PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION
PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION Chapter Seventeen Developing Integrated Marketing Communications © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 |
Learning Objectives 1. Describe integrated marketing communications. 2. Understand the role of promotion. 3. Explain the purposes of the three types of advertising. 4. Describe the advantages and disadvantages of the major advertising media. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 2
Learning Objectives (cont’d) 5. Identify the major steps in developing an advertising campaign. 6. Recognize the various kinds of salespersons, the steps in the personalselling process, and the major sales management tasks. 7. Describe sales promotion objectives and methods. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 3
Learning Objectives (cont’d) 8. Understand the types and uses of public relations. 9. Identify the factors that influence the selection of promotion-mix ingredients. 10. Identify and explain the criticisms of promotion. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 4
What Is Integrated Marketing Communications? § Coordination of promotion efforts to ensure maximal informational and persuasive impact on customers § Results in a consistent message to customers, longterm customer relationships, and the efficient use of promotional resources − Mass media advertising has given way to targeted promotional tools (e. g. , cable TV, direct mail, and the Internet) − The overall cost of marketing communications has risen significantly, pressuring managers to make the most efficient use of marketing resources © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 5
The Role of Promotion § Promotion • Commonly the object of two misconceptions - Promotional activities make up the entire field of marketing - Promotional activities are unnecessary and cause higher prices § Role of promotion • To facilitate exchanges directly or indirectly by informing individuals, groups, or organizations and influencing them to accept a firm’s products or to have more positive feelings about the firm - Convey product and service information directly to target market segments - Provide information to interest groups, regulatory agencies, investors, and the general public • To maintain positive relationships between a company and various groups in the marketing environment © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 6
Information Flows Into and Out of an Organization § A promotional activity’s effectiveness depends on the information available to marketers Figure 17. 1 Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 16 th ed. (Mason, Ohio: South-Western/Cengage Learning, 2012). Adapted with permission. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 7
The Promotion Mix: An Overview § The particular combination of promotion methods a firm uses to reach a target market • Advertising - A paid non-personal message communicated to a select audience through a mass medium • Personal selling - Personal communication aimed at informing customers and persuading them to buy a firm’s products • Sales promotion - The use of activities or materials as direct inducements to customers or salespersons • Public relations - Communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 8
Possible Ingredients of a Promotion Mix Figure 17. 2 Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 16 th ed. (Mason, Ohio: South. Western/Cengage Learning, 2012). Adapted with permission. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 9
Proportion of Total Advertising Dollars Spent on Selected Media Source: “Spending Fell only 2. 7% in ’ 08, the Real Issue ’ 09, ” Advertising Age, June 22, 2009, pp. 12– 13. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 10
Advertising § Types of Advertising by Purpose • Primary-demand advertising - Used to increase demand for all brands of a product in a specific industry • Institutional advertising - Designed to enhance a firm’s image or build its reputation © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 11
Advertising § Types of Advertising by Purpose • Selective-demand (brand) advertising - Used to sell a particular brand of product - Most common type of advertising - Immediate-response advertising - To persuade customers to buy the product within a short time - Reminder advertising - To keep the firm’s name fresh in the public’s mind - Comparative advertising - Compares specific characteristics of two or more brands to show the advertiser’s brand is better © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 12
Advertising Media The forms of communication through which advertising reaches its audience § Newspapers § • Relatively inexpensive and timely; short life span § Magazines • Reach a specific market segment; more prestigious than newspapers; high cost; lack of timeliness § Direct mail • Most selective; effectiveness can be measured; email © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 13
Advertising Media (cont’d) § Yellow pages advertising • Print and online; local; purchased for one year § Out-of-home advertising • Short promotional messages on billboards, posters, signs, and transportation vehicles; focuses on geographic area; fairly inexpensive § Television • The primary medium for larger firms trying to reach national or regional markets • Network time; local time; sponsoring a show; spot time; product placement; infomercials © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 14
Attitudes Toward Super Bowl Commercials Source: National Retail Federation survey of 9, 578 adults 18 and older; as cited in USA Today, February 4, 2010, p. B-1. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 15
Advertising Media (cont’d) § Radio • Offers selectivity; most accessible medium; can be less expensive than other media § Internet § Social media • Increasingly popular • Banner and button ads; sponsorship ads; keyword ads; interstitials • • Increasingly popular, more personal connection Only reaches person at the computer So new, uncertainty of best way to use it Large time commitment to monitor activity © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 16
Major Steps in Developing an Advertising Campaign 1. Identify and analyze the target audience 2. Define the advertising objectives 3. Create the advertising platform 4. Determine the advertising appropriation 5. Develop the media plan 6. Create the advertising message 7. Execute the campaign 8. Evaluate advertising effectiveness © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 17
Who Spends the Most on Advertising? Table 17. 1 Source: Reprinted with permission from the June 22, 2009 issue of Advertising Age. Copyright Craine Communications Inc. , 2009. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 18
Advertising Agencies § Independent firms that plan, produce, and place advertising for their clients § Large agencies also help with sales promotion and public relations § Media usually pay a commission to agencies § Firms may use both in-house advertising departments and an independent agency © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 19
Personal Selling § The most adaptable promotion method § The most expensive promotion method § Kinds of salespersons • Order getter - Responsible for creative selling: selling a firm’s products to new customers and increasing sales to current customers • Order taker - Handles repeat sales in ways that maintain positive relationships with customers © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 20
Personal Selling (cont’d) § Kinds of salespersons (cont’d) • Sales support personnel - Employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service - Missionary salespersons - Visit retailers to persuade them to buy the manufacturer’s products - Trade salespersons - Assist customers in promoting products, especially in retail stores - Technical salespersons - Assist current customers in technical matters © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 21
The Six Steps of the Personal-Selling Process Figure 17. 4 Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 16 th ed. (Mason, Ohio: South-Western/Cengage Learning, 2012). Adapted with permission. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 22
Managing Personal Selling § Setting sales objectives • Concrete, quantifiable terms • Specified time period • Specified geographic area § Adjusting the size of the sales force to meet changes in the firm’s marketing plan and the marketing environment Attracting and hiring effective salespersons Training salespersons Compensating salespersons Motivating salespersons § § © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 23
Sales Promotion Activities or materials that are direct inducements to customers or salespersons § Sales Promotion objectives § • • • To attract new customers To encourage trial of a new product To invigorate the sales of a mature brand To boost sales to current customers To reinforce advertising To increase traffic in retail stores To steady irregular sales patterns To build up reseller inventories To neutralize competitive promotional efforts To improve shelf space and displays © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 24
Sales Promotion Methods § Consumer sales promotion method • Designed to attract consumers to particular retail stores and to motivate them to purchase certain new or established products § Trade sales promotion method • Designed to encourage wholesalers and retailers to stock and actively promote a manufacturer’s product § Factors influencing the choice of sales promotion method • • • Objectives of the sales promotional effort Product characteristics Target market profile Distribution channels Availability of resellers Competitive and regulatory forces in the environment © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 25
Sales Promotion Methods (cont’d) § Rebate § Coupon § Sample § Premium § Frequent-user incentives • A return of part of the purchase price of a product • Reduces the retail price of a particular item by a stated amount at the time of purchase • A free product given to customers to encourage trial and purchase • A gift a producer offers to a customer in return for buying its product • A program that rewards customers who engage in repeat (frequent) purchases © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 26
Sales Promotion Methods (cont’d) § Point-of-purchase displays • Promotional material in the retail store designed to inform customers and encourage purchases § Trade shows • Industry-wide exhibits at which many sellers display their products § Buying allowance • A temporary price reduction to resellers for purchasing specified quantities of a product § Cooperative advertising • A manufacturer agrees to pay a certain amount of the retailer’s media cost for advertising the manufacturer’s product © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 27
Public Relations § A broad set of communication activities used to create and maintain favorable relationships between an organization and various public groups, both internal and external • Customers, employees, stockholders, suppliers, educators, the media, government officials, society in general § Types of public relations tools • Written and spoken communications - Brochures, newsletters, company magazines, annual reports, news releases, corporate-identity materials, speeches • Event sponsorship - Special events such as concerts and charity functions that the firm underwrites wholly or partially © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 28
Public Relations (cont’d) § Publicity • Communication in news-story form about an organization, its products, or both - News release Feature article Captioned photograph Press conference © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 29
Possible Issues for News Releases Table 17. 2 © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 30
The Uses of Public Relations § To promote people, places, activities, ideas § To enhance the reputation of the organization by increasing awareness of company products and activities § To create specific positive company images © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 31
Promotion Planning § Promotional campaign • A plan for combining and using the four promotional methods—advertising, personal selling, sales promotion, and public relations—in a particular promotion mix to achieve one or more marketing goals - What will be the role of promotion in the overall marketing mix? - To what extent will each promotional method be used in the promotion mix? © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 32
Promotion and Marketing Objectives § Providing product information to target markets § Increasing market share by convincing new customers to purchase § Positioning the product relative to the images customers have of competing products § Stabilizing sales by increasing sales during slack periods or for products that are declining © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 33
Developing the Promotion Mix Marketers may use several promotion mixes at the same time for different products § The promotion mix ingredients depend on § • • Organizational resources and objectives Target market characteristics Product characteristics The cost and availability of promotional methods © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 34
Criticisms of Promotion Table 17. 3 Source: William M. Pride and O. C. Ferrell, Foundations of Marketing, (Mason, Ohio: South-Western/Cengage Learning, 2011), p. 389. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 | 35
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