Introduction to IMC The Communication Process Communications efforts

Introduction to IMC

The Communication Process • Communications efforts should be viewed from the perspective of managing customer relationships over time. • The communication process begins with an audit of all potential contacts. • Effective communication requires knowledge of how communication works. 15 - 1

The Communication Process Noise Noise Sender Noise Noise Noise Noise Noise Encoding Noise Feedback Noise Noise Noise Noise Message Noise Noise Media Noise Noise Noise Response Decoding Noise Noise Noise Noise Noise Receiver Noise Noise Noise 15 - 2

Developing Effective Communication • Step 1: Identifying the Target Audience § Affects decisions related to what, how, when, and where message will be said, as well as who will say it § Assess needs, attitudes , preferences of the target market § Rasna , Mc. Donalds , Maggi Noodles • Step 2: Determining Communication Objectives § Six buyer readiness stages 15 - 3

Steps in Developing Effective Communication Step 1. Identifying the Target Audience Step 2. Determining the Communication Objectives Buyer Readiness Stages Awareness Knowledge Liking Preference Conviction Purchase 15 - 4

Steps in Developing Effective Communication Step 3. Designing a Message Appeal , Theme , Idea or USP Message Content Rational Appeals Emotional Appeals Love, pride, joy, humor, fear, guilt, shame Moral Appeals ESP Attention Message Structure Draw Conclusions Argument Type Argument Order Key decisions are required with respect to three message structure issues: -Whether or not to draw a conclusion – Ford in Mustang -One-sided vs. two-sided argument – “Heinz Ketchup is slow good” , ”Listerine tastes bad twice a day “ - Order of argument presentation - Interest Desire Message Format Headline, Copy, Color, Words, & Sounds, Body Language Action 15 - 5

Developing Effective Communication • Step 4: Choosing Media § Personal communication channels Includes face-to-face, phone, mail, and Internet chat communications v Word-of-mouth influence is often critical v Buzz marketing cultivates opinion leaders v § Nonpersonal communication channels v Includes media, atmosphere, and events 15 - 6

Developing Effective Communication • Step 5: Selecting the Message Source § Highly credible sources are more persuasive § A poor spokesperson can tarnish a brand • Step 6: Collecting Feedback § Recognition, recall, and behavioral measures are assessed § May suggest changes in product/promotion 15 - 7

Setting the Promotional Budget and Mix • Setting the Overall Promotion Mix § Determined by the nature of each promotion tool and the selected promotion mix strategy 15 - 8

The Marketing Communications Mix Advertising Any Paid Form of Non personal Presentation by an Identified Sponsor. Personal Selling Personal Presentations by a Firm’s Sales Force. Sales Promotion Short-term Incentives to Encourage Sales. Public Relations Direct Marketing Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Communications With Individuals to Obtain an Immediate Response. 15 - 9

Setting the Promotional Budget and Mix Promotion Tools • Advertising • Personal Selling • Sales Promotion • Public Relations • Direct Marketing • Reaches large, geographically dispersed audiences, often with high frequency • Low cost per exposure, though overall costs are high • Consumers perceive advertised goods as more legitimate • Dramatizes company/brand • Builds brand image; may stimulate short-term sales • Impersonal; one-way communication 15 - 10

Setting the Promotional Budget and Mix Promotion Tools • Advertising • Personal Selling • Sales Promotion • Public Relations • Direct Marketing • Most effective tool for building buyers’ preferences, convictions, and actions • Personal interaction allows for feedback and adjustments • Relationship-oriented • Buyers are more attentive • Sales force represents a longterm commitment • Most expensive of the promotional tools 15 - 11

Setting the Promotional Budget and Mix Promotion Tools • Advertising • Personal Selling • Sales Promotion • Public Relations • Direct Marketing • May be targeted at the trade or ultimate consumer • Makes use of a variety of formats: premiums, coupons, contests, etc. • Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales • Stimulates quick response • Short-lived • Not effective at building longterm brand preferences 15 - 12

Setting the Promotional Budget and Mix Promotion Tools • Advertising • Personal Selling • Sales Promotion • Public Relations • Direct Marketing • Highly credible • Many forms: news stories, news features, events and sponsorships, etc. • Reaches many prospects missed via other forms of promotion • Dramatizes company or benefits • Often the most underused element in the promotional mix 15 - 13

Setting the Promotional Budget and Mix Promotion Tools • Advertising • Personal Selling • Sales Promotion • Public Relations • Direct Marketing • Many forms: Telephone marketing, direct mail, online marketing, etc. • Four distinctive characteristics: § § Nonpublic Immediate Customized Interactive • Well-suited to highly targeted marketing efforts 15 - 14

Tremor Recruits Teens to Generate Word-of-Mouth © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin 15 - 15

Traditional Approach to Marketing Communications Point of purchase Special events Publicity Media Advertising Public relations Direct marketing Sales promotion Packaging Direct response Interactive marketing © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin 15 - 16

Integrated Marketing Communications • The Need for Integrated Marketing Communications § Conflicting messages from different sources or promotional approaches can confuse company or brand images v The problem is particularly prevalent when functional specialists handle individual forms of marketing communications independently 15 - 17

Contemporary IMC Approach Packaging Sales promotion Point of purchase Publicity Interactive marketing Media Advertising Direct marketing Direct response Public relations Special events © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin 15 - 18

Integrated Marketing Communications Company Carefully Integrates and Coordinates Its Many Communication Channels to Deliver a Clear, Consistent, Compelling Message. Packaging Event Marketing Advertising Message Direct Marketing Personal Selling Sales Promotion Public Relations 15 - 19

IMC Audience Contact Tools Broadcast media (TV/radio) Print media (newspapers, magazines) Public Relations/ publicity Out-of-home media Internet/ interactive Direct marketing Target Audience Personal selling Point-ofpurchase (displays, packaging) Sales Promotion Word-ofmouth Events and sponsorship © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin Product placements (TV and movies) 15 - 20

American Express • • • 80% of its annual advertising on television advertising By 2004 TV accounted for only about a third of its budget March 2004 launched a films featuring long time company spokesperson Jerry Seinfeld an animated version of superman exclusive on American express website – benefits of card membership : 2 million viewers • Returned on website after second online short was released two months later 15 - 21

• “your business model needs to adapt and to change. It is used to be that we bought the time , shipped you the commercials, had lunch or a glass of wine together once in a while, you took care of the quality of programming and we make sure that cheque did not bounce. We all sat back , checked the ratings, watched our business grow…. . those days are woefully over. American express Chief Marketing officer, John Hayes 15 - 22

Case Study – LG How can a Korean-based electronics company known for low cost home appliances become a leader in the global electronics industry? 15 - 23

How it was made possible for LG “Pucker Up New York” Campaign Encouraged New Yorkers to interact with LG brand by kissing live on the Time Square billboard. Advertised the campaign through Radio Spots, Street Marketing, Concurrent Radio Media tour featuring new LG products and brand messages Strategic media placement about world's first 76 -inch plasma display panel Evening Reception in Times Square for key electronics industry influencers, city officials and media and Monday before the event 15 - 24

Results for LG Campaign Radio Media yielded more than 25 hits in major markets and approximately 200 city and industry influencers attended the event including the Deputy Mayor of New York City 100 media outlets were in attendance including The New York Times, Forbes, Maxim, New York Magazine etc. More than 100 stories about LG’s Times Square debut appeared in print, broadcst, and online outlets. Generated LG equivalent of over $3. 2 million in advertising 15 - 25

Socially Responsible Communications • Advertising and Sales Promotion § Avoid false and deceptive advertising v Bait and switch advertising § Trade promotions can not favor certain customers over others § Use advertising to promote socially responsible programs and actions 15 - 26