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INTEGRATED MARKETING

COMMUNICA-TIONS AND

DIRECT MARKETING

CHAPTER

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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

1. Discuss integrated marketing communication and the communication process.

2. Describe the promotional mix and the uniqueness of each component.

3. Select the promotional approach appropriate to a product’s life-cycle stage and characteristics.

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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

4. Discuss the characteristics of push and pull strategies.

5. Describe the elements of the promotion decision process.

6. Explain the value of direct marketing for consumers and sellers.

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THE COMMUNICATION PROCESS

• Promotional Mix

• Integrated Marketing Communications (IMC)

• Communication

• Source

• Message

• Channel of Communication

• Receivers

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FIGURE 18-1 FIGURE 18-1 The communication process

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THE COMMUNICATION PROCESS

• Encoding and Decoding

Encoding

Decoding

Field of Experience

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THE COMMUNICATION PROCESS

• Feedback

Response

Feedback

• Noise

Pretesting

Feedback Loop

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FIGURE 18-2 FIGURE 18-2 The promotional mix

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THE PROMOTIONAL ELEMENTS

• Advertising

Paid Aspect

Nonpersonal Component

Wasted Coverage

• Personal Selling

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THE PROMOTIONAL ELEMENTS

• Public Relations

Public Relations

Publicity

• Sales Promotion

• Direct Marketing

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FIGURE 18-A FIGURE 18-A Factors that influence the use of promotional tools

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FIGURE 18-3 FIGURE 18-3 Promotional tools used over the product life cycle of Purina Dog Chow

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INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING

THE PROMOTIONAL MIX

• Stages of the Buying Process

Prepurchase Stage

Purchase Stage

Postpurchase Stage

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FIGURE 18-4 FIGURE 18-4 How the importance of promotional elements varies during the stages of consumer’s purchase decision

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INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING

THE PROMOTIONAL MIX

• Channel Strategies

Push Strategy

Pull Strategy

• Direct-to-Consumer

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FIGURE 18-5 FIGURE 18-5 A comparison of push and pull promotional strategies

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DEVELOPING AN IMC PROGRAM

• Identifying the Target Audience

Hierarchy of Effects

• Awareness

• Interest

• Specifying Promotion Objectives

• Evaluation

• Trial

• Adoption

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DEVELOPING AN IMC PROGRAM

• Setting the Promotion Budget

Percentage of Sales Budgeting

Competitive Parity Budgeting (Matching Competitors or Share of Market)

All-You-Can-Afford Budgeting

Objective and Task Budgeting

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FIGURE 18-7 FIGURE 18-7 U.S. promotion expenditures by companies in 2003

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FIGURE 18-8 FIGURE 18-8 The objective and task approach

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DIRECT MARKETING

• The Growth of Direct Marketing

Direct Orders

• The Value of Direct Marketing

Lead Generation

Traffic Generation

• Technological, Global, andEthical Issues in Direct Marketing

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

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Promotional Mix

The promotional mix consists of the combination of one or more of the communication tools used to: (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product.

The promotional mix consists of the combination of one or more of the communication tools used to: (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product.

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Integrated Marketing Communications (IMC)

Integrated marketing communications (IMC) is 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.

Integrated marketing communications (IMC) is 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.

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Communication

Communication is the process of conveying a message to others and requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

Communication is the process of conveying a message to others and requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.

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Source

A source is a company or person who has information to convey.A source is a company or person who has information to convey.

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Message

A message is the information sent by a source to a receiver in the communication process.

A message is the information sent by a source to a receiver in the communication process.

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Channel of Communication

A channel of communication is the means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver.

A channel of communication is the means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver.

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Receivers

Receivers are consumers who read, hear, or see the message sent by a source in the communication process.

Receivers are consumers who read, hear, or see the message sent by a source in the communication process.

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Encoding

Encoding is the process of having the sender transform an idea into a set of symbols.

Encoding is the process of having the sender transform an idea into a set of symbols.

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Decoding

Decoding is the process of having the receiver take a set of symbols, the message, and transform them back to an idea.

Decoding is the process of having the receiver take a set of symbols, the message, and transform them back to an idea.

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Field of Experience

A field of experience is a mutually shared understanding and knowledge that the a sender and receiver apply to a message so that it can be communicated effectively.

A field of experience is a mutually shared understanding and knowledge that the a sender and receiver apply to a message so that it can be communicated effectively.

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Response

A response is the impact the message had on the receiver’s knowledge, attitudes, or behaviors in the feedback loop.

A response is the impact the message had on the receiver’s knowledge, attitudes, or behaviors in the feedback loop.

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Feedback

Feedback is the sender’s interpretationof the response and indicates whether a message was decoded and understoodas intended.

Feedback is the sender’s interpretationof the response and indicates whether a message was decoded and understoodas intended.

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Noise

Noise includes extraneous factors that can work against effective communication by distorting a message or the feedback received.

Noise includes extraneous factors that can work against effective communication by distorting a message or the feedback received.

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Advertising

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea byan identified sponsor.

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea byan identified sponsor.

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Personal Selling

Personal selling is the two-way flowof communication between a buyer and seller, designed to influence a person’sor group’s purchase decision, usually in face-to-face communication between the sender and receiver.

Personal selling is the two-way flowof communication between a buyer and seller, designed to influence a person’sor group’s purchase decision, usually in face-to-face communication between the sender and receiver.

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Public Relations

Public relations is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

Public relations is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

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Publicity

Publicity is a nonpersonal, indirectly paid presentation of an organization, good, or service.

Publicity is a nonpersonal, indirectly paid presentation of an organization, good, or service.

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Sales Promotion

Sales promotion is a short-term inducement of value offered to arouse interest in buying a good or service.

Sales promotion is a short-term inducement of value offered to arouse interest in buying a good or service.

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Direct Marketing

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.

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.

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Push Strategy

A push strategy consists of directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product.

A push strategy consists of directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product.

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Pull Strategy

A pull strategy consists of directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.

A pull strategy consists of directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.

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Hierarchy of Effects

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

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

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Percentage of Sales Budgeting

Percentage of sales budgeting consists of allocating funds to promotion as a percentage of past or anticipated sales,in terms of either dollars or units sold.

Percentage of sales budgeting consists of allocating funds to promotion as a percentage of past or anticipated sales,in terms of either dollars or units sold.

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Competitive Parity Budgeting

Competitive parity budgeting consists of allocating funds to promotion by matching the competitor’s absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market.

Competitive parity budgeting consists of allocating funds to promotion by matching the competitor’s absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market.

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All-You-Can-Afford Budgeting

All-you-can-afford budgeting consists of allocating funds to promotion only after all other budget items are covered.

All-you-can-afford budgeting consists of allocating funds to promotion only after all other budget items are covered.

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Objective and Task Budgeting

Objective and task budgeting consists of allocating Allocating funds to promotion 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.

Objective and task budgeting consists of allocating Allocating funds to promotion 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.

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Direct Orders

Direct orders are the result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.

Direct orders are the result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.

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Lead Generation

Lead generation is the result of a direct marketing offer designed to generate interest in a product or a service and a request for additional information.

Lead generation is the result of a direct marketing offer designed to generate interest in a product or a service and a request for additional information.

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Traffic Generation

Traffic generation is the outcome of a direct marketing offer designed to motivate people to visit a business.

Traffic generation is the outcome of a direct marketing offer designed to motivate people to visit a business.