After Reading This Chapter You Should Be Able To:: Integrated Marketing Communication Strategy and Management

5/19/2017
Integrated Marketing AFTER READING THIS CHAPTER

CHAPTER 6 Communication Strategy and YOU SHOULD BE ABLE TO:
Management
1. Describe the practice and
framework of integrated marketing
communications.
2. Explain the process of how buyers
purchase an offering.
3. Select the appropriate
communication approach based on
an offering’s marketing strategy
and life cycle.
© 2010 Pearson Education, Inc. publishing as Prentice Hall Slide 6-1 © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 6-2
AFTER READING THIS CHAPTER AFTER READING THIS CHAPTER

YOU SHOULD BE ABLE TO: YOU SHOULD BE ABLE TO:
4. Describe the factors that influence 7. Identify the different approaches

the development of the integrated used to formulate a
marketing communication mix. communications budget.
5. Compare a push versus a pull 8. Discuss the mechanisms for
communication strategy. evaluating and controlling the
marketing communication process.
6. Describe the types of marketing
websites.
MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS
 The specific blend of major communication

modes by which firms attempts to inform,  Communication informs buyers of the:
persuade, and remind customer value and • Availability of an offering
build customer relationships • Unique benefits of the offering
• Where and how to obtain and use the offering
 The message should be:

• Desirable to the target market
• Exclusive to the offering
• Believable as to the offering’s benefits
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MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS
• Advertising is any  Public relations involve

paid form of building good relations with the
nonpersonal company’s various publics by
presentation and obtaining favorable publicity,
promotion of ideas, building up a good corporate
goods, or services by image, and handling or heading
an identified sponsor. off unfavorable rumors, stories,
and events
• Sales promotion is  Personal selling is the
the short-term personal (face-to-face)
incentives to presentation by the firm’s sales
encourage the force for the purpose of making
purchase or sale of a sales and building customer
• Find the most effective communication mix at the least possible cost product or service. relationships.
• Tools vary in flexibility, characteristics and capabilities, although they are
interchangeable and substitutable.
WHY TO USE INTEGRATED MARKETING

MARKETING COMMUNICATIONS
COMMUNICATIONS?
• Direct marketing involves  WoM marketing is an • IMC blends different communication elements
making direct connections with unpaid form of oral or in mutually reinforcing ways to deliver a clear,
carefully targeted individual written promotion in which
consumers to obtain an satisfied customers tell consistent, and compelling message about
immediate response and others how much they like the firm and its brands
cultivate lasting relationships. an offering.
• Helps provide a unified and cohesive message
• Interactive marketing is  Events and experiences
online activities and programs • Helps avoid contradiction between the positioning
are company-sponsored strategy and MC strategies
designed to engage activities and programs
customers directly with designed to create brand- • Ensures the integration of works of experts in
company or its products. related interactions with different fields and maximum impact
consumers.
IMC STRATEGY DECISIONS
After defining the offering and target markets, the manager

must consider the following decisions
1. What are the info requirements of target markets?
INTEGRATED 2. What objectives must be achieved?
MARKETING 3. How might the IMC activities be combined to convey
information?
COMMUNICATION 4. How much should be budgeted for communicating and
how should resources be allocated among various
STRATEGY FRAMEWORK communication activities?
5. How should the communication be timed and scheduled?
6. How should the communication process be evaluated?
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INFORMATION REQUIREMENTS IN
PURCHASE DECISIONS
 Communication can influence different

stages of the communication model:
–Awareness, consideration, preferences, and
INFORMATION purchase
–Attention, interest, desire and action
REQUIREMENTS IN
 At any point in time different buyers stay in
PURCHASE DECISIONS different stages
–Each stage requires a different communication
strategy
INFORMATION REQUIREMENTS IN INFORMATION REQUIREMENTS IN

PURCHASE DECISIONS PURCHASE DECISIONS
Purchase Decision Roles Purchase Decision Roles
Decision
The role consumers play is a prerequisite
Purchaser Influencer Consumer for successfully determining:
Maker
 The communication message itself

 A person may play more than one role
 To whom the message should be directed
 In a joint purchase decision, the roles
may be played by different individuals  How the message should be communicated
INFORMATION REQUIREMENTS IN
PURCHASE DECISIONS
To communicate effectively, a marketer must know:
information consumers think is

What necessary (price, location, size, etc.).
consumers will seek it (newspapers,

SETTING REASONABLE
Where the internet, friends, etc.). COMMUNICATION
When
consumers will seek it (how far in
advance, on what days, etc.).
OBJECTIVES
consumers will apply the
How information obtained.
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SETTING REASONABLE COMMUNICATION SETTING REASONABLE COMMUNICATION

OJBECTIVES OJBECTIVES
Communication objectives depend on: Communication objectives for offering-market

strategies:
The offering-market Market Market

strategies of the firm Penetration Development
 Emphasize more or  Stimulate awareness
frequent usage and trial of the offering
The stage of the  Build preference for or

offering life cycle loyalty to the offering
SETTING REASONABLE COMMUNICATION SETTING REASONABLE COMMUNICATION

OJBECTIVES OJBECTIVES
Communication goals for the offering life cycle: Communication objectives must be:
Through both the IMC program and the
Primary Demand Selective Demand Articulated
marketing communication tools
 Demand for the offering class  Demand for a brand or offering Among themselves and with
Consistent
 Occurs early in the life cycle  Occurs later in the life cycle
other marketing elements
 The message focuses on:  The message focuses on: For measurement and evaluation
– Introducing the benefits – The benefits of a specific brand Quantifiable
purposes
of an offering or offering
– Overcoming the – Differentiating the offering from With an appropriate amount of effort
objections to the offering competitive ones Attainable and expenditure within a specific time
frame
DEVELOPING AN INTEGRATED MARKETING

COMMUNICATION MIX
Factors to consider when designing the

communication mix are:
DEVELOPING AN
Information
INTEGRATED Requirements
Nature of the
Target Markets
of Buyers
MARKETING
COMMUNICATION MIX Nature of the Capacity of the
Offering Organization
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DEVELOPING AN INTEGRATED MARKETING DEVELOPING AN INTEGRATED MARKETING

COMMUNICATION MIX COMMUNICATION MIX
Nature of the Offering

Information Requirements of Buyers
 Personal selling is used for a highly technical

 The starting point in crafting the IMC mix is to
identify the relative value of communication tools at
and/or relatively expensive offering
various stages in the purchase-decision process  Advertising is appropriate when the offering:
─ Marketers often use consumer touch points to designate ─ Is not complex ─ Has benefits that
where, when, and how a customer comes in contact with differentiates it from
─ Is frequently purchased
an offering, a firm, or a brand message competing offerings
─ Is relatively inexpensive
 Sales promotion is used to induce consumer action
DEVELOPING AN INTEGRATED MARKETING DEVELOPING AN INTEGRATED MARKETING

COMMUNICATION MIX COMMUNICATION MIX
Target Market Characteristics Organizational Capacity
The ability or willingness of the organization to

 Use personal selling when target consumers: undertake certain IMC activities
─Consist of a small number of potential buyers
Make Decision Buy Decision
─Exist in close proximity to one another
─Purchase in large quantities Perform the IMC Buy, contract, or

activity internally outsource the IMC
with own human activity externally
 Use advertising and direct marketing when resources with outside
a mass market is geographically scattered experts
Make-Or-Buy Decision Factors Make-Or-Buy Decision Example

Economic
Dimension
Behavioral Dimensions Company Independent
Sales Force Sales Reps
Avail-
Costs Control Flexibility Effort
ability
Commission = 3% Commission = 5%
Fixed Variable
“Make” Cost Cost
Selects,
trains, and
Change
sales-call
Represent
only firm’s
Sales rep
may not exist Salary and
= $500,000 X = Break-even sales level
Company supervises patterns product in geographic Administration
personnel and line area;
Sales customers; can
Force transfer relocate
personnel
 At what sales level (X) would a company sales force
cost more or less than independent sales reps?
“Buy” Variable Cost Selection,
training and
Fixed
investment
Increased
since
Venturesome
spirit
[Hint: This is a form of break-even analysis.]
Independent supervision in sales force sales reps motivates
done as well is minimal must live on sales reps
Sales
Reps
by agencies
at no cost
commissions to go
wherever  Set the cost equations for both types to solve for
effective
to firm
demand the sales level (X)
exists
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Make-Or-Buy Decision Example Make-Or-Buy Decision Example
Cost of Company
Sales Force
= ( Commission × X
)+ Salary and
Administration The break-even sales volume (X) at which the
costs of both the alternatives are equal is $25 m.
Cost of Independent
Sales Reps
= ( Commission × X
)
Cost of Company Cost of Independent
=
Setting the cost equations equal to each other solves for the break-even sales level: Sales Force Sales Reps
Salary and
( Commission × X
)+ Administration = ( Commission × X
) Break-even Sales Level (X) = $25,000,000
(0.03 × X
)+ $500,000 = (0.05 × X
) Company
Sales Force
Use if expected sales volume is > $25 million
$500,000 = 0.02 X
Independent
Use if expected sales volume is < $25 million
X = $25,000,000 Sales Reps
EXHIBIT 6.1: BREAK-EVEN CHART FOR COMPARING

INDEPENDENT SALES REPRESENTATIVES AND A Make-Or-Buy Decision Example
COMPANY SALES FORCE
 Make-or-buy decision also relates to

advertising
─ It is advantageous to have intermediaries assume
advertising costs and placement responsibilities
─ In cooperative advertising, a manufacturer and
intermediaries share the costs of advertising or sales
promotion
Push Strategy Vs. Pull Strategy Push Strategy Vs. Pull Strategy
Push Strategy Pull Strategy Push Strategy
Producer Producer
 Concentrates on building relationships with
channel intermediaries
Wholesalers Wholesalers ─ Advertisements are likely to appear in trade
journals and magazines
Retailers Retailers
─ Sales aids and contests used as incentives to gain
shelf space and distribution
Consumers Consumers
─ Personal selling is emphasized with wholesalers
The offering is pushed through a Buyers demand the product from and retailers
marketing channel to buyers in a intermediaries, pulling the offering
sequential fashion through a marketing channel
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Push Strategy Vs. Pull Strategy Push Strategy Vs. Pull Strategy
Push Strategy Pull Strategy
 Personal selling is used with resellers when:  Seeks to create initial interest for an offering
among potential buyers
─ The firm has easily identifiable buyers
─ The offering is complex ─ Employs heavy consumer ad, free samples, and
coupons to stimulate consumer awareness and
─ Buyers view the purchase as being risky interest
─ An offering is early in its life cycle ─ Wholesalers and retailers must be willing and able
─ The firm has limited funds for direct-to-consumer to implement selling and sales promotion
advertising programs from manufacturers
Push Strategy Vs. Pull Strategy
Pull Strategy
 An advertising opportunity exists when: MARKETING WEBSITES

─ Favorable primary demand exists for an offering
category AND INTEGRATED
─ It can be significantly differentiated from its
competitors MARKETING
─ It has hidden qualities or benefits that can be
portrayed effectively through advertising COMMUNICATIONS
─ There are strong emotional buying motives involved
MARKETING WEBSITES AND IMC MARKETING WEBSITES AND IMC

As a part of IMC strategy, firms develop internet-enabled
technology and marketing websites
Promotional Websites
Is a digital place where a provider makes
Website information available to Internet users
An unpaid form of oral or written
Word of
promotion in which satisfied customers
Marketing Engages potential buyers in interactive Mouth tell others how much they like an offering
Website communication to sell a firm’s offerings
Transactional
Is an electronic storefront that tries Buzz Consists of only oral WoM behavior
to convert online browsers into
Website online buyers Is an Internet-enabled strategy to:
Promotes a firm’s offerings and Viral  Encourage individuals to forward marketer-
Promotional Marketing initiated messages to others via email
provides information on how they are
Engages visitors Website used and where they are purchased
with an interactive  Offer consumers incentives for referrals
experience © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 6-41 © 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 6-42
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MARKETING WEBSITES AND IMC
Promotional Websites
Are cost effective in the:

 Early stages of the process-need recognition COMMUNICATION MIX
 Development of product specifications
BUDGETING
 Supplier search
 Evaluation and selection of the buying process
 Providing feedback on offering performance
COMMUNICATION MIX BUDGETING COMMUNICATION MIX BUDGETING
Budgeting Approaches
Communication budget should be
commensurate with the tasks required for IMC
activities • Most widely used approach where past or
anticipated sales are used as the basis
 Allocate the large amount of funds, if IMC is more Percentage • When sales rise, communication expenses rise
important in a marketing strategy of Sales • Simple to calculate
• Which comes first—sales or communication?
 In setting budget, make sure that MC of • Is not flexible or market-oriented
communication equals the MR resulting from it
Fixed Dollar • Budget equals the per-unit allocation multiplied
Amount per by the number of units expected to be sold
Offering Unit • Used by durable-goods manufacturers
COMMUNICATION MIX BUDGETING COMMUNICATION MIX BUDGETING
Budgeting Approaches Objective-Task
• Balances the firm’s and competitors’

Competitive
communication expenses  Involves three steps:
• Uses advertising share of voice
Parity • Define the communication objectives
• Expressed as a percentage of total advertising
by all competitors in a market at a point in time • Identify the tasks needed to attain the objectives
• Employed in introducing a new offering for • Estimate the costs associated with the
All Available which maximum exposure is desired
Funds performance of these tasks
• Used by nonprofit organizations
 Is the best but most difficult method to apply
Objective- • Objectives are set for a communication program
Task • Costs are based on the tasks to achieve the goals
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Communication Budget Allocation Communication Budget Allocation
Budget allocation depends on which of

 Allocate communication budget across a firms’
communication tools
the six types of mass media is selected
 As a percentage of communication budget:

Television Radio Newspapers
• Marketers spend more for consumer products
on advertising
• Marketers spend more for industrial products on
personal selling Outdoor Magazines Internet
Communication Budget Allocation Communication Budget Allocation

These media or channels, consists of
Media selection is based on these factors:
vehicles
Specific entities in which ads Cost
Expressed as cost per thousand (CPM) readers or
Vehicles viewers to facilitate cross-vehicle comparisons
can appear
The number of buyers potentially exposed to an
Reach advertisement in a particular vehicle
Mass- Vehicles that appeal to a broad
Appeal audience • The number of times buyers are actually exposed
Frequency to an ad in a given time period
• Total exposure = Reach × Frequency
Selective- Vehicles that appeal to a narrow

Appeal audience The characteristics of target market match the
Audience characteristics of a vehicle’s audience
Sales Force Budget Allocation: How

Communication Budget Allocation Many Sales Reps?
Media timing strategies include: NS = Number of sales reps

NC = Number of customers (actual or potential)
Concentrating advertising dollars in a
Blitz FC = Necessary frequency of customer calls
relatively ST period when new products
Strategy
or services are introduced LC = Length of average customer call; includes travel time
TA = Average available selling time per sales rep
Continuity Spending advertising dollars over the
Strategy long term to maintain continuity
NC × FC × LC
Concentrating its advertising but also
NS =
Pulse TA
attempts to maintain some semblance
Strategy
of continuity
Note: The time period is normally one business year.
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Sales Force Budget Allocation: How

Sales Force Budget Allocation
Many Sales Reps?
Example:  A sales force should be allocated based on:

• Organization and marketing objectives
NS = Number of sales reps NC × FC × LC
NS =
NC = 2,500 potential customers TA
• Offering characteristics
FC = 4 customer calls per year • Competitor and industry practices
LC = 2 hours average customer call; includes travel time
TA = 1,340 average available selling time per sales rep  Have sales representatives specialize in:
• Certain offerings
2,500 × 4 × 2
NS = • Customer types
1,340
• Combination of these
NS = 15 sales reps needed
EVALUATION AND CONTROL OF

THE COMMUNICATION PROCESS
 Continuously monitor the execution of IMC plan

to ensure that the communication objectives are
EVALUATION AND being met
CONTROL OF THE  Use budgeting to add/reduce funds for specific
COMMUNICATION communication activities as a form of control
PROCESS  Use incremental analysis to evaluate and control

ad, personal selling, and expenditures
All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
© 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 6-59
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5/19/2017

Integrated Marketing AFTER READING THIS CHAPTER

AFTER READING THIS CHAPTER AFTER READING THIS CHAPTER

4. Describe the factors that influence 7. Identify the different approaches

MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS

 The specific blend of major communication

 The message should be:

MARKETING COMMUNICATIONS MARKETING COMMUNICATIONS

• Advertising is any  Public relations involve

WHY TO USE INTEGRATED MARKETING

IMC STRATEGY DECISIONS

After defining the offering and target markets, the manager

 Communication can influence different

INFORMATION REQUIREMENTS IN INFORMATION REQUIREMENTS IN

Purchase Decision Roles Purchase Decision Roles

 The communication message itself

To communicate effectively, a marketer must know:

information consumers think is

consumers will seek it (newspapers,

SETTING REASONABLE COMMUNICATION SETTING REASONABLE COMMUNICATION

Communication objectives depend on: Communication objectives for offering-market

The offering-market Market Market

The stage of the  Build preference for or

SETTING REASONABLE COMMUNICATION SETTING REASONABLE COMMUNICATION

DEVELOPING AN INTEGRATED MARKETING

Factors to consider when designing the

DEVELOPING AN INTEGRATED MARKETING DEVELOPING AN INTEGRATED MARKETING

Nature of the Offering

 Personal selling is used for a highly technical

 Sales promotion is used to induce consumer action

DEVELOPING AN INTEGRATED MARKETING DEVELOPING AN INTEGRATED MARKETING

Target Market Characteristics Organizational Capacity

The ability or willingness of the organization to

─Purchase in large quantities Perform the IMC Buy, contract, or

Make-Or-Buy Decision Factors Make-Or-Buy Decision Example

Make-Or-Buy Decision Example Make-Or-Buy Decision Example

EXHIBIT 6.1: BREAK-EVEN CHART FOR COMPARING

 Make-or-buy decision also relates to

Push Strategy Pull Strategy Push Strategy

Push Strategy Pull Strategy

Push Strategy Vs. Pull Strategy

 An advertising opportunity exists when: MARKETING WEBSITES

MARKETING WEBSITES AND IMC MARKETING WEBSITES AND IMC

MARKETING WEBSITES AND IMC

Are cost effective in the:

COMMUNICATION MIX BUDGETING COMMUNICATION MIX BUDGETING

COMMUNICATION MIX BUDGETING COMMUNICATION MIX BUDGETING

Budgeting Approaches Objective-Task

• Balances the firm’s and competitors’

Communication Budget Allocation Communication Budget Allocation

Budget allocation depends on which of

 As a percentage of communication budget:

Communication Budget Allocation Communication Budget Allocation

Selective- Vehicles that appeal to a narrow

Sales Force Budget Allocation: How

Media timing strategies include: NS = Number of sales reps

Sales Force Budget Allocation: How

Example:  A sales force should be allocated based on:

EVALUATION AND CONTROL OF

 Continuously monitor the execution of IMC plan

PROCESS  Use incremental analysis to evaluate and control

All rights reserved. No part of this publication may be reproduced, stored in a

© 2013 Pearson Education, Inc. publishing as Prentice Hall Slide 6-59