Chapter 17 Integrated Marketing Communication

Integrated Marketing Communication (IMC)
integration of all promotional elements (advertising, sales promotion, publicity, personal selling, direct marketing)
Purpose of Promotion
1. Inform prospective buyers
2. Persuade them to try
3. Remind them of the benefits
differential advantage
promotion seeks to create this which is a unique set of features of a company and its products perceived by consumers in the target market as significant and superior to the company
• implications for: demand/quantity demanded – promotion seeks to rotate demand to make it more inelastic, and/or shift the D curve to the right
Contemporary Promotion Example:
• “ROM” Romanian chocolate bar
• people weren’t buying the product, challenged their patriotism, saw increase (shift) in the D curve when the flag wrapper was changed back to the Romanian flag from the American flag
• possibly made the product more inelastic, more loyal to the product
• used integrated marketing communication – ex. PR, advertising
Communication
the process of conveying a message to others; requires 6 elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding
Promotional Decision Planning Framed in the Communications Model
1. Who is the target audience?
2. What response do you want?
3. What message will motivate this response?
4. What source attributes should accompany the message?
5. What channel of communication should be used?
6. What feedback should be collected?
Encoding
process of having the sender transform an idea into a set of symbols
Decoding
process of having a receiver take the message and transform the symbols into an idea
Errors in Communication
source may not adequately transform the abstract idea into a set of symbols, a properly encoded message may be sent through the wrong channel and never make it to the receiver, etc.
Field of Experience
similar understanding and knowledge shared between sender and receiver; ex. Tiger Woods ad – “winning takes care of everything”; works for target audience (sports fans), he’s been winning and past scandals
Response
impact the message had on the receiver’s knowledge, attitudes, or behavior
Feedback
sender’s interpretation of the response and indicates whether the message was decoded and understood as intended
Noise
extraneous factors that can work against effective communication by distorting a message or the feedback received
• Ex. McMahon was working with a client who had ads with firefighters and policemen right after 9/11, pulled ads to not have a misconstrued message and lots of noise
Ex. GE Financial Network Article
• Trying to drive traffic to a site, sweepstakes association, ultimately wanted people to open accounts
• Demographic skew: dropped the wallets in office buildings (wealth, professionals)
• Reward with sweepstakes, PR generated, mult channels (personal selling, online)
Ex. Rosetta Stone
sell language learning
• Did marketing research through FB and found that one of the psychographic characteristics was users wanted a mental challenge
• Positioned learning a language as a mental challenge
• Generated 3X the response of other campaigns
Ex. Starbucks
free iced coffee voucher
• Emailed to all employees
• These employees passed it on to friends and family spread way too quickly
• Pulled campaign; people were angry and sued $114 million
• Used the wrong channel, instantly spread
Ex. Audi – Art of the Heist
• Immersive 24-hr a day alternate reality experience that used the target market’s web addicted tendencies to play out a story line over multiple platforms
the promotion decision process includes
planning, implementation, and evaluation
Factors Affecting the Blend of Promotional Mix Elements
1. who is the target audience?
2. stage in product life cycle?
3. product characteristics
4. Stage in buying decision
5. Push vs. pull strategy
Who is the target audience?
• Either directed to the ultimate consumer or to an intermediary
• Ex. 3M for industrial target (business): sales promotion due to large quantities purchased, personal selling maybe by an agent vs. for college student: advertising in college book store, sales promotion online
Stage in product life cycle?
•Introduction – inform consumers in an effort to increase their level of awareness
•Growth – persuade the consumer to buy the product (advertising stresses brand difference, personal selling is used to solidify the channel of distribution)
•Maturity – remind buyers of the product’s existence (sales promotion is important for maintaining loyal buyers)
•Decline – period of phase-out, little money is spent in the promotional mix
Product Characeristics
•Complexity – technical sophistication of the product & amount of understanding required to use it (the more complex, the greater the emphasis of personal selling – hard to explain a complex product in a 30 second ad)
•Risk – assessed in terms of financial risk, social risk, and physical risk; advertising can help, but the greater the risk, the greater the need for personal selling
•Ancillary Services – degree of service required after the sale; direct marketing can help describe how a product or service can be customized to individual needs
Stage in Buying Decision
• Pre-purchase – research (internal/external), recognizing a need, start with advertising; sales promotion can also gain low-risk trial
• Purchase – important of personal selling is the highest, and sales promotion can encourage demand
• Post-purchase – the more personal contact after the sale the more the buyer is satisfied; reduce cognitive dissonance
Push vs Pull Strategy
• Push – mainly personal selling directed to intermediaries; directing the promotional mix to get channel members to order and stock the product
• Pull – mainly advertising directly to consumers; directing the promotional mix at the ultimate consumer to encourage them to ask the retailer for a product
Ex. Old Style – Grow the Ivy: Ivy at Wrigley Field: Chicago Cubs, “Love Your Team”
• Push – went to distributor and offered parts of display
• Pull – billboards and print ads
Direct Marketing
customize communication efforts to create one-to-one interactions
• Data-driven, addressable media, measurable response, testing
• Ex. trying to sell detergent, mailed women who were leaders in their community, wrapped package in a T-Shirt, dirty when it got there detergent got the stains out (stimulated trial)
Types of Budgeting
% of sales budgeting, competitive parity budgeting, all you can afford budgeting, task and objective budgeting
% of sales budgeting
most common; i.e. advertising will be 5% of projected sales; not necessarily logical; advertising drives sales and if sales are high might need more ads
competitve parity budgeting
match competitors or base on share of market; the competition might have different promotional objectives (diff level of expenditures)
all you can afford budgeting
“all I have left”; money is allocated to promotion only after all the other budget items are covered
task and objective budgeting
(best approach); determines promotional awareness, repeat, trial objectives and the promotion cost
After a budget has been determined: select the right promotional tools
• Specific mix can range from a simple program using a single tool to a comprehensive program using all forms of promotion; one may deserve emphasis
• Then comes, designing the promotion – viewed as the step requiring the most creativity
• After design you must schedule the promotion by determining the most effective timing of their use
Ex. Walgreen “Arm Yourself Campaign”
• Objectives: wanted to be #1 for flu shots, inspire 5 million people to get a flu shot, increase brand perception
• Results: after 5 weeks, administered 5.5 million flu shots
• Targeted Consumer Buying Cycle: before flu season – started early in prepurchase, targeted doctors, schools, ultimate consumers
• Used push and pull, integrated promotion