Unit10 English ADI

Engaging Consumers and
Communicating Customer Value:

Integrated Marketing Communication
Strategy
UNIT 10
CHAPTER 14 KOTLER AND ARMSTRONG (2018)
MARKETING I COURSE 2020/21 1

Marketing Mix: Promotion
Promotion (or communication):
• Unit 10: Integrated Marketing
Communications Strategy (this unit)
• Unit 11: Advertising and Public Relations
• Unit 12: Personal Selling and Sales Promotion
• Unit 13: Direct, Online, Social Media and
Mobile Marketing (2 sessions)

Communicate Value to Customers
Building good customer relationships calls more than just developing a good product, setting
an attractive price, and making it available to target customers.
 Companies must engage consumers and communicate their value propositions, and what
they communicate should not be left to chance.
 All communications must be planned and coordinated into carefully integrated marketing
communication programs.

1. The Promotion Mix
A company´s total promotion mix – also called marketing communications mix – consists of the
specific lend of advertising, sales promotion, public relations, personal selling, and direct and
digital marketing tools that the company uses to engage consumers, communicate customer
value, and build customer relationships.
Advertising Sales promotion Personal selling Public relations Direct and digital
marketing

1. The Promotion Mix: Advertising
Advertising. Any paid form of nonpersonal presentation and promotion of ideas, goods, or
services.
• Radio
• TV
• Newspapers
• Magazines
• Billboards
• Online

1. The Promotion Mix : Sales Promotion
Sale promotion. Short-term incentives to drive the purchase or sale of a product or service.
• Discounts
• Coupons
• Demonstrations
• Contests
• ...

1. The Promotion Mix: Public Relations
Public relations (PR). Activities designed to engage the company´s various audiences and build
good relations with them.
• Press releases
• Sponsorship activities
• Events
• Company magazine
• Web page
• ...

1. The Promotion Mix: Personal Selling
Personal selling. Personal customer interactions by the firm´s sales force to engage customers,
make sales, and build customer relationships.
Personal and interactive communication
• Sales Presentations
• Trade fairs
• Incentive programs
• ...

1. The Promotion Mix: Direct and
Digital Marketing
Direct and digital marketing. Engaging directly individual consumers and customer communities
to both obtain and immediate response and build lasting customer relationships.
• Catalogs
• Telemarketing
• Mail
• E-mail
• Phone
• Social media
• Mobile marketing

1. The Promotion Mix
Do not forget that marketing communication goes beyond these concrete communication
tools:
 The product design, its price, the shape and color of its package, and the stores where it is
sold. All communicate something to buyers
The promotion mix is the fundamental communication activity, but:
 The company must coordinate the entire marketing mix (4 Ps) to have a greater impact with
communication activities

2. The New Marketing Communications
Model
 One-way communication  Communication in all directions

Model
 Consumers are changing (digital era)
‐ More informed
‐ More control over the message
‐ They don't trust information from manufacturers
‐ They have more tools to search for themselves
‐ They can connect with other consumers to exchange information
‐ They can create their own messages
 Strategies are changing
‐ Mass communication loses relevance
‐ Markets are more fragmented
‐ Closer and more focused relationships with micromarkets (more personalized and interactive content)
Advances in digital technology
‐ Change the way we communicate
‐ New model of more social marketing communication

Model
 Companies spend less on mass media and more on digital media
 Big companies like Nike and Uniliver adopt a 'digital first' approach
 Uniliver spends ¼ of the total communication budget on digital media
 Nevertheless, mass communication continues to capture a significant part of the

budgets. However, the type of consumption of mass communication has also changed.
Change, for example, in television consumption
 Before, we saw on television what was broadcasted at that time and we had few TV
channels
 Now, we can watch any show at any time and on many devices

2. The Need for Integrated Marketing
Communications
 Today, it is important to have a communication model that coherently integrates
traditional media with social, digital and mobile media.
What happens often in reality?
 Customers are bombarded by commercial messages from many sources
 Companies are unable to integrate their various communication sources
 Each message usually comes from different parts of the company: advertising agency,
sales management, public relations managers, etc.
 Sometimes, messages from one source differ from messages from other source
BUT, on the consumer mind content related to the brand or company is grouped into a
single message about that brand or company. If the messages are different it can result in
confused company images and brand positions.

Communications
The explosion of online, mobile and social media marketing presents big
opportunities but also big challenge for companies.
How to group all the communication sources in an organized way?
Practicing the concept of integrated marketing communications(IMC):
 The integration and coordination of the many communication
channels of the company to convey a clear, coherent and attractive
message about the organization and its brands.
 Integrated marketing communications involves identifying the target
audience and shaping a well-coordinated promotional program to
obtain the desired audience response.

Communications

3. Developing Effective Marketing
Communication
Because costumers differ, communication programs must be developed for specific segments of
consumers, niches, and even individuals.
Here, companies have to ask themselves:
 How can we engage our customers?
 How can we let our customers engage us and each other?
 The communication process should start with an audit of all the potential touch points that target
customers may have with the company and its brands.
A customer touch point is any interaction between your business and a customer. It includes any
interaction before, during, or after a customer purchases something from you.
 To communicate effectively, marketers need to understand how communication works.
Communication involves the nine elements shown in slide 25.

Main touch points of consumers with the Brand over the
customer journey

3a. The Elements of the Communication Process
SENDER Message RECEIVER
SENDER RECEIVER
Media
Media
Encoding
Encoding Decoding
Decoding
Noise
Feedback
Feedback Response
Response
Main participants
• Sender. The party sending the message to another party
• Receiver. The party receiving the message sent by another party
Communication tools
• Message. The set of symbols that the sender transmits (the actual ad)
• Media. The communication channels through with the message moves from the sender to receiver
Communication functions
• Encoding. The process of putting thought into symbolic form (process of creating the message)
• Decoding. The process by which the receiver assigns meaning to the symbols encoded by the sender (assigns meaning to
the message)
• Response. The reactions of the receiver after being exposed to the message
• Feedback. The part of the receiver´s response communicated back to the sender.
System noise
• Noise. The unplanned static or distortion during the communication process, which results in the receiver getting a
different message that the one the sender sent.
◦ Semantic. The message is not understood.
◦ Influence. Selective attention

Sender´s objective: that the receiver receives the message without noise and remembers it
• The encoding process of the sender has to match the decoding process of the receiver
• The best messages are those that consist of words and other symbols that are familiar to the
receiver.
• The marketing Communicator must understand the customer´s field of experience
 Messages, media and feedback channels must be based on the characteristics of the
receiver

22 MARKETING I COURSE 2020/21
Step 8. Measuring the results
Step 7. Shaping the overall promotion mix
Step 6. Setting the total promotion budget
Step 5. Selecting the message source
Step 4. Choosing communication channels and media
Step 3. Designing the message
Step 2. Determining the communication objectives
Step 1. Identifying the target audience
Communication
3b. Steps in Developing Effective Marketing
Communication
Communication
Step 1. Identification of the target audience
Possible target audience (receivers)
 Potential customers  Current Users
 Decision makers  Influencers
Audience types
 Individuals  Groups
 General public  Special audience
 Communication decisions based on the audience
 What will you say?  How are you going to say it?
 When is it going to be said?  Where and who is going to say it?

Communication
Communication
Once the target audience has been identified,
 What answer is the company looking for?
− Usually, the company wants a purchase response.
− But, it might be looking for other responses over the “willingness to buy” process
 In what stage of the “willingness to buy process” is the audience?
The target audience can be in six stages of “willingness to buy”. They are the stages that
customers usually go through on the way to purchase.

Stages of “willingness to buy” process
AWARENESS
KNOWLEDGE
LIKING
PREFERENCE
CONVICTION
PURCHASE

3. Steps in Developing Effective Marketing Communication
Communication
Step 3. Dessigning a message
Ideally, the message will achieve:
• Attention
• Hold the Interest
• Wake up the Desire
• And achieve the Action
Conceptual framework known as model AIDA
What to say and how to say it?
When creating the message, the communicator has to decide what to say (message content) and
how to say it (structure and format of the message).

Communication
Message content. What to say to elicit the desired response. Three orientations:
 Rational argument. They show that the product will produce the desired benefits to the
audience
 Emotional argument. They try to provoke positive or negative emotions that motivate the
purchase
 Moral argument. They are directed to the feeling of the audience about what is correct and
appropriate.

Communication
Message content. Can you identify the type of content?
Example: Colgate
Example:Estrella Galicia, Martini, Cruz Campo,
Example: Colgate

Communication
Structure of the message. How to express the message. Three aspects to consider:
◦ Whether to draw a conclusion or leave it to the audience
◦ Whether to present the strongest arguments at the beginning or end of the message
◦ Whether to present a one-sided argument (mentioning only the product's strengths) or a two-
sided argument (mentioning product´s strengths while also admitting its shortcomings).
 Message format. How to symbolically express the message: slogan, position
of the message, color, sound, shape, size, ...
To capture attention, advertisers can use novelty and contrast

Communication
Communication
Personal channels Nonpersonal channels

 Salespeople  Media (e.g., television, radio)
 Word-of-mouth influence  Atmosphere (designed environments)
 Buzz marketing (opinion leaders)  Events (e.g., shows and exhibits)

Communication
 Personal communication channels. Channels trhough which two or more people communicate
directly with each other (telephone, email, face-to-face, ..)
Advantage
 Personal interaction
 Feedback
 Channels of personal communication
 Controlled directly by the company. Sellers, sales force of the company
 Not controlled by the company:
• Independent experts. Shopping guides, doctors, consumer advocates, bloggers, …
• Word of mouth: friends, family, colleagues, social networks, …

Word-of-mouth and Buzz Marketing
Word-of-Mouth (WOM) Influence and Buzz Marketing. The impact of the personal words and
recommendations of trusted friends, family, and other consumers on buying behavior.
 Consumers speak or give opinions about products, services and brands
 Occurs naturally, spontaneously
 Brands can influence it: buzz marketing
 Buzz marketing. Cultivating opinion leaders and getting them to spread information about a
product or a service to others in their communities.

Communication
 Nonpersonal communication channels. Media that carries message without personal contact or
feedback between sender and receiver.
 Mass media: press, television, radio, billboards, online communication, ...
 Atmosphere. Environment designed to create or reinforce the tendency to buy a product:
furniture, flooring, lights, ...
 Events. Events that communicate messages to the target audience: press conferences,
sponsorships, shows exhibitions, ...

Communication
Communication
In either personal or nonpersonal communication, the message´s impact also depend on how the
target audience views the communicator.
 Who transmits the message
 Company-related
 Celebrities (be careful, Lance Armstrong case)
 Street people
 Experts (e.g., doctors or dentists for food companies)
 ...
 The most credible sources are more persuasive

Communication
Communication
 One of the hardest marketing decisions
 The communication expenditure can be:
• Between 10 and 12% of sales in the case of packaged products
• Around 20% in the case of cosmetics
• 1.9% in household appliances
Within the same industry, there can be many differences between companies
How does a company set the promotion budget?
 4 common methods

Communication
AFFORDABLE PERCENTAGE-OF-SALES
METHOD METHOD
COMPETITIVE-PARITY OBJECTIVE-AND-TASK
METHOD METHOD

Communication
Affordable method. Setting the promotion budget at the level management thinks the company
can afford. It is based on its income and expenses. Ignore the effects of communication on sales.
Promotion is the last in spending priorities.
 Percentage-of-sales method. Setting the promotion budget at a certain percentage of current or
forecasted sales or as a percentage or the unit sales price.
• Advantage: Its application is simple and helps to assess the relationship between promotion
spending, selling price, and profit per unit.
• Disadvantages. It wrongly views sales as the cause of promotion rather than as a result. It is based
on the availability of funds rather than on opportunities.

Communication
Competitive-parity method. Setting the promotion budget to match competitors' spending
(companies monitor competitors´ promotions activity or get industry promotion spending estimates
from publications or trade associations and then set their budgets based on the industry average)
 Objective-and-task method. More logical method but more difficult to apply. It implies developing
the promotion budget by:
• Defining specific promotion objectives
• Determining the tasks needed to achieve these objectives and,
• Estimating the costs of performing these tasks: the sum of these costs is the proposed promotion
budget.

Communication
Communication
Carefully combine the company communication tools into a coordinated promotion mix (Integrated
marketing communications)
Advertising Sales promotion Public relations Personal selling Direct and digital
marketing
 Factors influencing what mix of promotion tools to use

1. The nature of each promotion tool. Each tool has different characteristics and costs
2. Promotion mix strategies (push vs. pull)

Communication
1. The nature of each promotion tool
Let´s briefly analyze the nature of each
 Advertising
 It can reach large masses of geographically dispersed buyers, there is low cost per contact and it allows the
message to be repeated many times.
 Customers often consider the advertised products to be the most legitimate.
 It's impersonal, one-way, and can be expensive
 Personal Selling
 The most effective at some stages of “willingness to buy” process, such as the generation of preferences,
conviction and purchase.
 It allows relationships with customers and is a two-way communication
 It is the most expensive tool and has a high change cost

Communication
1. The nature of each promotion tool
 Sales promotion
 They include many promotional tools (coupons, contests, discount offers, etc.)
 They attract the attention of customers and incentivize the purchase
 Short-term effects and do not create long-term customer relationships
 Public relations
 Examples: news, articles, event sponsorship activities, etc.
 High credibility and the message arrives as "news and events" rather than as a sales-directed communication
 Companies tend to use public relations very little, and it can be very effective and inexpensive
 Direct and digital marketing
 Many forms: mail and catalogs, telemarketing, online marketing, on mobile phones or on social networks
 4 characteristics: it is more targeted, it is immediate, it is personalized for the receiver and it is interactive, allowing a
dialogue between the company and the client.
 Well suited for creating one-to-one customer relationships

Communication
2. Promotion Mix Strategies

Communication
Push strategy. A promotion strategy that calls for using the sales force and trade promotion to push
the product through channels. The producer promotes the product to the channel members who in
turn promote it to final consumers.
Example: John Deere does not spend much effort promoting its tractors and light garden machinery
to reach final consumers, but its sales force works with Lowe's, The home Depot, independent sellers
and other channel members who do push products to final consumers.

Communication
Pull strategy. A promotion strategy that calls for spending a lot on consumer advertising, promotion,
and other content to induce final consumers to engage with and buy the product, creating a demand
that “pulls” the product through the channel.
Example. Uniliver promotes Axe directly to consumers (young men) using television and newspapers,
websites, social media and other channels. If the pull strategy is effective, customers will then
demand the product from retailers (in this case, CVS, Walgreens or Walmart) which will in turn
demand it from the producer (in this case Uniliver)

Communication
 Some companies only use "push“ strategies, others only "pull” strategies. Most companies
combine them
What factors must be taken into account when designing the promotion mix strategies?
Type of product / market
• Business-to-consumer companies (B2C) usually “pull” more, putting more of their funds into
advertising, followed by sales promotion, personal selling and then public relations.
• Business-to-business companies (B2B) tend to “push” more putting more of their funds into
personal selling, followed by sales promotion, advertising and public relations.

Communication
Communication
 What effect does the message have on the target audience?
Evaluation of that effect
Ask consumers things like: if they remember the message, how many times they saw it, what
points they remember, how they felt about the message and their past and current attitudes
towards the product and the company.

4. Socially Responsible Marketing
Communication
The company has to be aware of the legal and ethical issues around marketing communication.
 Most marketers work hard to communicate openly and honestly with consumers
and resellers
 Responsibility for communication
◦ Avoid false claims or misleading advertising
◦ Non-discriminatory promotion by customers
◦ Forms of communication that promote socially responsible actions (ecology, diseases, ..)

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Engaging Consumers and

Communicating Customer Value:

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 Nevertheless, mass communication continues to capture a significant part of the

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 In what stage of the “willingness to buy process” is the audience?

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Personal channels Nonpersonal channels

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 Factors influencing what mix of promotion tools to use

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