Chapter 17 Integrated Marketing Communications 17 1 The Nature of Integrated Marketing Communication Integrated Marketing Communications the coordination of promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers o Mass media advertising which was used extensively in the past is being used less frequently today because of its high cost and lower effectiveness in reaching some markets o Online advertising is a quickly growing business 17 2 Promotion and the Communication Process Communications a sharing of meaning Source a person group or organization with a meaning it attempts to share with an audience Receiver the individual group or organization that decodes a coded message o Audience a group of two or more receivers Coding Process converting the meaning of a source into a series of signs or symbols representing ideas or concepts o The encoder should use a language with which the receiver is familiar o Understanding the target market is vital o Marketers should avoid signs or symbols that may have several meanings for an audience Communications Channel the medium of transmission that carries the coded message from the source to the receiver or audience o Newspapers magazines television radio internet sites etc o If a wrong communications channel is selected the coded message may reach some receivers but they may be the wrong kind of receivers Decoding Process signs or symbols are converted into concepts and ideas o Seldom does a receiver decode exactly the same meaning the source intended Noise anything that reduces the clarity and accuracy of the communication o Radio television transmission difficulties poor slow internet connections etc o Noise occurs when a source uses signs or symbols that are unfamiliar to the receiver or have a meaning that s different from the one intended Feedback the receiver s response to a decoded message o The receiver or audience provides the original source with a response to the message o Feedback is encoded sent through a communications channel and decoded by the original source This creates a circular communication process o Face to face communication is the most adaptive and flexible form of feedback because customer reactions can be decoded almost immediately eye movements facial expressions etc and adjustments to the message can be implemented o Mass communication is less flexible and it can take months to years to realize the effects of this promotion Channel Capacity the limit on volume of information that each communication channel can handle effectively o It is determined by the least efficient component of the communication process o Verbal communication an individual can speak only so fast and there is a limit to how much an individual receiver can take in through listening 17 3 The Role and Objectives of Promotion Promotion communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization positively and accept its products o Marketers also indirectly facilitate favorable relationships by focusing information about company activities and products on interest groups ie environmental groups potential investors regulatory agencies and society in general o By contributing to causes that its target market support cause related marketing can help marketers boost sales increase loyalty and generate goodwill Promotional objectives vary considerably from one organization to another and within organizations over time There are eight promotional objectives that a firm can pursue 1 Create Awareness 17 3A Creating awareness involves making customers aware of new product or line extension through promotion It is important for paying off product development costs 2 Stimulate Demand 17 3B Primary Demand demand for a product category rather than for a specific brand of product Pioneer Promotion informs potential customers about the product what it is what it does how it can be used and where it can be purchased i Used during the introductory stage of a product life cycle no Selective Demand demand for a specific brand i Promotional efforts should shift to the strengths and benefits of a competitors specific brand ii Supposed to differentiate a product from competing brands iii Can be stimulated by price discounts free samples sweepstakes etc 3 Encourage Product Trial 17 3C Free samples coupons test drives or limited free use offers can be used to encourage product trial 4 Identify Prospects 17 3D Customers who respond to ads usually represent higher interest consumers which make them likely sales prospects The organization can then respond with phone calls e mail or contact by salespeople 5 Retail Loyal Customers 17 3E 6 Facilitate Reseller Support 17 3F Costs of retaining customers are usually considerably lower than those of acquiring new ones Frequent user programs ie frequent flier miles for airlines rewards points etc that benefit customers that are loyal to a product Some organizations employ special offers that only existing customers can use Producers generally want to provide support to resellers to assist in selling their products and in turn they expect resellers to support their products A producer agrees to pay a certain proportion of retailers advertising expenses for promoting its products To encourage wholesalers and retailers to increase their inventories of its products a manufacturer may provide them with special offers and buying allowances 7 Combat Competitive Promotional Efforts 17 3G A marketer s objectives in using promotion can sometimes be used to offset or lessen the effect of a competitor s promotional or marketing programs Combative promotional objectives are most often used in extremely competitive consumer markets ie fast food cable internet markets etc 8 Reduce Sales Fluctuations 17 3H Demand for products can fluctuate due to factors such as climate holidays and seasons When promotional techniques reduce fluctuations by generating sales during slow periods a firm can use its resources more efficiently During peak seasons marketers may reduce promotion During off seasons marketers may increase promotion 17 4 The Promotion Mix Promotion Mix the combination of specific methods to manage the integrated marketing communications for a particular product There are four possible elements of a promotion mix 1 Advertising 17 4A 2 Personal Selling 17 4B A paid nonpersonal communication about an organization
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