Promotional Strategy & Integrated Marketing Communication

Chapter 12
Catch the Buzz: Promotional Strategy and Integrated Marketing Communication
Chapter Objectives
Understand the communication model
Understand the role of integrated marketing communication
List and describe the tradition elements of the promotion mix
Contrast two major alternative promotional strategies: Advertising and Personal Selling
Cover Buzz Marketing — alternatives to traditional media forms
Discuss the role of sponsorships
Discuss the ethical issues around promotion

Figure 12.2 Communication Model
The Communication Model
Elements of the model:

Source: Firm or person sending a message
Encoding: Transmitting an idea into a form of communication that conveys meaning
Message: Communication in physical form that goes from a sender to a receiver
Medium: Communication vehicle through which a message is transmitted

The Communication Model
Elements of the model (cont.):

Receiver: Individual or organization that intercepts and interprets the message
Decoding: Process whereby a receiver assigns meaning to a message
Noise: Anything that interferes with effective communication
Feedback: Receiver’s reactions to the message
IMC Overview

Integrated Marketing Communications (IMC): Coordination of all promotional activities –advertising, direct mail, personal selling, sales promotion, and public relations – to produce a unified customer-focused promotional message

Importance of Teamwork to IMC Programs

Successful implementation of IMC requires that everyone involved in every aspect of promotion – public relations, advertising, personal selling, direct mail and sales promotion – function as a team
Beyond that, IMC requires a comprehensive strategy that includes all marketing activities, not just promotion
Many companies have integrated by hiring a single company to execute all aspects of promotion

Figure 12.4Steps to Develop an IMC Plan
Developing the IMC Plan
Step 1: Identify target audiences
Step 2: Establish the communication objectives, which may include…
Create awareness
Inform the target market
Create desire
Encourage purchase and trial
Build loyalty

Step 3: Determine and allocate the marketing communication budget
Determine the total promotion budget
Use one the following:
Top-down budgeting techniques
Percentage-of-sales
Competitive-parity
Bottom-up budgeting techniques

Step 4: Design the promotion mix
Which forms of promotion
Which types of media
Which media alternatives
Which executions

Step 5: Evaluate the effectiveness of the communication program
Are communication objectives adequately translated into marketing communication that is reaching the right target market?
Some activities (sales promotions and direct marketing) are easier to evaluate than others (public relations and advertising)
Effective Promotional Messages
An effective promotional message should accomplish the following:
It gains the receiver’s attention
It is understood as intended
It stimulates the receiver’s needs
It suggests an appropriate method of satisfying the receiver’s needs

Let’s put a couple of ads through this test:
Video_Ch12\Budweiser1.mpg
Video_Ch12\DAEWOOD2.MPG
Five Objectives of Promotion
Provide Information
Inform the market about the availability of a particular good or service

  1. Increase Demand
    Most promotions are aimed at increasing selective demand, the desire for a specific brand
  2. Differentiate the Product
    When consumers regard the firm’s output as virtually identical to its competitors’, then the firm has virtually no control over marketing variables
  3. Increase the Product’s Value
    Promotion can explain the greater ownership utility of a product to buyers, thereby increasing its value to the consumer and justifying a higher price
  4. Stabilize Sales
    For the typical firm, sales fluctuations may result from cyclical, seasonal, or irregular demand
    Stabilizing these variations is often an objective of promotional strategy
    The Promotional Mix
    Promotional mix: blend of personal selling, advertising, sales promotion, direct marketing, and public relations designed to achieve promotional objectives

Advertising: Paid, nonpersonal communication through various media by a business firm, not-for-profit organization, or individual identified in the message with the hope of informing or persuading members of a particular audience

  1. Sales Promotion: Marketing activities that stimulate immediate consumer purchasing (includes: displays, trade shows, coupons, premiums, contests, & product demonstrations)
    Trade promotion: sales promotion aimed at marketing intermediaries rather than ultimate consumers
  2. Personal selling: interpersonal promotional process involving a seller’s person-to-person presentation to a prospective buyer
  3. Direct Marketing: Direct communications other than personal sales contact between buyer and seller, designed to generate sales, information requests, or store visits.
  4. Public relations: Firm’s communications and relationships with its various publics

The Promotional Mix
The extent of the marketer’s control over different communication elements varies

Sponsorships
Sponsorships- Provision of funds for a sporting or cultural event in exchange for a direct association with the events
Integrates several promotional mix elements: advertising, sales promotion, and public relations
Sponsorship Spending has more than tripled during the past 10 years to almost $10 Billion/year
Nearly impossible to measure effectiveness

AT&T: A Sponsor of the PGA Tour

Q. Why do companies sponsor events and facilities outside of their HQ market?

Pulling vs. Pushing Promotional Strategies
Pulling strategy: Promotional effort by a seller to stimulate demand among consumers, who will then exert pressure on retailers to carry the product, pulling it though the marketing channel
Pushing strategy: Promotional effort by a seller to retailers intended to stimulate personal selling of the good or service, thereby pushing it through the marketing channel

Q. Can you think of some examples of promotions which use each of these strategies?

Colgate Total
Using a Pulling Strategy With Ads Like This Combined With a Pushing Strategy (30 Million Samples to Dental Practitioners)Created Strong Demand for This Improved Product
Buzz Appeals
Buzz:
Word-of-mouth communication that consumers view as authentic
Buzz marketing:
Using high-profile entertainment or news that gets people to talk about the brand
Viral marketing:
Creating entertaining or informative messages to be passed along
Buzz Appeals
Word-of-mouth (WOM) marketing:
Activities that give people a reason to talk about the product
Guerrilla marketing:
Activities that “ambush” consumers with promotional content in places they are not expecting to encounter this kind of activity

Buzz Appeals
Experiential marketing:
Marketing activities that attempt to give customers an opportunity to actually interact with a brand
Consumer-generated media:
The on-line consumer-generated comments, opinions, and product-related stories available to other consumers through digital media (such as Twitter)
Ethical Issues in Buzz Marketing
Ethical problems in buzz marketing can occur when:
Activities are designed to deceive consumers
Directing buzz marketing at children or teens
Stealth marketing activities deliberately deceive or lie on behalf of clients
Shilling – pretending to be a customer
The Ethics of Promotion
Q. Is Promotion overall good for society or bad for society?
The Ethics of Promotion
Pro’s
Provides information to allow selection of the best product
Boosts the economy by stimulating sales
Provides entertainment
Enables companies of all sizes to compete
Opens up the world to companies
Is an important factor in campaigns aimed at achieving socially oriented objectives like the elimination of drug abuse
Increases the firm’s units sold, resulting in lower production costs & therefore lower sales prices
The Ethics of Promotion
Con’s
Exaggerated claims & lies
Poor taste & offensiveness (sex and violence)
Irritating repetition & intrusiveness
Encourages usage of products some consider unethical – alcohol & tobacco usage and gambling
Perpetuates stereotypes
Plays on humans’ desires, like self-esteem, security, & acceptance
Encourages people to believe that their needs and desires can be best satisfied by purchases
Creates needs that didn’t previously exist

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