3104: Marketing Exam 3 Material
Chapter 18: Integrated Marketing Communications and Direct Marketing
1. Promotion represents the 4th element in the marketing mix. It consists of communication
tools, like advertising, personal selling, sales promotion, public relations, and direct
marketing.
a. The combination of one or more of these communication tools is called the
promotional mix. These tools can be used to;
a.i. Inform prospective buyers about the benefits of the product
a.ii. Persuade them to try it
a.iii. Remind them later about the benefits they enjoyed by using the product
2. Integrated Marketing Communications (IMC): the concept of designing marketing
communications programs that coordinate all promotional activities advertising,
personal selling, sales promotion, public relations, and direct marketing to provide a
consistent message across all audiences
The Communication Process
1. Communication: is the process of conveying a message to others and it requires six
elements; a source, a message, a channel of communication, a receiver, and the processes
of encoding and decoding (look @chart on page 458)
a. Source: may be a company or person who has information to convey
b. Message: formed by the information sent by a source, such as a description of a
new cellular telephone
c. Channel of Communication: the means of which the message is conveyed such as
a salesperson, advertising media, or public relations tools
d. Receivers: consumers who read, hear, or see the message
2. Encoding: is the process of having the sender transform an idea into a set of symbols
3. Decoding: is the reverse, or the process of having the receiver take a set of symbols, the
message, and transform the symbols back to an idea
a. Decoding is performed by the receivers according to their own frame of reference;
their attitudes, values, and beliefs
4. For the message to be communicated effectively, the sender and receiver must have a
mutually shared Field of Experience a similar understanding and knowledge they apply
to the message.
a. Many misinterpretations are merely the result of bad translations, like KFC
translated their slogan in China but finger-lickin good translated to eat your
fingers off!
5. Feedback: there is a line labeled feedback loop, which consists of a response and
feedback.
a. Response: is the impact the message had on the receivers knowledge, attitudes,
or behaviours.
b. Feedback: the senders interpretation of the response and indicates whether the
message was decoded and understood as intended.
6. Noise: includes extraneous factors that can work against effective communication by
distorting a message or the feedback received.
a. Ex. a printing mistake that affects the meaning of a newspaper ad
The Promotional Elements
1. To communicate with consumers, a company can use one or more of 5 promotional
alternatives: advertising, personal selling, public relations, sales promotion, and direct
marketing.
a. 3 of these elements (advertising, sales promotion, and public relations) are often
said to use mass selling because they are used with groups of prospective buyers
b. In contrast, personal selling uses customized interaction between a seller and a
prospective buyer
2. The 5 elements of promotional mix (look @chart on page 461):
a. Advertising: is any paid form of nonpersonal communication about an
organization, good, service, or idea by an identified sponsor. Its for a Mass
crowd, and fees are paid for ad space or time, strengths are efficient means for
reaching large numbers of people, and weakness is the high cost and difficult to
receive good feedback.
b. Personal Selling: is the 2way flow of communication between a buyer and seller
designed to influence a person or groups purchase decision. Its customized to
people usually face to face. Fees paid to salespeople as either salaries or
commissions. Strengths: immediate feedback, very persuasive, and a salesperson
can control to whom the presentation is made which reduces the amount of
wasted coverage. Weakness: extremely expensive, messages may differ between
salespeople.
c. Public Relations: is a form of communication management that seeks to influence
the feelings, opinions, or beliefs held by customers, stockholder, employees and
etc about a company and its products or services. Its mass communication, there
is no direct payment to the media. Strengths: consumers think its really credible.
Weaknesses: difficult to get media cooperation.
c.i. Publicity: is a nonpersonal, indirectly paid presentation of an organization,
good, or service. Ex. news story or editorial. But it is hard to control what
they say about you if you invite them to try your product.
d. Sales Promotion: a short term inducement of value offered to arouse interest in
buying a good or service. Ex. coupons, rebates, samples, and sweepstakes, such as
the Shop Smart for College promotion. Its mass communication, payment is
wide range of fees paid. Strengths: flexible, effective at changing short run
behavior b/c people buy a lot more during the promotion. Weakness: easily
abused or duplicated, can lead to promotion wars.
e. Direct Marketing: uses direct communication with consumers to generate a
response in the form of an order, a request for further information, or a visit to a
retail outlet. Ex. face to face selling, direct mail, catalogs, telephone solicitations,
online marketing. It is customized communication. Payment is whatever it costs
to communicate through mail telephone or computer. Strengths: messages can be
prepared quickly, facilitates relationship with customer. Weaknesses: declining
customer response, database management is expensive.
Integrated Marketing Communications Developing the Promotional Mix (factors in developing
below)
1. The Target Audience: promotional programs are directed to the ultimate consumer, to an
intermediary (retailer, wholesaler, or industrial distributor), or to both. They can use mass
media to target buyers of consumer products. Or they usually use personal selling to
target intermediaries, etc.
2. The Product Life Cycle: the composition of the promotional mix changes over the 4 life
cycle stages (look @chart on page 465 for more information).
a. Introduction Stage: objective here is To Inform consumers to increase their level
of awareness. A lot of activites are used here like advertising, sales promotion, or
publicity in veterinary magazines, sales promotion like free samples, etc.
b. Growth Stage: objective here is To Persuade the consumer to buy the product
rather than substitutes. Marketers want to gain brand preference and solidify
distribution. Use personal selling and advertising.
c. Maturity Stage: objective is To Remind you want to maintain existing buyers and
advertising role is to remind buyers of the products existence. Use advertising,
sales promotion in the form of discounts and coupons, limited personal direct selling,
and mail reminders.
d. Decline Stage: objective is To Phase Out the product and little money is spent in
the promotional mix.
3. Product Characteristics: 3 specific characteristics about the product should be considered
a. Complexity: refers to the technical sophistication of the product and amount of
understanding required to use it. (no info needed for simple products like ketchup)
b. Risk: buyer can asses it in terms of financial risk, social risk, and physical risk.
The greater the risk than the greater the need for Personal Selling.
c. Ancillary Services: pertain to the degree of service or support required after the
sale (common in industrial products like who will provide maintenance of the
plane) Use advertising, direct marketing, and especially personal selling to build
buyer confidence and provide evidence of customer service.
4. Stages of the Buying Decision: the promotional mix needed various during the 3 stages of
the Consumer Purchase Decision Process (look @chart on page 468 for more info).
a. Prepurchase Stage: need high advertising (let them know about the product), some
PR, a little sales promotion/direct marketing (free samples), and no personal
selling
b. Purchase Stage: importance of personal selling is highest, and impact of
advertising is lowest. Some sales promotion with coupons, deals, etc.
c. Postpurchase Stage: personal selling is still pretty important; the more personal
contact after the sale then the more the buyer is satisfied. Advertising is important
again to assure the buyer that the right purchase was made. These help reduce
buyers postpurchase anxiety.
5. Channel Strategies (look @chart of page 469 for more info)
a. Push Strategy: directing the promotional mix to channel members to gain their
cooperation in ordering and stocking the product. Personal selling and sales
promotion used, its directed to intermediaries like wholesalers. They want to
stimulate demand by pushing the product through the channel the goal is to get
channel members to push it to their customers.
b. Pull Strategy: when a manufacturer directs its promotional mix at ultimate
consumers to encourage them to ask the retailer for a product, so the flow of
demand stimulation is going from the consumer to the retailer to the wholesaler
then to the manufacturer. They use Advertising directed to consumers.
Developing (planning) an IMC Program; promotion decision process is divided into developing,
executing, and assessing the promotion program (look @chart on page 468 for more info).
1. Development focuses on the 4 Ws:
a. WHO is the target audience?
b. WHAT are (1) the promotion objectives, (2) the amounts of money that can be
budgeted for the promotion program, and (3) the kinds of promotion to use?
c. WHERE should the promotion be run?
d. WHEN should the promotion be run?
2. Identify the Target Audience
3. Specify Promotion Objectives: a guideline to developing promotion objectives is a
hierarchy of effects.
a. Hierarchy of Effects: Is the sequence of stages a prospective buyer goes through
from initial awareness of a product to eventual action (trial or adoption) so
marketers can focus on one or a couple stages; 5 stages below
a.i. Awareness the consumers ability to recognize and remember the product
or brand name
a.ii. Interest an increase in the consumers desire to learn about some of the
features of the product or brand
a.iii. Evaluation consumers appraisal of the product or brand on important
attributes
a.iv. Trial the consumers actual first purchase and use of the product or brand
a.v. Adoption through a favorable experience on the first trial, the consumers
repeated purchase and use of the product or brand
b. Promotion objectives should possess 3 important qualities:
b.i. Designed for a well defined target audience
b.ii. Be measurable
b.iii. Cover a specific time period
4. Setting the Promotion Budget: several methods can be used to decide how much to spend
a. Percentage of Sales: funds are allocated to promotion as a percentage of past or
anticipated sales, in terms of either dollars or units sold. Ex our promotion
budget for this year is 3% of last years gross sales.
a.i. Fallacy in this approach is that it implies that sales cause promotion. A
company may reduce its promotion budget b/c of a downturn in past sales
or an anticipated downturn in future sales situations where they need
promotion.
b. Competitive Parity: matching the competitors absolute level of spending or the
proportion per pint of market share.
c. All You Can Afford: money is allocated to promotion only after all other budget
items are covered; common to many small businesses.
d. Objective and Task: best approach wherby the company (1) determines its
promotion objectives (2) outlines the tasks to accomplish these objectives (3)
determines the promotion cost of performing these tasks
5. Selecting the right promotional tools: specify the combination of the 5 basic IMC tools
(advertising, personal selling, sales promotion, PR, and direct marketing)
6. Designing the Promotion: this will play a primary role in determining the message that is
communicated to the audience, its a challenge to design each IMC promotional activity
to communicate the same message.
7. Scheduling the Promotion: choose the order in which each promotional tool is introduced
and the frequency of its use during the campaign
Executing (implementation) and Assessing (evaluation) the Promotion Program
1. Executing the promotion program:
a. Pretest the promotion
b. Carry out the promotion
2. Assessing the promotion program:
a. Post test the promotion
b. Make needed changes
Direct Marketing
1. Examples: direct mail and catalogs, TV home shopping, telemarketing, direct selling, etc.
2. Email is the most common form
3. There has been a growth in Direct Marketing: increasing interest in customer relationship
management and increasing popularity in Internet
4. The Value of Direct Marketing: the level of use of various forms of direct marketing,
many also believe that provides excellent customer service
a. Direct Orders: result of offers that contain all the information necessary for a
prospective buyer to make a decision to purchase and complete the transaction
b. Lead Generation: result of an offer designed to generate interest in a product or
service and a request for additional information
c. Traffic Generation: the outcome of an offer designed to motivate people to visit a
business
5. Issues in Direct Marketing
a. Databases need to be kept up to date
b. Global issues
b.i. Have to have permission to include a name of direct marketing solicitation
list
b.ii. Some countries dont have well developed interest and phones
b.iii. Payment is hard b/c of availability of credit and credit cards
b.iv. Issues of privacy like the EU passed consumer privacy law Data
Protection Directive makes it harder to keep up w/ consumers