Agribusiness project
INTEGRATED MARKETING COMMUNICATIONSTrainer: Vladimir Pandurov
Learning Objectives( day 1)
1.1. Discuss the concept of integrated Discuss the concept of integrated marketing communications - IMCmarketing communications - IMC
2. Discuss the elements of the 2. Discuss the elements of the IMC IMC ((promotionalpromotional)) mix. mix.
3. Describe the communication process.3. Describe the communication process.
4. Explain the goal and tasks of promotion.4. Explain the goal and tasks of promotion.
5. Discuss the AIDA concept and its 5. Discuss the AIDA concept and its relationship to the relationship to the IMCIMC mix. mix.
6.6. Describe the factors that affect the Describe the factors that affect the IMCIMC mix.mix.
7.7. Describe the IMC planning process.Describe the IMC planning process.
8.8. Approaches to Determining Approaches to Determining the Promotional Budgetthe Promotional Budget
Learning Objectives ( day 1)
Learning Objective
Discuss the concept of integrated Discuss the concept of integrated marketing communications - IMCmarketing communications - IMC
11
Integrated Marketing Communications (IMC):
“is the coordination and integration of all marketing communications tools, avenues, and sources within a company into a seamless program that maximizes the impact on consumer and other end users at a minimal cost.”
Clow and Baack, 2004, p.8
– The concept under which a company integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products
Source: Marketing: An introduction, Armstrong & Kotler
IMC definition(s) 11
The specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives.
Kotler
IMC definition(s)
“IMC is capable of enhancing the holistic consumer experience and creating a holistic brand value structure, which can unite the consumer’s sensory, emotional, social and intellectual experiences in a new and positive way.”
Tsai (2005)
11
Integrated Marketing Communications
• Integrated Marketing Communications is the integrated areas of marketing, advertising, sales promotion, and public relations.
• There is a need for communications cross training as a basic requirement to function as a practitioner.
IMC definition(s) 11
• The Marketing Communications Environment is Changing:– Mass markets have fragmented, causing marketers to
shift away from mass marketing• Media fragmentation is increasing as well
– Improvements in information technology are facilitating segmentation
- Increasingly difficult to target audiences & communicate effectively
Consumers no longer passive recipients They demand more than information
From a myriad of sources
The Need for Integrated Marketing Communications 11
– Conflicting messages from different sources or promotional approaches can confuse company or brand images
– The problem is particularly prevalent when functional specialists handle individual forms of marketing communications independently
– The Web alone cannot be used to build brands; brand awareness potential is limited
– Best bet is to wed traditional branding efforts with the interactivity and service capabilities of online communications
– Web efforts can enhance relationships
The Need for Integrated Marketing Communications 11
• A shifting of marketing dollars from media advertising to other forms of promotion, particularly consumer and trade-oriented sales promotions.– A movement away from relaying on advertising-
focused approaches, which emphasize mass media such as network television and national magazines, to solve communication problems.
– A shift in marketplace power from manufacturers to retailers.
The Reason for Integrated Marketing Communications 11
– The rapid growth and development of database marketing.
– Demands for greater accountability from advertising agencies and changes in the way agencies are compensated.
– The rapid growth of the Internet, which is changing the very nature of how companies do business and the ways they communicate and interact with consumers.
The Reason for Integrated Marketing Communications 11
Point ofPurchase
Publicity
PublicRelations
DirectMarketing
InteractiveMarketing
SpecialEvents
Packaging
SalesPromotion
DirectResponse
Traditional Approach to Marketing Communications
MediaAdver-tising
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
11
Contemporary IMC Approach
Point ofPurchase
Publicity
InteractiveMarketing
PublicRelations
DirectMarketing
SpecialEvents
PackagingSales
PromotionDirect
Response
MediaAdver-tising
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
11
Traditional Mass Marketing Communication Model
11
IMC Communication Model 11
Some Differences between Some Differences between Traditional Marketing Traditional Marketing
Communication Efforts and Communication Efforts and IMCIMC11
Traditional CompensationTraditional Compensation Performance Based Compensation Performance Based Compensation Traditional CompensationTraditional Compensation Performance Based Compensation Performance Based Compensation
Media AdvertisingMedia Advertising Multiple Forms of CommunicationMultiple Forms of Communication
Mass MediaMass Media Specialized MediaSpecialized Media
Manufacturer DominanceManufacturer Dominance Retailer DominanceRetailer Dominance
General FocusGeneral Focus Data Based MarketingData Based Marketing
Low Agency AccountabilityLow Agency Accountability Greater Agency AccountabilityGreater Agency Accountability
Limited Internet AvailabilityLimited Internet Availability Widespread Internet AvailabilityWidespread Internet Availability
Media AdvertisingMedia Advertising Multiple Forms of CommunicationMultiple Forms of Communication
Mass MediaMass Media Specialized MediaSpecialized Media
Manufacturer DominanceManufacturer Dominance Retailer DominanceRetailer Dominance
General FocusGeneral Focus Data Based MarketingData Based Marketing
Low Agency AccountabilityLow Agency Accountability Greater Agency AccountabilityGreater Agency Accountability
Marketing Revolution and Shifting Tides
From Toward
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
11
• Integrated marketing means approaching communication issues from the customer’s perspective
– Consumers do not separate promotional material or newspaper advertising or community responsiveness into separate compartments
– They lump everything together to make judgments about services and organizations
IMC - The Customer’s Perspective 11
1. Integrated marketing communication is not about ads, direct e-mail pieces, or public relations projects
– It is about understanding the consumer and what the consumer actually responds to
– In other words, behavioral change is the communicators’ mission
– If the customer does not act, the communicator – and the communication have failed
IMC - The Customer’s Perspective 11
2. Organization can not succeed without good relationship with their publics
– Organizations need relationships with their customers that go beyond the pure selling of a product or service
– They need to build relationships
– As the world becomes more competitive in everything, relationship building becomes more critical
IMC - The Customer’s Perspective 11
3. Integrated marketing communications require collaboration on strategy
– Not just on execution
– The entire communication function must be part of the launch of a product, service, campaign or issue from its inception
– Communicators must participate in the planning of a campaign, not just in the implementation of communication vehicles
IMC - The Customer’s Perspective 11
4. Strategic plans must be clear on the role that each discipline is to play in solving the problem
– The roles of advertising, marketing and public relations are different
– None of them can do everything by itself
– Therefore, although advertising might control the message
– Marketing and product promotion might provide support
– It is public relations that should provide credibility for the product and even more important for the organization
IMC - The Customer’s Perspective 11
5. Public relations is about relationships
– Public relations professionals can become proprietors of integrated marketing communications
– The essence of public relations is building relationship between institutions and its publics
– Public relations professionals more than any others, should lead the integrated marketing initiative
– Such an understanding is pivotal to the successful rendering of integrated marketing communications
IMC - The Customer’s Perspective 11
6. To be players in integrated marketing communication,
public relations professionals need to practice more than
the craft of public relations
– Public relations people must expand their horizons, increase their knowledge of their discipline
– Seek out and participate in interdisciplinary skills building
– Public relations professionals must approach their task to enhance customer relationship through a strategy of total communication
IMC - The Customer’s Perspective 11
14-25
• Marketing the anything-but-ordinary car presented big challenges.
• The MINI is a tiny but potent car that has a retro 60s look.
• Canadians tend to be serious about their cars.
• The marketing team concluded that In Canada the car performance was the main attribute to stress.
• BMW choose Taxi as its advertising agency.
• Taxi created an integrated strategy with unified brand personality: “The MINI is an individualistic, high-performance, premium vehicle that’s fun to drive.”
• The campaign began with a 60-second movie theatre spot called “Anthem”.
• Traditional print and outdoor advertising followed next: “parks as faster than a Ferrari”, “Onramps are foreplay”, and “The world is your go-kart track”.
• Ads were placed everywhere• Edgy and humorous TV spots were
also used.• Other components: “Velocity” parties,
online contests, driving events, and investments in showroom improvements.
• Hip dealerships were selected and trained in a new soft-sell approach.
• Product placement in the remake of The Italian Job, online marketing, and publicity.
• Finally word of mouth.• The campaign was a huge success
and annual sales goals were exceeded.
Case StudyBMW MINI
Canada
Creative Outdoor Communication
Humor
11
Learning Objective 22
Discuss the elements Discuss the elements of the of the IMC mix IMC mix
((promotional mixpromotional mix))..
AdvertisingAdvertising
Direct MarketingDirect Marketing
Interactive/Internet Marketing
Interactive/Internet Marketing
Sales PromotionSales Promotion
Publicity/PublicRelations
Publicity/PublicRelations
Personal SellingPersonal Selling
The IMC mix 22
Advertising
Impersonal, one-way
mass communication
about a product or
organization that is
paid for by a marketer.
The IMC mix 22
Advertising Media
Traditional Advertising Media
Traditional Advertising Media
ElectronicAdvertising Media
ElectronicAdvertising Media
Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards
Internet Computer modems Fax machines
The IMC mix 22
Advertising
AdvantagesAdvantages
• Ability to reach large number of people
• Cost per contact is low
• Ability to repeat message with frequency
• Can be micro-targeted
DisadvantagesDisadvantages
• Total cost is high
• Impersonal; one-way communication(no feedback from audience)
The IMC mix 22
Creative Outdoor Communication
DEVELOPING AN ADVERTISING CAMPAIGN
EvaluateAdvertisingEffective-
ness
Select &Schedule
Media
DetermineAdvertising
Budget
DetermineAdvertisingObjectives
SelectTargetMarket
DesignCreativeStrategy
22
22ADVERTISING STRATEGY
• MESSAGE STRATEGIESObjective vs. Subjective MessagesComparative Message TechniquesEmotional Techniques: Mood, Fear, HumorCelebrity Endorsements vs. Non-Celebrity Images
• MEDIA STRATEGIESBroadcast: Television, RadioPrint: Newspapers, Magazines, JournalsSpecialized: Outdoor, Transit, Direct Mail, Internet
22ADVERTISING STRATEGY
• RELATIVE STRENGTHS AND WEAKNESSES OF STRATEGIESEffectiveness and Efficiency: Reach and
FrequencyTarget CapabilitiesCostBelievabilityAppropriateness for Message (Image, Details)
Reach & Frequency
• Reach: number of different target consumers who are exposed to a message at least once during a specific period of time
• Frequency: number of times an individual is exposed to a given message during a specific period of time
• Cost per contact: cost of reaching one member of the target market– Allows comparison across advertising strategy
vehicles
22ADVERTISING STRATEGY
EVALUATING ADVERTISING EFFECTIVENESS
PretestingPretesting
PosttestingPosttesting
Sales EffectivenessEvaluations
Sales EffectivenessEvaluations
Tools:•Focus Groups•Screening•Persuasion Scores
Tools:•Unaided Recall Tests•Aided Recall Tests•Inquiry Evaluations
Tools:•Monitor Sales
22
Public RelationsThe marketing function that
evaluates public attitudes,
identifies areas within the
organization that the public may be
interested in, and executes a
program of action to earn public
understanding and acceptance.
The IMC mix 22
PUBLIC RELATIONS 22
• EFFORTS TO IMPROVE AND MANAGE RELATIONSHIPS WITH PUBLICS– Customers– Stock Holders– Community– Government– News Media
• PUBLICITY– Not Overtly Sponsored– High Credibility
Public Relations
Evaluates public attitudes
Evaluates public attitudes
Identifies areas of public interestIdentifies areas of public interest
Executes programs to “win” public
Executes programs to “win” public
Functions ofFunctions ofPublic RelationsPublic Relations
Functions ofFunctions ofPublic RelationsPublic Relations
PUBLIC RELATIONS 22
Crisis managem
ent
Crisis managem
ent
Message flexibility
Message flexibility
Cost effective
Cost effective
Public re lations
Public re lations
- -Difficult to re ach audience
s
- -Difficult to re ach audience
s
More objective
More objective
Advice on i mportant tr
ends
Good citizenship
2000Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den . ppp p p p p, : . . 24 0 .
Strengths of public relations 22
Effectivenes s hard
to measure Lack of con
trol
Public relations
Journalists a s gatekeepe
rs
2000Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den . 249Marketing Communications Essex, England : Pearson Education Ltd. pp. .
Weaknesses of public relations 22
Bad reputation
Bad reputation
Globalization
Globalization
New technologies New technol
ogies
PR PR
Corporate branding
Corporate branding
-Single issu e publics
-Single issu e publics
Good employe e relation
Measurin g effect
Growing con sumer awar
eness
Specialization
Trends and challenges in public relations 22
2000Source: Pelsmacker, Patrick De., Geuens, Maggie and Bergh , Joeri Van den . 249Marketing Communications Essex, England : Pearson Education Ltd. pp. .
Personal Selling
Planned presentation to
one or more prospective buyers for
the purpose
of making a sale.
The IMC mix 22
PERSONAL SELLING 22
• PERSONAL SELLING– Oral presentation in a conversation with one or more prospective
purchasers for the purpose of making a sale– Personal selling represents the most popular promotional effort in
terms of financial expenditures and number of people employed
• Personal Selling is:– (1) Dyadic, (2) Flexible, (3) Focused (personalized), and (4)
Often results directly in a sale– Other promotional elements move the customer toward the sale,
personal selling closes the sale
STEPS IN THE SELLING PROCESS: A RELATIONSHIP APPROACH 22
• INITIATING RELATIONSHIPS– Prospecting– Pre-Call Planning– Approach
• DEVELOPING CUSTOMER RELATIONSHIPS– Sales Communications and Presentations– Gaining and Managing Commitment
• ENHANCING CUSTOMER RELATIONSHIPS– Follow-Up– Support
• TRADITIONAL vs. RELATIONSHIP APPROACHES– Consultative (needs-satisfaction) vs. Manipulative (product-focused)
Sales Promotion
Marketing activities--other than
personal selling, advertising, and
public relations--that stimulate
consumer buying and
dealer effectiveness.
The IMC mix 22
EndConsumers
EndConsumers
Trade CustomersTrade Customers
CompanyEmployees Company
Employees
Sales PromotionSales PromotionTargetsTargets
Sales PromotionSales PromotionTargetsTargets
Sales Promotion 22
Consumer FactorsConsumer Factors
AccountabilityAccountability
Increased Retail PowerIncreased Retail Power
Impact of TechnologyImpact of Technology
Short-Term FocusShort-Term Focus
Reasons for the Growth in Sales Promotion: 22
StimulateTrial
StimulateTrial
SupportFlexible Pricing
SupportFlexible Pricing
IncreaseConsumption
IncreaseConsumption
NeutralizeCompetitorsNeutralize
Competitors
ComplementaryProducts
ComplementaryProducts
EncourageRepurchaseEncourage
Repurchase
ImpulsePurchasing
ImpulsePurchasing
OBJECTIVES OF CONSUMER PROMOTIONS 22
Price Deals
AdvertisingSpecialties Coupons
Sampling Rebates
Contests, Games,Sweepstakes
Premiums Cross-Promotions
CONSUMER SALES PROMOTION TECHNIQUES 22
Increase ResellerInventory
InfluencePrice Discount
Defend AgainstCompetitors
Avoid PriceReductions
InfluenceReseller Promotion
Gain/MaintainDistribution
Increase ResellerInventory
InfluencePrice Discount
Defend AgainstCompetitors
Avoid PriceReductions
InfluenceReseller Promotion
Gain/MaintainDistribution
OBJECTIVES OF TRADE PROMOTIONS 22
Cannot Reverse Declining Sales Trend
Cannot Reverse Declining Sales Trend
Cannot Overcome Inferior Product
Cannot Overcome Inferior Product
May Encourage Competitive Retaliation
May Encourage Competitive Retaliation
May Hurt ProfitMay Hurt Profit
LIMITATIONS OF SALES PROMOTION 22
Direct Marketing
It is a form of integrated marketing
communications whereby an
organization communicates directly
with target customers to generate
a response and/or transaction
The IMC mix 22
DirectResponse
Advertising
DirectResponse
Advertising
DirectMail
DirectMail
CatalogsCatalogs
TelemarketingTelemarketing
InternetSales
InternetSales
ShoppingChannels
ShoppingChannels
DirectMarketing
DirectMarketing
The IMC mix 22
Includes call for action.
Phone number, mail-in form,
website address provided.
Bose Uses Direct Response Advertising 22
Interactive/Internet Marketing
• Back-and-forth communication– Users participate in and modify the form and content of
information– Happens in real time
• Interactive media– Internet– CD-ROMs– Kiosks– Interactive television– Digital cell phones
Interactive/Internet Marketing
22
Builds and maintains customer
relationships
Builds and maintains customer
relationships
Obtains customer database
information
Obtains customer database
information
Communicates and interacts with buyers
Communicates and interacts with buyers
Provides customer
service and support
Provides customer
service and support
Educates or informs
customers
Educates or informs
customers
A persuasive advertising
medium
A persuasive advertising
medium
A sales tool or an actual sales vehicle
A sales tool or an actual sales vehicle
TheInternet
TheInternet
Using the Internet as an IMC Tool 22
It’s Google’s World
The most powerful brand in the world
22
• Founded in 1998– Delivers relevant search results by favoring pages linked to
by other sites– Sells ads linked to search keywords– Annual revenue exceeds $10 billion
• Keys to success– Simplicity– Speed– Accuracy
It’s Google’s World 22
Google Adwords
• Keyword-targeting advertising– Text ads at top or side of search results– Advertisers compete for top spot– Cost is “per click” (CPC)
• Contextual ads– Appear on other relevant Web sites
• Site-targeted– Generates sales and branding– Cost is per thousand impressions (CPM)
It’s Google’s World 22
Google Rapidly Expanding
• Beyond online search advertising– Automated purchase of radio ads– Magazine and newspaper ad-buying– YouTube– Google TV Ads– Partnership with Nielsen Media Research– New varieties of online ads
It’s Google’s World 22
Rapidly Changing Media Environment
• Increasingly difficult to target audiences & communicate effectively– Consumers no longer passive recipients– They demand more than information– From a myriad of sources
It’s Google’s World 22
Integrated Marketing Approach
• Traditional mass media– Television, radio, magazines, newspapers, billboards– Now drive consumers to Web sites
• Online strategies– Provide detailed information– Be experiential, entertaining, interactive– MySpace, YouTube, Facebook, wireless mobile media
devices, e-mail
22
Learning Objective
Describe the Describe the communication process.communication process.
33
Communication
The process by which we
exchange or share
meanings through a common set
of symbols.
Communication 33
Marketing Communication
Categories of CommunicationCategories of
Communication
InterpersonalInterpersonalCommunicationCommunicationInterpersonalInterpersonal
CommunicationCommunicationMassMass
CommunicationCommunicationMassMass
CommunicationCommunication
Communication 33
As SendersAs Senders As ReceiversAs Receivers
Inform
Persuade
Remind
Develop messages
Adapt messages
Spot new communication opportunities
The Communication Process 33
SenderSender The originator of the message in the communication process.
The originator of the message in the communication process.
EncodingEncodingThe conversion of a sender’s ideas
and thoughts into a message, usually in the form of words or signs.
The conversion of a sender’s ideas and thoughts into a message, usually
in the form of words or signs.
The Sender and Encoding 33
NoiseNoise
SenderSender EncodingMessage
EncodingMessage
MessageChannel
MessageChannel
MessageChannel
MessageChannel
DecodingMessage
DecodingMessage ReceiverReceiver
The Communication Process 33
Communication Mode Communication Mode
Communication ControlCommunication Control
Feedback AmountFeedback Amount
Feedback SpeedFeedback Speed
Message Flow DirectionMessage Flow Direction
Message Content ControlMessage Content Control
Sponsor IdentificationSponsor Identification
Reaching Large Audience Reaching Large Audience
Message FlexibilityMessage Flexibility
AdvertisingAdvertisingAdvertisingAdvertising
Indirect and non-personal Indirect and non-personal
LowLow
LittleLittle
DelayedDelayed
One-wayOne-way
YesYes
YesYes
Fast Fast
Same message to all audiencesSame message to all audiences
Characteristics of Advertising 33
Communication Mode Communication Mode
Communication ControlCommunication Control
Feedback AmountFeedback Amount
Feedback SpeedFeedback Speed
Message Flow DirectionMessage Flow Direction
Message Content ControlMessage Content Control
Sponsor IdentificationSponsor Identification
Reaching Large Audience Reaching Large Audience
Message FlexibilityMessage Flexibility
Public RelationsPublic RelationsPublic RelationsPublic Relations
Usually indirect, non-personal Usually indirect, non-personal
Moderate to lowModerate to low
LittleLittle
DelayedDelayed
One-wayOne-way
NoNo
NoNo
Usually fast Usually fast
Usually no direct controlUsually no direct control
Characteristics of Public Relations 33
Communication Mode Communication Mode
Communication ControlCommunication Control
Feedback AmountFeedback Amount
Feedback SpeedFeedback Speed
Message Flow DirectionMessage Flow Direction
Message Content ControlMessage Content Control
Sponsor IdentificationSponsor Identification
Reaching Large Audience Reaching Large Audience
Message FlexibilityMessage Flexibility
Sales PromotionSales PromotionSales PromotionSales Promotion
Usually Indirect and non-personal Usually Indirect and non-personal
Moderate to lowModerate to low
Little to moderateLittle to moderate
VariesVaries
Mostly one-wayMostly one-way
YesYes
YesYes
Fast Fast
Same message to varied targetSame message to varied target
Characteristics of Sales Promotion 33
Communication Mode Communication Mode
Communication ControlCommunication Control
Feedback AmountFeedback Amount
Feedback SpeedFeedback Speed
Message Flow DirectionMessage Flow Direction
Message Content ControlMessage Content Control
Sponsor IdentificationSponsor Identification
Reaching Large Audience Reaching Large Audience
Message FlexibilityMessage Flexibility
Personal SellingPersonal SellingPersonal SellingPersonal Selling
Direct and face-to-face Direct and face-to-face
HighHigh
MuchMuch
ImmediateImmediate
Two-wayTwo-way
YesYes
YesYes
Fast Fast
Tailored to prospectTailored to prospect
Characteristics of Personal Selling 33
Communication Mode Communication Mode
Communication ControlCommunication Control
Feedback AmountFeedback Amount
Feedback SpeedFeedback Speed
Message Flow DirectionMessage Flow Direction
Message Content ControlMessage Content Control
Sponsor IdentificationSponsor Identification
Reaching Large Audience Reaching Large Audience
Message FlexibilityMessage Flexibility
Direct MarketingDirect MarketingDirect MarketingDirect Marketing
Direct and impersonalDirect and impersonal
HighHigh
MuchMuch
ImmediateImmediate
Two-wayTwo-way
YesYes
YesYes
Slow Slow
More’less tailored to prospectMore’less tailored to prospect
Characteristics of Personal Selling 33
Learning Objective
Explain the goal andExplain the goal and tasks of promotion.tasks of promotion.
44
InformingInforming RemindingReminding
PersuadingPersuading
TargetAudienceTarget
Audience
Goals and Tasks of Promotion
44
InformingInforming RemindingReminding
PersuadingPersuading
TargetAudienceTarget
Audience
PLC StagesPLC Stages:Introduction Early Growth
PLC Stages:PLC Stages:Growth Maturity
PLC Stages:PLC Stages:Maturity
Goals and Tasks of Promotion
44
Informative Objective
• Increase awareness
• Explain how product works
• Suggest new uses
• Build company image
Goals and Tasks of Promotion
44
Persuasion Objective
• Encourage brand switching
• Change customers’ perception of product attributes
• Influence buying decision
• Persuade customers to call
Goals and Tasks of Promotion
44
Reminder Objective
• Remind customers that product may be needed
• Remind customers where to buy product
• Maintain customer awareness
Learning Objective 44
Discuss the AIDA concept Discuss the AIDA concept and its relationship to and its relationship to the promotional mix.the promotional mix.
55Learning Objective
The AIDA Concept
Model that outlines the process for
achieving promotional goals in
terms of stages of consumer
involvement with the message.
55Learning Objective
AAttentionttention
IInterestnterest
DDesireesire
AActionction
55The AIDA Concept
AwarenessAwarenessAwarenessAwareness InterestInterestInterestInterest DesireDesireDesireDesire ActionActionActionAction
AdvertisingAdvertising Veryeffective
Veryeffective
Somewhateffective
Noteffective
Noteffective
PublicPublicRelationsRelations
PublicPublicRelationsRelations
Veryeffective
Veryeffective
Veryeffective
Veryeffective
Veryeffective
Veryeffective
Noteffective
Noteffective
SalesSalesPromotionPromotion
Somewhateffective
Somewhateffective
Veryeffective
Veryeffective
Veryeffective
PersonalPersonalSellingSelling
Somewhateffective
Veryeffective
Veryeffective
Somewhateffective
Somewhateffective
55AIDA and the IMC Mix
66
Describe the factors that Describe the factors that affect the affect the IMCIMC mix. mix.
Learning Objective
Nature of ProductNature of Product
Stage in PLCStage in PLC
Target Market FactorsTarget Market Factors
Type of Buying DecisionType of Buying Decision
Promotion FundsPromotion Funds
Push or Pull StrategyPush or Pull Strategy
Factors Factors AffectingAffectingChoice of Choice of IMCIMC Mix Mix
Factors Factors AffectingAffectingChoice of Choice of IMCIMC Mix Mix
66Factors Affecting the
Promotional Mix
• Product characteristics – Business product vs. consumer product
• Costs and risks
• Social risk
Factors that influence Factors that influence IMC IMC mixmix
66Nature of the Product
TimeTime
IntroductionIntroduction GrowthGrowth
MaturityMaturity
DeclineDecline
Sal
es (
$)S
ales
($)
66Stage in the Product Life Cycle
Light Advertising,
pre-introduction
Publicity
Heavy use of advertising,
PR forawareness;
sales promotion
for trial
AD/PRdecreaseLimited Sales
Promotion, Personal Selling for
distribution
Ads decrease.
Sales Promotion,Personal Selling
Reminder & Persuasive
Advertising, PR, Brand
loyaltyPersonal Selling for
distribution
IntroductionIntroduction GrowthGrowth
MaturityMaturityDeclineDecline
Sal
es (
$)S
ales
($)
TimeTime
66Product Life Cycle and the IMC Mix
FOR:
• Widely scattered market
• Informed buyers
• Repeat buyers
Advertising
Sales Promotion
Less Personal Selling
66Target Market Characteristics
Advertising
Sales PromotionType ofType of
Buying DecisionBuying Decisionaffectsaffects
Promotional Promotional Mix ChoiceMix Choice
Type ofType ofBuying DecisionBuying Decision
affectsaffectsPromotional Promotional Mix ChoiceMix Choice
ComplexComplexComplexComplex
RoutineRoutineRoutineRoutine
Personal Selling
Not RoutineNot Routineor Complexor Complex
Not RoutineNot Routineor Complexor Complex
Advertising
Public Relations
66Type of Buying Decision
• Trade-offs with funds available
• Number of people in target market
• Quality of communication needed
• Relative costs of promotional elements
66Available Funds
ManufacturerManufacturerpromotes to promotes to wholesalerwholesaler
ManufacturerManufacturerpromotes to promotes to wholesalerwholesaler
Wholesaler Wholesaler promotes to promotes to
retailerretailer
Wholesaler Wholesaler promotes to promotes to
retailerretailer
Retailer Retailer promotes topromotes toconsumerconsumer
Retailer Retailer promotes topromotes toconsumerconsumer
ConsumerConsumerbuys frombuys from
retailerretailer
ConsumerConsumerbuys frombuys from
retailerretailer
PUSH STRATEGYPUSH STRATEGY
Orders to manufacturer
ManufacturerManufacturerpromotes to promotes to
consumerconsumer
ManufacturerManufacturerpromotes to promotes to
consumerconsumer
Consumer Consumer demands demands productproduct
from retailerfrom retailer
Consumer Consumer demands demands productproduct
from retailerfrom retailer
Retailer Retailer demands demands productproduct
from wholesalerfrom wholesaler
Retailer Retailer demands demands productproduct
from wholesalerfrom wholesaler
Wholesaler Wholesaler demandsdemands
product fromproduct frommanufacturermanufacturer
Wholesaler Wholesaler demandsdemands
product fromproduct frommanufacturermanufacturer
Orders to manufacturer
PULL STRATEGYPULL STRATEGY
66Push and Pull Strategies
• Push strategy is directed toward the channel members– Provide incentives for those in the
distribution channels to buy the product• Pull strategy is directed toward the ultimate
purchaser– The focus is on creating demand at the
household or ultimate consumer level
66Push and Pull Strategies
77
IMC PLANNING PROCESSIMC PLANNING PROCESS
Learning Objective
Marketing Plan ReviewMarketing Plan Review
Situation AnalysisSituation Analysis
Communications ProcessAnalysis
Communications ProcessAnalysis
Budget DevelopmentBudget Development
Program DevelopmentProgram Development
Integration & ImplementationIntegration & Implementation
Monitoring, Evaluating, Controlling
Monitoring, Evaluating, Controlling
METHODS
PUSH vs.PULL
IMC PLANNING PROCESS 77
Promotional Program Situation Analysis
Analysis of the Communications Process
Budget Determination
Develop Integrated Marketing Communications Programs
Review of Marketing Plan
AdvertisingSales
PromotionPR/
PublicityPersonalSelling
DirectMarketing
AdvertisingObjectives
SalesPromotionObjectives
PR/Publicity
Objectives
PersonalSelling
Objectives
DirectMarketingObjectives
MessageStrategy
SalesPromotionStrategy
PR/PublicityStrategy
PersonalSelling
Strategy
DirectMarketingStrategy
Integration & Implementation of Marketing Communications Strategies
Monitor, Evaluate & Control Promotional Program
Internet/Interactive
Internet/InteractiveObjectives
Internet/InteractiveStrategy
IMC PLANNING PROCESS 77
Approaches to Determining Approaches to Determining the Promotional Budgetthe Promotional Budget
88Learning Objective
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 17-103
Affordable
Percentage-of-Sales
Competitive Parity
Objective-and-Task
Approaches to Determining the Promotional Budget
88
Affordable Method
• Setting the promotion budget at the level that management thinks the company can afford.
• Small companies project their total revenues, deduct their operating expenses and capital outlays, and then devote some of the remaining funds to advertising.
• This method places advertising last among expenses, therefore, ignores the effects of promotion on sales.
• This method may result in either over or under spending for advertising.
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Percentage-of-Sales Method
• Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the sales price.
• The advantage of this method is that it helps management think about the relationships between promotion spending, selling price, and profit per unit.
• The disadvantages are; (1) it wrongly views sales as the cause of promotion rather than as the result, (2) it may prevent increase in promotional spending, when the sales are falling, (3) it does not provide any basis for choosing a specific percentage, except last year’s and competitors percentages.
• Probably the most widely used as it is simple• But, what about cause and effect?
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Competitive-Parity Method
• Setting the promotion budget to match competitor’s outlays. The company monitors competitor’s advertising or industry averages.
• The advantage of this method is that it mat prevent promotional wars.
• The disadvantages of this method are; (1) each company has its own promotional needs, therefore, the competitors’ spending may be misleading, (2) there is no guarantee that this method will prevent promotion wars.
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Objective-and-Task Method
• Setting promotion budgets based on what the company wants to accomplish with promotion.
• This is the most logical budget setting where the company (1) defines specific promotion objectives, (2) determines the tasks needed to achieve these objectives, (3) estimates the total costs of performing these tasks.
• This is the most difficult method to use because it is hard to understand which tasks will achieve specific objectives. E.g. if Sony wants to create 95% awareness for its new camera within 6 months, it is difficult to decide what messages and promotions to use and how much to spend.
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Media Strengths 88
Evaluating Media
• Example– Grey’s Anatomy: 9.3 million TVs – Grey’s Anatomy: $440,000 per 30 seconds– McDonald’s meal contribution: $0.50
• $440,000/0.50 = 880,000 meals/breakeven – 9.3 million viewers are exposed; thus, McDonalds needs
9.5% to purchase
• 880,000 / 9.3 million = 9.5%– The question is…Is this reasonable?
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Impact of Phone Contacts on Spending
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Impact of Email Contacts on Spending
88
Impact of Mail Contacts on Spending
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Impact on Profit of Different
Combinations
($10)
$10
$30
$50
$70
$90
0 1 2 3 4 5 6 7 8
Pfofit
Equal # of contactsPhone=Mail, No emailEmail, No phone or mail
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THANK YOU
VERY MUCH
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