24/10/20151 integrated marketing communications dr. vesselin blagoev
TRANSCRIPT
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INTEGRATED INTEGRATED MARKETING MARKETING
COMMUNICATIONSCOMMUNICATIONSDr. Vesselin Blagoev
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Communications MixCommunications MixWe call
Marketing communications mix or Promotion mix
the specific mix of advertising, sales promotion, personal selling, and public relations that a company uses to pursue its advertising and marketing objectives
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Promotion MixPromotion MixAdvertising
Agency, Media, Effectiveness
Public RelationsCompany image, Contributions,
Lobbing
Sales Promotion
Point-of-salesPackagingSamplesCouponsContests
Direct mail
Personal SellingSales force
ManagementControl
Promotionmix
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Marketing Marketing Communications SystemCommunications System
Producer
AdvertisingSales promotionPersonal sellingPublic relations
AdvertisingSales promotionPersonal sellingPublic relations
Middlemen
ConsumersWord ofmouthPublics
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Elements in the Elements in the Communication ProcessCommunication Process
Sender Encoding
Media
Message Decoding Receiver
Noise
Feedback Response
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Functions of AdvertisingFunctions of AdvertisingTo differentiate products from
their competitorsTo communicate product
informationTo urge product useTo expand product distributionTo increase brand preference
and loyaltyTo reduce overall sales costs
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How to classify advertisingHow to classify advertisingBy Media Used
A/ Print D/ Out of Home– Newspaper - Outdoor (posters,…) – Magazine - Transit (busses, trams)
B/ Electronic E/ Internet– Radio - Web sites, blogs,
podcasts– Television - E-mailing– Channels - Banners
C/ Direct Mail F/ Directories
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How to Classify AdvertisingHow to Classify AdvertisingBy Purpose
Product vs. Nonproduct (image oriented)
Commercial vs. NoncommercialPrimary demand vs. Selective
demand (for particular brand name)
Direct action vs. Indirect actionDirect – toll free phone numbers, coupons,
limited time offersIndirect – to build brand awareness
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AIDA ModelAIDA Model
Attention
Interest
Desire
Action
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Advertising ObjectivesAdvertising ObjectivesInformative advertising: for a new
product or feature, and to build a primary demandPersuasive advertising: to build
selective demand for a brand by persuading that it offers the best quality for money
Comparison advertising: one brand to another
Reminder advertising: think about the product
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Push and Pull StrategiesPush and Pull Strategies
Manufacturer
Wholesaler
Retailer
Consumer Consumer
Retailer
Wholesaler
Manufacturer
Pull Strategy Push Strategy
Pur
e F
orm
Pus
h
Mix
ed F
orm
Pus
h
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Buyer-Readiness StatesBuyer-Readiness States
Awareness Knowledge Liking
PurchaseConvictionPreference
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Current Consumer States Current Consumer States for Two Brandsfor Two Brands
100%market
100%market
100%market
Of these
80% aware
20% not aware
Of 80% aware
60% tried
40% did not try
20% satisfied
80% disappointed
Brand A
50% aware
50% not aware
50% tried
50% did not try
80% satisfied
Of these
Of 50% aware
Of those who tried
Of those who tried
Brand B
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Sales PromotionSales PromotionSales promotion (SP) consists of short-
term incentives to encourage purchase or sales of a product or service
Consumer promotion is SP designed to stimulate consumer purchasing
Trade promotion is SP designed to gain reseller support and to improve reseller selling efforts
Salesforce promotion is SP designed to motivate salesforce and make salesforce selling efforts more effective
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Consumer-Promotion ToolsConsumer-Promotion ToolsSamples: offers of a trial amount of a
productCoupons: certificates which give buyers
savings when they purchase specified products (over 220 billion coupons/year in the USA)
Rebates (Cash refund offers): like coupons except that the price reduction is done after the purchase and not in the retail outlet
Price packs (Cents-off deals): savings off regular price, marked by the producer on the label
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Consumer-Promotion ToolsConsumer-Promotion ToolsPremiums: goods offered either free or at low
price as an incentive to buy a product Patronage rewards: cash or other awards
for the regular use of a certain company’s products or services
Point-of-purchase (POP) promotions: displays, signs, posters and demonstrations at the point of sale
Contests and Games: give consumers the chance to win something by chance
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Trade-Promotion ToolsTrade-Promotion ToolsThey are mostly directed to the middle-
men (55%), than to consumers (45%):Straight Discounts (Price-off, Off-
invoice, Off-list): given by the producers for different reasons, often for a quantity of order
Advertising Allowances, or Display Allowances: they compensate the retailers for doing something, i.e. using special displays
Conventions, Trade Shows
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Personal sellingPersonal sellingThe work done by salesperson at different
positions: Deliver the product, such as bread, milk Inside order taker – department store
salesperson standing behind the counter Outside order taker – in the packing room Building goodwill or educating customers –
calling doctors on behalf of a pharmaceutical company
Technical knowledge – consulting the client Creative sale of tangible products – houses,
encyclopedia, or intangibles – insurance, or education
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Major Steps in Effective Major Steps in Effective Personal SellingPersonal Selling
Prospecting and qualifying
Presentation anddemonstration
Handlingobjections
Pre-approach
Closing
Approach
Follow-up
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Direct MarketingDirect MarketingTelemarketing: combines aspects of
advertising, marketing research and personal interview (telephone)
Relationship marketing: it costs 4-7 times as much to create a customer, as it does to maintain a customer
Integrated direct marketing (IDM): Marketing database
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Direct marketingDirect marketingMultiple-vehicle, multiple-stage campaign
Paid add
with a responsechannel
Direct mail
mechanism
Outbound telemarketing
Face-to-face
Sales call
Outbound TelemarketingOutbound TelemarketingA company who uses outbound calling as a way
to build a client base to sell a product or service is required by law to remove names from their contact list if the contact requests them to do so. It can be considered harassment under the statutes of law if a company repeatedly calls upon an individual or business for the purposes of solicitation once they have been asked to stop. 21/04/23 22
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Public RelationsPublic RelationsPress relations: Placing newsworthy
information into the news media to attract attention to a person, product, company
Product publicity: Publicizing specific products
Corporate communications: Creating communications to promote understanding of the firm or institution
Lobbying: Dealing with legislators and government officials to promote specific policy
Counseling: Advising managers about public issues and company positions and image
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Setting the Total Setting the Total Promotion Budget Promotion Budget
and Mixand Mix
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Relative Importance of Relative Importance of Promotion Tools in Promotion Tools in
Consumer vs. Industrial Consumer vs. Industrial MarketsMarkets
Advertising
Sales promotion
Personal selling
PR PR
Advertising
Sales promotion
Personal selling
Relative importance Relative importance
Consumer goods
Industrial goods
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How much to spend?How much to spend?
“I know that half of my advertising is wasted, but I don’t know which half. I spent $2 million for advertising, and I don’t know if that is half enough or twice too much.”
John Wanamaker
Department store magnate
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How much to spend?How much to spend?Promotion spending may be
20-30% of sales in the cosmetics industry and only 5-10% in the industrial machinery industry.
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Methods to set the Methods to set the Advertising BudgetAdvertising Budget
Affordable methodPercentage-of-Sales methodCompetitive-Parity methodObjective-and-Task Method
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Affordable methodAffordable methodSimpleIf the boss asks me how much we must
spend, and I answer a figure, given to me by the Finance Manager a day before, I am on a solid ground. I know that the boss will also call the Fin manager to ask him/her how much we can afford to spend this year.
Long-range planning is difficult
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Percentage-of-Sales MethodPercentage-of-Sales MethodPromotion spending is likely to vary with
what the company can affordIt helps to feel better the relationship
between the price, promotion, and salesIt supposedly creates competitive
stability – the direct competitors tend to spend a similar percentage of their sales on promotion
But …
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Percentage-of-Sales MethodPercentage-of-Sales MethodIt mistakenly views sales as the cause of
promotion, rather than as the resultThe budget is based on availability of
funds rather than on opportunitiesIt may prevent the increased spending
sometimes needed to turn falling sales around
Long-range planning is difficultNo other base for decision for the % but
the previous experience or competitors
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Competitive-Parity MethodCompetitive-Parity Method Some companies get industry
promotion-spending estimates from publications or other sources and set their budget on the industry average
First +: Competitors’ budgets represent the collective wisdom of the industry
Second +: Spending the same % helps to prevent promotion wars
Minus: Neither argument is valid
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Decoding in the Decoding in the Communication ProcessCommunication Process
Sender Encoding
Media
Message Decoding Receiver
Noise
Feedback Response