Integrated Marketing

Communication Strategy

LIVE SESSIOM
AIMA-ePGDM
 Objectives
• Know the tools of the marketing communications
mix.
• Understand the process and advantages of
integrated marketing communications.
• Learn the steps in developing effective marketing
communications.
• Understand methods for setting promotional
budgets and the factors that affect the design of
the promotion mix.
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 Definition
• Marketing Communications Mix
 The specific mix of advertising, personal
selling, sales promotion, and public
relations a company uses to pursue its
advertising and marketing objectives.

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 Integrated Marketing
Communications
• The Marketing Communications
Environment is Changing:
 Mass markets have fragmented, causing
marketers to shift away from mass marketing
 Media fragmentation is increasing as well
 Improvements in information technology are
facilitating segmentation

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 Integrated Marketing
Communications
• The Need for Integrated Marketing
Communications
 Conflicting messages from different sources
or promotional approaches can confuse
company or brand images
 The problem is particularly prevalent when
functional specialists handle individual forms of
marketing communications independently

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 Integrated Marketing
Communications
• The Need for Integrated Marketing
Communications
 Traditional media such as newspapers,TVand radio
have lost its reach and frequency.
 The Web alone cannot be used to build brands; brand
awareness potential is limited
 Best bet is to wed traditional branding efforts with the
interactivity and service capabilities of online
communications
 Web efforts can enhance relationships

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 Integrated Marketing
Communications
• Integrated Marketing Communications
 The concept under which a company carefully
integrates and coordinates its many
communications channels to deliver a clear,
consistent, and compelling message about the
organization and its products.

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 The Communication
Process
• Communications efforts should be viewed
from the perspective of managing customer
relationships over time.
• The communication process begins with an
audit of all potential contacts.
• Effective communication requires
knowledge of how communication works.

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The Communication
Process
Elements in the
Communication Process
• Sender • Encoding
• Message • Decoding
• Media • Response
• Receiver • Feedback
• Noise
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 Developing Effective
Communication
• Step 1: Identifying the Target Audience
 Affects decisions related to what, how, when,
and where message will be said,
as well as who will say it
• Step 2: Determining Communication
Objectives
 Sense buyer readiness stages
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Developing Effective
Communication
Buyer-Readiness Stages

• Awareness • Preference
• Knowledge • Conviction
• Liking • Purchase

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 Developing Advertising
Strategy
• Consists of two major elements:

 Creating advertising messages

 Selecting advertising media

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 Developing Effective
Communication
• Step 3: Designing a Message
 AIDA framework guides message design
 Message content contains appeals or themes
designed to produce desired results
 Rational appeals
 Emotional appeals
– Love, pride, joy, humor, fear, guilt, shame
 Moral appeals

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 Developing Effective
Communication
• Step 3: Designing a Message
 Message Structure: Key decisions are required with
respect to three message structure issues:
 Whether or not to draw a conclusion
 One-sided vs. two-sided argument
 Order of argument presentation
 Message Format: Design, layout, copy, color, shape,
movement, words, sounds, voice, body language,
dress, etc.
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 The Message Strategy
• Identify Customer Benefits
• Develop Compelling Creative Concept
—the “Big Idea”
• Advertising Appeals Should Be:
Meaningful, Believable, & Distinctive

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 Message Execution
• Slice of Life • Personality Symbol
• Lifestyle • Technical Expertise
• Fantasy • Scientific Evidence
• Mood or • Testimonial or
Image Endorsement
• Musical

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 Developing Effective
Communication
• Step 4: Choosing Media
 Personal communication channels
 Includes face-to-face, phone, mail, and Internet
chat communications
 Word-of-mouth influence is often critical
 Buzz marketing cultivates opinion leaders

 Nonpersonal communication channels

 Includes media, atmosphere, and events
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Selecting Advertising Media
• Reach
 Percentage of people exposed to ad
• Frequency
 Number of times a person is exposed to ad
• Media Impact
 The qualitative value of a message exposure
through a given medium

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 Developing Effective
Communication
• Step 5: Selecting the Message Source
 Highly credible sources are more persuasive
 A poor spokesperson can tarnish a brand
• Step 6: Collecting Feedback
 Recognition, recall, and behavioral measures
are assessed
 May suggest changes in product/promotion

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 Deciding on Media Timing
• Must decide how to schedule the
advertising over the course of a year.
 Follow seasonal pattern
 Oppose seasonal pattern
 Same coverage all year
• Choose the pattern of the ads
 Continuity
 Pulsing

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 Setting the Promotional
Budget and Mix
• Setting the Total Promotional Budget
 Affordability Method
 Budget is set at a level that a company can afford
 Percentage-of-Sales Method
 Past or forecasted sales may be used
 Competitive-Parity Method
 Budget matches competitors’ outlays

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 Setting the Promotional
Budget and Mix
• Setting the Total Promotional Budget
 Objective-and-Task Method
 Specific objectives are defined
 Tasks required to achieve objectives are
determined
 Costs of performing tasks are estimated, then
summed to create the promotional budget

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 Setting the Promotional
Budget and Mix
• Setting the Overall Promotion Mix
 Determined by the nature of each
promotion tool and the selected
promotion mix strategy

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 Evaluating Advertising
• Measure the communication effects of
an ad—“Copy Testing”
• Measure the sales effects of an ad
 Is the ad increasing sales?

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 Setting the Promotional
Budget and Mix
Promotion Tools • Reaches large, geographically
dispersed audiences, often with
high frequency
• Advertising • Low cost per exposure, though
overall costs are high
• Personal Selling • Consumers perceive advertised
goods as more legitimate
• Sales Promotion • Dramatizes company/brand
• Builds brand image; may
• Public Relations stimulate short-term sales
• Direct Marketing • Impersonal; one-way
communication

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 Setting the Promotional
Budget and Mix
Promotion Tools • Most effective tool for building
buyers’ preferences, convictions,
and actions
• Advertising • Personal interaction allows for
feedback and adjustments
• Personal Selling
• Relationship-oriented
• Sales Promotion • Buyers are more attentive
• Public Relations • Sales force represents a long-
term commitment
• Direct Marketing • Most expensive of the
promotional tools
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 Setting the Promotional
Budget and Mix
• May be targeted at the trade or
Promotion Tools ultimate consumer
• Makes use of a variety of
formats: premiums, coupons,
• Advertising contests, etc.
• Personal Selling • Attracts attention, offers strong
purchase incentives, dramatizes
• Sales Promotion offers, boosts sagging sales
• Stimulates quick response
• Public Relations • Short-lived
• Not effective at building long-
• Direct Marketing term brand preferences

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 Setting the Promotional
Budget and Mix
• Highly credible
Promotion Tools • Many forms: news stories, news
features, events and
• Advertising sponsorships, etc.
• Reaches many prospects missed
• Personal Selling via other forms of promotion
• Sales Promotion • Dramatizes company or benefits
• Often the most underused
• Public Relations element in the promotional mix
• Direct Marketing

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 Setting the Promotional
Budget and Mix
Promotion Tools • Many forms: Telephone
marketing, direct mail,
online marketing, etc.
• Advertising • Four distinctive
• Personal Selling characteristics:
 Nonpublic
• Sales Promotion  Immediate
 Customized
• Public Relations  Interactive
• Direct Marketing • Well-suited to highly
targeted marketing efforts

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 Other Advertising
Considerations
• Small Companies
• Large Companies
• Advertising Agency
• International Issues

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 Setting the Promotional
Budget and Mix
• Promotion Mix Strategies
 Push strategy: trade promotions and personal
selling efforts push the product through the
distribution channels.
 Pull strategy: producers use advertising and
consumer sales promotions to generate strong
consumer demand for products.

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 Setting the Promotional
Budget and Mix
• Checklist: Integrating the Promotion Mix
 Analyze trends (internal and external)
 Audit communications spending
 Identify all points of contact
 Team up in communications planning
 Make all communication elements compatible
 Create performance measures
 Appoint an IMC manager

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 Socially Responsible
Communications
• Advertising and Sales Promotion
 Avoid false and deceptive advertising
 Bait and switch advertising
 Trade promotions can not favor certain
customers over others
 Use advertising to promote socially
responsible programs and actions
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 Socially Responsible
Communications
• Personal Selling
 Salespeople must follow the rules of “fair
competition”
 Three day cooling-off rule protects ultimate
consumers from high pressure tactics
 Business-to-business selling
 Bribery, industrial espionage, and making false and
disparaging statements about a competitor are
forbidden
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 Consumer Sales Promotion
Tools
• Samples • Patronage Rewards
• Coupons • Point-of-Purchase
• Rebates Promotions
• Cents-off Deals • Contests
• Premiums • Sweepstakes
• Advertising • Games
Specialties

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Rest Stop: Reviewing the Concepts

• Discuss the process and advantages of

integrated marketing communications.
• Define the five promotion tools and
discuss factors that must be considered
in shaping the overall promotion mix.
• Describe and discuss the major decisions
involved in developing an advertising
program.

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Rest Stop: Reviewing the Concepts

• Explain how sales promotion

campaigns are developed and
implemented.
• Explain how companies use public
relations to communicate with their
publics.

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THE 3rd “P” IN MARKETING
Pricing Decisions

Setting Prices
 TOPIC OBJECTIVES
• Stages of establishing prices
• Pricing objectives
• Pricing basis
• Pricing strategies

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Stages for Establishing
Prices

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Factors Influencing Pricing
Internal Factors External Factors
•Corporate & marketing objectives of the firm •Market characteristics (these relate to
demand, customer and competition)
•The image sought by the firm through pricing •Price elasticity of demand of the product in
particular
•The characteristics of the product •Buying behaviour of the customers of the
product
•The stage of the product in its life cycle •Bargaining power of major customers
•Use pattern and turnaround rate of the •Bargaining power of major suppliers
product
•Costs of manufacturing and marketing •Competitors’ pricing strategies
•Extent of distinctiveness of the product and •Government controls/regulation on pricing
extent of differentiation practiced
•Other elements of the marketing mix and •Other relevant legal aspects
their interaction with pricing
•Composition of the product line of the firm •Societal views
and whether buyers buy some of the products
as a bundle
•Understanding reached, if any, with
competitors/price cartels
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Objectives Firms Seek in Pricing
The following are among the objectives firms seek in pricing. It is to be noted that a
given firm adopts a few out of this list of objective, not all of them.
•Profit maximization in the short term •Target profit on the entire product line,
irrespective of profit level in individual
products.
•Profit optimisation in the long term •Keeping competition out, or keeping it
under check
•A minimum return on investment •Keeping parity with competition
•A minimum return on sales turnover •Fast turnaround and early cash recovery
•Achieving a particular sales volume •Stabilising the prices and margins in the
market
•Achieving a particular market share •Providing the commodity/service at prices
affordable by the weaker sections
•Deeper penetration of the market •Providing the commodities/services at
prices that will stimulate economic
development.
•Entering new markets

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 1. Development of Pricing
Objectives
• Pricing objectives
 are goals that describe what a firm wants to
achieve through pricing.
 form the basis for decisions about other stages of
pricing.
 must be consistent with the firm’s overall
marketing objectives.
 can support the attainment of multiple short-term
and long-term goals.

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 Development of Pricing
Objectives
Survival
Survival Profit
Profit

Product Pricing
Pricing
Product Return
Returnon
on
Quality Objective
Objective
Quality Investment
Investment
ss

Status
StatusQuo
Quo Cash
CashFlow
Flow Market
Market Share
Share

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 2. Assessment of the Target
Market’s Evaluation of Price
• The Importance of Price
 Type of product
 Type of target market
 The purchase situation
• Value Focus
 A combination of product’s price and quality attributes
 Helps customers differentiate a product from competing
brands
 Guides marketers in their evaluation of the importance
of price to the consumer

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3. Evaluation of Competitors’ Prices
• Sources of Competitors’ Pricing Information
 Comparative Shoppers
 Persons who systematically collect data on
competitors’ prices
 Purchased Price Lists
 Developed by syndicated marketing research services

• Importance of Knowing Competitors’ Prices

 Helps determine how important price will be to
customers
 Helps marketers in setting competitive prices for their
products

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4. Selection of a Basis for Pricing
• Dimensions of Pricing
 Cost, demand, and competition
• Bases for Pricing
 Type of product
 Market structure of the industry
 Brand’s market share relative to competing
brands
 Customer characteristics

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Broad Categories of Pricing Methods
•Cost-based pricing •Demand based •Competition-
pricing oriented pricing
•Product line-
oriented pricing •Tender pricing •Affordability-
based pricing
•Differentiated
pricing

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 Selection of a Basis for
Pricing (cont’d)
• Cost-Based Pricing
 Adding a Rupee amount or percentage to the cost of
the product
 Cost-Plus Pricing or Full cost Pricing
Adding a specified Rupee amount or percentage to
the seller’s cost
 Markup Pricing
Adding to the cost of the product a predetermined
percentage of that cost

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 Selection of a Basis for Pricing
• Demand-Based Pricing
 Customers pay a higher price when demand for a
product is strong and and a lower price when demand
is weak.
 Effectiveness depends on marketer’s ability to
estimate demand accurately.
• Competition-Based Pricing
 Pricing influenced primarily by competitors’ prices
 Importance increases when competing products are
relatively homogeneous
 May necessitate frequent price adjustments

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 Selection of a Pricing Strategy
1. Differential Pricing
» Charging different prices to different buyers for the same
quality and quantity of product

Strategy Action

Negotiated pricing Establishing a final price through bargaining

Secondary-market Setting one price for the primary market and a

pricing different price for another market

Periodic discounting Temporary reduction of prices on a patterned or

systematic basis

Random discounting Temporary reduction of prices on an unsystem-

atic basis
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 Selection of a Pricing Strategy

2. New Product Pricing

• Price Skimming
 Charging the highest possible price that
buyers who desire the product will pay
• Penetration Pricing
 Setting prices below those of competing
brands to penetrate a market and gain a
significant market share quickly

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 Selection of a Pricing Strategy
3. Product Line Pricing
Establishing and adjusting prices of multiple products
within a product line

Strategy Action

Captive pricing Pricing the basic product in a product line low

while pricing related items at a higher level

Premium pricing Pricing the highest-quality or most versatile

products higher than other models in the product
line

Bait pricing Pricing an item in the product line low with the
intention of selling a higher-priced item in the line

Price lining Setting a limited number of prices for selected

groups or lines of merchandise

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 Selection of a Pricing Strategy
4. Psychological Pricing
attempts to influence a customer’s perception of price to
make a product’s price more attractive
Strategy Action

Reference pricing Pricing a product at a moderate level and

positioning it next to a more expensive
model or brand

Bundle pricing Packaging together two or more comple-

mentary products and selling them for a
single price

Multiple-unit pricing Packaging together two or more identical

products and selling them for a single price

Everyday low prices Setting a low price for products on a consis-

(EDLP) tent basis

Strategy Action

Odd-even pricing Ending the price with certain numbers to

influence buyers’ perceptions of the price or
product

Customary pricing Pricing on the basis of tradition

Prestige pricing Setting prices at an artificially high level to

convey prestige or a quality image

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 Selection
5. Professional Pricing
of a Pricing Strategy
 Fees set by people with great skill or experience in a particular
field
6. Promotional Pricing
 Price leaders
 Products priced below the usual markup, near cost, or below
cost
 Special-event pricing
 Advertised sales or price cutting linked to a holiday, season,
or event
 Comparison discounting
 Setting a price at a specific level and comparing it with a
higher price

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 Group Question
• Characterize the nature of Price in the market where you
will sell your product (i.e., price competitive, non price
competitive, elasticity of demand). Are there other factors
that will affect your pricing decisions, such as - perceived
customer interpretation and response, legal and
regulatory issues, competition, etc..
• Using your product as the subject, answer the following
questions:
 What is your Pricing Objective (one or more of
seven)?
 What is your Basis for Pricing (one of three)?
 What is your Pricing Strategy (one of six)?

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 Contemporary
Issues in Marketing
 Political Marketing
• Political marketing is the recent trend in
Indian politics.
• Political marketing is not limited to just
political advertising.
• Political broadcast and electoral speeches
are aimed for giving political parties a
positioning in electoral market.

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The Product in Political
Marketing
• Product is a promise of good government

• It might be the image of candidate, or an

ideology or style of good governance which
is differentiated, positioned and the
packaged as marketing offer.

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 Price in Political
Marketing
• Price is the fund raised by the political
party.
• Fund raising is mainly through
membership fee, donations etc.
• Fund raising strongly depend on
product concept.

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 Political Advertising
• It is the positioning stand
- eg. India Shining Campaign – 2004 by
BJP or Jai Ho campaign by UPA.

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Social Marketing

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 Social awareness marketing involves
the analysis, planning, execution and
evaluation of programmes designed to
influence the voluntary behaviour of
target audience eg. health promotion,
road safety, dowry, drugs, aids, senior
citizen

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• Social marketing do not necessarily
promote an organization but promote a
cause. So that human behaviour can be
directed, molded and changed. Thereby
associating a organisation with a cause.
• If the cause is recalled, automatically
organization/brand is recalled.
• Jago India Campaign – by Tata Tea

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• Social marketing gets higher consumer
connect and brand recall as consumer do
not view this campaign as ad.
• The image of organization is enhanced
due association with social cause.

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 Rural Marketing
• Rural marketing are tomorrows market and
marketers should know how to penetrate,
and harness their market.
• Rural market in India is undergoing a socio-
economic change.
• Information technology has helped the
penetration of market more.
• The self help group and access to easy
funds have made this market more lucrative
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• Rural market is growing at a rate of 25%
per annum.
• In general the literacy rate of rural
population has increased.
• Rural population is strongly guided by
reference group – primary health workers,
doctors, teachers, panchayat members.
• Brand conscious has increased for FMCG
and durable products.
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Campaign by Companies in
Rural India
• ITC e-chaupal – Internet Kiosk set up at chaupal for
giving information on crop price, weather forecast,
fertilizer, loans etc
• Project Shakti from HLL – a self help group (SHG)
for promoting and selling products.
• Mahindra and Mahindra’s Shubh labh stores.
• Kisan credit card issued by various banks for easy
excess to money – Already 41 million Kisan Card
issued.

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 Green Marketing
or
Ecological Marketing

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• Green marketing refers to the process of
selling products or services based on their
environmental benefits.
• Organization are using it as new
marketing tool or competitive advantage.
• ISO 14020 is a guide to eco labels.

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