Marketing Chapter 17 Integrated Marketing Communications Dhruv Grewal

Marketing Chapter 17 Integrated Marketing Communications Dhruv Grewal Michael Levy Mc. Graw-Hill/Irwin Copyright © 2008 by the Mc. Graw-Hill Companies, Inc. All rights reserved.

17 -2 Volvo l l l Introducing the new S 60 required a new way of marketing Consumers felt Volvo was boring but safe Using IMC Volvo was able to demonstrate the new style elements © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -3 Integrated Marketing Communications Communication channel © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -4 Communicating with Consumers: The Communication Process © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -5 Test Your Knowledge Which of the A) B) C) D) following is NOT considered a form of feedback? A customer’s purchase of an item A complaint or compliment The redemption of a coupon or rebate A customer telling their friend about a purchase

17 -6 How Consumers Perceive Communication l l Receivers decode messages differently Senders adjust messages according to the medium and receivers’ traits © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -7 The AIDA Model

17 -8 Awareness l l Senders first must gain the attention of the consumers A multichannel approach increases the likelihood the message will be received © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -9 Interest l l After the customer is aware, they must be persuaded The customer must want to further investigate the product/service © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -10 Desire I like it I want it! © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -11 Action Purchase is just one type of action Discussion question What other actions can IMC ask consumers to take? © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -12 Lagged Effect l l l Advertising does not always have an immediate impact Multiple exposures are often necessary It is difficult to determine which exposure led to purchase © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -13 Entrepreneurial Marketing 17. 1: Oxygen: The Network for Women l l l What type of TV program do today’s women want? Oxygen is fun and entertaining but acknowledges women’s intelligence Uses IMC to deliver a consistent message about Oxygen © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -14 Elements of an Integrated Communication Strategy © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -15 Advertising l l Most visible element of IMC Extremely effective at creating awareness and generating interest © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -16 Test Your Knowledge Since the 1990’s, advertising’s share of total promotional dollars has _____. A) risen B) fallen C) remained the same D) fluctuated wildly

17 -17 Personal Selling l l l Some products require the help of a salesperson More expensive than other forms of promotion Salespeople can add significant value, which makes the expense worth it © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -18 Sales Promotions l l l Can be aimed at both end user consumers or channel members Used in conjunction with other forms of IMC Can be used for both shortterm and long-term objectives © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -19 Direct Marketing l l l Easily personalizable Growth of databases has fueled the growth of direct marketing New technologies have opened new direct marketing channels © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -20 Test Your Knowledge What factor has enabled marketers to identify and track consumers over time and across purchase situations, contributing to the rapid growth of direct marketing? A) Online surveys B) The increased use of customer databases C) Infomercials D) Point-of-purchase displays

17 -21 Using M-Commerce for IMC How can firms use the new capabilities of mobile technology to deliver marketing communications? © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -22 Case in Point: Warner Brother’s Studio 2. 0 Challenge To use new capabilities of Mobile technology. Answer Warner Brother’s established Studio 2. 0 to create short-form broadband mobile content for marketers. Enables marketers to create entertainment/advertising content to be viewed online or via a mobile device. Results Anheuser Busch had signed on and launched Bud. TV during the 2007 Super Bowl.

17 -23 Public Relations (PR) l l l “Free” media attention Importance of PR has grown as cost of other media has increased Consumers becoming more skeptical about marketing, PR becoming more important © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -24 PR Toolkit © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -25 Test Your Knowledge What is the key benefit of public relations versus other forms of marketing communications? A) it is “free” B) it is often more credible C) can reinforce the advertising D) these are all benefits of PR

17 -26 Sponsorship in Motion What do sponsor’s do when top athletes change teams? © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -27 Case in Point: David Beckham and Adidas Challenge Answer Results Keeping the brand name sponsorship consistent when top athletes change teams. Adidas already has a $10 m individual contract with David Beckham. Now he is moving to LA to play for the Galaxy, which it already sponsors the jerseys for. Adidas has announced that it will take on more of a sponsorship role. The Adidas name and logo will be featured more prominently on team apparel.

17 -28 Electronic Media Corporate blogs Online games Text messaging © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -29 Results-Driven Elements: Planning for and Measuring IMC Success l l l Understand the outcome they hope to achieve before they begin Short-term or long-term Should be explicitly defined and measured © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -30 Budget Objective-and-task method Rule-of-thumb methods © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -31 Budget © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -32 Test Your Knowledge In which rule-of-thumb method assumes communication expenses do not stimulate sales and profit? A) competitive parity B) frequency C) affordable budgeting D) percentage-of-sales

17 -33 Measuring Success Frequency Reach Gross rating points © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -34 Online Measurements Web tracking software Online couponing Online referring © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -35 Legal and Ethical Issues in IMC Commercial speech l l l Message with an economic motivation Must be fact based Examples: Advertising and direct marketing Non-Commercial speech l l l Message with no economic motivation Protected under the First Amendment Example: PR © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -36 Stealth Marketing Stealth marketing Viral marketing © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -37 Ethical Dilemma 17. 1: Is It Deception to Disguise the Message Sender? l l l Marketers using websites to promote movies and TV shows The sites do not identify that they are promotional tools Is this deception? © 2007 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

17 -38 Chapter 17 Glossary l l l l l Advertising: A paid form of communication from an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future. Communication channel: The medium—print, broadcast, the Internet—that carries the message. Direct marketing: Sales and promotional techniques that deliver promotional materials individually to potential customers. Frequency: Measure of how often the audience is exposed to a communication within a specified period of time. Gross rating points (GRP): Measure used for various media advertising—print, radio, or television; GRP = reach × frequency. Integrated marketing communications (IMC): Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact. Lagged effect: A delayed response to a marketing communication campaign. Objective-and-task method: An IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs. Personal selling: The two-way flow of communication between a buyer and a seller that is designed to influence the buyer’s purchase decision.

17 -39 Chapter 17 Glossary (continued) l l l Public relations (PR): The organizational function that manages the firm’s communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media. Reach: Measure of consumers’ exposure to marketing communications; the percentage of the target population exposed to a specific marketing communication, such as an advertisement, at least once. Rule-of-thumb methods: Budgeting methods that bases the IMC budget on either the firm’s share of the market in relation to competition, a fixed percentage of forecasted sales, or what is left after other operating costs and forecasted sales have been budgeted. Sales promotions: Special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays. Stealth marketing: A strategy to attract consumers using promotional tactics that deliver a sales message in unconventional ways, often without the target audience knowing that the message even has a selling intent. Viral marketing: A marketing phenomenon that encourages people to pass along a marketing message to other potential consumers.