Marketing Exam 6: IMC (Chapter 11)

What are the parts of the communication process?
1. Sender
2. Encoding
3. Message
4. Media
5. Decoding
6. Receiver
7. Response
8. Feedback
Party sending a message to another party
Sender
Process of putting thought into symbolic form
Encoding
Set of symbols that the sender transmits
Message
Communication channels through which the message moves from the sender to the receiver
Media
Process by which the receiver assigns meaning to the symbol encoded by the sender
Decoding
The party receiving the message sent by the other party
Receiver
The reactions of the receiver after being exposed to the message
Response
The part of the receives response communicated back to the sender
Feedback
Noise in the communication process is between ______ and _________
Encoding and decoding
The unplanned static or distortion during the communication process which results in the receiver getting a different message than the one the sender sent
Noise
What is the idea of the Communication Process?
When we are communication, we have message being to receiver, this idea came about when people sent messages through telephone lines, encoding and decoding it
It can be distracting, people can miss the information and get wrong information because they weren’t paying attention

Ex: Watching a commercial with friends, you are distracted may not fully understand the message

How does Noise translate into Marketing Promotions?
Used to decode, use what you know, your past, your meanings attached to words, symbols
– can disrupt communication
– different lives experiences can cause people to encode/decode messages in different ways
– can be used to target/communicate with certain target markets
How does Field of Experience translate into Marketing Promotions?
Fields of experience makes the product ______ to you, and get the message across
relevant
Companies are trying to get their message across in a way that is _______ to the audience in order for them ______ the message they are trying to send.
Relevant, Decode
Advertising is usually ____ for customers- it could be that the target market is different than the person who watching the commercial. If you don’t have the ________ they are targeting, then you wont understand/enjoy it.
miserable, Field of Experience
What must marketers understand to communicate with customers?
– Best messages consist of words and symbols that are familiar to the receiver
– The more the senders field of experience overlaps with that of the receiver, the more effective the message will be
– The marketer must understand the customers field of experience to communicate effectively, even if they don’t always share the same field of experience
Best messages consist of _______ and ______ that are familiar to the ______
words, symbols, receiver
In terms of the Communication Process, explain why the KFC ad on walking dead could have been potentially troubling?
KFC slogan was, “fresh is better” saying that their chicken is fresh and good quality. This ad was placed after the walking dead and the ad was taken differently. It was an example of NOISE because it put a new spin on the slogan, influenced the way the commercial was taken, it got KFC a lot of attention, worked for certain customers but not for all.
When you are trying to communicate through different channels, you have to be careful about the process of ______ and how people _____ it
encoding, decode
5 Main categories of Promotion
1. Advertisements
2. Sales Promotion
3. Personal Selling
4. Public Relations
5. Direct/Digital Marketing
Paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor
Advertising
Examples of Advertising
Billboards, Magazine Ads, Broadcast, print, online, mobile, outdoor
Short term incentives to encourage the purchase or sale of product/service “bogo” discounts, rebates,
-short term
-made to encourage trial of product
– hope when people try it they will like it and buy it
Sales Promotion
– Lower the rebate/gift cards being used, the more ideal for business
– Can decrease customer Satisfaction, “cheap out” on customer, can break customer experience
– Not interesting/user friendly to customer
– Not marketing concept oriented
Sales Promotion
Examples of Sales Promotion
1. discounts
2. coupons
3. Displays
4. Demonstration
– Reach is a benefit
– Cost is a negative
– Ex: Expensive Super Bowl ads is an advertising method; upfront cost on TV ads is expensive
– Cant do it company is small
Sales Promotion
Promotions can be _____ for branding; learned behavior to value product based on discount; if brand is always discounted it makes it harder to build brand equity
SALES PROMOTION, bad
Personal customer interaction by the firms sales force for the purpose of engaging customers, making sales, and building relationships. Positive interaction, beneficial later down the road
Personal Selling
– Puts incentive to sell, the more you sell the better you are doing
– What should not be done, can make tellers into sales people, priority doesn’t become customer service, becomes just making sales
Personal Selling
Customizable because its one interaction with the customer, more personable
– very expensive (commission and base salary) makes product more expensive, markup price
PErsonal Selling
Examples of Personal Selling
1. Sales Presentations
2. Trade Shows
3 Incentive Programs
Building good relations with the company’s various publics by obtaining favorably publicity, building up good corporate image, and handling or heading off unfavorable rumors, stories, events
– a lot of this is unpaid
Public Relations
– Donald Trump 2 Billion in free publicity based on things he says/does, creates exposure
– operation through unpaid channels because not as biased, more credibility coming from unpaid source, more genuine/legitimate, more impact
Public Relations
– Unpaid sources have large impact building image
– Trade off: Bad PR can happen, may not go in the direction company wants it to go (encoding, decoding, noise) can lose control
– unpaid exposure could go viral, be spun in unfavorable ways for company
Public Relations
Examples of Public Relations
1. Press Releases
2. Sponsorships
3. Events
4. Web Pages
Engaging directly with individually carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting relationships
Direct/Digital Marketing
In Direct/Digital Marketing,
DIRECT =
DIGITAL =
DIRECT= mail, less focused individual

DIGITAL= Facebook, amazon, twitter ads; create value proposition to individual customer based on interests, preferences

Customizable because you get data on your customer, find out how to them, but you can have low response (Ex: junk mail, mail sent to you not always going to respond too, sometime 1% response rate, send out 1000 flyers in the mail, only ten respond)
Direct/Digital Marketing
What is the Approximate amount of spending for Advertising?
160 Billion (49%)
What is the Approximate amount of spending for Promotions?
$40 Billion (12%)
What is the Approximate amount of spending for Digital?
50 Billion (15%)
What is the Approximate amount of spending for Direct Mail?
44 Billion (13%)
What is the Approximate amount of spending for Sponsorships?
20 Billion (6%)
What is the Approximate amount of spending for PR?
6 Billion (2%)
What is the Approximate amount of spending for Social Media?
5 Billion (2%)
What is the Approximate amount of spending for Cause?
2 Billion (1%)
Strengths and Weaknesses of Advertising?
– Reach/Cost
– Reach is a benefit. That is why do it — especially on television. For a certain cost, you are going to get your message out in front of a lot of people. At super bowl, so many viewers but the negative is that you are going to pay for it. The overall cost is a ton.
– Even though it might be a okay deal, the upfront cost of running advertising on TV is excessive
Strengths and Weaknesses of Promotions?
– Purchase Incentive/Bad for Branding
– You can get people to buy so it does induce trial and that is why it has been around for a while. It is everywhere.
– But the negative is that it can be bad for branding.
– How many of you shop at Public and use their bogo deals? If an items keeps going on sale, people keep buying it and that is called LEARNED BEHAVIOR. You have learned behavior to value this product at its promotion based price.
– You are discounting the products price in your mind.
– You can’t build brand equity if you are constantly discounting your brand
Strengths and Weakness of PR?
Credibility/Lack of Control
Strengths and Weaknesses of Selling?
Customizable/High Cost
– Very customizable, you have one on one interaction, that person can read your concerns, listen of read language. And possibly even explain the product that release those concerns and now you understand
– Very influential because you are having a one on one.
– Downside is that it is expensive, you can only do that if you have the right markup.
– Ex: Cars have a good markup so that is why we have car sales men and women
Strengths and Weaknesses of Direct?
Customziable/Low Response
– Customizable because we are collecting data on people to customize what we are doing for them.
– But for some it has a low response. Meaning that how often do you look at mailing that you get in the mail that you don’t know
Can reach masses of geographically dispersed buyers at a low cost per exposure and it enables the seller to repeat a message many time (Television advertising reaches huge audience
– Large scale says something positive about the sellers size, popularity and success
– Consumers tend to view advertised products as more legitimate
The Nature of Advertising
– Very expensive, it allows the company to dramatize its products through the artful use of visuals, print, sound and color
– Building long term image for a product
– Trigger quick sales
– Has shortcomings, although it reaches many people quickly, it is impersonal and lacks direct persuasiveness of a company salespeople
– can carry on only a one way communication with an audience and the audience does not feel that it has to pay attention
The Nature of Advertising
Most effective tool at certain stages of the buying process particularly in building up buyers preferences, convictions, and actions
– Personal interactions between two or more people so each person can observe the others needs and characteristics and make quick adjustments
– allows customer relationships to spring up, ranging from matter of fact selling relationships to a personal friendship
The Nature of Personal Selling
– the buyer feels a greater need to listen and respond
– Sales force requires longer term commitment than advertising, advertising can be turned down but the size of a sales force is harder to change
– Most expensive promotion tool (spend 3x more on selling than advertising
The Nature of Personal Selling
Includes wide assortment of tools, coupons, contests, discounts, premiums, and others which all have unique characteristics
– Attract consumer attentions, engage consumers, offer strong incentives to purchase, can be used to dramatize product offers and boost sagging sales
– Invite and reward quick response
– Advertising says, “buy our product” and sales promotion says “buy it now”
– Can be short lived, and isn’t always effective as advertising or personal selling in building long run brand preference and customer relationships
The Nature of Sales Promotion
Very believable; news stories, features, sponsorships, and events seem more real and believable to readers than ads do
– can reach many prospects who avoid salespeople and advertisements (message gets to buyers as “news and events” rather than a sales directed communication
– Can dramatize a company/product as with advertising
– Marketers tend to underuse or use this as an after thought
The Nature of Public Relations
Direct mail, catalogs, telephone marketing, online, mobile, social media
– More targeted (directed at specific customer or customer community) is immediate and personalized. Messages can be prepared quickly, even in real time, and tailored to appeal to specific consumers brand groups
– Interactive, allows a dialogue between the marketing team and consumer, and messages can be altered depending on the consumers response
– Well suited to highly targeted marketing efforts, creating customer engagement, and building one to one customer relationships
The Nature of Direct and Digital Marketing
What is breakage in regard to sales promotion? What is an argument for and against breakage?
– There is an idea that the lower the amount that gets reimbursed through rebates (through sales promotion) actually saves the company money. For Example: gift cards
– If i run a sales promotion on something and customers don’t follow through on the end, they see that a positive because they save money
– Sometimes companies try to maximize the amount of people who use a rebate
– By doing this, you are decreasing the customer experience, shows lack of customer/marketing orientation, not making it customer friendly
– When you run these kind of things, you have already budgeted the budget. You are breaking customer experience and not making it as interesting.
– Whole idea is not a good idea and does not represent marketing concept about breakage
Methods of Promotion Budgeting?
1. Affordable Method
2. Percentage of Sales
3. Competitive Parity
4. Objective Task
One of the hardest marketing decision facing a company is what?
how much to spend on promotion
All 5 promotion budgeting tools must
work together, consider what we are saying holistically, represent the company, product, and brand
Setting the promotion budget at the level management thinks the company can afford
-Cost Function and Cost Based
– Used by small businesses reasoning that the company cannot spend more on advertising than it has
– Ignores the effects of promotion among sales, often results in underspending and tends to place promotion last among spending priorities
Affordable Method
Setting the promotion budget at a certain percentage of current or forecast sales or as a percentage of the unit sales price
– VALUE BASED
– Simple to use, helps management think about the relationships between promotion, spending, selling price, and profit per unit
– Wrongly views sales as the cause of promotion rather than the result
– based on the availability of funds rather than on opportunities, it may prevent the increased spending sometimes needed to turn around falling sales.
-Because the budget varies year to year, long range planning is difficult
– Does not provide any basis for choosing a specific percentage, except what has been done in the past
Percentage of Sales Method
Setting their promotion budgets to match competitors outlays, monitor competitors advertising/get industry promotion spending estimates from publication or trade associations then set their budgets based on industry average
– COST BASED
– 2 Arguments support this method, 1. competitors budgets represent the collective wisdom of the industry. 2. Spending what competitors spend helps prevent promotion wars. Neither argument is valid
– There are no grounds for believing that the competition has a better idea of what a company should be spending on promotion than does the company itself
Competitive Parity Method
Most logical budget setting method, whereby the company sets its promotion budget based on what it wants to accomplish with promotion
Objective and Task Method
This budgeting method entails (1) defining specific promotion objective (2) determining the task needed to achieve these objectives and (3) estimating the costs of performing these tasks.
– The sum of these costs is the proposed promotion budget
Objective and Task Method
Determines what objective to accomplish, how and what money to spend, only method that uses the marketing concept and influences customers to accomplish goals
– most difficult method to use
Objective and Task Method
What are the 3 easiest Promotion Budgeting Methods?
1. Affordable Method
2. Percentage of Sales
3. Competitive Parity
Which Promotion Budgeting method is the most representative of the marketing concept?
Objective and Task Method
The product directs its marketing activities (advertising, consumer promotion, and direct/digital media) toward final consumers to induce them to buy the product
– If it is effective consumers will demand the brand, the consumer then “____” the product through the channels
Pull Strategy
Ex: Unilever promotes AXE grooming products through web and tv ads, and if effective, consumers demand the brand from retailers such as CVS

This is an example of

Pull Strategy
Involves “____” the product through marketing channels to final consumers
– Producer directs marketing activities (personal selling and trade promotion) toward channel members to induce them to carry the product and promote it to final consumer
Push Strategy
Ex: John Deere does not do its own promoting of tractors, instead it works with lower and home depot who ____ John Deer products to final consumers

This is an example of

Push Strategy
Some industrial good companies only use _________ and some direct marketing companies only use _____ but most companies use a ______
Push strategies, Pull Strategies, combination of both
The concept of designing marketing communications programs that coordinate all promotional activities
Integrated Marketing Communications
Carefully integrating and coordinating the company’s communication channels to deliver a clear, consistent, and compelling message about the organization and its products
Integrated Marketing Communications
No other area of marketing is changing so quickly and profoundly. A big part of the reason is the huge surge in customer engagement and through digital media
Integrated Marketing Communications
Came about in the 90’s created by Don Shultz
Integrated Marketing Communications
Integrated Marketing Communications is
Strategy Directive
What are two things that IMC helps a firm obtain?
1. Clarity
2. Synergy
Makes the message clear, if message is unclear, you are sending out a muddled message
Clarity
Ad says you are prominent luxury brand, but send another ad offering discounts, this send two messages and muddles the power of the ad.
This is an example of
clarity in IMC
Jos A. Banks sells suits, at one time was a decent brand; has many sales/discounts, and used to buy one get 2 free, it became excessive
– it got so bad that SNL began making fun of the company
– You can spend a lot of $ on shirt/suit, but when running deals, it made it sound dirt cheap, conflicted with brand message

This is an example of

Clarity in IMC
Ad channels and promotion categories can amplify each other, exceed sum of individual effects
Synergy
1. Don’t have to use all 5 channels,but if you use them well it has a powerful effect
2. Channels down have to have exact message, is tweaked across it to amplify certain message
3. Meaning that these advertising channels and categories when used right and in conjunction, they work on top of each other and amplify each others effects
4. Find ways to relate different channels back to original message/idea
Synergy
What is IMC not?
– A common mistake is to imagine that having the same look and feel across different channels “matching luggage” will create successful integration. But that is a terrible basis for creating an integrated campaign. Just because the press ad and website have the same look and copy, it wont necessarily connect with consumer. It may just get boring
2 Common Mistakes about IMC
1. It doesn’t simply make everything look and feel the same across channels. It is much deeper than that. It goes into integrating the different parts together. It can just be understanding what your brand message is an how it is being conveyed
2. Not about making someone who is the center of everything approve everything. Some of the best world is when we make small teams work together. All working together get something done
– It isn’t a bureaucratic nightmare
– Can slow things down
– Chick Fila doesn’t do this, it creates teams of different departments that work together, because they are on a team, faster, and cleaner way to operate
What is IMC NOT
How is Promotion Changing? What are the 3 factors pushing this change?
1. Consumers are changing
2. Marketing Strategies are changing
3. Digital Technology
Consumers are more informed and more communication empowered because we are in a digital and wireless age
– Rather than relying on a marketer, supplied information, they can use the internet and social media to find it on their own
– Connect easily with other consumers to exchange brand related info or even create their own brand messages and experiences
How is Promotion Changing?
Consumers are Changing
As mass markets have fragmented, marketers are shifting away from mass marketing
– They are developing focused marketing programs designed to build closer relationships with customers in more narrowly defines micro markets
How is Promotion Changing?
Marketing Strategies
Remarkable changes in the ways companies/customers communicate with each other
– Has spawned a new host of info and communication tools such as smartphones, tablet, satellite, cable TV
– Explosive developments have had a dramatic impact on marketing communication
How is Promotion Changing?
Digital Technology
– Just as mass marketing gave rise to a new generation of mass media communications, the new digital and social media have given birth to more a targeted, social, and engaging marketing communications model
– The use of network television, magazine, newspapers etc are declining and advertisers are now adding a broad selection of more specialized and highly targeted media to engage smaller customer segments with more personalized, interactive content
Example: Twitter and Feedback
How is Promotion Changing?
Digital Technology
Any point where there is an interface between an organization and a stakeholder
– interface can be through a product, front line employee, marketing communication
– is anywhere where someone comes in contact with your brand
– Whatever the customer relates to the brand
Ex: McDonalds: Store, Ad, Facebook page
Customer Touch Point
Ex: Getting a camera fixed, customer service channel is the _______, if product is outsourced there is no customer ________, affects customer experience/opinion of the brand
Customer Touch Point
Connects customer service, billing services, call center, all relates to brand
– many companies don’t connect billing with customer touch point
– Very difficult to correctly utilize/manage all touch points
Touch Point Diagram
Mindset present when certain departments or sectors do not wish to share information with others in the same company
– it is more than just within the organization
– Makes connecting all touch points difficult
-Ex: Sales and marketing department don’t always coordinate well together
– Sales incentives are quotas (represent how you manage accounts) doesn’t tie in with marketing, they are separated/disjointed, not incentivized to communicate or share information among both departments
– sometimes there are battles within the organization to prove which department is more important, sometimes actually have fights and hate each other
– Company has to to somehow make them interrelated and get along
– Called “breaking down silos” is very hard
Silo Mentality
Why is IMC Hard?
External Partners are the outsource aspect of business
– Ex: Dell outsourced, had a large server, had to hire 3rd party to manage)
– Become more complex because company must try to make outsourced 3rd party aligned with touch points as well
– Aligning different functional areas
– manifestations of the “brand message” has to make sense in the promotional channel
– organizations nimbleness must be maintained
How well did Nike write the Future Campaign do as compared to other companies affiliated with the world cup?
– The ad was to appeal to emotions, aspirational
– Message of ad was controlling your destiny, you are writing the future right now
– Did a contest where you would send in message, and if picked it was put on Wayne Rooney’s shoe
– Social media based content, project people messages that won contest onto building
– Made shoes for sponsored players even though Nike didn’t officially sponsor the world cup
– Took idea and played it across many different mediums, and stole the show, had the most response, more than actual sponsor
Was Nike a Sponsor of the World Cup?
NO