Chapter 18    ( cont...)

Marketing: Integrated Marketing Communications and Direct Marketing
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INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX

 


Integrated Marketing Communications

The concept of designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences. 
 

 

 


Concept Check

1. For consumer products, why is advertising emphasized more than personal selling?
 
A:  There is a large number of buyers.
 
2.  Explain the differences between a push strategy and a pull strategy.
 
A:  In a push strategy, promotion is used to move the product through the channel by directing promotional activities at channel members.  In a pull strategy, promotion stimulates end user demand to pull the product through the channel.
 
3.  Integrated marketing communi-   cations programs provide a
_________ message across all audiences.
 

A:  consistent

 


DEVELOPING THE
PROMOTION PROGRAM

  • §Who  is the target audience?
  • §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?
  • §Where should the promotion be run?
  • §When should the promotion be run?
 

 

 


DEVELOPING THE
PROMOTION PROGRAM

FIGURE 18-6  The promotion decision process


DEVELOPING THE
PROMOTION PROGRAM

  • Identifying the Target Audience
  • Specifying Promotion Objectives
  • Setting the Promotion Budget

 

 


Hierarchy of Effects

The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product).  The stages include awareness, interest, evaluation, trial, and adoption.
 

 

 


FIGURE 18-7  U.S. promotion expenditures by companies in 2000


DEVELOPING THE
PROMOTION PROGRAM

  • Setting the Promotion Budget (cont)
 

 

 


Percentage of Sales Budgeting

Allocating funds to advertising as a percentage of past or anticipated sales, in terms of either dollars or units sold.

 

 


Competitive Parity Budgeting

Matching the competitors’ absolute level of spending or the proportion per point of market share.

 

 


All-You-Can-Afford Budgeting

Allocating funds to promotion only after all other budget items are covered.
 

 

 


Objective and Task Budgeting

A budgeting approach whereby the company (1) determines its promotion objectives, (2) outlines the tasks to accomplish these objectives, and (3) determines the promotion cost of performing these tasks.
 

 

 


FIGURE 18-8  The objective and task approach


DEVELOPING THE
PROMOTION PROGRAM
  • Selecting the Right Promotional Tools
  • Designing the Promotion
  • Scheduling the Promotion
  • EXECUTING AND EVALUATING THE PROMOTION PROGRAM

 

 


EXECUTING AND EVALUATING
THE PROMOTION PROGRAM
 

 

 

 

 


Concept Check

1.  What are the characteristics of good promotions objectives?
 
A:  They should (1) be designed for a well-defined target audience, (2) be measurable, and (3) cover a specified time period.
 
2.  What are the weaknesses of the percentage of sales budgeting approach?
A:  It implies that sales cause promotions; may cause a lag in budgets that are based on previous year’s figures, e.g. a low sales year would result in low advertising the next year when it should perhaps be higher; fails to consider the importance of promotion and company objectives.
 

3.  How have advertising agencies changed to facilitate the use of IMC programs?

 
A:  Agencies such as J. Walter Thompson design integrated programs for a company.  Although many agencies still have departments such as direct marketing, the trend is clearly toward a long-term perspective in which all forms of promotion are integrated.
 

 

 


DIRECT MARKETING

  • The Growth of Direct Marketing

 

 


FIGURE 18-9  Direct marketing expenditures, sales and employment by medium


DIRECT MARKETING

 

 

 


Direct Orders

The result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase an complete the transaction.

 

 


Lead Generation

The result of a direct marketing offer designed to generate interest in a product or a service, and a request for additional information. 
 

 

 


Traffic Generation

The outcome of a direct marketing offer designed to motivate people to visit a business. 

 

 


Concept Check

1.  The ability to design and use direct marketing programs has increased with the availability of __________ and _________.

 

A:  computers/data bases

 

2.  What are the three types of responses generated by direct marketing activities?

 

A:  Direct orders, lead generation, traffic generation

 

 

 

 


Chapter 18 - Summary

 

  1. Communication is the process of conveying a message to others and requires a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.
  2. For effective communication to occur, the sender and receiver must have a shared field of experience. The receiver's response provides feedback to the sender and helps determine whether decoding has occurred or noise has distorted the message.
  3. The promotional elements consist of advertising, personal selling, sales promotion, public relations, and direct marketing. These tools vary according to whether they are personal; can be identified with a sponsor; and can be controlled with regard to whom, when, where, and how often the message is sent.
  4. In selecting the appropriate promotional mix, marketers must consider the target audience, the stage of the product's life cycle, characteristics of the product, decision stage of the buyer, and the channel of distribution.
  5. The target for promotional programs can be the ultimate consumer, an intermediary, or both. Ultimate consumer programs rely more on advertising, whereas personal selling is more important in reaching business buyers and intermediaries.
  6. The emphasis on the promotional tools varies with a product's life cycle. In introduction, awareness is important. During growth, creating brand preference is essential. Advertising is more important in the former stage and personal selling in the latter. Sales promotion helps maintain buyers in the maturity stage.
  7. The appropriate promotional mix depends on the complexity of the product, the degree of risk associated with its purchase, and the need for ancillary services.
  8. In the prepurchase stage of a customer's purchase decision, advertising and public relations are emphasized; at the purchase stage personal selling, sales promotion, and direct marketing are most important; and during the postpurchase stage advertising, personal selling, and sales promotion are used to reduce postpurchase anxiety.
  9. When a push strategy is used, personal selling and sales promotions directed to intermediaries play major roles. In a pull strategy, advertising and sales promotions directed to ultimate consumers are important.
  10. Integrated marketing communications programs coordinate all promotional activities to provide a consistent message across all audiences.
  11. The promotion decision process involves developing, executing, and evaluating the promotion program. Developing the promotion program focuses on determining who is the target audience, what to say, where the message should be said, and when to say it.
  12. Setting promotion objectives is based on the hierarchy of effects. Objectives should be measurable, have a specified time period, and state the target audience.
  13. Budgeting methods often used are percentage of sales, competitive parity, and the all-you-can-afford approaches. The best budgeting approach is based on the objectives set and tasks required.
  14. Selecting, designing, and scheduling promotional elements requires experience and creativity because of the large number of possible combinations of the promotion mix.
  15. Direct marketing offers consumers convenience, entertainment, privacy, time savings, low prices, and customer service. Sellers benefit from direct orders, lead generation, and traffic generation.
  16. Global opportunities for direct marketing will increase as mail and telephone systems improve worldwide. Consumer's concerns about privacy will be a key issue for direct marketers in the future.

 

 



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