Chapter 11:
Integrated Marketing Communications Strategy
1
Today’s Agenda
PROMOTION STRATEGIES
The Marketing Communications Mix
Setting the Total Promotion Budget
Advertising Strategy
Sales Promotion Strategy
Public Relations Strategy
Personal Selling Strategy
Direct Marketing Strategy
The Marketing Communications Mix
Any
AnyPaid
PaidForm
FormofofNonpersonal
Nonpersonal
Advertising
Advertising Presentation
Presentation by anIdentified
by an Identified
Sponsor.
Sponsor.
Personal
Personal Selling
Selling Personal Presentations by
a Firm’s Sales Force.
Sales Promotion Short-term Incentives to
Encourage Sales.
Building Good Relations with
Public Relations Various Publics by Obtaining
Favorable Unpaid Publicity.
Direct Communications
Direct Marketing With Individuals to Obtain
an Immediate Response.
The Marketing Communications Mix
Promotional Mix Tools
Advertising
Strengths: * Weaknesses
Influence customer perceptions - Difficult to close sale
Build brand equity - Easy to ‘tune out’
Low cost per person reached - Difficult to
determine effect
Ability to intrude
Personal Selling
Strengths: * Weaknesses
Can close a sale - High cost per
prospect
Holds prospect’s attention - Difficult to intrude
Build customer loyalty
Provides immediate feedback
The Marketing Communications Mix
Sales Promotion
Strengths: * Weaknesses
Immediate sales response -May not build
Create customer database -Brand loyalty
Provides quick feedback -Not desirable for long
term
Little cost wastage
Public Relations / Publicity
Strengths: * Weaknesses
Low cost - Lack of control
Potential positive impact due - Questionable
ethics
to 3rd party endorsement - Possible backfire
The Marketing Communications Mix
Direct Marketing Tools
Database Marketing and CRM
Strengths: * Weaknesses
- One-to-one personalised - Frustration with junk mail
communication based on usage & telemarketing
- Eliminates wastage and minimises
advert annoyance
- Builds long term relationships
Internet Marketing
Strengths: * Weaknesses
One-to-one personalised - Consumer frustration
communication with spam
Extremely low cost - Variable access to net
- slow linkage speed
- skewed demographics
A View of the Communications Process
The Communications Process
Steps in Developing Effective Marketing Communication
Step
Step 1.
1. Identifying
Identifying the
the Target
Target Audience
Audience
Step 2. Determining the Communication Objectives
Buyer Readiness Stages
Awareness
advertising
Knowledge
Liking
Preference Sales
promotion
Conviction
Purchase
Steps in Developing Effective Communication
Step 3. Designing a Message
What to say How to say it
Message Content
Rational Appeals
Emotional Appeals Message Structure
Moral Appeals Draw Conclusions
-Value, performance Argument Type Message Format
-sex, humor appeal Argument Order Headline, Copy, Color,
-use conscience -concluding statement Words, & Sounds,
-1 or 2 sided arguments
Body Language
-strongest arg last -Celeb endorsements
AIDA MODEL: desirable qualities of a good message
Get attention hold interest arouse desire obtain action
Attention Interest Desire Action
Steps in Developing Effective Communication
Step 4. Choosing Media
Eg. tel, email, word of mouth,
reference gps...
Personal Communication
Channels
Eg. media: tv, mags, billboards; Nonpersonal Communication
atmospheres: eg throwing coffee Channels
beans on roads
Step 5. Selecting the Message Source
Consider credibility and attractiveness: Tiger Woods, Michael Jordan...
Step 6. Collecting Feedback
Measure sales perf., ad recall using surveys...
Setting the Total Promotion Budget and Mix
TOP-DOWN (Breakdown) or BOTTOM-UP
(Buildup)
Top-down Budgeting
Where a total budget is subjectively determined
(often fixed % of sales) by senior management, with a
proportion thereof allocated to each tool to be used.
Bottom-up Budgeting
Deciding upon a rational budget figure based on
objectives and tasks for each tool and then
aggregating all tools together for a total spend.
One of the Hardest Marketing Decisions Facing a Company is How
Much to Spend on Promotion.
Affordable Percentage
Percentage of
of Sales
Sales
Based on What the Based
BasedononaaCertain
CertainPercentage
Percentage
Company Can Afford ofofCurrent
Currentor
orForecasted
ForecastedSales
Sales
Objective-and-Task
Objective-and-Task Competitive-Parity
Competitive-Parity
Based
BasedononDetermining
Determining Based
Basedon
onthe
theCompetitor’s
Competitor’s
Objectives
Objectives&&Tasks,
Tasks,Then
Then Promotion
PromotionBudget
Budget
Estimating
EstimatingCosts
Costs
Arbitrary
Arbitrary Method
Method
Based
Basedononthe
theCompetitor’s
Competitor’s
Promotion
PromotionBudget
Budget
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
Affordable budget method sets the budget
at an affordable level
Ignores the effects of promotion on sales
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
Percentage of sales method sets the
budget at a certain percentage of current
or forecasted sales or unit sales price
Easy to use and helps management think
about the relationship between
promotion, selling price, and profit per
unit
Wrongly views sales as the cause rather
than the result of promotion
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
Competitive parity method sets the
budget to match competitor outlays
Represents industry standards
Avoids promotion wars
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
Objective-and-task method sets the
budget based on what the firm wants to
accomplish with promotion and includes:
Defining promotion objectives
Determining tasks to achieve the
objectives
Estimating costs
Setting the Total Promotion Budget and Mix
Setting the Total Promotion Budget
Arbitrary Method of determining the advertising
budget, which a high level executive
subjectively stipulates how much will be spent
on advertising for a certain time period.
Setting the Total Promotion Budget and Mix
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
Advertising reaches masses of geographically
dispersed buyers at a low cost per exposure,
and it enables the seller to repeat a message
many times
Setting the Total Promotion Budget and Mix
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
Personal selling is the most effective method
at certain stages of the buying process,
particularly in building buyers’ preferences,
convictions, actions, and developing
customer relationships
Setting the Total Promotion Budget and Mix
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
Sales promotion includes coupons, contests, cents-
off deals, and premiums that attract consumer
attention and offer strong incentives to purchase,
and can be used to dramatize product offers and
to boost sagging sales
Setting the Total Promotion Budget and Mix
Shaping the Overall Promotion Mix
The Nature of Each Promotion Tool
Public relations is a very believable form of
promotion that includes news stories,
features, sponsorships, and events
Direct marketing is a non-public, immediate,
customized, and interactive promotional
tool that includes direct mail, catalogs,
telemarketing, and online marketing
Setting the Total Promotion Budget and Mix
Promotion Mix Strategies
Setting the Total Promotion Budget
Other factors to consider
• Push Strategy - “Pushing” the Product Through Distribution
Channels to Final Consumers.
• Pull Strategy - Producer Directs It’s Marketing Activities
Toward Final Consumers to Induce Them to Buy the Product.
Advertising Objectives
• Specific Communication Task
• Accomplished with a Specific Target Audience
• During a Specific Period of Time
Informative
Informative Advertising
Advertising Persuasive Advertising
Build Persuasive Advertising
Build Primary
Primary Demand
Demand Build
(provide info on new Build Selective
Selective Demand
Demand
(provide info on new (for
prod) (for aa particular
particular brand)
brand)
prod)
Comparison
Comparison Advertising
Advertising Reminder
Reminder Advertising
Advertising
Compares
Compares One One Brand
Brand to
to Keeps
Keeps Consumers
Consumers
Another
Another Thinking
Thinking About
About aa Product
Product
(Mercedes
(Mercedes vv BMW)
BMW) (Sony
(Sony billboards)
billboards)
Setting the Advertising Budget
Advertising Budget Methods: Affordable, Percentage of Sales,
Competitive-Parity and Objective-and-Task
but also consider the following factors
Product
Product Stage
Stageininthe
theProduct
Product
Differentiation
Differentiation Life
LifeCycle
Cycle
Less phy diff - up adv Intro - up adv
to up perceived diff
Factors in
Advertising Setting the
Advertising Market
Frequency Advertising Market
Frequency Share
Share
Budget
Speed of penetration High share - up adv
“3 exposure rule” to maintain
Competition
Competition
and
andClutter
Clutter Many comp - up adv
Advertising Strategy
Creating Advertising Messages
Plan
Plan aa Message
Message Strategy
Strategy
General
GeneralMessage
Messageto
toBe
BeCommunicated
Communicatedto
toCustomers
Customers
Message must be creative to break through the advertising clutter
Develop
DevelopaaMessage
Message
Focus
Focuson
on
Customer Benefits Creative
Customer Benefits CreativeConcept
Concept
“Big
“BigIdea”
Idea”
Visualization
Visualizationor
orPhrase Advertising
What are the impt
Combination
Phrase AdvertisingAppeals
Appeals
benefits? Mkt res Combinationof ofBoth
Both Meaningful
Meaningful
Believable
Believable
Develop a theme
or slogan Distinctive
Distinctive
Advertising Strategy
Message Execution
Turning the “Big Idea” Into an Actual Ad to Capture the Target
Market’s Attention and Interest.
Show product used in
Celeb endorsement every day life
Testimonial
Testimonial Slice
Sliceof
ofLife
Life
Evidence
Evidence
Oral-B cars
Scientific
Scientific
Evidence
Typical
Typical Lifestyle
Lifestyle
Evidence
Message
Message
Technical
Technical Execution
Execution Fantasy
Fantasy
Expertise
Expertise Styles
Styles
cars perfume
Personality
Personality Mood
Moodoror
Symbol
Symbol Image
Image
Gatorade
KFC Musical
Musical
Sing a song
Sales Promotion Consumer - Promotion Tools for Pull Strategy
Short-Term Incentives to Encourage Purchase
or Sales of a Product or Service.
Consumer-Promotion
Objectives
Entice
EnticeConsumers
Consumersto to
Try
TryaaNew
NewProduct
Product
Lure
LureCustomers
CustomersAwayAway
From Competitors’ Products
From Competitors’ Products
Get
GetConsumers
Consumersto to“Load
“LoadUp’
Up’
on a Mature Product
on a Mature Product
Hold
Hold&&Reward
Reward Loyal
Loyal
Customers
Customers
Consumer
ConsumerRelationship
Relationship
Building
Building
Sales Promotion
Consumer - Promotion Tools
for Pull Strategy
Consumer-Promotion
Tools
Samples Advertising
Advertising Company pens, matches
Samples
Specialties
Specialties
Coupons
Coupons Patronage
Patronage
Patronage Freq flyer
Rewards
Rewards
Rewards
Cash
CashRefunds
Refunds
Contests
Contests Black jack tournament
20% more,
no extra cost Price
PricePacks
Packs Sweepstakes
Sweepstakes Luck draw
Mcdonalds free toy Premiums
Premiums Games
Games Mcmatch and win
Point-of-Purchase
Point-of-Purchase
Displays
Displays
Also consider cross promotion between different companies
Public Relations
Public Relations: Building good relations with the
company’s various publics by obtaining favorable
publicity, building up a good “corporate image” and
handling or heading off unfavorable rumors, stories
and events.
Major functions of the PR dept are:
Press Relations
Product Publicity - esp for new technologies
Lobbying – eg. body shop for the environment
Investor Relations - build corp image and inc sh price
Development - advise mgnt on public issues
Publicity: Unpaid ‘News’ about product or service
appearing in print or electronic media
Eg. Media releases
Public Relations Tools
Company info
Supporting charity Web
events Public WebSite
Site Press releases
Public
Service
Service News
Activities News
Activities
For special
announcements
Corporate
Corporate
Identity
Identity Speeches
Speeches
Uniforms Materials
Materials
stationary
cars w/ signage
mc - olympics
Audiovisual
Audiovisual Special
Special
Company Video Materials
Materials Events
Events
Written
Written
Materials
Materials
Annual reports
newsletters
Direct Marketing
Direct Marketing Consists of Direct Communications with Carefully
Targeted Individual Consumers to Obtain an Immediate Response.
As opposed to mass marketing which targets broadly with
standardized messages
Benefits of Direct Marketing Benefits of Direct
to Customers Marketing to Companies
Fun,
Fun, Convenient
Convenient&& Mailing
Hassle-Free MailingLists
Listsfor
forAlmost
Almost
Hassle-Free Any Market
Any Market
Saves
SavesTime
Time Customized
CustomizedOffers
Offers
Larger
LargerMerchandise
Merchandise Ongoing
OngoingRelationships
Relationships
Selection
Selection with Customers
with Customers
Timed
Timedto
toAchieve
AchieveHigher
Higher
Comparison
ComparisonShopping
Shopping Readership & Response
Readership & Response
Order
OrderProducts
Productsfor
for Privacy
Themselves or Others Privacy
Themselves or Others
Face-to-Face
Face-to-Face
Selling Personal selling, amway, insurance, B2B
Selling
Direct-Mail
Direct-Mail
Highly selective, personalised, use of coupons,
Marketing
Marketing easy to measure
Catalog
Catalog “Myer Direct”, B2B
Marketing
Marketing
Outbound: salesperson calls out
Telemarketing
Telemarketing Inbound: 1800 free call to obtain info via fax, catalogs,...
Direct-Response
Direct-Response Infomercials, Digital interactive TV in the future
TV
TVMarketing
Marketing
Kiosk
Kiosk Computer station to provide general info and ordering
Marketing
Marketing ATMs, Myer touch screens, food dispensing machines
Online
Online
Marketing
Marketing
The End