Integrated Marketing Communications 02

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Integrated MarketingIntegrated Marketing

CommunicationsCommunications


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Learning ObjectivesLearning Objectives

1.1. Discuss the role of promotion in theDiscuss the role of promotion in the

marketing mix.marketing mix.

2. Discuss the elements of the promotional2. Discuss the elements of the promotionalmix.mix.

3. Describe the communication process.3. Describe the communication process.


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Learning Objectives (continued)Learning Objectives (continued)

4. Explain the goal and tasks of promotion.4. Explain the goal and tasks of promotion.

5. Discuss the AIDA concept and its5. Discuss the AIDA concept and its

relationship to the promotional mix.relationship to the promotional mix.

6. Describe the factors that affect the6. Describe the factors that affect the

promotional mix.promotional mix.

7.7. Discuss the concept of integrated marketingDiscuss the concept of integrated marketing

communications.communications.


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Learning ObjectiveLearning Objective 1

1

Discuss the role of promotionDiscuss the role of promotionin the marketing mix.in the marketing mix.


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PromotionPromotion 1

1

Communication by marketers

that informs, persuades, and

reminds potential buyers of aproduct in order to influence

an opinion or elicit a

response.


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Promotional StrategyPromotional Strategy 1

1

A plan for the optimal use of

the elements of promotion:

AdvertisingAdvertisingPublic RelationsPublic Relations

Personal SellingPersonal Selling

Sales PromotionSales Promotion


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The Role of PromotionThe Role of Promotion 11

Promotional MixPromotional Mix

AdvertisingPublic Relations

Personal SellingSales Promotion

Promotion PlanPromotion Plan


AdvertisingPublic Relations

Personal SellingSales Promotion

Promotion PlanPromotion Plan

OverallOverallMarketingMarketingObjectivesObjectives

OverallOverallMarketingMarketingObjectivesObjectives

Marketing MixMarketing Mix ProductProduct

DistributionDistribution

PromotionPromotion

PricePrice

Marketing MixMarketing Mix ProductProduct

DistributionDistribution

PromotionPromotion

PricePrice

Target MarketTarget MarketTarget MarketTarget Market


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Differential AdvantageDifferential Advantage

Unique FeaturesUnique Features

Excellent ServiceExcellent Service

Low PricesLow Prices

Rapid DeliveryRapid Delivery

High Product QualityHigh Product Quality

FeaturesFeaturesthat providethat provideDifferentialDifferentialAdvantageAdvantage

FeaturesFeaturesthat providethat provideDifferentialDifferentialAdvantageAdvantage

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Discuss the elementsDiscuss the elements

of the promotional mix.of the promotional mix.


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Combination of promotion

tools used to reach the target

market and fulfill

the organizations

overall goals.

AdvertisingAdvertising

Public RelationsPublic RelationsPersonal SellingPersonal Selling


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Elementsof the

PromotionalMix

Elementsof the

PromotionalMix

Public RelationsPublic Relations



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Impersonal, one-way

mass communication

about a product or

organization that is

paid for by a marketer.

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Advertising MediaAdvertising Media

TraditionalAdvertising Media

TraditionalAdvertising Media

ElectronicAdvertising Media

ElectronicAdvertising Media

Television Radio Newspapers Magazines

Books Direct mail Billboards Transit cards

Internet Computer modems Fax machines

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AdvantagesAdvantages

Ability to reach largeAbility to reach largenumber of peoplenumber of people

Cost per contact is lowCost per contact is low

Can be micro-targetedCan be micro-targeted

DisadvantagesDisadvantages

Total cost is highTotal cost is high

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The marketing function that

evaluates public attitudes, identifies

areas within the organization that

the public may be interested in, andexecutes a program of action to

earn public understanding and

acceptance.

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Evaluates publicattitudes

Evaluates publicattitudes

Identifies areasof public interest

Identifies areasof public interest

Executesprograms to win

public

Executesprograms to win

public

Functions ofFunctions of


Functions ofFunctions of


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PublicityPublicity 22

Public information about a

company, good, or service

appearing in the mass media

as a news item.


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Sales PromotionSales Promotion 22

Marketing activities--other than

personal selling, advertising,

and public relations--that

stimulate consumer buying and

dealer effectiveness.


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EndConsumers

EndConsumers

Trade CustomersTrade Customers

CompanyEmployees

CompanyEmployees


TargetsTargets


TargetsTargets

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Free samplesFree samples

ContestsContests

PremiumsPremiums

Trade ShowsTrade Shows

Vacation GiveawaysVacation Giveaways

CouponsCoupons

Popular ToolsPopular Toolsforfor

Consumer SalesConsumer SalesPromotionPromotion

Popular ToolsPopular ToolsforforConsumer SalesConsumer Sales

PromotionPromotion

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Personal SellingPersonal Selling 22

Planned presentation to

one or more prospective buyers

for the purpose

of making a sale.


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TraditionalSelling

TraditionalSelling

RelationshipSelling

RelationshipSelling

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Learning ObjectiveLearning Objective

Describe theDescribe the

communication process.communication process.

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CommunicationCommunication 33

The process by which we

exchange or share

meanings through a common

set of symbols.


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Marketing CommunicationMarketing Communication

Categories ofCommunication

Categories ofCommunication

InterpersonalInterpersonalCommunicationCommunication

InterpersonalInterpersonalCommunicationCommunication

MassMassCommunicationCommunication

MassMassCommunicationCommunication

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The Communication ProcessThe Communication Process

As SendersAs Senders As ReceiversAs Receivers

Inform

Persuade

Remind

Develop messages

Adapt messages

Spot newcommunicationopportunities

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The Sender and EncodingThe Sender and Encoding 33

SenderSenderThe originator of the message in the

communication process.

The originator of the message in the

communication process.

EncodingEncodingThe conversion of a senders ideas and

thoughts into a message, usually in the

form of words or signs.

The conversion of a senders ideas and

thoughts into a message, usually in the

form of words or signs.


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The Communication ProcessThe Communication Process

NoiseNoise

SenderSenderEncodingMessage

EncodingMessage

MessageChannel

MessageChannel

MessageChannel

MessageChannel

DecodingMessage

DecodingMessage Receiver

Receiver

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Characteristics of AdvertisingCharacteristics of Advertising

Communication ModeCommunication Mode

Communication ControlCommunication Control

Feedback AmountFeedback Amount

Feedback SpeedFeedback Speed

Message Flow DirectionMessage Flow Direction

Message Content ControlMessage Content ControlSponsor IdentificationSponsor Identification

Reaching Large AudienceReaching Large Audience

Message FlexibilityMessage Flexibility

AdvertisingAdvertisingAdvertisingAdvertising

Indirect and non-personalIndirect and non-personal

LowLow

LittleLittle

DelayedDelayed

One-wayOne-way

YesYesYesYes

FastFast

Same message to all audiencesSame message to all audiences

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Characteristics of PublicCharacteristics of PublicRelationsRelations

33






Message Content ControlMessage Content ControlSponsor IdentificationSponsor Identification



Public RelationsPublic RelationsPublic RelationsPublic Relations

Usually indirect, non-personalUsually indirect, non-personal

Moderate to lowModerate to low

LittleLittle

DelayedDelayed

One-wayOne-way

NoNoNoNo

Usually fastUsually fast

Usually no direct controlUsually no direct control

C f


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Characteristics ofCharacteristics ofSales PromotionSales Promotion

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Message Content ControlMessage Content Control

Sponsor IdentificationSponsor Identification



Sales PromotionSales PromotionSales PromotionSales Promotion

Usually Indirect and non-personalUsually Indirect and non-personal

Moderate to lowModerate to low

Little to moderateLittle to moderate

VariesVaries

Mostly one-wayMostly one-way

YesYes

YesYes

FastFast

Same message to varied targetSame message to varied target


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Characteristics of PersonalCharacteristics of PersonalSellingSelling

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Message Content ControlMessage Content Control

Sponsor IdentificationSponsor Identification



Personal SellingPersonal SellingPersonal SellingPersonal Selling

Direct and face-to-faceDirect and face-to-face

HighHigh

MuchMuch

ImmediateImmediate

Two-wayTwo-way

YesYes

YesYes

SlowSlow

Tailored to prospectTailored to prospect


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Explain the goal and tasks of promotion.Explain the goal and tasks of promotion.

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Goals and Tasks of PromotionGoals and Tasks of Promotion

InformingInforming RemindingReminding

PersuadingPersuading

TargetAudience

TargetAudience

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InformingInforming RemindingReminding


TargetAudience

TargetAudience

PLC StagesPLC Stages:Introduction

Early Growth

PLC Stages:PLC Stages:

Growth

Maturity

PLC Stages:PLC Stages:

Maturity

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Informative Objective

Increase awareness

Explain how product works

Suggest new uses

Build company image

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Persuasion Objective

Encourage brand switching

Change customers perception of productattributes

Influence buying decision

Persuade customers to call

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Reminder Objective

Remind customers that productmay be needed

Remind customers where to buy product

Maintain customer awareness

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Discuss the AIDA conceptDiscuss the AIDA concept

and its relationship toand its relationship tothe promotional mix.the promotional mix.

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The AIDA ConceptThe AIDA Concept

Model that outlines the process

for achieving promotional goals

in terms of stages of consumer

involvement with the message.

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The AIDA ConceptThe AIDA Concept

AAttentionttention

IInterestnterest

DDesireesire

AActionction

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AIDA and the Promotional MixAIDA and the Promotional Mix

AwarenessAwarenessAwarenessAwareness InterestInterestInterestInterest DesireDesireDesireDesire ActionActionActionAction

AdvertisingAdvertisingVery

effectiveVery

effectiveSomewhateffective

Noteffective

Noteffective

PublicPublicRelationsRelations

PublicPublicRelationsRelations

Veryeffective

Veryeffective

Veryeffective

Veryeffective

Veryeffective

Veryeffective

Noteffective

Noteffective

SalesSales

PromotionPromotion

Somewhat

effective

Somewhat

effective

Very

effective

Very

effective

Very

effective

PersonalPersonalSellingSelling

Somewhateffective

Veryeffective

Veryeffective

Somewhateffective

Somewhateffective

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Describe the factors thatDescribe the factors thataffect the promotional mix.affect the promotional mix.

F t Aff ti thFactors Affecting the


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Factors Affecting theFactors Affecting thePromotional MixPromotional Mix

Nature of ProductNature of Product

Stage in PLCStage in PLC

Target Market FactorsTarget Market Factors

Type of Buying DecisionType of Buying Decision

Promotion FundsPromotion Funds

Push or Pull StrategyPush or Pull Strategy

FactorsFactorsAffectingAffectingChoice ofChoice of


FactorsFactorsAffectingAffectingChoice ofChoice of


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Nature of the ProductNature of the Product 66

Product characteristicsProduct characteristics Business product vs. consumer productBusiness product vs. consumer product

Costs and risksCosts and risks

Social riskSocial risk

Factors that influence promotional mixFactors that influence promotional mix


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Stage in the Product Life CycleStage in the Product Life Cycle 66

TimeTime

IntroductionIntroductionGrowthGrowth

MaturityMaturity

DeclineDecline

Sales

($)

Sales

($)

Product Life Cycle and theProduct Life Cycle and the


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Product Life Cycle and theProduct Life Cycle and thePromotional MixPromotional Mix

LightAdvertising,

pre-

introductionPublicity

Heavy use ofadvertising,

PR for

awareness;sales

promotionfor trial

AD/PRdecreaseLimited

SalesPromotion,PersonalSelling for

distribution

Adsdecrease.

Sales

Promotion,PersonalSelling

Reminder &Persuasive

Advertising,PR, Brand

loyalty

PersonalSelling for

distribution

IntroductionIntroduction GrowthGrowth

MaturityMaturity

DeclineDecline

S

ales($)

S

ales($)

TimeTime

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Target Market CharacteristicsTarget Market Characteristics 66

FOR:FOR:

Widely scatteredWidely scattered

marketmarketInformed buyersInformed buyers

Repeat buyersRepeat buyers

Advertising

Sales Promotion

Less Personal Selling


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Type of Buying DecisionType of Buying Decision

Advertising

Sales PromotionType ofType of

Buying DecisionBuying DecisionaffectsaffectsPromotionalPromotionalMix ChoiceMix Choice

Type ofType of

Buying DecisionBuying DecisionaffectsaffectsPromotionalPromotionalMix ChoiceMix Choice

ComplexComplexComplexComplex

RoutineRoutineRoutineRoutine

Personal Selling

Not RoutineNot Routineor Complexor Complex

Not RoutineNot Routineor Complexor Complex

Advertising

Public Relations

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Available FundsAvailable Funds

Trade-offs with funds availableTrade-offs with funds available

Number of people in target marketNumber of people in target market

Quality of communication neededQuality of communication needed

Relative costs of promotional elementsRelative costs of promotional elements

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Push and Pull StrategiesPush and Pull Strategies

ManufacturerManufacturerpromotes topromotes towholesalerwholesaler

ManufacturerManufacturerpromotes topromotes towholesalerwholesaler

WholesalerWholesalerpromotes topromotes to

retailerretailer

WholesalerWholesalerpromotes topromotes to

retailerretailer

RetailerRetailerpromotes topromotes toconsumerconsumer

RetailerRetailerpromotes topromotes toconsumerconsumer

ConsumerConsumerbuys frombuys from

retailerretailer

ConsumerConsumerbuys frombuys from

retailerretailer

PUSH STRATEGYPUSH STRATEGY

Orders to manufacturer

ManufacturerManufacturer

promotes topromotes toconsumerconsumer

ManufacturerManufacturer

promotes topromotes toconsumerconsumer

ConsumerConsumer

demandsdemandsproductproductfrom retailerfrom retailer

ConsumerConsumerdemandsdemandsproductproduct

from retailerfrom retailer

RetailerRetailer

demandsdemandsproductproductfrom wholesalerfrom wholesaler

RetailerRetailerdemandsdemandsproductproduct

from wholesalerfrom wholesaler

WholesalerWholesaler

demandsdemandsproduct fromproduct frommanufacturermanufacturer

WholesalerWholesalerdemandsdemands

product fromproduct frommanufacturermanufacturer

Orders to manufacturer

PULL STRATEGYPULL STRATEGY

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Discuss the concept ofDiscuss the concept of

integrated marketing communications.integrated marketing communications.

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Integrated MarketingIntegrated MarketingCommunicationsCommunications

A method of carefully

coordinating all promotional

activities to produce aconsistent, unified message

that is customer focused.

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IMC Popularity GrowthIMC Popularity Growth 77

Proliferation of thousands of media choicesProliferation of thousands of media choices

Fragmentation of the mass marketFragmentation of the mass market

Slash of advertising spending in favor ofSlash of advertising spending in favor ofpromotional techniquespromotional techniques


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Communication andCommunication and

Connections PlanningConnections Planning


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Case StudyCase Study

Its Crunk!!! time againIts Crunk!!! time again Budget still only have $25 MillionBudget still only have $25 Million Target still Urban and suburban hip-hop youthTarget still Urban and suburban hip-hop youth Discuss how these five responses to diminished effectivenessDiscuss how these five responses to diminished effectiveness

would shape your media strategywould shape your media strategy

Integrated Marketing CommunicationsIntegrated Marketing Communications

SegmentationSegmentation

Relationship MarketingRelationship Marketing

Database MarketingDatabase Marketing

Connections PlanningConnections Planning


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IMC BasicsIMC Basics

Coordinate various communications approaches into aCoordinate various communications approaches into amutually supportive, thematically unified, coordinatedmutually supportive, thematically unified, coordinatedwholewhole

Must manage all sources of information about a productMust manage all sources of information about a productthat moves the customer towards a sale and maintainsthat moves the customer towards a sale and maintainsloyaltyloyalty


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Bridging ElementsBridging Elements

MarryMarry behavior-changingbehavior-changing efforts of promotions and direct responseefforts of promotions and direct responsewithwith image-buildingimage-building efforts of PR and advertising - seamlessefforts of PR and advertising - seamlessconnectionconnection

Tactically-oriented - Integrated executionsTactically-oriented - Integrated executions

Strategically-oriented -- Coordinated campaignsStrategically-oriented -- Coordinated campaigns


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Model of IMCModel of IMC


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Primary Goal of MarketingPrimary Goal of Marketing

First task is to retain satisfied customers, not just produceFirst task is to retain satisfied customers, not just producenew customersnew customers Difference between creating a single sale and creating a lifelongDifference between creating a single sale and creating a lifelong

customercustomer

The basis for relationship marketingThe basis for relationship marketing

M di Pl i dMedia Planning and


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Media Planning andMedia Planning and

Media RelationsMedia Relations

Critical to coordinate paid and unpaid media as part ofCritical to coordinate paid and unpaid media as part ofIMC effortsIMC efforts Timing of Message PlacementTiming of Message Placement

Reinforcement Across ChannelsReinforcement Across Channels Compatibility of Editorial ToneCompatibility of Editorial Tone

All with the goal of building relationshipsAll with the goal of building relationships


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Marketing Public RelationsMarketing Public Relations

Use of public relations to directly support marketing effortsUse of public relations to directly support marketing efforts

to build sales, not simply image and issue managementto build sales, not simply image and issue management Planning, executing, and evaluating programs that encouragePlanning, executing, and evaluating programs that encourage

purchase and consumer satisfaction through crediblepurchase and consumer satisfaction through credible

communicationscommunications 70% of PR billing are for Marketing PR70% of PR billing are for Marketing PR


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Power of PRPower of PR

Marketers find is increasing difficult to reach consumersMarketers find is increasing difficult to reach consumers

hearts and mindshearts and minds

Decline of mass marketing and limited effectiveness ofDecline of mass marketing and limited effectiveness oftarget advertisingtarget advertising

Power of news, events, and community programs toPower of news, events, and community programs toregain a share of voiceregain a share of voice


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Credibility is KeyCredibility is Key

PR more credible than advertisingPR more credible than advertisingKey to reaching skeptical consumersKey to reaching skeptical consumers

Particularly when targeting youth, who want toParticularly when targeting youth, who want to

be told not soldbe told not sold Important for building brand awarenessImportant for building brand awareness Critical for building brand credibilityCritical for building brand credibility


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How MPR Works with IMCHow MPR Works with IMC

Builds excitement before advertising breaksBuilds excitement before advertising breaks

Ex. Teasers for upcoming moviesEx. Teasers for upcoming movies

Drives communications when there is no advertisingDrives communications when there is no advertising

Ex. During Hiatus or Economic DownturnEx. During Hiatus or Economic Downturn

Makes advertising news when no product newsMakes advertising news when no product news

Ex. Coverage of Super Bowl spots as newsEx. Coverage of Super Bowl spots as news

Brings advertising to lifeBrings advertising to life

Ex. California Raisins, Got Milk, Tony the TigerEx. California Raisins, Got Milk, Tony the Tiger

Extends promotion programsExtends promotion programs

Ex. Publicity can grow geometricallyEx. Publicity can grow geometrically


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MPR and IMC, ContinuedMPR and IMC, Continued

Builds personal relationships with brandBuilds personal relationships with brand

Ex. Butterball Talkline, Pillsbury Bake-OffEx. Butterball Talkline, Pillsbury Bake-Off

Influences the influencersInfluences the influencers

Ex. Secondary Effects Through Opinion LeadersEx. Secondary Effects Through Opinion Leaders

Communicates new product benefitsCommunicates new product benefits

Ex. Arm & Hammer, Aspirin, Cranberry JuiceEx. Arm & Hammer, Aspirin, Cranberry Juice

Demonstrates social responsibility and build trustDemonstrates social responsibility and build trust

Ex. Ben & Jerrys, Body Shop, McDonaldsEx. Ben & Jerrys, Body Shop, McDonalds

Defends products at risk and gives permission to buyDefends products at risk and gives permission to buy

Ex. Tylenol, Pepsi, Robert Downey Jr.Ex. Tylenol, Pepsi, Robert Downey Jr.


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Media Planning and IMCMedia Planning and IMC

Media Planning Shape IMC StrategyMedia Planning Shape IMC Strategy

Media Planning More Critical Than EverMedia Planning More Critical Than Ever

Media Explosion Creating an Info GlutMedia Explosion Creating an Info Glut

Must find the balance pointsMust find the balance points


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Integrated Media PlanningIntegrated Media Planning

Earlier involvement in strategic planningEarlier involvement in strategic planning Brand insights and research sharingBrand insights and research sharing More conceptual and qualitative analysisMore conceptual and qualitative analysis

Expand definition of communicationExpand definition of communication Coordinate all elements, set the timingCoordinate all elements, set the timing Must balance efficiencies of mass comm with advantages ofMust balance efficiencies of mass comm with advantages of

one-to-oneone-to-one

Develop market specific approachDevelop market specific approach Zero-based, market-by-market media planningZero-based, market-by-market media planning Replaces broad-market approachReplaces broad-market approach


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Techniques in IMPTechniques in IMP

Mass marketing vs market-driven approachesMass marketing vs market-driven approaches

Micro-marketingMicro-marketing - specialized market segments- specialized market segments

Data miningData mining - building information profiles of consumers- building information profiles of consumers

One-to-one targetingOne-to-one targeting - build relationship with consumers- build relationship with consumers

Consumer-initiatedConsumer-initiated - customers begin communication\- customers begin communication\

Sports and entertainment marketingSports and entertainment marketing

I t t d M k tiIntegrated Marketing


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CommunicationCommunication


Public Relations/ PublicityPublic Relations/ PublicityPersonal SellingPersonal Selling


Direct MarketingDirect Marketing


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MARKETINGMARKETING

COMMUNICATIONSCOMMUNICATIONS

MARKETINGMARKETING

COMMUNICATIONSCOMMUNICATIONSMARKETER INITIATED TECHNIQUES USED TO SET UPMARKETER INITIATED TECHNIQUES USED TO SET UPCHANNELS OF INFORMATION AND PERSUASION WITHCHANNELS OF INFORMATION AND PERSUASION WITHTARGETED AUDIENCES TO INFLUENCE ATTITUDESTARGETED AUDIENCES TO INFLUENCE ATTITUDES

AND BEHAVIORAND BEHAVIOR PromotionPromotion Message and MediaMessage and Media

MARKETING COMMUNICATIONS MIXMARKETING COMMUNICATIONS MIX

Tool Box of Media and TechniquesTool Box of Media and Techniques Integration and CoordinationIntegration and Coordination

Based on Communications ModelBased on Communications Model

MARKETER INITIATED TECHNIQUES USED TO SET UPMARKETER INITIATED TECHNIQUES USED TO SET UPCHANNELS OF INFORMATION AND PERSUASION WITHCHANNELS OF INFORMATION AND PERSUASION WITHTARGETED AUDIENCES TO INFLUENCE ATTITUDESTARGETED AUDIENCES TO INFLUENCE ATTITUDESAND BEHAVIORAND BEHAVIOR

PromotionPromotion Message and MediaMessage and Media

MARKETING COMMUNICATIONS MIXMARKETING COMMUNICATIONS MIX

Tool Box of Media and TechniquesTool Box of Media and Techniques Integration and CoordinationIntegration and Coordination

Based on Communications ModelBased on Communications Model

MAJOR OBJECTIVES OFMAJOR OBJECTIVES OF


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MARKETINGMARKETINGCOMMUNICATIONSCOMMUNICATIONS

InformingInforming


RemindingReminding

MARKETINGMARKETINGCO C O SCOMMUNICATIONS


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COMMUNICATIONSCOMMUNICATIONSOBJECTIVESOBJECTIVES Increase Market Penetration Develop Repeat Purchase Behavior Establish Customer Relationships Increase Rate of Consumption Encourage Product Trial

Stimulate Impulse Buying Stimulate Demand Differentiate the Product Establish a Product Image Influence Sales Volume Establish, Modify, or Reinforce Attitudes Develop Sales Leads Stimulate Interest Establish Understanding Build Support & Acceptance

ELEMENTS OF THEELEMENTS OF THEMARKETINGMARKETING


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MARKETINGMARKETINGCOMMUNICATIONS MIXCOMMUNICATIONS MIX

1. Advertising1. Advertising

2. Public Relations2. Public Relations5. Direct Marketing5. Direct Marketing

3. SalesPromotion

3. SalesPromotion4. Personal Selling4. Personal Selling

Integrated Marketing Communications (IMC)is the strategic integration of multiple means of

communicating with target markets

MARKETINGMARKETING


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MARKETINGMARKETINGCOMMUNICATIONS PLANNINGCOMMUNICATIONS PLANNING

Marketing Plan ReviewMarketing Plan Review

Situation AnalysisSituation Analysis

Communications Process

Analysis

Communications Process

Analysis

Budget DevelopmentBudget Development

Program DevelopmentProgram Development

Integration & ImplementationIntegration & Implementation

Monitoring, Evaluating,Controlling

Monitoring, Evaluating,Controlling

METHODS

PUSH vs.PULL


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Push and Pull StrategiesPush and Pull Strategies

Push strategy is directed toward thePush strategy is directed toward thechannel memberschannel members Provide incentives for those in theProvide incentives for those in the

distribution channels to buy the productdistribution channels to buy the product

Pull strategy is directed toward thePull strategy is directed toward the

ultimate purchaserultimate purchaser

The focus is on creating demand at theThe focus is on creating demand at thehousehold or ultimate consumer levelhousehold or ultimate consumer level


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Approaches toApproaches to

Determining theDetermining thePromotional BudgetPromotional BudgetPercentage of salesPercentage of sales

A fixed amount of money per past or projectedA fixed amount of money per past or projectedsalessales

Probably the most widely used as it is simpleProbably the most widely used as it is simple

But, what about cause and effect?But, what about cause and effect?

All available funds/All you can affordAll available funds/All you can afford

Budget what is left over for promotionalBudget what is left over for promotionalexpendituresexpendituresNew companies often put all available funds intoNew companies often put all available funds intopromotion to penetrate the marketpromotion to penetrate the market

But, you can miss opportunities or overspendBut, you can miss opportunities or overspend


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Approaches toApproaches to

Determining theDetermining thePromotional BudgetPromotional BudgetCompetitive parity/Follow the competitionCompetitive parity/Follow the competition

Adopt the average ratio for promotional expensesAdopt the average ratio for promotional expensesto sales for the industry or main competitor; or theto sales for the industry or main competitor; or the

same absolute amount as a competitorsame absolute amount as a competitorBut, what if they do not know what they are doing and/orBut, what if they do not know what they are doing and/orstrategies and tactics are different?strategies and tactics are different?

Objective and taskObjective and task 1) Determine objectives; 2) Determine relationship1) Determine objectives; 2) Determine relationship

between expenditures and ability to achievebetween expenditures and ability to achieveobjective; 3) Set a budget that allows theobjective; 3) Set a budget that allows theachievement of these goalsachievement of these goals

h l lP h l i l P


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Psychological ProcessesPsychological Processes

The high involvement decision processThe high involvement decision processNeed -> search -> evaluation -> purchase -> outcomesNeed -> search -> evaluation -> purchase -> outcomes

The adoption processThe adoption processAwareness -> interest -> evaluation -> trial -> adoption -> post-adoptionAwareness -> interest -> evaluation -> trial -> adoption -> post-adoption

confirmationconfirmation

Buyer readiness states/Hierarchy of effectsBuyer readiness states/Hierarchy of effectsAwareness -> knowledge -> liking -> preference -> conviction ->Awareness -> knowledge -> liking -> preference -> conviction ->purchasepurchase

AIDAAIDAAwareness -> Interest -> Desire -> ActionAwareness -> Interest -> Desire -> Action

S l f h lS l ti f th P ti l Mi


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Selection of the Promotional MixSelection of the Promotional Mix

PRODUCT CHARACTERISTICSPRODUCT CHARACTERISTICS Industrial good/technical goodIndustrial good/technical good

Need personal selling; customers want to receiveNeed personal selling; customers want to receiveinformation, inspect and compare the productsinformation, inspect and compare the products

Consumer package goods/frequently purchase itemsConsumer package goods/frequently purchase itemsAdvertising and sales promotion to reach marketAdvertising and sales promotion to reach market

Unit valueUnit valueLow cost must use mass media approaches, with high unitLow cost must use mass media approaches, with high unitcost personal selling is effectivecost personal selling is effective

CustomizationCustomizationCustomized often requires personal sellingCustomized often requires personal selling

S l i f h P i l MiS l ti f th P ti l Mi


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Selection of the Promotional MixSelection of the Promotional Mix

CUSTOMER CHARACTERISTCSCUSTOMER CHARACTERISTCS Industrial versus consumer marketIndustrial versus consumer market

Consumers are easier to reach (decision maker) throughConsumers are easier to reach (decision maker) throughmedia sources; industrial buyers typically have a more formalmedia sources; industrial buyers typically have a more formalbuying process, requiring personal sellingbuying process, requiring personal selling

Number of customersNumber of customersFor a small number of customers, personal selling can play aFor a small number of customers, personal selling can play amuch more important rolemuch more important role

Geographical dispersionGeographical dispersionNot only affects the type of promotional effort, but the mediaNot only affects the type of promotional effort, but the media

choiceschoices


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Advertising DefinedAdvertising DefinedADVERTISINGADVERTISING Any paid form of non-personal presentationAny paid form of non-personal presentation

and promotion of ideas, goods, or servicesand promotion of ideas, goods, or servicesby an identified sponsorby an identified sponsor

Magazines, newspaper, outdoor posters, directMagazines, newspaper, outdoor posters, directmail, radio televisions, etc.mail, radio televisions, etc.

Key issuesKey issues The time or media space is paid forThe time or media space is paid for The sponsor is identified and has control over theThe sponsor is identified and has control over the

promotional activitypromotional activity

DEVELOPING ANDEVELOPING AN


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DEVELOPING ANADVERTISING CAMPAIGNADVERTISING CAMPAIGN

EvaluateAdvertisingEffective-

ness

Select &Schedule

Media

DetermineAdvertising

Budget

DetermineAdvertisingObjectives

SelectTargetMarket

DesignCreativeStrategy


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ADVERTISING STRATEGYADVERTISING STRATEGYADVERTISING STRATEGYADVERTISING STRATEGYMESSAGE STRATEGIESMESSAGE STRATEGIES Objective vs. Subjective MessagesObjective vs. Subjective Messages

Comparative Message TechniquesComparative Message Techniques Emotional Techniques: Mood, Fear, HumorEmotional Techniques: Mood, Fear, Humor Celebrity Endorsements vs. Non-Celebrity ImagesCelebrity Endorsements vs. Non-Celebrity Images

MEDIA STRATEGIESMEDIA STRATEGIES Broadcast: Television, RadioBroadcast: Television, Radio Print: Newspapers, Magazines, JournalsPrint: Newspapers, Magazines, Journals Specialized: Outdoor, Transit, Direct Mail, InternetSpecialized: Outdoor, Transit, Direct Mail, Internet

MESSAGE STRATEGIESMESSAGE STRATEGIES Objective vs. Subjective MessagesObjective vs. Subjective Messages

Comparative Message TechniquesComparative Message Techniques Emotional Techniques: Mood, Fear, HumorEmotional Techniques: Mood, Fear, Humor Celebrity Endorsements vs. Non-Celebrity ImagesCelebrity Endorsements vs. Non-Celebrity Images

MEDIA STRATEGIESMEDIA STRATEGIES

Broadcast: Television, RadioBroadcast: Television, Radio Print: Newspapers, Magazines, JournalsPrint: Newspapers, Magazines, Journals Specialized: Outdoor, Transit, Direct Mail, InternetSpecialized: Outdoor, Transit, Direct Mail, Internet


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ADVERTISING STRATEGYADVERTISING STRATEGYADVERTISING STRATEGYADVERTISING STRATEGYRELATIVE STRENGTHS AND WEAKNESSES OFRELATIVE STRENGTHS AND WEAKNESSES OFSTRATEGIESSTRATEGIES Effectiveness and Efficiency:Effectiveness and Efficiency: ReachReach andand FrequencyFrequency Target CapabilitiesTarget Capabilities CostCost BelievabilityBelievability

Appropriateness for Message (Image, Details)Appropriateness for Message (Image, Details)

RELATIVE STRENGTHS AND WEAKNESSES OFRELATIVE STRENGTHS AND WEAKNESSES OFSTRATEGIESSTRATEGIES Effectiveness and Efficiency:Effectiveness and Efficiency: ReachReach andand FrequencyFrequency Target CapabilitiesTarget Capabilities CostCost BelievabilityBelievability Appropriateness for Message (Image, Details)Appropriateness for Message (Image, Details)

R h & FR h & F


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Reach & FrequencyReach & Frequency

Reach: number of different target consumersReach: number of different target consumerswho are exposed to a message at least oncewho are exposed to a message at least onceduring a specific period of timeduring a specific period of time

Frequency: number of times an individual isFrequency: number of times an individual is

exposed to a given message during a specificexposed to a given message during a specificperiod of timeperiod of time

Cost per contact: cost of reaching one memberCost per contact: cost of reaching one memberof the target marketof the target market Allows comparison across advertising strategy vehiclesAllows comparison across advertising strategy vehicles

EVALUATING ADVERTISINGEVALUATING ADVERTISING


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EVALUATING ADVERTISINGEVALUATING ADVERTISINGEFFECTIVENESSEFFECTIVENESS

PretestingPretesting

PosttestingPosttesting

Sales Effectiveness

Evaluations

Sales EffectivenessEvaluations

Tools:

Focus GroupsScreeningPersuasion Scores

Tools:

Unaided Recall TestsAided Recall TestsInquiry Evaluations

Tools:

Monitor Sales


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PUBLIC RELATIONSPUBLIC RELATIONSPUBLIC RELATIONSPUBLIC RELATIONS

EFFORTS TO IMPROVE AND MANAGEEFFORTS TO IMPROVE AND MANAGERELATIONSHIPS WITH PUBLICSRELATIONSHIPS WITH PUBLICS CustomersCustomers Stock HoldersStock Holders CommunityCommunity GovernmentGovernment News MediaNews Media

PROACTIVE vs. REACTIVEPROACTIVE vs. REACTIVE DuPont vs. ExxonDuPont vs. Exxon

PUBLICITYPUBLICITY Not Overtly SponsoredNot Overtly Sponsored High CredibilityHigh Credibility

EFFORTS TO IMPROVE AND MANAGEEFFORTS TO IMPROVE AND MANAGE

RELATIONSHIPS WITH PUBLICSRELATIONSHIPS WITH PUBLICS CustomersCustomers Stock HoldersStock Holders CommunityCommunity GovernmentGovernment News MediaNews Media

PROACTIVE vs. REACTIVEPROACTIVE vs. REACTIVE

DuPont vs. ExxonDuPont vs. ExxonPUBLICITYPUBLICITY Not Overtly SponsoredNot Overtly Sponsored High CredibilityHigh Credibility

PUBLIC RELATIONSPUBLIC RELATIONS


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PUBLIC RELATIONSPUBLIC RELATIONS

PressRelations

PressRelations

ProductPromotionsProductPromotionsAdvisingManagement

AdvisingManagement

CorporateCommunications

CorporateCommunicationsLobbyingLobbying

Public Relations Functions

P l S lliP l S lli


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PERSONAL SELLINGPERSONAL SELLING Oral presentation in a conversation with one or moreOral presentation in a conversation with one or more

prospective purchasers for the purpose of making aprospective purchasers for the purpose of making asalesale

Personal selling represents the most popularPersonal selling represents the most popularpromotional effort in terms of financial expenditurespromotional effort in terms of financial expendituresand number of people employedand number of people employed

Personal Selling is:Personal Selling is:(1) Dyadic, (2) Flexible, (3) Focused (personalized), and (4)(1) Dyadic, (2) Flexible, (3) Focused (personalized), and (4)Often results directly in a saleOften results directly in a sale

Other promotional elements move the customer toward theOther promotional elements move the customer toward thesale, personal selling closes the salesale, personal selling closes the sale


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PERSONAL SELLING ANDPERSONAL SELLING AND

SALES MANAGEMENTSALES MANAGEMENT


SALES MANAGEMENTSALES MANAGEMENTFUNCTIONS AND CONTRIBUTIONS OFFUNCTIONS AND CONTRIBUTIONS OFPERSONAL SELLINGPERSONAL SELLING

Boundary Spanner Role, RelationshipBoundary Spanner Role, RelationshipManagement (Management (TrustTrust)) Two-Way Information Channel (Diffusion ofTwo-Way Information Channel (Diffusion of

ProductProduct andandMarket Information)Market Information) Facilitate ExchangeFacilitate Exchange

FUNCTIONS AND CONTRIBUTIONS OFFUNCTIONS AND CONTRIBUTIONS OF

PERSONAL SELLINGPERSONAL SELLING

Boundary Spanner Role, RelationshipBoundary Spanner Role, RelationshipManagement (Management (TrustTrust)) Two-Way Information Channel (Diffusion ofTwo-Way Information Channel (Diffusion of

ProductProduct andandMarket Information)Market Information)

Facilitate ExchangeFacilitate Exchange

THE MARKETING-THE MARKETING-CO C O SCOMMUNICATIONS MIX


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COMMUNICATIONS MIX:COMMUNICATIONS MIX:Relative Emphasis in Consumer and BusinessRelative Emphasis in Consumer and Business

MarketsMarkets

BUSINESS MARKETS CONSUMER MARKETS

SALESFORCE

SALESFORCE

ADVERTISINGPROMOTIONSDIRECT MKT.

ADVERTISINGPROMOTIONSDIRECT MKT.

EMPHASIS EMPHASIS

COMPLEMENT


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SALES MANAGEMENTSALES MANAGEMENT


SALES MANAGEMENTSALES MANAGEMENTROLES OF SALESPERSONROLES OF SALESPERSON PsychologistPsychologist ConsultantConsultant

Educator / TeacherEducator / Teacher Problem SolverProblem Solver Team LeaderTeam Leader

TYPES OF SELLING POSITIONSTYPES OF SELLING POSITIONS

New Business (Prospector)New Business (Prospector) Existing Business (Order Taker)Existing Business (Order Taker) DetailingDetailing Support (Marketing, Technical)Support (Marketing, Technical)

ROLES OF SALESPERSONROLES OF SALESPERSON PsychologistPsychologist ConsultantConsultant

Educator / TeacherEducator / Teacher

Problem SolverProblem Solver Team LeaderTeam Leader

TYPES OF SELLING POSITIONSTYPES OF SELLING POSITIONS

New Business (Prospector)New Business (Prospector) Existing Business (Order Taker)Existing Business (Order Taker) DetailingDetailing Support (Marketing, Technical)Support (Marketing, Technical)

STEPS IN THE SELLINGSTEPS IN THE SELLING



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PROCESS:PROCESS:

A RELATIONSHIP APPROACHA RELATIONSHIP APPROACH

PROCESS:PROCESS:

A RELATIONSHIP APPROACHA RELATIONSHIP APPROACHINITIATING RELATIONSHIPSINITIATING RELATIONSHIPS ProspectingProspecting Pre-Call PlanningPre-Call Planning ApproachApproach

DEVELOPING CUSTOMER RELATIONSHIPSDEVELOPING CUSTOMER RELATIONSHIPS Sales Communications and PresentationsSales Communications and Presentations Gaining and Managing CommitmentGaining and Managing Commitment

ENHANCING CUSTOMER RELATIONSHIPSENHANCING CUSTOMER RELATIONSHIPS Follow-UpFollow-Up

SupportSupport

TRADITIONAL vs. RELATIONSHIP APPROACHESTRADITIONAL vs. RELATIONSHIP APPROACHES Consultative (needs-satisfaction) vs. Manipulative (product-focused)Consultative (needs-satisfaction) vs. Manipulative (product-focused)

INITIATING RELATIONSHIPSINITIATING RELATIONSHIPS ProspectingProspecting Pre-Call PlanningPre-Call Planning ApproachApproach

DEVELOPING CUSTOMER RELATIONSHIPSDEVELOPING CUSTOMER RELATIONSHIPS Sales Communications and PresentationsSales Communications and Presentations Gaining and Managing CommitmentGaining and Managing Commitment

ENHANCING CUSTOMER RELATIONSHIPSENHANCING CUSTOMER RELATIONSHIPS Follow-UpFollow-Up SupportSupport

TRADITIONAL vs. RELATIONSHIP APPROACHESTRADITIONAL vs. RELATIONSHIP APPROACHES Consultative (needs-satisfaction) vs. Manipulative (product-focused)Consultative (needs-satisfaction) vs. Manipulative (product-focused)


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SALES MANAGEMENT ISSUESSALES MANAGEMENT ISSUESSALES MANAGEMENT ISSUESSALES MANAGEMENT ISSUES

RECRUITING AND HIRINGRECRUITING AND HIRING Difficult to Predict SuccessDifficult to Predict Success

DEPLOYMENTDEPLOYMENT Territory DesignTerritory Design

AUTOMATIONAUTOMATION Use of Technology to Link Buyer, Salesperson, andUse of Technology to Link Buyer, Salesperson, and

Organizations (Customer Relationship ManagementOrganizations (Customer Relationship Managementand Supply Chain Management)and Supply Chain Management)

EVALUATION AND COMPENSATIONEVALUATION AND COMPENSATION Outcome-Based vs. Behavior-BasedOutcome-Based vs. Behavior-Based

RECRUITING AND HIRINGRECRUITING AND HIRING Difficult to Predict SuccessDifficult to Predict Success

DEPLOYMENTDEPLOYMENT Territory DesignTerritory Design

AUTOMATIONAUTOMATION Use of Technology to Link Buyer, Salesperson, andUse of Technology to Link Buyer, Salesperson, and

Organizations (Customer Relationship ManagementOrganizations (Customer Relationship Managementand Supply Chain Management)and Supply Chain Management)

EVALUATION AND COMPENSATIONEVALUATION AND COMPENSATION Outcome-Based vs. Behavior-BasedOutcome-Based vs. Behavior-Based



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SALES PROMOTIONSALES PROMOTION Those marketing activities - other thanThose marketing activities - other than

advertising, public relations/publicity, andadvertising, public relations/publicity, andpersonal selling - that stimulate consumerpersonal selling - that stimulate consumer

purchasing and dealer effectivenesspurchasing and dealer effectivenessDisplays, shows and exhibitions, coupons, contests,Displays, shows and exhibitions, coupons, contests,samplessamples

THE GROWTH IN SALESTHE GROWTH IN SALES


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PROMOTIONPROMOTION

Consumer FactorsConsumer Factors

Accountability

Accountability

Increased Retail PowerIncreased Retail Power

Impact of TechnologyImpact of Technology

Short-Term FocusShort-Term Focus

Reasons for the Growth in Sales Promotion:

OBJECTIVES OF CONSUMEROBJECTIVES OF CONSUMERPROMOTIONSPROMOTIONS


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Stimulate

Trial

Stimulate

Trial

Support

Flexible Pricing

Support

Flexible Pricing

Increase

Consumption

Increase

Consumption

NeutralizeCompetitorsNeutralize

Competitors

Complementary

Products

Complementary

Products

Encourage

Repurchase

Encourage

Repurchase

ImpulsePurchasing

ImpulsePurchasing

PROMOTIONSPROMOTIONS

CONSUMER SALESCONSUMER SALES


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CONSUMER SALESCONSUMER SALESPROMOTION TECHNIQUESPROMOTION TECHNIQUES

Price Deals

Advertising

Specialties Coupons

Sampling Rebates

Contests, Games,

Sweepstakes

Premiums Cross-Promotions

OBJECTIVES OF TRADEOBJECTIVES OF TRADE


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OBJECTIVES OF TRADEPROMOTIONSPROMOTIONS

Increase ResellerInventory InfluencePrice Discount

Defend Against

Competitors

Avoid Price

Reductions

Influence

Reseller Promotion

Gain/Maintain

Distribution

Increase Reseller

Inventory

Influence

Price Discount

Defend Against

Competitors

Avoid Price

Reductions

Influence

Reseller Promotion

Gain/Maintain

Distribution

LIMITATIONS OF SALESLIMITATIONS OF SALES


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PROMOTIONPROMOTION

Cannot Reverse Declining SalesTrend

Cannot Reverse Declining SalesTrend

Cannot Overcome Inferior

Product

Cannot Overcome Inferior

Product

May Encourage CompetitiveRetaliation

May Encourage CompetitiveRetaliation

May Hurt ProfitMay Hurt Profit



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Techniques used to get consumers toTechniques used to get consumers tomake a purchase from their home, officemake a purchase from their home, office

or other nonretail settingor other nonretail setting

Direct mail, catalogs, mail order,Direct mail, catalogs, mail order,telemarketing, electronic retailingtelemarketing, electronic retailing

TECHNIQUES OF DIRECTTECHNIQUES OF DIRECT


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MARKETINGMARKETING

Electronic

Media

Electronic

Media

Direct SellingDirect Selling

Print

Media

Print

MediaBroadcast

Media

Broadcast

Media

Direct MailDirect Mail

TelemarketingTelemarketing

Integrated Marketing Communications 02

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