An Overview of Marketing Communications

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Irwin/McGraw-Hill & Dr. Chen16-1

Professor Jason C. H. Chen, Ph.D.

School of Business Administration

Gonzaga UniversitySpokane, WA 99223

[email protected]

Chapter 16An Overview of Marketing

Communications


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Discuss the objectives of marketingcommunications.

Understand the marketing communications mix

and its role. Explain the key elements of the marketing

communications process.

Discuss the seven steps in the marketingcommunications planning process.

Demonstrate awareness of some of the keyethical and legal issues related to marketing

communications.

After studying this chapter

you should be able to:


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OPENING VIGNETTE

WWW.MINIUSA.COM

1. What were the objectives of BMWs integratedcommunications program to establish the MiniCooper as a quirky and funproduct? Why didthey use so many different communicationschannels?

2. What did BMW accomplish by putting up a Webpage nine months before the Mini Cooper wasintroduced in the American market?


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A Marketing Strategyshowing the 4 Ps of a

Marketing Mix

PlaceProduct

Price Promotion

C


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Overview of Marketing Strategy Planning Process

PlaceProduct

Price Promotion

C

External Market EnvironmentTechnologies Political and Legal Cultural and Social Economic

Narrowing down to focused strategy with quantitative and qualitative screening criteria

CustomersNeeds and other

Segmenting

Dimensions

CompanyObjectives

&

Resources

CompetitorsCurrent

&

Prospective

Segmentation &

Positioning

Segmentation &

TargetingS.

W.

O.

T.


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Promotion

Communicating information between seller

and potential buyer or others in the channel -

to influence attitudes and behavior

Three major categories:Personal Selling

Mass Selling (Advertising and Publicity)

Sales Promotion

Different methods have different limitations

and advantages


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Photo of Colgate Palmolive

s director of

promotions conducting a meeting



Target

Market

Promotion PricePlaceProduct

Personal

selling

Mass

selling

Sales

promotion

PublicityAdvertising

Basic Promotion Methods and Strategy Planning



AIDA Model: Impact of promotional tools on consumer response

Personal SellingAdvertising

Public relations

and publicity

Sales

promotion

Effectiveness

Awareness/Attention Interest Desire Action



Relation of Promotion Objectives, Adoption

Process, and AIDA Model

Promotion Objectives Informing Persuading Reminding

Adoption Process Awareness Interest Evaluation

Trial Decision Confirmation

AIDAModel

Attention

Interest

Desire Action



The Role of Marketing Communications

(Basic Promotion Objectives)

InformingPersuading

Reminding



ActionConfirmationReminding

DesireTrail

Decision

Persuading

Attention

Interest

Awareness

Interest

Evaluation

Informing

AIDA ModelAdoption ProcessPromotion Objectives


process, and AIDA Model



ObjectivesInform

Persuade

Remind

Advertising

Direct

marketing

Personal

selling

Sales

promotion

Public

relations

The Marketing Communications Mix

Exhibit 16-1

The marketing communication mix


14/47Irwin/McGraw-Hill & Dr. Chen16-14(left) KELLOGGS NUTRI-GRAIN and KELLOGGS SNACK UMS are trademarks of Kellogg Company. All rights reserved. Used with permission.;

(right) Courtesy Beech Nutrition Companyfor use only with Basic Marketing

Kellogg and Beechnut ads



Integrated Marketing Communications

Integrated MarketingCommunications (IMC):

The strategic integration of

multiple means ofcommunicating with target

markets to form a

comprehensive, consistent

message.



Integrated Marketing Communications

Intentional coordination of every communication

from a firm to a target customer to convey a

consistent and complete message

Marketing manager blends inputs from

Sales managers Advertising managers

Public relations manager

Sales promotion managers

Integrated promotion effort in channel requires

cooperation and coordination

Blend depends on promotion objectives and

situation



The Marketing Communications Process



Traditional Communication Concepts

in Promotion

Sourcethe sender of a message Encodingthe source deciding what to say

and translating it into words or symbols that

convey meaning

Message channelthe carrier of the message

Noiseany distraction that reduces theeffectiveness of the communication process

Decodingthe receiver translating themessage

Receiverthe potential customer



Marketing Communications Planning

Situation

Analysis(see next slide)

CommunicationsProcess

Analysis

Budget

Development

Program

Development

Integration

&

Implementation

Monitoring,

Evaluating,

Controlling

Marketing

Plan

Review

Exhibit 16-3


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Marketing Communications Environments

The

Competitive

Environment

The

Economic

Environment

MarketingMix

Considerations

TheSocial

Environment


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Communications Process Analysis

Apply the Basic Communication

Model.

Set Marketing Communications

Objectives


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Budget Development

Influences on Budgeting: Size of the company

Its financial resources

The type of business

The market dispersion

The industry growth rate

The firms position in the

marketplace


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Budgeting Methods

Percentage of Sales

Competitive Parity

All-You-Can-Afford Objective-Task


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Setting the Promotion Budget

Budget based on percent of past or expected sales most common approach

main advantage is ease

can lead to major problems, including cutbacks when

more money is needed

Task methodbudgets for what needs to be

accomplished

usually the sensible approach

requires that activities be evaluated against objectives

Same ideas apply in budgeting other types of

marketing activities

C


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Marketing Communications

Program Development

Explicit Communications:

Convey a distinct, clearly stated message

through personal selling, advertising, publicrelations, sales promotion, direct marketing, or

some combination of these methods.

Implicit Communications: What the message connotes about the product

itself, its price, or the places it is sold.


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Manufacturer

Wholesaler

Retailer

Consumer

Manufacturer

Wholesaler

Retailer

Consumer

P

R

O

MO

T

I

O

N

P

R

O

M

O

T

I

O

N

Push Pull

PUSH and PULL STRATEGIES

M k ti C i ti


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Marketing Communications

Program Development (cont.)

Push Strategy: Involves convincing intermediary channel members to

pushthe product through the channel to the ultimate

consumer. Pull Strategy:

Attempts to get consumers to pullthe product fromthe manufacturing company through the marketingchannel.

Combination Strategy:

Aiming marketing communications at bothresellers and ultimate consumers.

P ti M E P hi i th Ch l


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Producers promotion blend

Personal selling, sales promotion, advertising,

and publicity

Wholesalerspromotion

push

Retailers

promotion

push

Wholesalerspromotion

push

Final

consumers

request (pull)

product

Business

customers

request (pull)

product

Promotion

to final

consumers

Promotion

to business

customers

Promotion to channel members

Promotion May Encourage Pushing in the Channel,

Pulling by Customers, or Both


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Promotion Blend May Involve Pushing and

Pulling

PUSHINGusing normal promotion efforts to sell

the marketing mix to channel members

PULLINGgetting customers to ask middlemen for

the product, usually because of

promotion directed to final consumers

or users

Some combination of the two methods is

usually required


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Integration and Implementation

Implementation: Setting the marketing communications

plan into action.

The key aspect o f imp lementat ion

is coord ination !! !

Monitoring Evaluating and


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Monitoring, Evaluating, and

Controlling

Examples: Monitor sales promotion by the number of coupons

redeemed.

Measure the effectiveness of a new personal selling

strategy by looking at the number of new accountsopened.

A firm might run tests to see if consumers noticedthe ad.

Review sales results and attribute fluctuations insales volume to MC.


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Promotion Seeks to Shift the Demand Curve


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A. Demand moreinelastic ( consumers

less price-sensitive)

B. Demand shift tothe right (consumers

buy more)

C. Both to the rightand more inelastic

Quantity

Price

0

D1D2

Quantity

Price

0

D1

D2

Quantity

Price

0

D1D2

Promotion Seeks to Shift the Demand Curve


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Advertising

Personal selling

Consumer goods Industrial goods

A. Normal communication mix in consumer VS. industrial market

Percentofpromotionb

udget


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Advertising

Personal selling

Awareness Preference

B. Communication mix cost-effectiveness at different buyer

readiness stage

Perc

entofpromotion

budget

Knowledge Purchase


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Integrated Direct-Response Promotion

Direct communication between a seller and individual

customer using a promotion method other than face-to-face

personal selling

Started with mail advertising, but has evolved to include

other media, including

Internet

Teletext and Cable TV

Interactive Video Kiosks

Fax on Demand

Distinctive feature is that it attempts to evoke a directresponse from the customer

Closely tied to use of a database to target customers

Privacy and other ethical issues may arise


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Customer May Initiate Communication

New electronic media encourage consumersto search for information

Consumer decides how much information to

get

Marketing information not just in 30-second

sound bytes

Action (response)including purchase

may be immediate

Communication with customers is becoming

more customized (personalized)

A Model of Customer Initiated Interactive


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A Model of Customer-Initiated Interactive

Communication


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Multistep Flow Model of Communication

R l ti f P ti Obj ti Ad ti


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Process, and AIDA Model

Promotion Objectives Informing Persuading Reminding

Adoption Process Awareness Interest Evaluation Trial Decision Confirmation

AIDAModel

Attention

Interest

Desire Action


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The Adoption Curve

Innovators3-5% EarlyAdopters10-15%

EarlyMajority34%

LateMajority34%

Laggards orNonadopters5-16%

90

50

20

5

0Time

PercentAdoption

Ethi l d L l C id ti


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Ethical and Legal Considerations

M C Element Legal / Ethical Concerns

Advertising Deceptive advertising

Unfavorable stereotypes

Public Relations Lack of sincerity

Using economic power unfairly

Sales Promotion Misleading consumer promotions

Paying slotting allowances for shelf space

Personal Selling High-pressure selling

Misrepresenting product benefits

Direct Marketing Telemarketing privacy invasion

Misuse of consumer database information

L l b t Ethi l?


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Legal -- but Ethical?

Some marketing communications may betechnically legal but raise significant ethicalquestions: Liquor industry now advertises on cable and local

television stations.

Extensive promotion of higher-cost drugs when healthcare costs are spiraling out of control.

Heavy promotional allowances to pharmacies for

agreement to push proprietary instead of genericdrugs.

Promotion of legalized gambling.

Deception in Marketing


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Deception in MarketingCommunications

Deceptive

Advertising:

Communicationsintended to mislead

consumers by

making false claims

or failing to disclose

importantinformation.

Examples:

False pricing offers

Misleading or overstating

product benefits

Non-substantiation ofclaims made in marketing

communications

Addi i l R l C


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Additional Regulatory Concerns

Comparative advertising requires that

comparative claims be supported.

Product endorsers must be qualified tomake judgments and must actually

use the product being endorsed.

Packaging and labeling practices of food

and drug marketers are heavily scrutinized

by consumers and regulatory agencies.

Eff t f Gl b li ti


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Effects of Globalization

Adjust the communications mixfrom country to country to avoid

legal and ethical problems.

Sales promotion techniquesthat involve contests and

giveaways are regulated quite

differently in various countries.

Eff t f Gl b li ti


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Effects of Globalization

Acceptable personalselling behavior varies

significantly across

countries and cultures.

Special precautions must

be taken to not

perpetuate unfavorablestereotypes of ethic and

racial groups.

An Overview of Marketing Communications

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