17

Designing and Managing Integrated Marketing Communications

Marketing Management, 13th ed

What are 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 they sell.

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Modes of Marketing Communications

Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Sales promotion: a variety of short term incentives to encourage trial or purchase of a product or service Events and experiences: Companysponsored activities and programs designed to create daily or special brand related interactions Public relations and publicity: a variety of programs designed to promote or protect a companys image or its individual products Direct marketing: Use of mail, telephone, fax, email, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects activities and programs designed to engage customers or prospects

Interactive marketing: Online Word-of-mouth marketing Personal selling

Table 17.1 Communication Platforms

Advertising Print and broadcast ads Packaging inserts Motion pictures Brochures and booklets Posters Billboards POP displays Logos Videotapes
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Sales Promotion Contests, games, sweepstakes Premiums Sampling Trade shows, exhibits Coupons Rebates Entertainment Continuity programs

Table 17.1 Communication Platforms

Events/ Experiences Public Relations
Sports Entertainment Festivals Art Causes Factory tours Company museums Street activities Press kits Speeches Seminars Annual reports Charitable donations Publications Community relations Lobbying Identity media Company magazine

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Table 17.1 Communication Platforms

Personal Selling
Sales presentations Sales meetings Incentive programs Samples Fairs and trade shows

Direct Marketing
Catalogs Mailings Telemarketing Electronic shopping TV shopping Fax mail E-mail Voice mail Blogs Websites

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Elements in the Communications Process

Sender Encoding Message Decoding Receiver Response Noise Feedback

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

An Ideal Ad Campaign
The right consumer is exposed to the message at the right time and place The ad causes consumer to pay attention The ad reflects consumers level of understanding and behaviors with product The ad correctly positions brand in terms of points-of-difference and points-of-parity The ad motivates consumer to consider purchase of the brand The ad creates strong brand associations

Steps in Developing Effective Communications

Identify target audience
Identify the potential buyers, current users, deciders, or influencers; individuals, groups, particular or general public. Its always useful to target audience as per their usage & loyalty.

Determine objectives
Category Need e.g. a new to the world product such as an electric or flying car would always begin with a communication objective of establishing category need. Brand Awareness Brand recognition is important inside the store and brand recall outside it. Brand Attitude Brand attitude can negatively or positively oriented. Household cleaning products often use problem solving solutions; food items on the other hand use sensory oriented ads emphasizing on appetite appeal.

Design communications
It deals with what to say (message strategy) , how to say it (creative Strategy) & who should say it (Message source) e.g. Panadol stops toughest headaches, elfy can withstand all weather and pressure conditions. Two sided messages are considered better than one sided ads where both positive and negative of a product are described. E.g. Listerine tastes bad twice a day
Expertise trustworthiness & likability

In one sided ad its always better to describe the strongest points first specially where audience do not attend to the complete message.

 Global Adaptations Multinational companies face additional challenges in the world markets. They must make sure that the market segment they address is both legal & customary, whether ad style and content is acceptable appropriate or whether made at headquarters or locally.
Product Many products are restricted or banned in certain countries e.g. beer, wine and spirits can not be advertised in Muslim countries. Tobacco products are restricted in many. Market Segment Norway & Sweden do not allow any ads directed at children under 12 years of age. To play it safe Mc Donald advertises as a family restaurant. Style Comparative ads though allowed in US & Canada are unacceptable in many countries. A Pepsi comparative taste test ad in Japan was refused by many channels and eventually led to lawsuit.

Select channels
Personal Communication Channels
Lets two or more persons communicate face to face, person to person, over the telephone, IM or through internet. Considerable consumer to consumer communication takes place on the web on wide range of subjects. Word of web is joining word of Mouth as an important buying influence. You dont need to reach two million people to let them know about your product, you just need to reach the right 2000 people in the right way & they will help you reach the two million. Personal influence carries especially great weight in two situations. One occurs when products are expensive, risky or purchased infrequently. The other arises when products suggest something about the users status or tastes. People therefore often ask others for a recommendation for a doctor, plumber, hotel, lawyer, accountant, architect, interior decorator, or even mechanic.

Non-Personal Communication Channels

Are communication channels which are directed to more than one person and include: Media Consisting of Print (newspaper & magazines); broadcast media( radio & TV); network Media(Telephone, cable, satellite, wireless); electronic media(audiotapes, video tapes, video disk, CD Rom, web page)and display media (billboards, signs, posters). Sales Promotions consist of consumer promotions (such as samples, coupons & premiums) trade promotions (such as advertising) and business & Sales-force Promotions (Contests for sales reps) Events and Experiences includes sports, arts, entertainment & cause evens a well as less formal activities that create novel brand interaction with consumers. Public Relations includes communications directed internally to employees of the company or externally to consumers, other firms, media or the government.

Establishing the budget

One of the most difficult marketing decision is determining how much top spend on marketing communication or promotions. Industries and companies vary in how much the spend on promotions. It might be 40 % to 45 % of sales in the cosmetics industry and 5% to 10% in the industrial equipment industry. Within industry there might be high or low spending companies. There are four common methods to decide on promotional budgets:
Affordable Method many companies set the promotion budget at what they think the company can afford. It completely ignores the role of promotion as an investment & the immediate impact of promotion on sales volume. Leads to uncertain annual budget and makes long run planning difficult.

Percentage - of - Sales Method This method calls for setting promotion budget on current or anticipated sales. Supporters of this method believe expenses should be closely related to the movement of corporate sales over the business cycle and it encourages stability when competing firms spend approximately the same percentage of their sales on promotion. The disadvantage is that it discourages experimentation and interferes with log range planning.
Competitive Parity Method calls for setting the promotion budget to achieve parity with the competitors. The argument is that it represents the collective wisdom of the industry & it prevents promotional wars. Objective-and-task method. Here, marketers 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. This method has the advantage of requiring management to spell out assumptions about the relationship among dollars spent, exposure levels, trial rates, and regular usage.

Characteristics of The Marketing Communications Mix

Each promotional 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. Advertising can reach geographically dispersed buyers efficiently. Certain forms of advertising (TV advertising) typically require a large budget, whereas other forms (newspaper advertising) can be done on a small budget.
Advertising permits the seller to repeat messages many times. Large scale advertising says something about the sellers size, power and success. Provides opportunities for dramatizing the company through artful use of print, sound and color. The audience does not feel obligated to pay attention or respond therefore it as a monologue instead of a dialogue.

Sales promotion Although sales-promotion tools coupons, contests, premiums, and the likeare highly diverse, they offer three distinctive benefits: 1. Communication they gain attention and usually provide information that may lead the consumer to the product 2. Incentive they incorporate some concession or inducement that gives value to the consumer 3. Invitation they include a distinct invitation to engage in the transaction now. Sales promotion can be used for short-run effects such as dramatizing product offers and boosting sales. Public relations and publicity The appeal of public relations and publicity is based on three distinctive qualities: 1. High credibility news stories and features are more authentic and credible than ads 2. Ability to catch buyers off. Guard reach prospects who prefer to avoid salespeople and advertisements) 3. Dramatization the potential for dramatizing a company or product.

Personal Selling. Personal selling has three distinctive qualities: 1. Personal confrontation it involves an immediate and interactive relationship between two or more persons 2. Cultivation it permits all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship 3. Response it makes the buyer feel under some obligation for having listened to the sales talk. Direct marketing. All forms of direct marketingdirect mail, telemarketing, Internet marketingshare four distinctive characteristics: 1. Nonpublic the message is normally addressed to a specific person. 2. Customized the message can be prepared to appeal to the addressed individual 3. Up-to-date a message can be prepared very quickly 4. Interactive the message can be changed depending on the persons response.

Factors in Setting the Marketing Communications Mix

Companies must consider several factors in developing their promotion mix: Type of product market. Communication mix allocations vary between consumer and business markets. Consumer Markets tend to spend more on sales promotion & advertising; business markets tend to spend more on personal selling. In general personal selling is used more with complex, expensive and risky goods and in markets with fewer and larger sellers ( business Markets) Personal selling can also make a strong contribution in consumergoods marketing by helping to persuade dealers to take more stock and display more of the product, build dealer enthusiasm, sign up more dealers, and grow sales at existing accounts. A number of studies have underscored advertisings role in business markets. Advertising combined with personal selling can increase sales over what would have resulted if there was no advertising.

Buyer-readiness stage. Promotional tools vary in cost effectiveness at different stages of buyer readiness. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is affected primarily by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.

Product-life cycle stage. Promotional tool also vary in cost effectiveness at different stages of the product life cycle. Advertising and publicity are most cost effective in the introduction stage; then all the tools can be toned down in the growth stage because demand is building by word of mouth. Sales promotion, advertising, and personal selling grow more important in the maturity stage. In the decline stage, sales promotion continues strong, advertising and publicity are reduced, and salespeople give the product only minimal attention. Company market rank. Market leaders derive more benefit from advertising than from sales promotion. Conversely, smaller competitors gain more by using sales promotion in their marketing communications mix.