· Web viewAfter reading this chapter, students should: Know what is the role of marketing...

LEARNING OBJECTIVESAfter reading this chapter, students should:

Know what is the role of marketing communications

Know how marketing communications work

Know what are the major steps in developing effective communications

Know what is the communications mix and how should it be set

Know what is an integrated marketing communications program

CHAPTER SUMMARY Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible to target customers. Companies must also communicate with present and potential stakeholders, and with the general public.

The marketing communications mix consists of six major modes of communications: advertising, sales promotion, public relations and publicity, events and experiences, direct marketing, and personal selling.

The communication process consists of nine elements: sender, receiver, message, media, encoding, decoding, response, feedback, and noise. To get their messages through, marketers must encode their messages in a way that takes into account how the target audience usually decodes messages. They must also transmit the message through efficient media that reach the target audience and develop feedback channels to monitor response to the message. Consumer response to a communication can be often modeled in terms of a response hierarchy and “learn-feel-do” sequence.

Developing effective communications involves eight steps: (1) Identify the target audience, (2) determine the communications objectives, (3) design the communication, (4) select the communication channels, (5) establish the total communications budget, (6) decide on the communications mix, (7) measure the communications’ results, and (8) manage the integrated marketing communications process.

In identifying the target audience, the marketer needs to close any gap that exists between current public perception and the image sought. Communications objectives

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C H A P T E R 1 DESIGNING AND MANAGING INTEGRATED MARKETING COMMUNICATIONS

Chapter-by-Chapter Instructional Material

may involve category needs, brand awareness, brand attitude, or brand purchase intention. Formulating the communication requires solving three problems: what to say (message strategy), how to say it (creative strategy), and who should say it (message source). Communication channels may be personal (advocate, expert, and social channels) or non-personal (media, atmospheres, and events). The objective-and-task method of setting the promotion budget, which calls upon marketers to develop their budgets by defining specific objectives, is most desirable.

In deciding on the marketing communications mix, marketers must examine the distinct advantages and costs of each communication tool and the company’s market rank. They must also consider the type of product market in which they are selling, how ready consumers are to make a purchase, and the product’s stage in the products life cycle. Measuring the marketing communications mix’s effectiveness involves asking members of the target audience whether they recognize or recall the communication, how many times they saw it, what points they recall, how they felt about the communication, and their previous and current attitudes toward the product and the company.

Managing and coordinating the entire communications process calls for integrated marketing communications (IMC): marketing communications planning which recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of discrete messages.

OPENING THOUGHT Perhaps, the most challenging aspect of this chapter is the section on the nine elements of the communications process: sender, receiver, message, media, encoding, decoding, response, feedback, and noise. Students not previously exposed to these concepts in other marketing or communications’ courses will find these concepts somewhat difficult to fully understand and perceive without good use of examples and trial. The instructor is encouraged to use examples gleamed from advertisers Web sites, advertisers, television or print commercials to demonstrate via dissection these concepts especially encoding and decoding.

The remainder of the chapter covers material previously reviewed such as identifying the target market, and designing the marketing message. What is different in this chapter is the integration of all of the communication’s “mix” or elements of communicating to the target audience in a consistent and effective manner.

Finally, the coordination and integration of all of the elements of the communications mix and their effect/affect on the total message (evaluation of their effectiveness) remains a challenge to prove. The fact is that the concept of the combined effectiveness of the integration of all marketing communications is difficult to prove in the real business world. Instructors are encouraged to use examples of non-effective communication(s) to

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Chapter 17: Designing and Managing Integrated Marketing Communications

highlight what the “possibilities” could be with an integrated marketing communications process.

TEACHING STRATEGY AND CLASS ORGANIZATION PROJECTS1. At this point in the semester long marketing plan project, students should have agreed

upon their integrated marketing communications matrix. The instructor is encouraged to evaluate the submissions vis-à-vis the material presented in this chapter. In reviewing the submissions, the instructor should evaluate the continuity of the message across all possible communication media (students will tend to concentrate their media to television or to the Internet and exclude other forms such as personal selling and radio).

2. With the instructor’s guidance and attendance, set up a field trip to a local advertising agency in the community to gather from the agency’s management, their (ad agency) views on the topic of integrated marketing communications. Specially, what services have their clients’ requested that the ad agency performs to build an integrated marketing communications program? Today, many progressive ad agencies are including among their services: print, marketing intelligence, personal selling training, and strategy development in their portfolios.

3. Sonic PDA Marketing Plan Every marketing plan must include a section showing how the company will use marketing communications. The question is not whether to communicate, but rather what to say, to whom, how to say it, how often, and which promotional tools to use. You are responsible for planning integrated marketing communications for Sonic’s new PDA. Review the strategies you previously documented in the marketing plan for the targeting, positioning, branding, product management, pricing, and distribution of the Sonic 1000. Now use your knowledge of communications to answer these questions:

What audience(s) should Sonic target in its integrated marketing communications plan?

What image should Sonic seek to create for its first PDA product? What objectives are appropriate for Sonic’s initial communications campaign? What message design and communication channels are likely to be most effective

for the target audience? Which promotional tools would be most effective in Sonic’s promotional mix?

Why? How should Sonic decide the amount to allocate to its marketing communications

budget?

Summarize your answers in a written marketing plan or type them into the Marketing Mix section of Marketing Plan Pro.

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ASSIGNMENTSSmall Group Assignments1. The opening vignette of this chapter describes the marketing campaign that BMW

used in their relaunch of the Mini automobile. This small group assignment is entrusted with the following objectives. First, collect as many “copies” of the advertising that BMW used in the initial launch by looking for copies of the print ads in back issues of magazines. Second, find news stories that were run that mentioned the product and finally, collect other information off the Web site about the product. Once this information has been collected, compare, contrast, and form an opinion (based on the material in this chapter) of why this campaign was so successful? Could such a campaign (grassroots and/or guerilla) have worked so successfully for a “normal” size automobile? How does the non-traditional “form” of the Mini lend itself to a non-traditional campaign?

2. This chapter states that the marketing communications mix consists of six major modes of communication and that every brand contact delivers an impression that can strengthen or weaken a customer’s view of the company. In small groups, have the students select an example of a company’s message that is not consistent across its advertising, sales promotion, events and experiences, public relations, direct marketing, and personal selling. The students should also provide an example of a firm whose marketing communications is consistent in all of these areas. Students should be able to explain why they believe the communication is or is not consistent.

Individual Assignments1. The starting point in planning marketing communications is an audit of all the

potential interactions that customers in the target market may have with the brand and the company. Students should select a brand of their choosing and in their papers “map” out or create an audit of all the potential interactions that customers in the target market have with the brand and company. Student should, for the purpose of this assignment, assume that they are a member of the target market.

2. In the Marketing Insight, entitled, Coordinating Media to Build Brand Equity, the author lists solutions for strengthening communications effects as brand signatures, ad retrieval cues, and media interactions. Assign students the project of finding at least three examples of companies and/or brands that have used one or more of these strengthening effects to communicate brand awareness. The students should be prepared to defend, with the use of examples, their positions.

Think-Pair-Share1. Buzz marketing, word-of-mouth, and viral marketing techniques have lead to a

number of new ideas and new products. In the Marketing Insight, Buzz Marketing, the authors lists the five myths of buzz. Surveying their environment, have the students comment on what current products they feel are the “buzz” right now. Can “buzz” be managed? Is it more effective for a “fad” a “trend,” or “traditional” product?

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2. Following up on # 1 above, Malcolm Gladwell postulates in the “Law of the Few, Stickiness, and the Power of Context” and identifies mavens, connectors, and salesmen necessary for igniting public interest in an idea. Question: Do you agree with Mr. Gladwell’s assertions? Are there mavens, connectors, and salesmen present on campus? If so, have they been successful in igniting public interest in an idea or cause? Finally, can the “Law of the Few” work for building interest in a product (in other words can this be marketed?).

MARKETING TODAY—CLASS DISCUSSION TOPICSCreative strategy translates messages into specific communications. Creative strategies are either informational or transformational in form.

Following up from the class discussion topic in Chapter 1, how would you design a message strategy for “Mothers Against Drunk Driving.” Would an informational or transformational strategy be more effective? Why?

Note to Instructor: Before assigning this project, students should be directed to do research into previous ad campaigns for this group and to collect examples of such advertising. An in-class discussion can be conducted examining why these campaigns have or have not been successful in reducing incidences of drunk driving in this country. Better students will relate these campaigns to the concepts of consumer buying behavior covered in this text.

END-OF-CHAPTER SUPPORT MARKETING DEBATE—What Is the Biggest Obstacle to Integrating Marketing Communications?

Although integrated marketing communications is a frequently espoused goal, truly integrated programs have been hard to come by. Some critics maintain the problem is an organizational one—the agencies have not done a good job of putting together all the different teams and organizations involved with a communications campaign. Others maintain that the biggest problem is the lack of managerial guidelines for evaluating IMC programs. How does a manager know when his or her IMC program is satisfactorily integrated?

Take a position: The biggest obstacle to effective IMC programs is a lack of agency coordination across communication unit versus the biggest obstacle to effective IMC programs is a lack of understanding as to how to optimally design and evaluate such programs.

Pro: Advertising agencies have just recently begun to understand the concept of integrated marketing communications and have marshaled the resources needed to coordinate these various elements. Agencies are defined by specialists in particular disciplines (radio, print, television, and copy) and each discipline or specialist believes that his/her discipline is the reason for the effectiveness of the campaign. Because measuring the reason why a consumer has purchased a company’s particular product is difficult or nearly impossible, no true

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assignment of that “specialty” weight or importance to the purchase can be assigned, everyone then can hold onto their specialty as the reason why the sale was consummated.

However, because agencies work for the client company, the proliferation of these internecine positions rests with the client company not being able to either understand IMC, or not believe in the concepts espoused in IMC. If the client company begins the relationship with the agencies with clear IMC goals and objectives, the agencies will/would follow suit.

Con: Consumer buying is a complicated and often elusive process not fully understood by the companies involved and often not fully understood by the consumer as well. Why did/does a consumer, choose one branded product over another at any given buying opportunity? That is the question(s) plaguing companies. If that question cannot be fully satisfied/answered/ quantified for each purchase occasion, how can the firm subsequently contribute elements of the marketing communications mix to these decisions? Until an agreed upon system is developed that quantifies each element of the marketing communications mix into the consumers overall purchase decision. Such as having a consumer say that “in my purchase of product X, the following elements played a role in my decision-making: advertising-5 percent, sales promotion—10 percent, events and experiences—10 percent, public relations and publicity—4 percent, direct marketing—4 percent, and personal selling—67 percent.” Or some other matrix, evaluating the effectiveness and the contribution each element played in the consumer’s decision process will be debated.

Therefore, a manager cannot fully “know” (meaning assigning percentages of elements of the decision process versus costs involved) that their program is satisfactorily integrated. The manager can, however, know when their program is “not” satisfactorily integrated by measuring consumer perceptions about their products or firm compared/contrasted to the messages being transmitted to the consumer from the various elements of the company.

MARKETING DISCUSSION

Pick a brand and go to the Web site. Locate as many forms of communications as you can find. Conduct an informal communications audit. What do you notice? How consistent are the different communications?

Student answers will differ depending upon their favorite Web sites.

MARKETING SPOTLIGHT—Intel

Discussion Questions:

1) What have been the key success factors for Intel?

a. They have a strategic concept.

b. Chose a trademarkable name for their chips

c. Developed a program with computer manufacturers to co-op marketing if the name/logo/sticker was visible on the outside of the computer.

d. Advertised to the consumer to “look for” the Intel logo in the purchasing of their computers.

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e. Integrated marketing programs featuring both consumer and corporate programs.

2) Where is Intel vulnerable?

a. Overexposure of their trademarked name.

b. Danger of the name becoming “common speech” (aspirin) thereby losing their competitive advantage in the naming.

3) What should it watch out for?

a. The transformation in the consumer’s mind of the “computer product” to the “every type of product”—losing brand identity and positioning in the minds of the consumer (brand proliferation).

4) What recommendations would you make to senior marketing executives going forward?

a. Do not rest on past successes—continue your strategic direction of having an integrated marketing communications program.

b. Monitor consumers perceptions of the effectiveness of sound integrated marketing communications programs—consumers may begin to feel “manipulated” or “brain-washed” by constant and consistent exposure to such programs.

c. Develop flanker brands or other brands consistent with new areas of technology (TVs ,etc.) so as to protect their parent brand from overexposure or brand proliferation.

5) What should the company be sure to do with their marketing?

a. Capitalize on the “moment” and be ready to change, adapt, or discontinue the programs as consumer attitudes changes.

DETAILED CHAPTER OUTLINE Modern marketing calls for more than developing a good product, pricing it attractively,

and making it accessible. Companies must also communicate with present and potential stakeholders, and the general public.

For most companies, the question is not whether to communicate but rather what to say, how to say it, to whom, and how often.

THE ROLE OF MARKETING COMMUNICATIONS Marketing communications are the means by which firms attempt to inform,

persuade, and remind consumers—directly or indirectly—about the products and brands that they sell.

A) Marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers.

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B) Marketing communications performs many functions for consumers:

1) Told or shown how and why a product is used.

2) By what kind of person.

3) Where and when .

4) Learn about the product, the company, and what it stands for.

5) Allows consumers to be given an incentive or reward for usage or trial.

6) Allows companies to link their brands to people, places, feelings, and events.

7) Marketing communications can contribute to brand equity by establishing the brand in memory and crafting a brand image.

Marketing Communications and Brand Equity Marketing communications mix consists of six major modes of communication:

A) Advertising.

B) Sales promotion.

C) Events and experiences.

D) Public relations and publicity.

E) Direct marketing.

F) Personal selling.

Review Key Definitions here: marketing communications, advertising, sales promotion, events and experiences, public relations and publicity, direct marketing, and personal selling

G) Every brand contact delivers an impression that can strengthen or weaken a customer’s view of the company

Table 17.1 lists numerous communication platforms. Figure 17.1 shows IMC steps to build brand equity.

H) Marketing communication activities contribute to brand equity in many ways:

1) By creating awareness of the brand.

2) By linking the right associations to the brand image in the consumer’s memory.

3) Eliciting positive brand judgments or feelings.

4) And/or facilitating a stronger consumer-brand connection.

I) Marketing communication activities must be integrated to deliver a consistent message and achieve the strategic positioning.

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J) The starting point in planning marketing communications is an audit of all the potential interactions that customers in the target market may have with the brand and the company.

K) Marketers need to assess which experiences and impressions will have the most influence at each stage of the buying process.

L) This understanding will help them allocate communications dollars more efficiently, design, and implement the right communication program.

M) Armed with these insights, marketers can judge marketing communications according to its ability to build brand equity and drive brand sales.

N) Marketers should evaluate all the different possible communication options according to effectiveness criteria.

O) Brand awareness is a function of the number of brand-related exposures and experiences accumulated by the consumer.

P) Anything that causes the consumer to notice and pay attention to the brand can increase brand awareness.

Q) To enhance brand recall, more intense and elaborate processing may be necessary so that stronger brand links to the product category or consumer needs are established to improve memory performance.

R) All possible marketing communications options should be considered to create the desired brand image and knowledge.

The Communication Process Models Marketers should understand the fundamental elements of effective

communication. Two models are useful: a macro model and a micro model

Macro Model of the Communication Process Figure 17.2 shows a macro communication model with nine elements

A) Two represent the major parties in a communication:

1) Sender.

2) Receiver.

B) Two represent the major communication tools:

1) Message.

2) Media.

C) Four represent major communications functions

1) Encoding.

2) Decoding.

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3) Response.

4) Feedback.

D) The last element is noise.

E) The model emphasizes the key factors in effective communication:

1) Senders must know what audiences they want to reach and what response they want to get.

2) They must encode their messages so that the target audience can decode them.

3) They must transmit the message through media that reaches the target audience.

4) Develop feedback channels to monitor the responses.

F) The more the sender’s field of experience overlaps with that of the receiver, the more effective the message is likely to be.

G) Remember that:

1) Selective attention.

2) Distortion.

3) Retention processes may be operating during communication.

Review Key Definitions here: sender, receiver, message, media, encoding, decoding, response, feedback, noise, selective attention, distortion, and retention

Micro Model of Consumer Responses Micro models of marketing communications concentrate on consumer’s specific

response to communications. Figure 17.3 summarizes four classic response hierarchy models

A) All these models assume that the buyer passes through a:

1) Cognitive stage.

2) Affective stage.

3) Behavioral stage (in that order).

B) This “learn-feel-do” sequence is appropriate when the audience has a high involvement with a product category perceived to have high differentiation.

C) An alternative sequence, “do-feel-learn” is relevant when the audience has high involvement but perceives little or no differentiation within the product category.

D) A third sequence, “learn-do-feel” is relevant when the audience has low involvement and perceives little differentiation within the product category.

E) By choosing the right sequence, the marketers can do a better job of planning communications.

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F) Here we will assume that the buyer has high involvement with the product category and perceives high differentiation:

1) A hierarchy-of-effects model in the context of a marketing communication campaign:

a. Awareness.

b. Knowledge.

c. Liking.

d. Preference.

e. Conviction.

f. Purchase.

G) To increase the odds for a successful marketing communications campaign, marketers must attempt to increase the likelihood that each step occurs.

DEVELOPING EFFECTIVE COMMUNICATIONS There are five steps in developing effective communications: identifying the target

audience, determining the objectives, designing the communications, selecting the channels, and establishing the budget.

Figure 17.4: steps in developing effective communications

Identifying the Target AudienceA) The process starts with a clear target audience in mind.

1) Potential buyers of the company’s products.

2) Current users, deciders, or influencers.

3) Individuals, groups, or particular publics.

4) General public.

B) The target audience is a critical influence on the communicator’s decisions on:

1) What to say.

2) How to say it.

3) When to say it.

4) Where to say it.

5) To whom to say it.

C) The target audience can potentially be profiled in terms of any market segment.

D) It is useful to define target audience in terms of usage or loyalty.

1) Communication strategy will differ depending on the usage and loyalty involved.

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E) Image analysis can be conducted to profile the target audience in terms of brand knowledge to provide further insight.

F) A major part of audience analysis is assessing the current image of the company, its products, and its competitors.

G) Image is the set of beliefs, ideas, and impressions a person holds regarding an object.

H) People’s attitudes and actions toward an object are highly conditioned by that object’s image.

I) The first step is to measure the target audience’s knowledge of the object using the familiarity scale.

J) Respondents familiar with the product can be asked how they feel toward it using the favorability scale.

K) The two scales can be combined to develop insight into the nature of the communication challenge.

Figure 17.5 shows the familiarity-favorability analysis.L) Images are “sticky,” they persist long after the organization has changed.

M) Image persistence is explained by the fact that once people have a certain image, they perceive what is consistent with that image.

Determine the Communication Objectives Communication objectives can be set at any level of the hierarchy-of-effects model.

A) Rossiter and Percy identify four possible objectives:

1) Category need.

2) Brand awareness.

3) Brand attitude.

4) Brand purchase intention.

B) The most effective communications often can achieve multiple objectives.

Design the Communication Formulating the communication to achieve the desired response will require solving

three problems: what to say (message strategy), how to say it (creative strategy), and who should say it (message source).

Message Strategy In determining message strategy, management searches for appeals, themes, or ideas

that will tie into the brand positioning and help to establish points-of-parity or points-of-difference.

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A) Some of these may be related directly to product or service performance:

1) Quality.

2) Economy.

3) Value of the brand.

B) Where others may relate to more extrinsic considerations:

1) Contemporary.

2) Popular.

3) Traditional.

C) John Maloney saw buyers as expecting one of four types of reward from a product:

1) Rational.

2) Sensory.

3) Social.

4) Ego satisfaction.

D) Crossing the four types of rewards with the three types of experiences generates 12 types of messages that can be used.

E) It is generally believed that industrial buyers are more responsive to performance messages.

Creative Strategy Communication effectiveness depends on how a message is being expressed as well as

the content of the message itself.

A) An ineffective communication may mean that the wrong message was used or the right message was expressed poorly.

B) Creative strategies are how marketers translate their messages into specific communication.

C) Creative strategies can be broadly classified as either “informational” or “transformational” appeals.

Review Key Definition here: creative strategies

Informational Appeals An informational appeal elaborates on product or service attributes or benefits.

A) Examples are:

1) Problem solving ads.

2) Product demonstration ads.

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3) Product comparison ads.

4) Testimonials.

B) Informational appeals assume very rational processing of the communication on the part of the consumer—logic and reason “rule.”

C) There are three types of informational appeals:

1) Conclusion drawing.

2) One-versus-two-sided arguments.

3) Order of argument presentations.

D) Each of these appeals has their supporters and distracters and depends heavily upon the target audience for the message.

Transformational Appeals A transformational appeal elaborates on a non-product-related benefit or image.

A) It might depict:

1) What kind of person uses a brand.

2) What kind of experience results from using the brand.

B) Transformational appeals often attempt to stir up emotions that will motivate purchase.

C) Communicators use negative appeals such as:

1) Fear.

2) Guilt.

3) Shame.

D) Messages are most persuasive when they are moderately discrepant with what the audience believes.

E) Communicators also use positive emotional appeals such as:

1) Humor.

2) Love.

3) Pride.

4) Joy.

F) Motivational or “borrowed interest” devices are often employed to attract consumer attention and raise their involvement with an ad.

G) Borrowed interest techniques are thought to be necessary in the tough new media environment characterized by low involvement consumer processing and while competing with ad and programming clutter.

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H) These borrowed interest approaches can attract attention and create more liking and belief in the sponsor, but they may also:

1) Detract from comprehension.

2) Wear out their welcome fast.

3) Overshadow the product.

I) Attention getting tactics are often too effective and distract from brand or product claims.

J) One challenge in arriving at the best creative strategy is figuring out how to “break through the clutter” to attract the attention of the consumer—but still be able to deliver the intended message.

K) The magic of advertising is to bring concepts to life in the minds of the consumer target.

Message Source Messages delivered by attractive or popular sources can potentially achieve higher

attention and recall.

A) What is important is the spokesperson’s credibility.

B) The three factors underlining credibility are:

1) Expertise.

2) Trustworthiness.

3) Likability.

C) The most highly credible source would be a person who scores high on all three dimensions.

Review Key Definitions here: expertise, trustworthiness, and likabilityD) If a person has a positive attitude toward a source and a message, or a negative attitude

toward both, a state of congruity is said to exist.

E) What happens if a consumer holds one attitude towards the source and another toward the product?

1) Attitude change will take place in the direction of increasing the amount of congruity between the two evaluations

F) The consumer will end up respecting one somewhat less or somewhat more.

G) The principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience.

H) Multinational companies wrestle with a number of challenges in developing global communications programs:

1) Whether the product is appropriate for a country.

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2) That the market segment they address is both legal and customary.

3) If the style of the ad is acceptable.

4) Whether ads should be created at headquarters or locally.

I) Companies that sell their products to different cultures or in different countries must be prepared to vary their messages.

Select the Communication Channels Selecting efficient channels to carry the message becomes more difficult as channels of

communication become more fragmented and cluttered.

A) Communication channels may be personal and non-personal

Personal Communication Channels Personal communication channels involve two or more persons communicating directly

face-to-face, person to audience, over the telephone, or through e-mail.

A) Personal communication channels derive their effectiveness through individualized presentation and feedback.

B) Advocate channels consist of company salespeople contacting buyers in the target market.

C) Expert channels consist of independent experts making statements to target buyers.

D) Social channels consist of neighbors, friends, family members, and associates talking to target buyers.

E) Personal influence carries especially great weight in two situations:

1) With products that are expensive, risky, or purchased infrequently.

2) Where the product suggests something about the user’s status or taste.

F) Communication researchers are moving toward a social-structure view of interpersonal communication.

1) They see society as consisting of cliques, small groups whose members interact frequently.

2) A liaison is a person who connects two or more cliques without belonging to either.

3) A bridge is a person who belongs to one clique and is linked to a person in another clique

G) Many companies are becoming acutely aware of the power of word of mouth or “buzz.”

1) In some cases, positive word of mouth happens in a natural way.

2) “Buzz” is managed.

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H) Companies can take several steps to stimulate personal influence channels to work on their behalf:

1) Identify influential individuals and companies and devote extra effort to them.

2) Create opinion leaders by supplying certain people with the product on attractive terms.

3) Work through community influentials such as presidents of social, religious, and other organizations.

4) Use influential or believable people in testimonial advertising.

5) Develop advertising that has high “conversation value.”

6) Develop word-of-mouth referral channels to build business.

7) Establish an electronic forum.

8) Use viral marketing.

a. Viral marketing involves passing on company-developed products, services, or information from user to user.

I) Marketers must be careful in reaching out to consumers.

1) Consumers can resent personal communications if unsolicited.

Non-Personal Communication Channels Non-personal communication channels are communications directed to more than one

person and includes media, sales promotions, events, and publicity.

A) Media includes print, broadcast, network, electronic, and display media.

B) Sales promotions consist of consumer promotions, trade promotions, and business and sales-force promotion.

C) Events and experiences include sports, arts, entertainment, and cause events.

D) Public relations include communications directed internally or externally to consumers, other firms, media, and government.

E) Much of the recent growth of non-personal channels has been with events and experiences.

1) A company can build its brand image through creating or sponsoring events.

2) Companies are searching for better ways to quantify the benefits of sponsorship and are demanding greater accountability.

F) Companies can create events designed to surprise the public and create a buzz.

G) The increased use of attention-getting events is a response to the fragmentation of the media.

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1) The lasting effects of events on brand awareness, knowledge, or preference will depend upon the quality of the product, the event itself, and its execution.

Integration of Communication Channels Although personal communication is often more effective than mass communication,

mass media might be the major means of stimulating personal communication.

A) Mass communications affect personal attitudes toward behavior through a two-step process:

1) Ideas flow from mass media to opinion leaders.

2) Opinion leaders to the less media-involved population groups.

B) This two-step flow has several implications:

1) The influence of mass media on public opinion is not as direct, powerful, and automatic as supposed.

a. It is mediated by opinion leaders.

2) This two-step flow challenges the notion that consumption styles are primarily influenced by a “trickle-down” or “trickle up” effect from mass media.

a. People interact primarily with their own social groups and acquire ideas from opinion leaders in their group.

3) The two-step process suggests that mass communicators should direct messages specifically to opinion leaders and let them carry the message to others.

Review Key Definitions here: viral marketing, non-personal communications, media, sales promotions, events and experiences, and public relations

Establish the Total Marketing Communications Budget One of the most difficult marketing decisions is determining how much to spend on

promotion. Industries and companies vary considerably in how much they spend on promotion. Companies decide on the promotion budget in four common ways: the affordable method, percentage-of-sales method, competitive-parity method, and objective-and-task method.

Affordable Method Many companies set the promotion budget at what they think the company can

afford. This method completely ignores the role of promotion as an investment and the immediate impact on sales volume. It leads to uncertain annual budget, and makes long-range planning difficult.

Percentage-of-Sales Method Many companies set promotion expenditures at a specified percentage of sales

(current or anticipated) or the sales price.

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A) Supporters of the percentage-of-sales method see a number of advantages

1) Promotion expenditures will vary with what the company can “afford.”

2) It encourages management to think of the relationship among promotion cost, selling price, and profit per unit.

3) It encourages stability when competing firms spend approximately the same percentage of their sales on promotion.

B) The percentage-of-sales method has little to justify it.

1) It views sales as the determiner of promotion rather than as the result.

2) It leads to a budget set by the availability of funds rather than by market opportunities.

3) It discourages experimentation with countercyclical promotion or aggressive spending.

4) Year-to-year sales fluctuations interfere with long-range planning.

5) There is no logical basis for choosing the specific percentage.

6) It does not encourage building the promotion budget by determining what each product and territory deserves.

Competitive-Parity Method Some companies set their promotion budget to achieve share-of-voice parity with

competitors

A) Two arguments are made in support of the competitive-parity method.

1) Competitors’ expenditures represent the collective wisdom of the industry.

2) Maintaining competitive parity prevents promotion wars.

3) Neither argument is valid.

Objective-and-Task Method The objective-and-task method calls upon marketers to develop promotion budgets by

defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

A) The objective-and-task method has the advantage of requiring management to spell out its assumptions about the relationship among dollars spent, exposure levels, trial rates, and regular usage.

B) A major question is how much weight marketing communications should receive in relation to alternatives such as product improvement, lower prices, or better service.

1) The answers depends on where the company’s products are in their life cycles

2) Whether they are commodities or highly differentiable products.

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3) Whether they are routinely needed or have to be “sold.”

4) Other considerations.

C) Marketing communications budgets tend to be higher:

1) When there is low channel support.

2) Much change in the marketing program over time.

3) Many hard-to-reach customers.

4) More complex customer decision-making.

5) Differentiated products and non-homogeneous customer needs.

6) Frequent product purchases in small quantities.

D) In theory, the total communications budget should be established so that the marginal profit from the last communications dollar equals the marginal profit from the last dollar in the best non-communications use.

E) Implementing this principle is not easy.

Review Key Definitions here: affordable, percentage-of-sales, competitive-parity, and objective-and-task methods

DECIDING ON THE MARKETING COMMUNICATIONS MIX Companies must allocate the marketing communications budget over the six major

modes of communication—advertising, sales promotion, public relations and publicity, events and experiences, sales force, and direct marketing.

A) Within the same industry, companies can differ considerably in their media and channel choices.

B) Companies are always searching for ways to gain efficiency by replacing one promotional tool with others.

C) The substitutability among promotional tools explains why marketing functions need to be coordinated.

Characteristics of the Marketing Communications Mix Each communication tool has its own unique characteristics and costs.

Advertising Advertising can be used to build up a long-term image for a product or trigger quick

sales.

A) Advertising can efficiently reach geographically dispersed buyers.

B) Certain types of advertising require large budgets; others do not.

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C) Just the presence of advertising might have an effect on sales.

1) Consumers might believe that the advertised brand must offer a “good value.”

D) Because of the many forms of advertising, it is difficult to make generalizations; however, the following qualities can be noted:

1) Pervasiveness.

2) Amplified expressiveness.

3) Impersonality.

Sales Promotion Companies use sales-promotion tools to draw a stronger and quicker buyer response.

A) Sales promotion can be used for short-run effects.

B) Sales-promotion offer three distinct benefits:

1) Communication.

2) Incentive.

3) Invitation.

Public Relations and Publicity Marketers tend to under-use public relations, yet a well-thought out program

coordinated with the other promotion-mix elements can be extremely effective.

Promotion Decision Wholesalers rely primarily on their sales force to achieve promotional objectives.

A) The appeal of public relations and publicity is based on three distinctive qualities:

1) High credibility.

2) Ability to catch buyers off guard.

3) Dramatization.

Events and Experiences A) There are many advantages to events and experiences:

1) Relevant.

2) Involving.

3) Implicit.

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Direct Marketing The many forms of direct marketing—direct mail, telemarketing, and Internet

marketing—share three distinctive characteristics.

A) Direct marketing is:

1) Customized.

2) Up-to-date.

3) Interactive.

Personal Selling Personal selling is the most effective tool at the later stages of the buying process,

particularly in building up buyer preference, conviction, and action.

A) Personal selling has three distinctive qualities:

1) Personal interaction

2) Cultivation

3) Response Review Key Definitions here: advertising, sales promotion, public relations and

publicity, events and experiences, direct marketing, and personal selling

FACTORS IN SETTING THE MARKETING COMMUNICATIONS MIX

Type of Product Market Communication allocations vary between consumer and business markets.

A) Consumer markets tend to spend comparatively more on sales promotion and advertising.

B) Business marketers tend to spend comparatively more on personal selling.

C) In general, personal selling is used more with:

1) Complex.

2) Expensive.

3) Risky goods.

a. In markets with fewer and larger sellers.

D) Advertising combined with personal selling can increase sales in the business market over what would have resulted if there had been no advertising.

E) Corporate advertising can improve a company’s reputation and improve the sales force’s change of getting a favorable first hearing and early adoption of the product.

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F) Personal selling can also make a strong contribution in consumer goods marketing.

G) An effectively trained company sales force can make four important contributions

1) Increased stock position.

2) Enthusiasm building.

3) Missionary selling.

4) Key account management.

Buyer-Readiness Stage Communication tools vary in cost-effectiveness at different stages of buyer

readiness Figure 17.6 shows the relative cost effectiveness of four communication tools.

A) Advertising and publicity play the most important roles in the awareness-building stage.

B) Customer comprehension is primarily affected by advertising and personal selling.

C) Customer conviction is influenced mostly by personal selling.

D) Closing the sale is influenced mostly by personal selling and sales promotion.

E) Reordering is also affected mostly by personal selling, sales promotion, and somewhat by advertising.

Product Life-Cycle Stage Communication tools also vary in cost-effectiveness at different stages of the product life

cycle.

A) In the introduction stage:

1) Advertising and publicity have the highest cost-effectiveness.

2) Followed by personal selling to gain distribution coverage.

3) Sales promotion to induce trial.

B) In the growth stage:

1) Demand has its own momentum through word-of-mouth.

C) In the maturity stage:

1) Sales promotion.

2) Advertising.

3) Personal selling all grow more important in that order.

D) In the decline stage:

1) Sales promotion continues strong.

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2) Advertising and publicity are reduced.

3) Salespeople give the product only minimal attention.

Measuring Communication Results Senior managers want to know the outcomes and revenues resulting from their

communications investments.

A) Too often, communications directors supply only outputs and expenses.

B) After implementing the communication plan, the communications director must measure its impact on the target audience.

C) Members of the target audience are asked:

1) Whether they recognize or recall the message.

2) How many times they saw it.

3) What points they recall.

4) How they felt about the message.

5) Previous and current attitudes toward the product and the company.

D) The communications director should also collect:

1) Behavioral measures of audience response. Figure 17.7 provides an example of good feedback measurement.

MANAGING THE INTEGRATED MARKETING COMMUNICATIONS PROCESS As defined by the American Association of Advertising Agencies, integrated

marketing communications (IMC) is a concept of marketing communications planning that recognizes the added value of a comprehensive plan.

A) Such a plan evaluates the strategic roles of a variety of communications disciplines such as general advertising, direct response, sales promotion, and public relations and combines these disciplines to provide:

1) Clarity.

2) Consistency.

3) Maximum impact through the seamless integration of messages.

B) Unfortunately, many companies still rely on one or two communication tools.

C) This practice persists in spite of the fragmenting of mass-markets into:

1) A multitude of mini markets each requiring its own approach.

2) The proliferation of new types of media.

3) The growing sophistication of consumers.

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Coordinating Media Media coordination can occur across and within media types.

A) Personal and non-personal communication channels should be combined to achieve maximum impact.

B) A single-vehicle, single-stage campaign is a one-time mailing offering a cookware item.

C) A single-vehicle, multiple-stage campaign would involve successive mailings to the same prospect.

D) A more powerful approach is the multiple-stage campaign.

E) Multiple media deployed within a tightly defined time frame can increase message reach and impact.

F) Research has shown that promotions can be more effective when combined with advertising.

G) Many companies are coordinating their online and off-line communication activities.

Review Key Definitions here: integrated marketing communications, single-vehicle, single-stage, multiple-stage campaigns

Implementing IMC Integrated marketing communications has been slow to take hold for several

reasons:A) Large companies employ several communications specialists to work with their brand

mangers who know comparatively little about the other communication tools.

B) Many global companies use a large number of ad agencies located in differing countries and serving different divisions.

C) Today a few larger agencies have substantially improved their integrated offerings.

1) They have acquired promotion agencies

2) Public relations firms.

3) Package-design consultancies.

4) Web-site developers.

5) Direct mail houses.

D) The result is integrated and more effective marketing communications and a much lower total communications cost.

E) Integrated marketing communications can produce stronger message consistency and greater sales impact.

F) It forces management to think about every way the customer:

1) Comes in contact with the company.

2) How the company communicates its positioning.

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3) The relative importance of each vehicle.

4) Timing issues.

G) It gives someone the responsibility to unify the company’s brand images and messages as they come through the thousands of company activities

H) IMC should improve the company’s ability to reach:

1) The right customers.

2) With the right messages.

3) At the right time.

4) In the right place.

I) IMC advocates describe it as a way of looking at the whole marketing process instead of focusing on individual.

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