Marketing 3000 exam 3 11 11 2013 Chapter 8 Integrated marketing communications Integrated marketing communications the concept of designing marketing activities advertising personal seeling sales promotion and public relations to provide a consistent message across all audiences is referred to as integrated marketing communication IMC Goals to accomplish with strategic marketing communication efforts o Create awareness We cant purchase a product if were not aware of it Important for new products and brands in order to stimulate trial purchases o Build positive image Positive images can create value for customers by adding meaning to products o Identify prospects Becoming increasingly more important because modern technology makes information gathering much more practical o Build channel relationships Try to help everyone from production channel prosper o Retain customers It costs more to attract a new customer than to retain an existing one Sales people and websites play an important role in retaining customers The promotion mix o The promotion mix concept refers to the combination and types of nonpersonal and personal communication the organization puts forth during a specified period o 5 elements of the promotion mix non personal forms advertising paid form of non personal communication about an organization its products or activities that is transmitted through a mass medium o could be television radio newspapers internet magazines outdoor displays car cards or directories sales promotion short term inducement of value to arouse interest e g coupons samples contests o could be a coupon sweepstakes refund or display o public relations communication management that seeks to influence stakeholders e g publicity lobbying o popular forms publicity non paid form of nonpersonal communication about an organization and its products that is transmitted through a mass medium in the form of a news story direct marketing uses direct forms of communication with customers o direct mail online marketing catalogs telemarketing and direct response advertising o similar to personal selling it may consist of an interactive dialog between the marketer and the customer personal forms personal selling 2 way personal eg face to face communication o most effective promotional tool o most costly o interaction makes it successful If the product is a new soft drink promotion effort is likely to rely more on advertising sales promotion and public relations If the product is more established the promositon mix will likely contain short run incentives sales promotions for people to buy the product immediately If the product is a new complex technology that requires a great deal of explanation the promotional mix will likely focus heavily on personal selling o 3 basic factors when devising promotional mix 1 the role of promotion in the overall marketing mix 2 the nature of the product 3 the nature of the market Integrated marketing communications o Has evolved in recent years Process of buyers 1 awareness of the product or service 2 comprehension of what it can do and its important features 3 conviction that it has value for them 4 ordering o 2 factors that hinder implementation of IMC internal turf battles within organizations reluctance of some advertising agencies to willingly broaden their role beyond advertising ADVERTISING Planning and strategy Advertising seeks to promote the sellers product by means of printed and electronic media Objectives of advertising o Objectives of advertising can be assigned that focus of creating Awareness Aiding comprehension Developing conviction Encouraging ordering o The ultimate objective of the business advertisers is to make sales and profits Advertising decisions Marketing managers must make 2 key decisions o 1 Determine the size of the advertising budget o 2 How the advertising budget should be allocated The expenditure question Firms determine how much to spend on advertising by one of the following methods o Percent of sales Popular in retail Most popular and simple The firm takes a percentage figure and applies it to either past or future sales Justified by 1 advertising is needed to generate sales 2 a number of cents out of each dollar of sales should be devoted to advertising in order to generate needed sales o o o o o 3 the percentage is easily adjusted and can be readily understood by other executives per unit expenditure a fixed monetary amount is spent on advertising for each unit of product expected to be sold popular with high priced merchandise such as automobiles or appliances attempts to determine the retail price by using production costs as a base problem with this approach is that they view advertising as a function of sales rather than sales as a function of advertising all you can afford the advertising budget is established as a predetermined share of profits or financial resources advantage it sets reasonable limits on the expenditure for advertising undesirable because there is no necessary connection between liquidity and advertising opportunity any firm that limits its advertising outlays to the amount of available funds will probably miss opportunities for increasing sales and profits competitive parity often used in conjunction with other approaches advertising budgets are based on those of competitors or other members of the industry followership technique the research approach the advertising budget is argued for and presented on the basis of research findings more expensive than other models it is far more rational approach to the expenditure decision the task approach well planned advertising programs usually make use of this approach formulates the advertising goals and defined the tasks to accomplish these goals often in conjunction with the research approach The Allocation question This question deals with the problem of deciding on the most effective way of spending advertising dollars o A successful ad campaign can has 2 related tasks 1 say the right things in the ads themselves 2 use the appropriate media in the right amounts at the right time to reach the target market o message strategy to be effective the advertising message should meet 2 general criteria 1 it should take into account the basic principles of communication 2 it should be predicated upon a good theory of consumer motivation and behavior 3 elements of basic communication process 1 The sender or source of the communication 2 The communication or message 3 the