Chapter 17
Designing and Managing
Integrated Marketing
Communications
17-1
Copyright © 2003 Prentice-Hall, Inc.
Key Points for Chapter 17
1. 8 modes of marketing communication
patterns
2. Hierarchy-of-effects model
3. AIDA model
4. Informational and transformational Appeals
5. Message source’s credibility
6. Principle of congruity
7. Buzz marketing & Viral marketing

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Copyright © 2003 Prentice-Hall, Inc.
Key Points for Chapter 17
8. Methods for marketing communication
budget:
Affordable, Percentage-of-sale, Competitive parity,
Objective-and-Task
9. Characteristics of marketing communications
mix
Advertising
Sales promotion
Public relations and publicity
Events and Experiences
Direct & interactive marketing
Word-of-mouth marketing
Personal selling
10. Integrated

marketing communications
17-3
Copyright © 2003 Prentice-Hall, Inc.
The Role of Marketing
Communications
 Marketing Communications
 The means by which firms attempt to
inform, persuade, and remind consumers
about the products and brands that they sell
 Changing Marketing Communication
Environment
 Marketing Communications, Brand
Equity, and Sales
 Communications Process Model
17-4
Copyright © 2003 Prentice-Hall, Inc.
Changing Marketing
Communication Environment
 Digital technology and Internet have changed
the way consumers process communication
 These changes have eroded the effectiveness of
mass media due to
 Fragmentation of U.S. audiences
 DVR (Digital Video Recorder) allowing consumers
to eliminate commercials with fast-forward button
 Marketers need to use fragmented, multiple
communications tools
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Copyright © 2003 Prentice-Hall, Inc.
Marketing Communications, Brand
Equity, and Sales
 Marketing Communications Mix
 Eight Major Modes of Communications
 Advertising, Sales Promotion, Events &
Experiences, Public Relations & Publicity, Direct
Marketing, Interactive Marketing, Word-of-Mouth
Marketing, and Personal Selling
 Additional Communication Platforms
 Product’s styling and price
 Shape and color of the package
 Salespeople’s manner and dress
 Store décor
 Company stationery, brochure, etc
 Company’s Website
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Copyright © 2003 Prentice-Hall, Inc.
Eight(8) Modes of Marketing
Communications
 Advertising
 Any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an
identified sponsor
 Sales Promotion
 A variety of short-term incentives to encourage trial
or purchase of a product or service
 Events & Experiences
 Company-sponsored activities and programs
designed to create special brand-related interactions
17-7
Copyright © 2003 Prentice-Hall, Inc.
Eight(8) Modes of Marketing
Communications
 Public Relations & Publicity
 A variety of programs designed to promote or
protect the image of the company or its individual
products
 Direct Marketing
 Communicating directly with or solicit response
from specific customers and prospects: mail,
telephone, fax, e-mail, or Internet
 Interactive Marketing
 Online activities & programs engaging customers or
prospects to raise awareness, improve image, or
elicit sales of products or services
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Copyright © 2003 Prentice-Hall, Inc.
Eight(8) Modes of Marketing
Communications
 Word-of-Mouth Marketing
 People-to-people oral, written, or electronic
communications as to the merits or experiences of
purchasing or using products or services
 Personal Selling
 Face-to-face interaction with one or more
prospective buyers for the purpose of making
presentations, answering questions, and procuring
orders
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Copyright © 2003 Prentice-Hall, Inc.
Common Communications
Platforms Table 17.1
Advertising
Sales Promotion
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 Contests, games,
sweepstakes
 Premiums
 Sampling
 Trade shows, exhibits
 Coupons
 Rebates
 Entertainment
 Continuity programs
Print and broadcast ads
Packaging inserts
Motion pictures
Brochures and booklets
Posters
Billboards
POP displays
Logos
Videotapes
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Copyright © 2003 Prentice-Hall, Inc.
Common Communications
Platforms Table 17.1
Events & Experiences Public Relations & Publicity
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Sports
Entertainment
Festivals
Art
Causes
Factory tours
Company museums
Street activities
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Press kits
Speeches
Seminars
Annual reports
Charitable donations
Publications
Community relations
Lobbying
Identity media
Company magazine
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Copyright © 2003 Prentice-Hall, Inc.
Common Communications
Platforms Table 17.1
Direct & Interactive
Marketing
Word-of-Mouth
Marketing
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Catalogs
Mailings
Telemarketing
Electronic shopping
TV shopping
Fax mail
E-mail
Voice mail
Blogs
Websites
Person-to-person
Chat rooms
Blogs
Social Network Service
Personal Selling
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Sales presentations
Sales meetings
Incentive programs
Samples
Fairs and trade shows
Copyright © 2003 Prentice-Hall, Inc.
17-12
Communications Process
Models
 The whole marketing communications
activities must be integrated to deliver a
consistent message and strategic
positioning
 Macromodel of the Communications
Process
 Micromodel of Consumer Responses
17-13
Copyright © 2003 Prentice-Hall, Inc.
Macromodel of the
Communications Process
 Nine(9) elements of a communications
model
 Parties in a communication: (1)Sender &
(2)Receiver
 Communication tools:(3)Message &
(4)Media
 Communication functions: (5)Encoding,
(6)Decoding, (7)Response, and (8)Feedback
 Interference with the intended
communication: (9)Noise
17-14
Copyright © 2003 Prentice-Hall, Inc.
Nine(9) Elements of a Communication
Model
 Sender
 The party sending the message to another party
 Encoding
 The process of putting thought into symbolic form:
Assembling words and illustrations
 Message
 The set of symbols that the sender transmits: Actual ad
copy
 Media
 The communication channels which carry the message
from the sender to the receiver
 Decoding
 The process by which the receiver assigns meaning to
the symbols: The receiver’s interpretation of the ad.
17-15
Copyright © 2003 Prentice-Hall, Inc.
Nine(9) Elements of a Communication
Model
 Receiver
 The party receiving the message sent by another
party
 Response
 The reactions of the receiver after being exposed to
the message: Any of hundreds of possible responses
 Feedback
 The part of the receiver’s response communicated
back to the sender
 Noise
 The unplanned static or distortion during the
communication process: Interference by competing
messages
17-16
Copyright © 2003 Prentice-Hall, Inc.
Figure 17.2: Elements in the
Communication Process
17-17
Copyright © 2003 Prentice-Hall, Inc.
Key Factors in Effective
Communication
 Senders must know what audiences they want
to reach and what responses they want to get
 Senders must encode their messages so that the
target audience can decode them
 Senders must transmit the messages through
media that reach the target audience
 Senders must develop feedback channels to
monitor the responses
 The more the sender’s field of experience
overlaps with that of the receiver, the more
effective the message is likely to be
17-18
Copyright © 2003 Prentice-Hall, Inc.
Micromodel of Consumer
Responses
 Consumers’ specific responses to a
marketer’s communications
 Response-Hierarchy Models. Fig. 17.3’s 4
models
 All these models assume that the buyer
passes through a cognitive, affective, and
behavioral stage (learn-feel-do), in that
order.
17-19
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Figure 17.3: Response Hierarchy Models
17-20
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AIDA Model
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Get Attention
Hold Interest
Arouse Desire
Obtain Action
17-21
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Hierarchy-of-Effects Model
(Buyer-Readiness Stage)
 Awareness
 If most of the target audience is unaware of the
object, the communicator’s task is building
awareness, perhaps just name recognition
 Knowledge
 If target audience might have product awareness
but not know much more, the communicator’s
task is to provide them with brand knowledge
 Liking
 If target audience looks unfavorably on the
brand, find out why and fix problems, and
communicate renewed quality
17-22
Copyright © 2003 Prentice-Hall, Inc.
Hierarchy-of-Effects Model
(Buyer-Readiness Stage)
 Preference
 Target audience might like the product but not
prefer it to others
 Try to build consumer preference by comparing
quality, value, performance, and other features
to likely competitors
 Conviction
 Target audience might prefer a particular brand
but not develop a conviction about buying it
 Purchase
 Some might have conviction but may not quite
get around to making the purchase
 Must lead them to take the final step.
17-23
Copyright © 2003 Prentice-Hall, Inc.
Hierarchy-of-Effects Model
(Buyer-Readiness Stage)
 Probability of Success
 If each step success is 50%, total success
1.5625% (.5x.5x.5x.5x.5x.5)
 If each step success is 10%, total success 1
in 10,000
 Mobilize all marketing communications tools
and provide the right consumer with the
right message and incentive at the right
place and time of the 6-step process
17-24
Copyright © 2003 Prentice-Hall, Inc.
Developing Effective
Communications
 Fig. 17.4. The Eight Steps in Developing Effective
Communications
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Identify the Target Audience
Determine the Communications Objectives
Design the Communications
Select the Communication Channels
Establish the Total Marketing Communications
Budget
 Deciding on the Marketing Communications Mix
 Measure Communications Results
17-25
Copyright © 2003 Prentice-Hall, Inc.
Figure 17.4: Steps
in Developing
Effective
Communication
17-26
Copyright © 2003 Prentice-Hall, Inc.
Identify the Target Audience
 The communications process must start with a
clear target audience in mind, that is, a market
segment
 Potential buyers, current users, deciders or influencers,
particular publics or general publics
 Nonusers or current users? Light or heavy users?
 Loyal to the brand, or to a competitor? Brand
switcher?
 The target audience is a critical influence on the
communicator’s decisions on what will be said,
how it will be said, when it will be said, where it
will be said, and who will say it.
17-27
Copyright © 2003 Prentice-Hall, Inc.
Determine the Communications
Objectives
 Once the target audience has been defined, the marketers
must decide what response they seek.
 In many cases, marketers seek a purchase response. But
consumers are at a different stage of the Hierarchy-ofEffects Model (Buyer-Readiness Model), Fig. 17.3
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Awareness
Knowledge
Liking
Preference
Conviction
Purchase
 Consumers normally pass through these stages on their
way to making a purchase
17-28
Copyright © 2003 Prentice-Hall, Inc.
Determine the Communications
Objectives
 The most effective communications often
can achieve multiple objectives.
 Geico: A 15-minute phone call can result in a 15
percent reduction on auto insurance.
17-29
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Design the Communications
 Deciding on
 Message Strategy: What will be said
 Creative Strategy: How it will be said
 Message Source: Who will say it
 Global Adaptations: Multinational
communications
17-30
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Message Strategy
(What will be said)
 Management searches for appeals,
themes or ideas that will tie into the
brand positioning
 Buyers expect one of 4 types of rewards
from a product:
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Rational satisfaction reward
Sensory satisfaction reward
Social satisfaction reward
Ego satisfaction reward
17-31
Copyright © 2003 Prentice-Hall, Inc.
Creative Strategy
(How it will be said)
 Communications effectiveness depends
on how a message is being expressed as
well as the content of the message itself
 Informational Appeals
 Transformational Appeals
17-32
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Informational Appeals
 Elaborate on product or service attributes
or benefits based on logic and reason
 Problem-solution ads, Product demonstration
ads, Product comparison ads, testimonials
17-33
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Transformational Appeals
 Elaborate on a non-product-related
benefits and attempt to stir up emotions
that will motivate purchase
 Negative emotional appeals: Fear, Guilt, and
Shame
 Positive emotional appeals: Humor, Love,
Pride, Joy, Borrowed interest devices (Cute
babies, frisky puppies, popular music or provocative
sex appeals)
17-34
Copyright © 2003 Prentice-Hall, Inc.
Communicator’s Decisions in Ads
 In a printed ad: Communicator has to
decide on headline, copy, illustration, and
color
 In a radio ad: words, voice quality,
vocalization
 On TV or in person: plus body language,
facial expressions, gestures, dress,
posture, and hairstyle
17-35
Copyright © 2003 Prentice-Hall, Inc.
Message Source
(Who will say it)
 Messages delivered by attractive or popular sources
can achieve higher attention and recall
 Factors underlying source credibility
 Expertise
 Specialized knowledge the communicator possesses to
back the claim
 Trustworthiness
 Related to how objective and honest the source is
perceived to be.
 Likability
 Source’s attractiveness
 Qualities like candor, humor, naturalness make a source
more likable
17-36
Copyright © 2003 Prentice-Hall, Inc.
Message Source
(Who will say it)
 Principle of Congruity
 Communicators can use their good image to
reduce some negative feelings toward a
brand but in the process might lose some
esteem with audience.
17-37
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Select the Communications
Channels
 Selecting efficient channels becomes more
difficult due to more fragmented and cluttered
channels
 Personal Communications Channels
 Nonpersonal Communications Channels
 Integration of Communications Channels
17-38
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Personal Communications Channels
 Two or more persons’ face-to-face, person-toaudience communications channels
 Advocate channels
 Company salespeople contacting buyers
 Expert channels
 Independent experts making statements to target buyers
 Social channels
 Family members, friends, neighbors, and associates talking to
target buyers
 Personal influence carries great weight, when products
 are expensive, risky, purchased infrequently
 suggest something about the user’s status or taste
 People often ask others for a recommendation and act on the
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referral.
Copyright © 2003 Prentice-Hall, Inc.
Personal Communications Channels
 Steps to stimulate personal influence channels
Buzz Marketing
 Devotes extra efforts to influential individuals and
companies
 Creates advocates by providing the product at
attractive terms to certain people
 Works through community influentials such as local disk
jockeys, class presidents, and presidents of women’s organizations
 Uses influential or believable people in testimonial
advertising
 Develops advertising with high “conversation value”
 Develops word-of-mouth referral channels to build
business
 Establishes an electronic forum
 Uses viral marketing on Internet
17-40
Copyright © 2003 Prentice-Hall, Inc.
Nonpersonal Communications
Channels
 Indirect communications channels of
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Media
Sales Promotions
Events and Experiences
Public Relations
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Copyright © 2003 Prentice-Hall, Inc.
Nonpersonal Communications
Channels
 Media
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Printed media: Newspapers, Magazines
Broadcast media: Radio, Television
Network media: Telephone, Cable, Satellite, Wireless
Electronic media: Audiotape, Videotape, CD-ROM,
Webpage
 Display media: Billboards, Signs, Posters
 Sales Promotions
 Consumer promotions: Samples, Coupons, Premiums,
Etc.
 Trade promotions: Advertising and display allowances
 Business & Sales force promotions: Contests
17-42
Copyright © 2003 Prentice-Hall, Inc.
Nonpersonal Communications
Channels
 Events and Experiences
 Sports, Arts, Entertainment, and cause events
 Less formal activities that create novel brand
interactions with consumers
 Public Relations
 Communications directed internally to employees
 Communications directed externally to consumers,
other firms, media, and government
17-43
Copyright © 2003 Prentice-Hall, Inc.
Integration of Communications
Channels
 Two-Step Process of Mass Communications
 Ideas often flow from radio, TV, and print to
opinion leaders
 From them to the less media-involved population
groups
 Implications of Two-Step Flow
 The influence of mass media on public opinion is not
as direct, powerful, and automatic as supposed
 People interact primarily within their own social
groups and acquire ideas from opinion leaders in
their groups
 Mass communicators should direct their messages
specifically to opinion leaders and let them carry the
message to others
17-44
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Establish the Total Marketing
Communications Budget
 Affordable M ethod
 P ercentage-of-Sales M ethod
 Com petitive-P arity M ethod
 Objective-and-Task M ethod
17-45
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Affordable Method
 Sets the promotion budget at what the
company can afford
 Ignores the role of promotion as an investment
 Ignores the impact of promotion on sales
volume
 Used by small firms with limited resources
 Tends to underspend.
17-46
Copyright © 2003 Prentice-Hall, Inc.
Percentage-of-Sales Method
 Sets the promotion budget at a specified percentage
of either current or anticipated sale or on the sales
price. Automobile, Gasoline
 Advantages:
 Promotion spending will be adjusted audomatically with
sales volume
 Makes management think of relationship among
promotion cost, selling price, and profit per unit
 Encourages stability in promotion spending
 Disadvantages
 Little justification. Views sales as the determiner of
promotion rather than as the result of promotion
 When promotion is really needed during declining
business cycle, less promotion budget
 No logical basis for choosing the specific percentage
17-47
Copyright © 2003 Prentice-Hall, Inc.
Competitive-Parity Method
 Sets the promotion budget to achieve share-ofvoice parity with competitors
 Arguments for competitive-parity method
 Companies believe that matching competitors’
promotion budget will help them maintain their
market share
 Also believe that the competitors’ expenditures
represent the collective wisdom of the industry
 Also believe that it may prevent promotion wars
 No grounds for believing the competitors know
better or for discouraging promotion wars
17-48
Copyright © 2003 Prentice-Hall, Inc.
Objective-and-Task Method
 The most logical but most difficult
 First, define specific objectives of marketing
 Second, determine the tasks that must be performed
to achieve these objectives
 Third, estimate the costs of performing these tasks
 Example
 Establish the market-share objective
 8% of 50 million potential users= 4 million users
 Determine the percentage of the market that should
be reached by advertising
 80% of 50 million= 40 million prospects
 Determine the percentage of aware prospects that
should be persuaded to try the brand
 25% of 40 million=10 million would try the product. 40%
of all triers, or 4 million people would become loyal users.
17-49
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Objective-and-Task Method
 Determine the number of advertising exposures per
1 percent trial rate
 40 advertising exposures for every 1 percent of the
population would bring about a 25% trial rate
 Determine the number of gross rating points that
would have to be purchased
 A gross rating point is one exposure to 1 percent of the
target population
 40 exposures to 80% of the population: 3,200 gross rating
points
 Determine the necessary advertising budget on the
basis of the average cost of buying a gross rating
point
 Cost of one exposure to reach 1% of the population is
$3,277
 3,200 gross rating points would cost $10,486,400 ($3,277 x
3,200)
17-50
Copyright © 2003 Prentice-Hall, Inc.
Deciding on the Marketing
Communications Mix
 Companies must allocate the marketing
communications budget over the 8 major modes
of communication
 Within the same industry, companies can differ
considerably in their media and channel choices
 Companies are always searching for ways to gain
efficiency by replacing one communications tool
with others
 Companies are shifting advertising funds into
sales promotion
17-51
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Deciding on the Marketing
Communications Mix
 Characteristics of the Marketing
Communications Mix
 Factors in Setting the Marketing
Communications Mix
17-52
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Characteristics of the Marketing
Communications Mix
 Advertising
 Sales Promotion
 Public Relations and Publicity
 Events and Experiences
 Direct Marketing
 Personal Selling
17-53
Copyright © 2003 Prentice-Hall, Inc.
Advertising
 Public presentation
 Confers legitimacy on the product and also
suggests a standardized offering
 Pervasiveness
 Seller can repeat a message many times
 Buyer can compare the messages of various
competitors
 Says something positive about the seller’s size,
power, and success
17-54
Copyright © 2003 Prentice-Hall, Inc.
Advertising
 Amplified expressiveness
 Can dramatize the company and its products
through the artful use of print, sound, and
color
 Impersonality
 Audience does not feel obligated to pay
attention or respond to it
 Not interactive
17-55
Copyright © 2003 Prentice-Hall, Inc.
Sales Promotion
 Communication
 Gains attention and leads the consumers to
the product
 Incentive
 Incorporates some concession, inducement
or contribution that gives value to the
consumer
 Invitation
 A distinctive invitation to engage in the
transaction now.
17-56
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Public Relations and Publicity
 High credibility
 News stories and features are more
credible to readers than ads
 Ability to catch buyers off guard
 Can reach prospects who prefer to avoid
salespeople or ads
 Dramatization
 Can dramatize a company and its
products
17-57
Copyright © 2003 Prentice-Hall, Inc.
Events and Experiences
 Relevant
 A well-chosen event or experience can be seen as
highly relevant as the consumer gets personally
involved
 Involving
 Consumers can find events and experiences more
actively engaging, due to their live, real-time quality
 Implicit
 Events are more of an indirect “soft-sell”
17-58
Copyright © 2003 Prentice-Hall, Inc.
Direct Marketing
Includes direct mail, telemarketing, and internet
marketing
 Customized
 The message can be prepared to appeal to the
addressed individual
 Up-to-date
 The message can include the latest change or
information
 Interactive
 The message can be changed depending on the
customer’s response
17-59
Copyright © 2003 Prentice-Hall, Inc.
Word-Of-Mouth Marketing
 Credible
 People trust others they know and respect
 Personal
 A very intimate dialogue
 Timely
 It occurs when people want it to and they are
most interested
17-60
Copyright © 2003 Prentice-Hall, Inc.
Personal Selling
 Personal interaction
 Immediate and interactive relationship between
two or more persons
 Can observe the other’s reaction
 Cultivation
 Permits all kind of relationships from a simple
selling relationship to a deep personal friendship
 Response
 Makes the buyer feel under some obligation for
having listened to the sales talk
17-61
Copyright © 2003 Prentice-Hall, Inc.
Factors in Setting the Marketing
Communications Mix
 Companies must consider several factors
in developing their communications mix
 Type of Product Market
 Buyer-Readiness Stage
 Product-Life-Cycle Stage
 Market leaders derive more benefits from
advertising than from sales promotion
 Smaller firms gain more by using sales
promotion
17-62
Copyright © 2003 Prentice-Hall, Inc.
Type of Product Market
 Consumer marketers spend on
 Sales promotion, advertising, personal selling, and
public relations, in that order
 Business marketers spend on
 Personal selling, sales promotion, advertising, and
public relations, in that order
 In general, personal selling is used more with
complex, expensive, and risky goods and in
markets with fewer and larger buyers (usually
business markets)
17-63
Copyright © 2003 Prentice-Hall, Inc.
Type of Product Market
 Company sales force’s contributions in
consumer-goods marketing
 Increased stock position
 Can persuade retailers to take more stock and
devote more shelf space to the company’s brand
 Enthusiasm building
 Can build retailers’ enthusiasm by dramatizing
planned advertising and sales promotion backup
 Missionary selling
 Can sign up more retailers
 Key account management
 Can take responsibility for growing business with
the most important accounts
17-64
Copyright © 2003 Prentice-Hall, Inc.
Buyer-Readiness Stage
Fig. 17.5
 Advertising and publicity play the most
important role in the awareness building stage
 Customer conviction is influenced by personal
selling
 Closing the sale is influenced mostly by
personal selling and sales promotion
 Reordering is also affected mostly by personal
selling and sales promotion and somewhat by
reminder advertising
17-65
Copyright © 2003 Prentice-Hall, Inc.
Product Life-Cycle Stage
 Introduction Stage
 Advertising, events and experiences, and publicity,
followed by personal selling to gain distribution coverage
and sales promotion and direct marketing to induce trial
 Growth Stage
 Keeps the promotion spending at the same or a slightly
higher level than Introduction stage to meet competition
and to continue to educate the market
 Employs Word-of-mouth
 Maturity Stage
 Advertising, events and experiences, and personal selling
all grow more important
 Decline Stage
 Continuous sales promotion.
 Reduced advertising and publicity
 Minimum personal selling
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Measuring the
Communications Result
 Must measure promotion’s impact on the target audience
 Ask members of the target audience
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Whether they recognize or recall the message
How many times they saw it
What points they recall
How they felt about the message
Their previous and current attitudes toward the product and the
company
 How many people bought the product
 How many people liked the product
 How many people talked to others about the product
 Fig. 17.6. Current Consumer States for Two Brands
 Brand A: 80% aware, 60% tried, but only 20% satisfied
 Brand B: Only 40% aware, 30%, but 80% satisfied
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Managing the Integrated Marketing
Communications Process
 Companies need to move toward Integrated Marketing
Communications (IMC)
 A comprehensive market communications plan
 Evaluates a variety of communications disciplines
 Combines these disciplines to provide clarity,
consistency, and maximum communications impact
 Improves the firm’s ability to reach the right
customers with the right messages at the right time and
in the right place.
 IBM, Motorola, Xerox, Hewlett-Packard, P & G
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Managing the Integrated Marketing
Communications Process
 Coordinating Media
 Personal and nonpersonal communications
channels should be combined to achieve
maximum impact
 Should use the multiple-vehicle, multiple
stage campaign
 Many companies are coordinating their
online and offline communications activities
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Managing the Integrated Marketing
Communications Process
 Implementing IMC
 IMC has been slow to take hold.
 Today, a few large ad agencies have substantially
improved their integrated offerings.
 Many international clients have opted to hire one
full-service agency for all marketing
communications needs
 IMC should improve the firm’s ability to reach the
right customers with the right messages at the right
time and in the right place.
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