Chapter 17 Integrated Marketing Communications Copyright 2004 by

Objectives 1. Discuss how integrated marketing communications relates to the development of the promotional mix. 2. Describe the communication process and how it relates to the AIDA concept. 3. Discuss how the promotional mix relates to the objectives of promotion. 4. Identify the different elements of the promotional mix and explain how marketers develop the promotional mix. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Objectives 5. Discuss the role of sponsorships and direct marketing in integrated marketing communications. 6. Contrast the two major alternative promotional strategies. 7. Explain how marketers budget for and measure the effectiveness of promotion. 8. Discuss the value of marketing communications. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Marketing Dictionary • Promotion. Function of informing, persuading, and influencing a consumer’s purchase decision. • Marketing Communications. Messages that deal with buyer-seller relationships. • Integrated Marketing Communications (IMC). Coordination of all promotional activities to produce a unified, customer-focused promotional message. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Good Housekeeping & IMC This web site demonstrates a coordinated effort of promotional activities to produce a unified, customer-focused promotional message. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Effective Message Tasks 1. Gain the receiver’s attention. 2. Achieve understanding by both receiver and sender. 3. Stimulate the receiver’s needs and suggests an appropriate method of satisfying them. AIDA Attention—Interest—Desire--Action Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Effective Messages The Juice Guys have an understanding of their target market and have developed an effective message to reach that market. – This is a fun site for reviewing effective messages Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Increase Demand 1. Primary demand, the desire for a general product category is more typical for marketers who decide to expand overseas. 2. Selective demand, the desire for a specific brand. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Promotional Mix 1. Price 2. Product 3. Promotion-Mix • Personal Selling • Advertising • Sales Promotions • Direct Marketing • Public Relations • Guerilla Marketing 4. Distribution Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Promotional Mix-Reaching the Teen Market According to a study by Teenage Research Unlimited (TRU), the nation's premier marketresearch firm focusing on the teen market, teens spent $172 billion in 2001. TRU goes on to state that teen consumers spent an average of 104 per week in 2001. Source: Teen Research Unlimited Web Site. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Growth of Commercial Sponsorships 1. Government restrictions. 2. Escalating costs of traditional advertising media. 3. Additional opportunities resulting from diverse leisure activities. 4. Greater media coverage of sponsored events. 5. An effective way to reach an international audience. 6. Sponsorships represent alternatives to the increased clutter associated with advertising and direct mail. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Direct Marketing • Opens new international markets of unprecedented size. • Pursue goals beyond creating product awareness. • Very important tool that helps organizations to win new customers and enhance relationships with existing ones. • Parallels the move toward integrated marketing communications. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Direct Marketing Sales by Media Category Copyright © 2004 by South-Western, a division of

Factors That Influence the Effectiveness of a Promotional Mix 1. Nature of the Market 2. Nature of the Product 3. Product Life Cycle Stage 4. Price 5. Funds Available for Promotion Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Two Promotional Alternatives 1. Pulling strategy is a promotional effort by the seller to stimulate final-user demand. 2. Pushing strategy relies more heavily on personal selling. – The objective is promoting the product to the members of the marketing channel rather than to final users. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Allocation of Promotional Budgets for Consumer Packaged Goods Trade Promotion Spending as a Percentage of Total Promotional Budget— 2005 Estimate Consumer Promotion 21% Advertising Media 21% Trade Promotion 58%% SOURCE: Data from Donnelley Marketing and Accenture Analysis, “Capturing and Sustaining Value Opportunities in Trade Promotion, ” accessed at the Accenture Web site, September 6, 2002, http: //www. accenture. com Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Promotional Budget Methods Copyright © 2004 by South-Western, a division of Thomson Learning, Inc.

Measuring Effectiveness of Promotion 1. Direct Sales results test to measure the effectiveness of promotion. • Reveal the specific impact on sales revenues for each dollar of promotional sending. • This technique has always eluded marketers. 2. Indirect evaluation • Concentrate on quantifiable indicators. • The basic problem with indirect measurement is the difficulty of relating these variables to sales. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Value of Marketing Communications 1. Provide socially important messages. 2. Are important to businesses. 3. Contain economic importance. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.