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 individual group or organization that decodes a coded message Audience two or more receivers o Encoding coding process in which a message has to have certain characteristics that are o Medium of transmission carries the coded message from the source to the audience radio familiar to the targeted group television etc o Decoding process signs converted into concepts and ideas o Feedback receiver s response o Channel capacity 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 What it is what it does how it is used and where it can be purchased Promotion that informs customers about a new product 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 Facilitate reseller support o Ex frequent user buyer programs cheaper than getting new customers o Build strong support for product by good relationship between producers and resellers Combat competitive promotional efforts Reduce sales fluctuations o Used in extremely competitive product markets ex fast food industry o Promotion techniques designed to stimulate sales during sales slumps THE PROMOTION MIX Four possible elements ADVERTISING Definition Advantages Disadvantages Impersonal cannot answer all a customer s questions Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media 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 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 Advertising is changing as consumers mass media consumption habits are changing Individuals and organizations use advertising to promote goods services ideas issues and people Slow feedback 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 Notes PERSONAL SELLING Definition Advantages Excellent for communicating complex detailed product information and features Paid personal communication that attempts to inform customers and persuade them to buy products in an exchange situation Highly interactive lots of communication between the buyer and seller 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 Notes Not suitable if there are thousands of important buyers 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 language o 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 Advantages Communication efforts used to create and maintain favorable relations between an organization and its stakeholders 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 stakeholders can affect a firm s current sales and profits as well as its long term survival Uses a variety of tools annual reports brochures event sponsorships of socially responsible programs aimed at protecting the environment or helping disadvantages individuals Goal is to create and enhance a positive image of the organization Marketers are increasingly going directly to consumers with their public relations efforts through social