CHAPTER 16 OUTLINE: INTEGRATED MARKETING COMMUNICATIONS NATURE OF INTEGRATED MARKETING COMMUNICATIONS • Integrated marketing communications o Obtaining maximum informational and persuasive impact through the coordination of the marketing efforts and promotion o Goal is to send constant messages to the customers THE ROLE OF PROMOTION • Communication with individuals, groups or organization to directly or indirectly facilitate exchange by informing and persuading one or more audiences to accept organizations products • Cause–related marketing o Links purchase to philanthropic efforts for a particular cause § Boost sales § Good will § Sponsor special events that lead to news coverage PROMOTION AND THE COMMUNICATION PROCESS • Transmission of information where sender and receiver must share some common ground • Communications–sharing of meaning, circular process o Begins with source (person, group or organization with a message o Receiver à individual, group, or organization that decodes a coded message § Audience à two or more receivers o Encoding à coding process in which a message has to have certain characteristics that are familiar to the targeted group o Medium of transmission à carries the coded message from the source to the audience (radio, television, etc.) o Decoding process à signs converted into concepts and ideas o Feedback à receiver’s response o Channel capacity à limit of information that a communication channel can handle OBJECTIVES OF PROMOTION • Create awareness • Stimulate demand o Primary demand: § Demand for a product category rather than for a specific brand of product § Pioneer promotion is used to inform potential customers about the product o Pioneer demand: § Promotion that informs customers about a new product § What it is, what it does, how it is used, and where it can be purchased o Selective demand: § Build demand on strengths or attributes of product done through free samples, coupons, contest and sweepstakes • Encourage product trial: o Coupons, samples, test drives, etc. • Identify prospects: o Efforts to identify customers through customer response cards, toll free numbers, etc. • Retain loyal customers: o Ex: frequent user/buyer programs, cheaper than getting new customers • Facilitate reseller support: o Build strong support for product by good relationship between producers and resellers • Combat competitive promotional efforts:o Used in extremely competitive product markets à ex: fast food industry • Reduce sales fluctuations: o Promotion techniques designed to stimulate sales during sales slumps THE PROMOTION MIX àFour possible elements ADVERTISING Definition Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media Advantages • Good for building awareness • Cost efficient when it reaches a vast number of people at a low cost per person • Effective at reaching a wide audience • User can repeat the message several times • Advertising a product a certain way can add to the product’s value, and the visibility an organization gains from advertising can enhance its image • Repetition of main brand and product positioning helps build customer trust Disadvantages • Impersonal - cannot answer all a customer's questions • Not good at getting customers to make a final purchasing decision • Measuring effect on sales is difficult • Less persuasive than personal selling • Dollar outlay can be high which can limit advertisements (TV ads during peak hours) • Slow feedback Notes • Advertising is changing as consumers’ mass media consumption habits are changing. • Individuals and organizations use advertising to promote goods, services, ideas, issues, and people • Highly flexible, advertising can reach an extremely large target audience or focus on a small, precisely defined segment • Sometimes a firm tries to enhance its own or its product’s image by including celebrity endorsers in advertisements. o Downside is when celebrities act inappropriately (Nike has suspended or terminated many contracts because of its PERSONAL SELLING Definition Paid personal communication that attempts to inform customers and persuade them to buy products in an exchange situation Advantages • Highly interactive - lots of communication between the buyer and seller • Excellent for communicating complex/detailed product information and features • Greater impact on customer • Relationships can be built up - important if closing the sale make take a long time • Immediate feedback – allows marketers to adjust their messages to improve communication, helps them determine and respond to customers’ information needs Disadvantages • Costly - employing a sales force has many hidden costs in addition to wages • Not suitable if there are thousands of important buyers Notes • Purchase products is interpreted broadly to encompass acceptance of ideas and issues • Most extensively used in the business-to-business market and also in the business-to-consumer market for high-end products (homes, cars, electronics furniture) • Involves more specific communication directed at one or several individuals • Several types of interpersonal communication: o Predominant is spoken and written languageo Kinesic communication: communicating through the movement of head, eyes, arms, hands, legs, torso or winking, head nodding, hand gestures, and arm motion o Proxemic communication: communicating by varying the physical distance in face-to-face interaction o Tactile communication: communicating through touching • Very useful in high-risk transactions PUBLIC RELATIONS Definition Communication efforts used to create and maintain favorable relations between an organization and its stakeholders Advantages • Often seen as more "credible" - since the message seems to be coming from a third party (e.g. magazine, newspaper) • Cheap way of reaching many customers - if the publicity is achieved through the right media Disadvantages • Risk of losing control - cannot always control what other people write or say about your product • Unpleasant situations and negative events (product tampering, environmental disaster, etc.) may generate unfavorable public relations for an organization Notes • Maintaining a positive relationship with one or more