advertising strategy
vehicles
EVALUATING
ADVERTISING
EFFECTIVENESS
2

Tools:
Pretesting
Pretesting •Focus Groups
•Screening
•Persuasion Scores

Tools:
Posttesting
Posttesting •Unaided Recall Tests
•Aided Recall Tests
•Inquiry Evaluations

Sales
Sales Effectiveness
Effectiveness Tools:
Evaluations
Evaluations •Monitor Sales
The IMC mix 2
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.
PUBLIC RELATIONS 2
• EFFORTS TO IMPROVE AND MANAGE RELATIONSHIPS
WITH PUBLICS
– Customers
– Stock Holders
– Community
– Government
– News Media
• PUBLICITY
– Not Overtly Sponsored
– High Credibility
PUBLIC RELATIONS 2
Public Relations

Functions
Functions of
of
Public
Public Relations
Relations

Executes
Executes
Evaluates
Evaluates public
public programs
programs to
to
attitudes
attitudes “win”
“win” public
public
Identifies
Identifies areas
areas
of
of public
public interest
interest
Strengths of public
relations 2
Good
citizenship Advice on
Crisis important tre
manage nds
ment
Public
Difficult-to-
relations reach audienc
Message es
flexibility
More
Cost objective
effective
Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den 2000.
Marketing Communications Essex, England : Pearson Education Ltd. pp. 240.
Weaknesses of public
relations 2

Effectiveness
hard Lack of
to measure control

Public relations

Journalists as
gatekeepers

Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den 2000.
Marketing Communications Essex, England : Pearson Education Ltd. pp. 249.
Trends and challenges in
public relations 2

Measurin
Bad g effect Good employee
reputatio relation
n
Corporate
Specialization branding
PR
Growing
consumer aw
Globalization
areness
Single-issue
New
publics
technologies

Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den 2000.
Marketing Communications Essex, England : Pearson Education Ltd. pp. 249.
The IMC mix 2
Personal Selling

Planned presentation to
one or more prospective buyers for
the purpose
of making a sale.
PERSONAL SELLING 2
• PERSONAL SELLING
– Oral presentation in a conversation with one or more prospective
purchasers for the purpose of making a sale
– Personal selling represents the most popular promotional effort in
terms of financial expenditures and number of people employed

• Personal Selling is:


– (1) Dyadic, (2) Flexible, (3) Focused (personalized), and (4) Often
results directly in a sale
– Other promotional elements move the customer toward the sale,
personal selling closes the sale
STEPS IN THE SELLING PROCESS:
A RELATIONSHIP APPROACH 2
• INITIATING RELATIONSHIPS
– Prospecting
– Pre-Call Planning
– Approach

• DEVELOPING CUSTOMER RELATIONSHIPS


– Sales Communications and Presentations
– Gaining and Managing Commitment

• ENHANCING CUSTOMER RELATIONSHIPS


– Follow-Up
– Support

• TRADITIONAL vs. RELATIONSHIP APPROACHES


– Consultative (needs-satisfaction) vs. Manipulative (product-focused)
The IMC mix 2
Sales Promotion

Marketing activities--other than


personal selling, advertising, and
public relations--that stimulate
consumer buying and
dealer effectiveness.
Sales Promotion 2

Sales
Sales Promotion
Promotion
Targets
Targets

End
End Company
Company
Consumers
Consumers Employees
Employees

Trade
Trade Customers
Customers
Reasons for the Growth in
Sales Promotion: 2

Consumer
ConsumerFactors
Factors

Accountability
Accountability

Impact
Impactof
ofTechnology
Technology

Short-Term
Short-TermFocus
Focus

Increased
IncreasedRetail
RetailPower
Power
OBJECTIVES OF
CONSUMER PROMOTIONS 2

Stimulate Encourage
Trial Repurchase
Complementary Increase
Products Support Consumption
Neutralize Flexible Pricing Impulse
Competitors Purchasing
CONSUMER SALES
PROMOTION TECHNIQUES 2

Price Deals

Advertising
Specialties Coupons

Sampling Rebates

Premiums Cross-
Promotions

Contests, Games,
Sweepstakes
OBJECTIVES OF TRADE
PROMOTIONS 2

Avoid Price Gain/Maintain


Avoid Price Gain/Maintain
Reductions Distribution
Reductions Distribution
Defend Against Influence
Defend Against Influence
Competitors Reseller Promotion
Competitors Reseller Promotion
Increase Reseller Influence
Increase Reseller Influence
Inventory Price Discount
Inventory Price Discount
LIMITATIONS OF
SALES PROMOTION 2

Cannot
Cannot Reverse
Reverse Declining
Declining Sales
Sales
Trend
Trend

Cannot
Cannot Overcome
Overcome Inferior
Inferior
Product
Product

May
May Encourage
Encourage Competitive
Competitive
Retaliation
Retaliation

May
May Hurt
Hurt Profit
Profit
The IMC mix 2
Direct Marketing

It is a form of integrated marketing


communications whereby an
organization communicates directly
with target customers to generate
a response and/or transaction
The IMC mix 2

Direct
Mail
Direct
Internet
Response
Sales Advertising
Direct
Direct
Marketing
Marketing
Shopping
Telemarketing
Channels

Catalogs
Bose Uses Direct
Response Advertising 2

Includes call
for action.
Phone number,
mail-in form,
website address
provided.
Interactive/Internet
Marketing
2
Interactive/Internet Marketing

• Back-and-forth communication
– Users participate in and modify the form and content of
information
– Happens in real time
• Interactive media
– Internet
– CD-ROMs
– Kiosks
– Interactive television
– Digital cell phones
Using the Internet as
an IMC Tool 2

The
The
Internet
Internet

Educates
Educates oror AA persuasive
persuasive AA sales
sales tool
tool
informs
informs advertising
advertising or
or an
an actual
actual
customers
customers medium
medium sales
sales vehicle
vehicle

Obtains
Obtains Provides
Provides Builds
Builds and
and
Communicates
Communicates
customer
customer customer
customer maintains
maintains
and
and interacts
interacts
database
database service
service and
and customer
customer
with
with buyers
buyers
information
information support
support relationships
relationships
It’s Google’s World 2

The most powerful brand in the world


It’s Google’s World 2

• Founded in 1998
– Delivers relevant search results by favoring pages linked to
by other sites
– Sells ads linked to search keywords
– Annual revenue exceeds $10 billion
• Keys to success
– Simplicity
– Speed
– Accuracy
It’s Google’s World 2
Google Adwords

• Keyword-targeting advertising
– Text ads at top or side of search results
– Advertisers compete for top spot
– Cost is “per click” (CPC)
• Contextual ads
– Appear on other relevant Web sites
• Site-targeted
– Generates sales and branding
– Cost is per thousand impressions (CPM)
It’s Google’s World 2
Google Rapidly Expanding

• Beyond online search advertising


– Automated purchase of radio ads
– Magazine and newspaper ad-buying
– YouTube
– Google TV Ads
– Partnership with Nielsen Media Research
– New varieties of online ads
It’s Google’s World 2
Rapidly Changing Media Environment

• Increasingly difficult to target audiences &


communicate effectively
– Consumers no longer passive recipients
– They demand more than information
– From a myriad of sources
Integrated Marketing
Approach 2

• Traditional mass media


– Television, radio, magazines, newspapers, billboards
– Now drive consumers to Web sites
• Online strategies
– Provide detailed information
– Be experiential, entertaining, interactive
– MySpace, YouTube, Facebook, wireless mobile media
devices, e-mail
Learning Objective 3

Describe the
communication process.
Communication 3
Communication

The process by which we


exchange or share
meanings through a common set
of symbols.
Communication 3
Marketing Communication

Categories
Categories of
of
Communication
Communication

Interpersonal
Interpersonal Mass
Mass
Communication
Communication Communication
Communication
The Communication
Process
3

As Senders As Receivers

Inform  Develop messages

Persuade  Adapt messages

Remind  Spot new


communication
opportunities
The Sender and
Encoding
3

The
The originator
originator of
of the
the message
message in
in the
the
Sender
Sender communication
communication process.
process.

Encoding The
The conversion
conversion of of aa sender’s
sender’s ideas
ideas
Encoding
and
and thoughts
thoughts into
into aa message,
message, usually
usually
in
in the
the form
form of
of words
words oror signs.
signs.
The Communication
Process
3

Noise
Noise

Encoding
Encoding Message
Message Decoding
Decoding
Sender
Sender Receiver
Receiver
Message
Message Channel
Channel Message
Message

Message
Message
Channel
Channel
Characteristics of
Advertising
3

Advertising
Advertising
Communication
CommunicationMode
Mode Indirect
Indirectand
and non-personal
non-personal
Communication
CommunicationControl
Control Low
Low
Feedback
FeedbackAmount
Amount Little
Little
Feedback
FeedbackSpeed
Speed Delayed
Delayed
Message
MessageFlow
Flow Direction
Direction One-way
One-way
Message
MessageContent
Content Control
Control Yes
Yes
Sponsor
Sponsor Identification
Identification Yes
Yes
Reaching
ReachingLarge
LargeAudience
Audience Fast
Fast
Message
MessageFlexibility
Flexibility Same
Samemessage
messageto
toall
allaudiences
audiences
Characteristics of Public
Relations
3

Public
Public Relations
Relations
Communication
CommunicationMode
Mode Usually
Usuallyindirect,
indirect,non-personal
non-personal
Communication
CommunicationControl
Control Moderate
Moderatetoto low
low
Feedback
FeedbackAmount
Amount Little
Little
Feedback
FeedbackSpeed
Speed Delayed
Delayed
Message
MessageFlow
Flow Direction
Direction One-way
One-way
Message
MessageContent
Content Control
Control No
No
Sponsor
Sponsor Identification
Identification No
No
Reaching
ReachingLarge
LargeAudience
Audience Usually
Usuallyfast
fast
Message
MessageFlexibility
Flexibility Usually
Usuallyno
no direct
directcontrol
control
Characteristics of
Sales Promotion
3

Sales
Sales Promotion
Promotion
Communication
CommunicationMode
Mode Usually
UsuallyIndirect
Indirect and
andnon-personal
non-personal
Communication
CommunicationControl
Control Moderate
Moderateto tolow
low
Feedback
FeedbackAmount
Amount Little
Littleto
to moderate
moderate
Feedback
FeedbackSpeed
Speed Varies
Varies
Message
MessageFlow
Flow Direction
Direction Mostly
Mostlyone-way
one-way
Message
MessageContent
Content Control
Control Yes
Yes
Sponsor
Sponsor Identification
Identification Yes
Yes
Reaching
ReachingLarge
LargeAudience
Audience Fast
Fast
Message
MessageFlexibility
Flexibility Same
Same message
messageto
to varied
varied target
target
Characteristics of
Personal Selling
3

Personal
Personal Selling
Selling
Communication
CommunicationMode
Mode Direct
Direct and
andface-to-face
face-to-face
Communication
CommunicationControl
Control High
High
Feedback
Feedback Amount
Amount Much
Much
Feedback
Feedback Speed
Speed Immediate
Immediate
Message
MessageFlow
Flow Direction
Direction Two-way
Two-way
Message
MessageContent
ContentControl
Control Yes
Yes
Sponsor
Sponsor Identification
Identification Yes
Yes
Reaching
ReachingLarge
LargeAudience
Audience Fast
Fast
Message
MessageFlexibility
Flexibility Tailored
Tailored to
to prospect
prospect
Characteristics of
Personal Selling
3

Direct
Direct Marketing
Marketing
Communication
CommunicationMode
Mode Direct
Directand
andimpersonal
impersonal
Communication
CommunicationControl
Control High
High
Feedback
Feedback Amount
Amount Much
Much
Feedback
Feedback Speed
Speed Immediate
Immediate
Message
MessageFlow
Flow Direction
Direction Two-way
Two-way
Message
MessageContent
ContentControl
Control Yes
Yes
Sponsor
Sponsor Identification
Identification Yes
Yes
Reaching
ReachingLarge
LargeAudience
Audience Slow
Slow
Message
MessageFlexibility
Flexibility More’less
More’lesstailored
tailoredto
toprospect
prospect
Learning Objective 4

Explain the goal and


tasks of promotion.
Goals and Tasks of 4
Promotion

Informing
Informing Reminding
Reminding

Target
Target
Audience
Audience

Persuading
Persuading
Goals and Tasks of 4
Promotion

Informing
Informing Reminding
Reminding

PLC Stages:
Stages PLC Stages:
Introduction Maturity
Early Growth Target
Target
Audience
Audience

PLC Stages:
Growth
Maturity Persuading
Persuading
Goals and Tasks of 4
Promotion

Informative Objective
• Increase awareness

• Explain how product works

• Suggest new uses

• Build company image


Goals and Tasks of 4
Promotion

Persuasion Objective

• Encourage brand switching

• Change customers’ perception of


product attributes

• Influence buying decision

• Persuade customers to call


Learning Objective 4

Reminder Objective
• Remind customers that product
may be needed

• Remind customers where to buy product

• Maintain customer awareness


Learning Objective 5

Discuss the AIDA concept


and its relationship to
the promotional mix.
Learning Objective
5
The AIDA Concept

Model that outlines the process for


achieving promotional goals in
terms of stages of consumer
involvement with the message.
The AIDA Concept
5

Action
Desire

Interest

Attention
AIDA and the IMC Mix
5

Awareness
Awareness Interest
Interest Desire
Desire Action
Action

Very Very Somewhat Not


Not
Advertising effective effective effective effective
effective

Public
Public Very
Very Very
Very Very
Very Not
Not
Relations
Relations effective
effective effective
effective effective
effective effective
effective

Sales Somewhat Somewhat Very Very


Very
Promotion effective effective effective effective
effective

Personal Somewhat Very Very Somewhat


Somewhat
Selling effective effective effective effective
effective
Learning Objective 6

Describe the factors that


affect the IMC mix.
Factors Affecting the 6
Promotional Mix

Nature
Nature of
of Product
Product

Stage
Stage in
in PLC
PLC

Target
Target Market
Market Factors
Factors

Factors
Factors Type
Type of
of Buying
Buying Decision
Decision
Affecting
Affecting
Choice
Choice of
of Promotion
Promotion Funds
Funds
IMC
IMC Mix
Mix
Push
Push or
or Pull
Pull Strategy
Strategy
Nature of the Product
6

Factors that influence IMC mix

• Product characteristics
– Business product vs. consumer product

• Costs and risks

• Social risk
Stage in the Product Life
Cycle
6

Maturity
Sales ($)

Introduction Growth Decline

Time
Product Life Cycle and 6
the IMC Mix

Maturity
Sales ($)

Decline
Introduction Growth

Time
Light Heavy use of Advertising, Ads AD/PR
Advertising, advertising, PR, Brand decrease. decrease
pre- PR for loyalty Sales Limited
introduction awareness; Personal Promotion, Sales
Publicity sales Selling for Personal Promotion,
promotion distribution Selling Personal
for trial Reminder & Selling for
Persuasive distribution
Target Market 6
Characteristics

FOR:
• Widely scattered market
• Informed buyers
• Repeat buyers

Advertising

Sales Promotion

Less Personal Selling


Type of Buying 6
Decision

Advertising
Routine
Routine
Sales Promotion
Type
Type of
of
Buying
Buying Decision
Decision Advertising
affects
affects Not
NotRoutine
Routine
Promotional
Promotional or
orComplex
Complex Public Relations
Mix
Mix Choice
Choice

Complex
Complex Personal Selling
Available Funds
6

• Trade-offs with funds available

• Number of people in target market

• Quality of communication needed

• Relative costs of promotional elements


Push and Pull 6
Strategies

PUSH STRATEGY

Manufacturer
Manufacturer Wholesaler
Wholesaler Retailer
Retailer Consumer
Consumer
promotes
promotesto
to promotes
promotesto to promotes
promotesto to buys
buysfrom
from
wholesaler
wholesaler retailer
retailer consumer
consumer retailer
retailer

Orders to manufacturer
PULL STRATEGY
Consumer
Consumer Retailer
Retailer Wholesaler
Wholesaler
Manufacturer
Manufacturer demands
demands demands
demands demands
demands
promotes
promotesto
to product
product product
product product
productfrom
from
consumer
consumer from
fromretailer
retailer from
fromwholesaler
wholesaler manufacturer
manufacturer

Orders to manufacturer
Push and Pull 6
Strategies

• Push strategy is directed toward the channel


members
– Provide incentives for those in the
distribution channels to buy the product
• Pull strategy is directed toward the ultimate
purchaser
– The focus is on creating demand at the
household or ultimate consumer level
Learning Objective 7

IMC PLANNING PROCESS


IMC PLANNING PROCESS 7

Marketing
MarketingPlan
PlanReview
Review

Situation
SituationAnalysis
Analysis

Communications
CommunicationsProcess
Process
Analysis
Analysis

Budget
BudgetDevelopment
Development
METHODS
Program
ProgramDevelopment
Development
PUSH vs.
PULL Integration
Integration&&Implementation
Implementation

Monitoring,
Monitoring,Evaluating,
Evaluating,
Controlling
Controlling
IMC PLANNING PROCESS 7
Review of Marketing Plan
Promotional Program Situation Analysis
Analysis of the Communications Process

Budget Determination

Develop Integrated Marketing Communications Programs

Sales PR/ Personal Direct Internet/


Advertising
Promotion Publicity Selling Marketing Interactive

Advertising Sales PR/ Personal Direct Internet/


Promotion Publicity Selling Marketing Interactive
Objectives Objectives Objectives Objectives Objectives Objectives

Message Sales PR/ Personal Direct Internet/


Promotion Publicity Selling Marketing Interactive
Strategy Strategy Strategy Strategy Strategy Strategy

Integration & Implementation of Marketing Communications Strategies


Monitor, Evaluate & Control Promotional Program
Learning Objective 8

Approaches to Determining
the Promotional Budget
Approaches to Determining
the Promotional Budget 8

Affordable

Percentage-of-Sales

Competitive Parity

Objective-and-Task

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 17-103


Affordable 8
Method

• Setting the promotion budget at the level that


management thinks the company can afford.
• Small companies project their total revenues, deduct
their operating expenses and capital outlays, and
then devote some of the remaining funds to
advertising.
• This method places advertising last among expenses,
therefore, ignores the effects of promotion on sales.
• This method may result in either over or under
spending for advertising.
Percentage-of-Sales 8
Method

• Setting the promotion budget at a certain percentage of current or


forecasted sales or as a percentage of the sales price.
• The advantage of this method is that it helps management think
about the relationships between promotion spending, selling price,
and profit per unit.
• The disadvantages are; (1) it wrongly views sales as the cause of
promotion rather than as the result, (2) it may prevent increase in
promotional spending, when the sales are falling, (3) it does not
provide any basis for choosing a specific percentage, except last
year’s and competitors percentages.
• Probably the most widely used as it is simple
• But, what about cause and effect?
Competitive-Parity 8
Method

• Setting the promotion budget to match competitor’s


outlays. The company monitors competitor’s advertising
or industry averages.
• The advantage of this method is that it mat prevent
promotional wars.
• The disadvantages of this method are; (1) each
company has its own promotional needs, therefore, the
competitors’ spending may be misleading, (2) there is no
guarantee that this method will prevent promotion wars.
Objective-and-Task
Method
8

• Setting promotion budgets based on what the company wants


to accomplish with promotion.
• This is the most logical budget setting where the company (1)
defines specific promotion objectives, (2) determines the tasks
needed to achieve these objectives, (3) estimates the total
costs of performing these tasks.
• This is the most difficult method to use because it is hard to
understand which tasks will achieve specific objectives. E.g. if
Sony wants to create 95% awareness for its new camera within
6 months, it is difficult to decide what messages and
promotions to use and how much to spend.
Media Strengths 8
Evaluating Media 8

• Example
– Grey’s Anatomy: 9.3 million TVs
– Grey’s Anatomy: $440,000 per 30 seconds
– McDonald’s meal contribution: $0.50
• $440,000/0.50 = 880,000 meals/breakeven
– 9.3 million viewers are exposed; thus, McDonalds needs
9.5% to purchase
• 880,000 / 9.3 million = 9.5%
– The question is…Is this reasonable?
Impact of Phone
Contacts on Spending
8
Impact of Email Contacts
on Spending
8
Impact of Mail Contacts on
Spending
8
Impact on Profit of Different
8
Combinations
$90

$70

$50
P
fo
it

$30

$10

($10)
0 1 2 3 4 5 6 7 8
Equal # of contacts
Phone=Mail, No email
Email, No phone or mail
THANK YOU
VERY MUCH