Chapter 9: Integrated Marketing Communications 9-1
Chapter 9: Integrated Marketing Communications
I.
Marketing communications includes conveying and sharing meaning between
individuals and organizations within a marketing context. It starts with the
customer and develops a strategic program of persuasive communications that
considers all contacts a customer will have in a marketing relationship. As
illustrated in Exhibit 9.1 the elements of the promotion mix include advertising,
public relations, personal selling, and sales promotion.
A.
Advertising is one of the most visible components of integrated marketing
communications. It is a paid, nonpersonal communications that is
transmitted through mass media such as the Internet, television,
newspapers, magazines, direct mail, outdoor displays and signs on moving
vehicles.
1.
Advertising is flexible and can be used to reach a large target
audience or focus on a small, precisely defined market segment.
2.
Advertising can be extremely cost effective because it can reach a
large number of people by advertising on television, in magazines,
in outdoor displays, and Internet ads.
3.
Disadvantages of advertising include a high dollar outlay for
television advertising and magazines. [Exhibit 9.2]
4.
Online advertising is difficult to measure and is less persuasive
than personal selling.
B.
Types of Advertising: Advertising is used to promote all types of products
including goods, services, ideas, issues, people, and anything that
advertisers want to communicate. Different types of advertising include:
1.
Institutional advertising promotes organizational images, ideas,
and cultures.
2.
Advocacy advertising is advertising by a company to promote a
position on a public issue, such as tax decrease, international trade
regulations, or social issues.
3.
Institutional advertising is used to promote socially approved
behavior such as recycling, responsible use of alcohol beverages,
and support for diversity.
4.
Product advertising promotes the image, features, uses, benefits,
and attributes of products.
5.
Pioneer advertising focuses on stimulating demand for a product
category rather than a specific brand.
6.
Competitive advertising attempts to stimulate demand for a
specific brand by promoting the brands image, features, uses, and
benefits through comparisons with competing brands. Such
products include soft drinks, automobiles, computers, and pain
relievers.
7.
Reminder advertising is a form of competitive advertising that lets
customers know that a brand is still available and that it has certain
attributes, uses, or benefits.
Chapter 9: Integrated Marketing Communications 9-2
8.
C.
D.
Reinforcement advertising assures current users of a brand that
they have made a right choice and they should continue to use this
brand in the future.
Determining the Advertising Budget
1.
The advertising budget is the total amount of money a marketer
allocates for advertising for a specific time period.
2.
There are many factors that affect the advertising budget including
geographic size of the market, distribution of customers, types of
products advertised, sales volume relative to competitor sales, and
historic trends in the firm’s advertising budget.
3.
The following approaches to determine the advertising
appropriations are the most widely used.
a.
The objectives and task approach requires the marketing
strategist to determine what is to be accomplished in a
campaign and attempt to list the tasks required to
accomplish them. The cost of the tasks are calculated and
used to determine the total budget.
b.
The percentage-of-sales approach is simple and
straightforward and is based on what the firm traditionally
spends on advertising and the industry average. It appears
to work for many companies and is very easy to implement.
c.
The competition-matching approach is used when
determining the advertising allocation by trying to match
major competitor’s appropriations in absolute dollars.
d.
The arbitrary approach means that someone in the
organization determines how much to spend on advertising
for a certain period of time based on intuition and personal
experience.
Evaluating Advertising Effectiveness
1.
There are many ways to test the effectiveness of advertising.
a.
Assessing the achievement of advertising objectives.
b.
Assessing the effectiveness of copy, illustrations, and
layouts.
c.
Evaluating the effectiveness of various media.
2.
Advertising can be evaluated before, during, and after the
campaign.
a.
Pretests attempt to evaluate the potential effectiveness of
one or more elements of the advertising, usually the
message. To pretest marketers sometimes use a panel of
actual or potential buyers and get members of the panel to
judge one or more dimension of the advertisement.
b.
Measurement of effectiveness during a campaign usually
relies on communication or inquiries. The number of
responses to toll free numbers, return of coupons, website
hits, or personal communication are recorded and the
Chapter 9: Integrated Marketing Communications 9-3
c.
II.
effectiveness is judged based on industry norms or the
organization’s previous benchmarks.
A posttest is the evaluation of advertising effectiveness
after the campaign. The advertising objectives often
determine what kind of posttest is most appropriate to
measure effectiveness.
Public Relations
A.
Public relations are used to create and maintain positive relationships
between an organization and its stakeholders.
1.
It can be used to promote the organization, people, ideas, and
images.
2.
It can create an internal understanding of values used in daily
decision-making.
3.
It focuses on creating, enhancing, and maintaining a favorable
image of the firm.
4.
It can make people improve their general awareness of the firm
and create specific images such as quality, innovativeness, or
value.
B.
Public Relations Methods
Organizations use a number of public relations methods to convey
messages and create the right attitudes, images and opinions. Public
relation materials such as brochures, newsletters, annual reports, and news
releases influence the public.
1.
News releases, sometimes called a press release, is usually a few
pages of typewritten copy containing fewer than 300 words
describing a company event or product.
2.
Feature article is a manuscript up to 3,000 words prepared for a
specific publication. They also might be appropriate if a
company is dealing with negative publicity.
3.
Press conference is a meeting called to announce major news
events. Many companies hold a press conference when
announcing a new patent, acquisition, or philanthropic effort.
4.
Publicity-based public relations have the advantage of creditability
when being endorsed by news coverage because it has not paid the
media to deliver a message.
C.
Negative Public Relations
An important aspect of public relations is dealing with unexpected or
unfavorable public reactions. Organizations should have plans in place to
handle negative events.
1.
Safety programs and effective quality control procedures can
maintain a good image of the employee’s conduct and product
integrity.
2.
Specific policies and procedures for news coverage of a crisis or
controversy should be in place.
Chapter 9: Integrated Marketing Communications 9-4
3.
III.
Being upfront with the press and public by taking prompt action
will assure the public that the firm is taking an honest attempt to
deal with negative situations.
The Nature of Personal Selling
Personal selling is paid personal communication that attempts to persuade and
inform customers to purchase products. It is the most precise form of
communication that assures companies that they are in direct contact with an
excellent prospect. A major disadvantage of personal selling is the cost per
contact. One sales presentation can take months to prepare and cost thousands of
dollars.
A.
Personal selling goals vary tremendously, but usually involve:
1.
Finding prospects that are interested in the firm’s products.
2.
Informing prospects of the products characteristics and issues
involved in using the product for its intended purpose.
3.
Persuading prospects to buy by being well trained and
understanding the needs of the customers.
4.
Keeping customers satisfied by providing a high level of service.
5.
Strategic management of the sales force.
B.
The sales force determines the success of the firm. Effective management
of the sales force is important for their success in product knowledge,
training, and support to management.
1.
Sales force objective
a.
Sales force objectives determine the type of sales person
the company needs to hire.
1)
Some may be needed to find new customers and
increase sales.
2)
Some may seek repeat sales and take orders for
routinely purchased products.
b.
Others may provide customer service through education
and expert advice.
2.
Sales force size
a.
The size of the sales force is the firm’s opportunity to close
sales and build customer relationships. They need to be
effective in building one-to-one relationships.
b.
Sales persons compensation can be a major expense and
needs to be synchronized with the marketing plan.
Reducing size can affect sales and profits.
c.
There is no exact analytical method for determining the
size of the sales force. General approaches may include:
1)
Determine specific objectives and tasks.
2)
Determine how many sales calls per year are
necessary
3)
Determine if sales generated are maximized by
number of sales people.
Chapter 9: Integrated Marketing Communications 9-5
3.
4.
5.
6.
7.
Recruiting sales people
a.
The sales manager:
1)
Must determine the best qualified sales person for
the sales position.
2)
Recruits from within the firm, other firms,
employment agencies, educational institutions, or
through advertisements.
b.
Companies striving to reduce sales force turnover will have
strict recruiting, selection, and provide intense training.
c.
Recruiting should be a continuous activity to find
applicants that meet the needs of the sales program.
Training the sales force
a.
Sales managers must determine what to teach, when to
train, and how to effectively train sales people to reach the
sales objectives.
b.
Training continues to be in the classroom but is moving
toward self-directed online training modules.
c.
Classroom training will continue to be used for motivating
and socializing sales people.
Controlling and evaluation of the sales force
a.
The sales managers must:
1)
Compare sales objectives with actual performance.
2)
Set sales objectives for the sales person such as
sales volume, number of sales calls, and other
performance criteria.
b.
Before evaluating a sales person the sales manager must
have performance standards in place. The sales person is
often compared to other employees in a similar sales
position.
c.
Improving performance can be accomplished through
revised performance standards, additional training
including motivation training.
Sales promotion
a.
Sales promotion is an activity or object that acts as an
incentive or inducement providing added value for a buyer.
b.
It includes all promotional and communication activities
other than personal selling, advertising, and public
relations.
c.
It encourages product trial and purchase decisions.
d.
Sales promotion often affects advertising and public
relations through added value incentives.
Consumer Sales Promotions Methods
a.
Sales promotions to attract customers to specific locations
can be initiated by retailers.
b.
Manufacturers initiate sales promotions that introduce new
products.
Chapter 9: Integrated Marketing Communications 9-6
c.
8.
Sales promotion methods include:
1)
Coupons are used to reduce product price and
encourage customers to try a new or established
brand. To be effective they need to be accessible
and easy to recognize. They can be distributed on
packages, inserted in print advertising, direct mail,
in stores, at checkout counters, and over the
Internet.
2)
Demonstrations are used to encourage trial use and
purchase of a product such as used in the cosmetic
industry.
3)
Frequent user incentives such as frequent-flyer
programs used by most major airlines reward
consumers with free tickets who engage in repeat
purchases.
4)
Point-of-purchase (POP) include outdoor signs;
window displays, counter pieces, display racks and
self service cartoons. They are used to attract
attention, inform customers, and encourage retailers
to carry a particular product.
5)
Free samples are widely used and promote the trial
of a new product in the early stages of the product’s
life cycle.
6)
Premiums are items offered free or at minimum cost
as a bonus for purchasing a product.
7)
Contests, games, and sweepstakes encourage
consumers to compete for prizes or rewards. They
often attract a large number of participants and
generate interest in a product.
Business-to-Business Trade Sales Promotion
a.
Buy-back allowance is a sum of money a producer gives to
a reseller for each unit the reseller buys. This method is an
incentive in which the total amount of money resellers
receives is proportional to their purchases during a
promotional offer.
b.
Buying allowance is a temporary price reduction to
resellers for purchasing specified quantities of a product.
These are offered to provide an incentive to handle new
products, achieve temporary price reductions, or stimulate
the purchase of products.
c.
Free merchandise is offered to resellers who purchase a
specific quantity of products. It is given to reduce the
invoice or some other promotional activities that the
reseller may be engaged in to assist product distribution.
Chapter 9: Integrated Marketing Communications 9-7
d.
e.
f.
g.
Merchandise allowance is an agreement to pay resellers for
providing promotional efforts such as displays, advertising,
or other promotional efforts.
Cooperative advertising is an arrangement whereby the
manufacturer agrees to pay a certain amount of the
retailer’s media cost for advertising the manufacturer’s
products.
Premium or push money is used as an incentive to gain a
commitment from the sales force.
Sales contest recognizes outstanding achievements by sales
people.
Questions for Discussion
1.
What role does integrated marketing communications play in the overall
marketing strategy? What is the difference between the promotion mix and
the marketing mix?
2.
Comment on how the highly visible nature of advertising relates to the
development of a long-term brand image. What are the advantages and
disadvantages of advertising versus other elements of the promotion mix?
3.
How can public relations be used as an intricate part of integrated
communications? Which public relations method might be more appropriate
for a dot-com company?
Explain the role of effective management of the sales force in implementing a
marketing strategy. How can the sales force be involved in developing a
successful marketing plan?
4.