Chapter 15 Integrated Marketing Communications TEACHING RESOURCES QUICK REFERENCE GUIDE Resource Location Purpose and Perspective IRM, p. 375 Lecture Outline IRM, p. 376 Discussion Starters IRM, p. 385 Class Exercises IRM, p. 387 Chapter Quiz IRM, p. 389 Semester Project IRM, p. 390 Answers to Issues for Discussion and Review IRM, p. 391 Answers to Marketing Applications IRM, p. 395 Answers to Internet Exercise IRM, p. 397 Answers to Developing Your Marketing Plan IRM, p. 398 Comments on Video Case 15 IRM, p. 399 PowerPoint Slides Instructor’s website Note: Additional resources may be found on the accompanying student and instructor websites at www.cengagebrain.com. PURPOSE AND PERSPECTIVE This chapter is the first of three dealing with promotion decisions and activities. Its primary objective is to give students an overview of promotion and integrated marketing communications. First, the chapter shows how integrated marketing communications (IMC) provides the maximum informational and persuasive impact on customers. Then, it examines the communication process. After that, it presents a theoretical foundation on which to build an understanding of promotion. The first part of this chapter focuses on the nature of IMC, the communication process, the role of promotion in organizations, and the objectives of promotion. Next, the chapter introduces the concept of the promotion mix and briefly describes the major elements. Then it analyzes a number of factors which affect marketers’ decisions when selecting specific ingredients to include in a promotion mix for a product. At the end of this chapter, it examines such issues as word-of-mouth communications and their effects on promotion, product placement, and some criticisms and defenses of promotion. LECTURE OUTLINE I. The Nature of Integrated Marketing Communications A. Integrated marketing communications is the coordination of promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers. B. A major goal of integrated marketing communications is to send a consistent message to customers. C. Because various units both inside and outside most companies have traditionally planned and implemented promotional efforts, customers have not always received consistent messages. D. Mass media advertising is used less today than in the past because of high cost and lower effectiveness in reaching some target markets. E. More precisely targeted promotional tools, such as cable and TV, direct mail, the Internet, special-interest magazines, DVDs, cell phones, mobile applications, and outdoor boards are available. 1. Database marketing also allows marketers to be more precise in targeting individual customers. F. Today, a number of promotion-related companies provide one-stop shopping to clients seeking advertising, sales promotion, and public relations, thus reducing coordinating problems for the sponsoring company. G. Rising costs have also meant upper management demands systematic evaluations of communication efforts and reasonable return on investments. H. The specific communication vehicles employed and the precision with which they are used are changing as both information technology and customer interests become increasingly dynamic. I. Today, marketers and customers have nearly unlimited access to data about each other. 1. Integrating marketing communications and customizing it for consumers, while also protecting customer privacy, has become increasingly difficult. 2. The sharing of information and use of technology to facilitate communication between buyers and sellers are essential for successful customer relationship management. II. The Communication Process A. Communication can be defined as a sharing of meaning. Implicit in this definition is the notion of transmission of information because sharing necessitates transmission. B. Communication begins with a source, which is a person, group, or organization with a meaning it attempts to share with an audience. (Figure 15.1) C. A receiver is the individual, group, or organization that decodes a coded message; an audience is two or more receivers. D. To transmit meaning, a source must convert the meaning into a series of signs or symbols representing ideas or concepts. This is called the coding process or encoding. E. To share meaning, the source should use signs or symbols familiar to the receiver or audience. 1. Persuasive messages from a source are more effective when the appeal matches an individual’s personality. a. Marketers that understand this realize the importance of knowing the target market and ensuring that messages, such as advertisements, use language understood by the target market and that depicts behaviors acceptable within the culture. F. When coding a meaning, a source needs to use signs or symbols the receiver or audience uses for referring to the concepts the source intends to convey. G. To share a coded meaning with the receiver or audience, a source selects and uses a communications channel, the medium of transmission carrying the coded message from the source to the receiver or audience. H. In the decoding process, signs or symbols are converted by the receiver into concepts and ideas. Seldom does a receiver decode exactly the same meaning the source intended. I. Noise is anything that reduces the clarity and accuracy of the communication. It has many sources and may affect any or all parts of the communication process. 1. Noise sometimes arises within the communications channel itself. 2. Noise will occur if the source uses signs or symbols that are unfamiliar to the receiver or have a different meaning than the one intended. 3. Noise may also originate in the receiver; a receiver may be unaware of a coded message because his or her perceptual processes block it out. J. The receiver’s response to a decoded message is feedback to the source. 1. During feedback, the receiver or audience provides the original source with a response to the message. Thus, communication can be viewed as a circular process. 2. During face-to-face communication, both verbal and nonverbal feedback can be immediate, enabling communicators to quickly adjust their messages to improve the effectiveness of their communication. 3. When mass communication like advertising is used, feedback is often slow and difficult to recognize. a. Some relevant and timely feedback can occur in the form of sales increases, inquiries about products, or changes in attitude or brand awareness levels. K. Each communication channel is limited on the volume of information it can effectively handle. This limit, called channel capacity, is determined by the least efficient component of the communication process. III. The Role and Objectives of Promotion A. Promotion is communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization positively and accept its products. B. Many organizations spend considerable resources on promotion to build and enhance relationships with current and potential customers as well as other stakeholders. 1. Marketers indirectly facilitate favorable relationships by focusing information about company activities and products on interest groups, current and potential investors, regulatory agencies, and society in general. 2. Some organizations promote responsible use of potentially harmful products. 3. Companies sometimes promote programs that help selected groups. a. Cause-related marketing links the purchase of products to philanthropic efforts for one or more causes to help boost sales and generate goodwill. C. For maximum benefit from promotional efforts, marketers strive for proper planning, implementation, and control of communications. D. Promotional objectives vary widely from one organization to another and within organizations over time. E. Create Awareness 1. For an organization that is introducing a new product or a line extension, making customers aware of the product is crucial to initiating the product adoption process. 2. For existing products, promotional efforts aim to increase awareness of brands, product features, image-related issues, and/or operational characteristics. F. Stimulate Demand 1. When an organization is the first to introduce an innovative product, it tries to stimulate primary demand—demand for a product category rather than for a specific brand of product through pioneer promotion. a. Pioneer promotion informs potential customers about the product: what it is, what it does, how it can be used, and where it can be purchased. 2. Selective demand is demand for a specific brand. a. Marketers employ promotional efforts that point out the strengths and benefits of a specific brand. b. Advertising campaigns, price discounts, free samples, coupons, consumer contests and games, and sweepstakes are promotional activities that stimulate selective demand. G. Encourage Product Trial 1. Promotion activities are necessary to move customers through the product adoption process. a. Free samples, coupons, test drives, or limited free-use offers, contests, and games make product trial convenient and low risk for potential customers. H. Identify Prospects 1. Certain types of promotional efforts are directed at identifying customers who are interested in the firm’s product and are most likely to buy it. 2. Advertisements may direct prospects to provide information via websites or toll-free response lines. a. Customers who respond usually have higher interest in the product, and the organization can follow up with them. I. Retain Loyal Customers 1. Maintaining long-term customer relationships is a major goal of most marketers. 2. The costs of retaining customers are usually lower than those for acquiring new ones. 3. Common promotional activities directed at retaining loyal customers are frequent-user programs and special offers for existing customers only. 4. Reinforcement advertising assures current users they have made the right choice. J. Facilitate Reseller Support 1. Reseller support is a two-way street: producers generally want to provide support to resellers to assist in selling their products, and in turn they expect resellers to support their products. 2. Strong relationships with resellers are important to an organization’s ability to maintain a sustainable competitive advantage. a. Use of various promotional methods helps organizations achieve this goal. K. Combat Competitive Promotional Efforts 1. Promotional activities do not necessarily increase the organization’s sales or market share, but may prevent a sales or market share loss. 2. A combative promotional objective is most common in extremely competitive consumer products markets. L. Reduce Sales Fluctuations 1. Demand for many products varies because of climate, holidays, or seasons. 2. Promotional techniques are often designed to stimulate sales during sales slumps or low-demand periods. IV. The Promotion Mix A. When an organization combines specific methods to manage the integrated marketing communications for a particular product, that combination constitutes the promotion mix for that product. B. The four possible elements of a promotion mix are advertising, personal selling, public relations, and sales promotion. C. For some products, organizations use all four elements; for other products, only two or three. D. Advertising 1. Advertising is a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media, such as television, radio, the Internet, newspapers, magazines, direct mail, outdoor displays, and signs on mass transit vehicles. 2. Advertising is changing as consumers’ mass media consumption habits change. Marketers now utilize more digital media that are designed to cater to smaller, more personalized audiences. 3. Individuals and organizations use advertising to promote goods, services, ideas, issues, and people. 4. Because advertising is highly flexible, it can reach a large target audience or focus on a small, precisely defined segment. 5. Advertising offers several benefits. a. It is extremely cost-efficient when it reaches a vast number of people at a low cost per person. b. It lets the source repeat the message several times. c. The visibility an organization gains from advertising can enhance its image. 6. Advertising also has several disadvantages. a. Even though the cost per person reached may be low, the absolute dollar outlay can be extremely high, thus limiting and sometimes preventing the use of advertising in a promotion mix. b. It rarely provides rapid feedback. c. It is difficult to measure the effects of advertising on sales. d. Advertising ordinarily has less persuasive impact on customers than personal selling. e. The time available to communicate a message is often very short, even limited to a few seconds. E. Personal Selling 1. Personal selling is a paid, personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. 2. Personal selling is most extensively used in the business-to-business market and also in the business to consumer market for high-end products such as homes, cars, electronics, and furniture. 3. Like advertising, personal selling has both advantages and limitations. a. The cost of reaching one person through personal selling is considerably more than through advertising, but personal selling efforts often have greater impact on customers. b. Personal selling provides immediate feedback. 4. When a salesperson and a customer meet face-to-face, they use several types of interpersonal communication. a. A salesperson and customer frequently use kinesic communication, or communication through the movement of one’s head, eyes, arms, hands, legs, or torso. b. Proxemic communication, a less obvious form of communication used in personal selling situations, occurs when either party varies the physical distance which separates them. c. Tactile communication is communicating through touching. F. Public Relations 1. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. 2. Public relations uses a variety of tools, including annual reports, brochures, event sponsorship, and sponsorship of socially responsible programs aimed at protecting the environment or helping disadvantaged individuals. 3. Publicity, another public relations tool, is nonpersonal communication in news-story form about an organization, its products, or both, which is transmitted through a mass medium at no charge. 4. Unpleasant situations and negative events may generate unfavorable public relations for an organization; effective marketers have policies and procedures in place to help manage public relations problems. 5. Public relations should not be viewed as a set of tools to be used only during crises, but as an ongoing program. G. Sales Promotion 1. Sales promotion is an activity or material that acts as a direct inducement offering added value or incentive for the product to resellers, salespeople, or customers. Examples include free samples, games, rebates, sweepstakes, contests, premiums, and coupons. 2. Sales promotion should not be confused with promotion; sales promotion is just one part of the comprehensive area of promotion. 3. Marketers spend more on sales promotion than on advertising, and sales promotion is a faster-growing area than advertising. 4. Unlike advertising and personal selling, marketers’ use of sales promotion tends to be irregular, particularly when used to promote seasonal products. 5. Marketers frequently rely on sales promotion to improve the effectiveness of other promotion-mix elements. 6. An effective promotion mix requires the right combination of advertising, personal selling, public relations, and sales promotion. V. Selecting Promotion Mix Elements A. Marketers vary the compositions of promotion mixes for many reasons. A promotion mix can include all four elements, but frequently a marketer selects fewer than four. B. Promotional Resources, Objectives, and Policies 1. The size of an organization’s promotional budget affects the number and relative intensity of promotional methods included in the promotion mix. 2. If a company’s promotional budget is extremely limited, the firm is likely to rely on personal selling because it is easier to measure a salesperson’s contribution to sales than to measure the effect of advertising. 3. Businesses must have sizable promotional budgets to use regional or national advertising and sales promotion activities. 4. An organization’s promotional objectives and policies also influence the types of promotion selected. a. If a company’s objective is to create mass awareness of a new convenience good, its promotion mix is likely to lean heavily toward advertising, sales promotion, and possibly public relations. b. If a company hopes to educate consumers about the features of a durable good, its promotion mix may combine a moderate amount of advertising, possibly some sales promotion, and a great deal of personal selling because this is an excellent way to inform customers about such products. c. If an organization’s objective is to produce immediate sales of nondurable services, the promotion mix will probably stress advertising and sales promotion. C. Characteristics of the Target Market 1. The size, geographic distribution, and demographic characteristics of an organization’s target market help dictate the ingredients to be included in a product’s promotion mix. a. If the size of the market is limited, the promotion mix will probably emphasize personal selling because it can be effective for reaching a small number of people. When markets for a product consist of millions of customers, organizations rely on advertising and sales promotion. b. If a company’s customers are concentrated in a small geographic area, personal selling is more feasible than if the customers are dispersed across a vast region. Advertising may be more practical when the company’s customers are numerous and not concentrated. c. Demographic characteristics such as age, income, or education level may dictate the types of promotional techniques a marketer selects. D. Characteristics of the Product 1. Generally, promotion mixes for business products concentrate on personal selling, whereas consumer goods promotion relies on advertising. However, this generalization should be treated cautiously; producers of business products do use some advertising to promote goods. 2. Marketers of highly seasonal products may have to emphasize advertising and sales promotion, because off-season sales may be insufficient to support an extensive year-round sales force. 3. A product’s price influences the composition of the promotion mix. a. High-priced products call for more personal selling because consumers associate greater risk with the purchase of such products and usually want the advice of a salesperson. b. For low-priced convenience items, marketers use advertising rather than personal selling. E. Costs and Availability of Promotional Methods 1. The costs of promotional methods and the availability of promotional techniques are major factors to analyze when developing a promotion mix. 2. National advertising and sales promotion efforts require large expenditures; however, if they reach extremely large numbers of people, the cost per individual may be quite small. 3. Although there are numerous media vehicles within the United States, an organization may find that no available advertising medium effectively reaches a certain target market. F. Push and Pull Channel Policies 1. One element marketers should consider is whether to use a push policy or a pull policy. a. With a push policy, the producer promotes the product only to the next institution down the marketing channel. b. With a pull policy, the firm promotes directly to consumers with the intention of developing a strong consumer demand for the products. 2. Push and pull policies are not mutually exclusive and an organization may use both policies simultaneously at times. VI. The Growing Importance of Word-of-Mouth Communications A. Depending on the type of customers and the products involved, buyers to some extent rely on word-of-mouth communication from personal sources, such as family members and friends. 1. Word-of-mouth communication is personal informal exchanges of communication that customers share with one another about products, brands, and companies. a. Most customers are likely to be influenced by friends and family members when making purchases. b. Word-of-mouth communication is very important when people are selecting restaurants and entertainment along with automotive, medical, legal, banking, and personal services, such as hair care. B. Effective marketers who understand the importance of word-of-mouth communication attempt to identify opinion leaders and encourage them to try their products in the hopes that they will spread favorable publicity about them. C. Customers are increasingly going online for information and opinions about goods and services as well as about the companies. 1. Electronic word of mouth is communicating about products through websites, blogs, e-mail, social networks, or online forums. a. At consumer-oriented websites, consumers can learn about other consumers’ feelings toward and experiences with specific products. b. Users can also search within product categories and compare consumers’ viewpoints on various brands and models. 2. Electronic word-of-mouth communication is considered particularly important for consumers who wish to stay abreast of trends. Many websites set and report on trends and marketers increasingly must cater to these sites in order to garner positive reviews. D. An approach called buzz marketing is an attempt to incite publicity and public excitement surrounding a product through a creative event. 1. Buzz marketing works best as a part of an integrated marketing communication program that also uses advertising, personal selling, sales promotion, and publicity. 2. Marketers should take care that their buzz marketing events do not violate laws or have the potential to be misconstrued or cause undue alarm (for example, sidewalk paintings). E. Viral marketing is a strategy to get consumers to share a marketer’s message, often through e-mail or online videos such as YouTube, in a way that spreads quickly and dramatically. F. Word of mouth, no matter how it is transmitted, is not effective in all product categories. 1. It seems to be most effective for new-to-market and more expensive products. 2. Despite the obvious benefits of positive word of mouth, marketers must also recognize the potential dangers of negative word of mouth, particularly in dealing with online platforms which reach more people and encourage consumers to “gang up” on a company or product. VII. Product Placement A. Product placement is a form of advertising that strategically locates products or product promotions within entertainment media to reach the product’s target markets. B. In-program product placements have been successful in reaching consumers as they are being entertained rather than in the competitive commercial break periods. VIII. Criticisms and Defenses of Promotion A. A number of specific criticisms have been lodged against promotional activities. 1. There are two main reasons for such criticism: promotion does have flaws, and it is a highly visible business activity that pervades our daily lives. B. Is Promotion Deceptive? 1. Although no longer widespread, some deceptive or misleading promotion still occurs. 2. Laws, government regulation, and industry self-regulation have helped decrease deceptive promotion. C. Does Promotion Increase Prices? 1. Promotion is often blamed for higher prices, but if promotion is working to stimulate demand, producing and marketing larger quantities can actually help reduce prices. 2. Promotion can also help keep prices lower by facilitating price competition. 3. Research has found that advertising is not only related to economic growth but can also bring about economic growth D. Does Promotion Create Needs? 1. Critics of promotion claim promotion manipulates consumers by persuading them to buy products they do not need, but without promotion, many needs would still exist. 2. Marketing does not create needs, but capitalizes on them. E. Does Promotion Encourage Materialism? 1. Promotions are sometimes criticized for encouraging materialism. 2. Marketers assert that values are instilled at home and promotion does not change people into materialistic consumers. F. Does Promotion Help Customers Without Costing Too Much? 1. Critics question whether promotion helps consumers enough to be worth the costs. 2. Consumers do benefit, for promotions inform them about a product’s uses, features, advantages, prices, or purchase locations allowing them to make more intelligent buying decisions. G. Should Potentially Harmful Products Be Advertised? 1. Organizations are often criticized for promoting products associated with unhealthy activities. 2. Those who defend such promotion argue that as long as it is legal to sell a product, promoting it should also be allowed. DISCUSSION STARTERS Discussion Starter 1: Selling You the Brand Using IMC (integrated marketing communication) ASK: How could integrating marketing tools assist you in getting the job you want? Integrated marketing forces managers to pay attention to all of the various communication channels within the firm. They need to ensure that all of the various forms of communication deliver a consistent message and conveying the brand values to the consumers and the public. It is important to remember that everything can be a means of communicating. As students begin to think about interviewing for internships and positions, they also need to think about how they are going to communicate the values of their brand to their audience, the interviewer. Remember, little details matter. Every action you take, how you speak, how you dress, and whether or not you are on time all communicate information about your brand. In this video, you will learn how to best present you, the brand, to a potential employer. http://www.youtube.com/watch?v=R6FqxxYABvU&feature=related Discussion Starter 2: Web2.0 and Social Media ASK: How many of you use Facebook or Google+ every day? Given the increasing use of social media, such as Google+ and Facebook, marketing communication managers are striving to understand how to include these media in their IMC programs. What may come as second nature to a college student requires training for a manager accustomed to traditional marketing media. ASK: Why are organizations that use social media as part of the IMC program cautioned to have “a thick skin”? Since these are interactive and open forums, marketers will hear both the good and the bad about the organization and its brands. Not everyone loves every product, and those who have something against a product will not be shy about speaking up and expressing their opinions. Organizations need to understand their customers and be prepared to respond to criticism. Discussion Starter 3: Favorite Commercials ASK: What are your favorite print ads or television commercials? What works well and why? Pull up some of the ads on YouTube. Connect the examples with concepts from the promotion mix discussion from this chapter. Below is an advertisement from Honda that is very cleverly done and may be used as an example. http://www.youtube.com/watch?v=foJ2eT0BwZQ CLASS EXERCISES Class Exercise 1: Increasing Promotion Mix Effectiveness This exercise focuses on how components of the communication process influence the effectiveness of the promotion mix. Pose the exercise questions after the following activity: Bring a necktie to class for this exercise. Select a student volunteer who knows how to tie a necktie properly. Select another volunteer who knows nothing about tying a necktie. Ask the volunteers to stand back to back in front of the class. Give the tie to the second student, and ask the first student to explain how to tie the tie. Occasionally, you’ll have students who can communicate the procedure, but generally the second student is left wearing something less than a perfectly tied tie. Prompt for students: 1. What promotion mix element was this communication process most like? 2. What problems did the source have with the coding process? 3. How did noise affect the decoding process? 4. How is feedback different in a personal selling situation versus using mass communications? What are the pros and cons associated with each form? 5. How does channel capacity affect the ability to properly share meaning? Did the source (and other sources of noise) exceed the receiver’s ability to effectively decode all information? 6. How might it have helped if the source had been able to use kinesic and tactile communication? How might the receiver respond with proxemic communication? Answers: 1. This is personal selling in that immediate feedback was available and the source was trying to inform and persuade the receiver through personal communication. 2. As with many problems marketers have with producing meaningful ads and personal sales presentations, the source was very familiar with the uses of the product while the receiver was not. The source must consider the characteristics of the receiver. 3. Invariably, the students will laugh and make other distracting noises. The source may be using signs unfamiliar to the receiver (e.g., “Take one end and wrap it around the other end,” without specifying which end or how to wrap it), or the receiver’s perceptual processes may block it out (being in front of peers may change willingness or ability to decode information). 4. Personal selling provides immediate verbal and nonverbal feedback. This circular process allows the salesperson to adapt the presentation so that it is meaningful to the receiver. Conversely, feedback from advertising is often slow and difficult to recognize (even though the audience does often talk back to the television set). Advertisers may not recognize feedback until sales or attitudes change, which may take months during and after the campaign. The advantages of personal selling, then, are the feedback and greater individual impact, despite its high per-person cost. The absolute cost of advertising and poor feedback may preclude some from using it, but its cost efficiency, visibility, and image enhancement make it ideal for some products with mass appeal. 5. Often the first student will be trying to explain something while the second student is still trying to process the last command (and while the audience is offering their advice). 6. Demonstration with body language and touching would have helped. Class Exercise 2: Classifying Promotions This exercise should teach students that promotional efforts cannot always be easily and clearly classified into advertising, public relations, sales promotion, or personal selling. In the real business world, each category often overlaps with the others. Prompt for students: The promotion mix includes advertising, public relations, sales promotion, and personal selling. How would you classify each of the following promotion efforts? 1. McDonald’s uses television to tell consumers about how they can receive free french fries with the purchase of a Big Mac. 2. A Toyota salesperson tells customers about the quality of Michelin tires. 3. CNN has a story about Energizer’s latest ad campaign. The story features a commercial with the Energizer bunny. 4. Quaker Oats places an ad in Good Housekeeping magazine with a coupon attached. 5. A pharmaceutical salesperson leaves free samples with a physician. Answers: 1. Advertising and sales promotion 2. Personal selling 3. Publicity-based public relations 4. Advertising and sales promotion 5. Personal selling and sales promotion Class Exercise 3: Using Your IMC Tools In this chapter, you were introduced to an array of tools marketing managers use in IMC or integrated marketing communication. In this exercise, you will consider how each of these tools can be used to build a coherent brand message. Step 1: Identify all of the IMC components currently used by your university to attract student applicants. Step 2: Evaluate the effectiveness of each tool identified in step one. Step 3: Which tools, if any, do you feel the university could add to their IMC mix? How do you feel these tools will help better communicate with prospective students? Step 4: Write a memo to the university’s communications officer, evaluating how effectively you feel the university is using IMC to attract prospective students. Explain in detail what you feel they could do to improve. CHAPTER QUIZ 1. Face-to-face communication such as product sampling and personal selling provides marketers with a. the highest quality feedback. b. nonverbal feedback only. c. verbal feedback only. d. instant feedback. e. highly coded feedback. 2. In marketing communication terms, the speed of an Internet connection relates to a. decoding. b. feedback. c. encoding. d. noise. e. channel capacity. 3. The basic function of promotion is a. information. b. manipulation. c. communication. d. interpretation. e. image enhancement. 4. Promotion is communication that is a. managed. b. deceptive. c. persuasive. d. informal. e. product-related. Answers to Chapter Quiz: 1. d; 2. e; 3. c; 4. a SEMESTER PROJECT In this chapter, you learned about the variety of tools marketing managers use in IMC. In this exercise, you will examine how you can use each of these tools to effectively communicate information about your brand, you. Step 1: Identify all of the IMC components and list how you can use each of these components to communicate about your brand. Step 2: What themes, images, and colors will you use to unify your campaign across these components? Step 3: What IMC materials will you need to create? For example, will assets, such as a résumé, business cards, stationery, and website, be required? Step 4: What media channels will you use to communicate your message? Step 5: Develop your IMC portfolio containing all of your assets. ANSWERS TO ISSUES FOR DISCUSSION AND REVIEW 1. What does the term integrated marketing communications mean? Integrated marketing communications is the coordination of promotion and other marketing efforts to ensure the maximum informational and persuasive impact on customers. Coordinating multiple marketing tools so they have this kind of synergistic effect requires a marketer to employ a broad perspective. A major goal of integrated marketing communications is to send a consistent message to customers. Because various units both inside and outside of a company have traditionally planned and implemented promotional efforts, the messages customers received have not always been consistent. Integrated marketing communications provides an organization with a way to coordinate and manage its promotional efforts to ensure that customers do receive consistent messages. This approach fosters not only long-term customer relationships, but also the efficient use of promotional resources. 2. Define communication and describe the communication process. Is it possible to communicate without using all the elements in the communication process? If so, which elements can be omitted? Communication is a sharing of meaning. The communication process involves several steps. First, the source places the meaning into a code, a process sometimes called coding. The source must use signs familiar to the receiver or audience and refer to the same concepts or ideas. The coded message is sent through a medium of transmission to the receiver or audience. After the receiver or audience receives the message, the message is decoded and the receiver usually supplies feedback to the source. When the decoded message differs from what was encoded, a condition called noise exists. Communication is not possible without using all the elements in the communication process. 3. Identify several causes of noise. How can a source reduce noise? Noise may arise from faulty printing processes, interference or static in television or radio transmissions, laryngitis, or the use of unfamiliar signs which have multiple meanings. A source can reduce noise by employing familiar signs the audience or receiver uses to refer to concepts or ideas. Signs with multiple meanings are detrimental to the communication process because they result in noise. The choice of the proper medium of transmission is important to avoid noise that arises from reaching the wrong audience or from weak transmissions. 4. What is the major task of promotion? Do firms ever use promotion to accomplish this task and fail? If so, give several examples. The major task of promotion is to directly or indirectly communicate with individuals, groups, or organizations to facilitate exchanges by influencing one or more of them to accept the organization’s products. It is possible to use promotion to accomplish this objective and fail. Inconsistent communications or the use of nonessential information directed toward the organization’s audience could lead to failure. Students should be able to provide examples of these occurrences, such as promotion directed toward them for expensive or luxury items in which they have no interest or cannot afford. Items such as champagne, luxury cars, or gourmet restaurants could represent this type of failure in communication. 5. Describe the possible objectives of promotion and discuss the circumstances under which each objective might be used. Promotional objectives vary widely from one organization to another and within organizations over time. A considerable amount of promotion is directed at creating awareness of new products, new brands, or brand extensions. Creating awareness is important for existing products when marketers want to increase brand awareness, product feature awareness, awareness of image-related issues, or awareness of operational characteristics. When an organization is the first to introduce an innovative product, it uses pioneer promotion to stimulate primary demand. Primary demand is demand for a product category rather than for a specific product. To build selective demand, demand for a specific product, marketers employ promotional efforts based on the strengths and benefits of a specific brand. When customers stall during the evaluation stage of the product adoption process, marketers use certain kinds of promotions to encourage product trial. The objective of some promotional activities is to identify prospective customers who are interested in the firm’s products and are most likely to buy. Because the costs of retaining customers are usually much lower than those of acquiring new ones, one objective of promotion is to retain loyal customers. Using some promotional methods helps organizations maintain strong relationships with resellers, which is critical to maintaining a competitive advantage. Sometimes marketers use promotions to offset or combat the effects of a competitor’s promotional program. These types of programs are most commonly used by organizations in extremely competitive consumer products markets. Finally, promotional techniques are used to increase sales during slow periods, thereby reducing sales fluctuations. 6. Identify and briefly describe the four promotional methods an organization can use in its promotion mix. Advertising is a paid form of non-personal communication about an organization and/or its products which is transmitted to a target audience through a mass medium. Personal selling is informing customers and persuading them to purchase products through personal communication in an exchange situation. Sales promotion is an activity and/or material that acts as a direct inducement, offering resellers, salespeople, or consumers added value or incentive for the product. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its publics. Public relations tools can include reports, brochures, and event sponsorship. Publicity, which is part of public relations, is non-personal communication in news story form about an organization, its products, or both that is transmitted through a mass medium at no charge. 7. What forms of interpersonal communication besides language can be used in personal selling? Communication may be accomplished through the use of kinesic, proxemic, or tactile communication. Kinesic communication is body language. Proxemic communication involves varying the physical space between the parties involved in communication. Tactile communication involves touching, such as handshaking. 8. How do target market characteristics determine which promotional methods to include in a promotion mix? Assume a company is planning to promote a cereal to both adults and children. Along what major dimensions would these two promotional efforts have to differ from each other? Market characteristics which influence the composition of the promotion mix include the size, geographic distribution, and demographic characteristics of the market. If a company was promoting a cereal to both adults and children, it would use different advertising and sales promotion efforts for each market. Advertising appeals to children might include cartoon characterizations of the cereal, and the sales promotion might include a small toy. In the adult market, such methods would not be suitable; nutritional information, recipes, or a contest might be appropriate. 9. How can a product’s characteristics affect the composition of its promotion mix? Both the type of product being promoted and the characteristics of that product affect the composition of the promotion mix. Whether the product is a business or consumer good will affect the composition of the promotion mix. Whether a consumer good is a durable or nondurable good is another factor. Product characteristics such as seasonality, price, stage of the product’s life cycle, intensity of distribution of the product, and uses of the product are also determinants of the promotion mix. 10. Evaluate the following statement: “Appropriate advertising media are always available if a company can afford them.” Availability of media is an important consideration in the formulation of a promotion mix. Even given the large number of media vehicles available, it may be difficult to reach a target market. A small, highly specialized market is difficult to reach with any degree of certainty through mass media. In addition, some geographic areas may not be accessible through the use of media. 11. Explain the difference between a pull policy and a push policy. Under what conditions should each policy be used? A pull policy aims promotional efforts directly at consumers with the intention of developing a strong demand for the product. A push policy aims promotional efforts only at the next institution down the marketing channel. A pull policy is sometimes used to introduce convenience goods. A push policy often is used to promote items such as business goods and consumer durables. 12. In which ways can word-of-mouth communication influence the effectiveness of a promotion mix for a product? Word-of-mouth communication is personal informal exchanges of communication customers share with one another about products, brands, and companies. Effective marketers who understand the importance of word-of-mouth communication attempt to identify opinion leaders and encourage them to try their products in the hope that they will spread favorable comments about them. Two ways they are doing so are through buzz marketing and viral marketing. Buzz marketing is an attempt to create a trend or acceptance of a product through word-of-mouth communications, while viral marketing is a strategy to get Internet users to share ads and promotions among friends. 13. Which criticisms of promotion do you believe are the most valid? Why? This is an open-ended question, and students’ opinions will vary. In any discussion of this question, it is important to facilitate a balanced view of promotion, giving equal weight to criticisms as well as defenses. 14. Should organizations be allowed to promote offensive, violent, sexual, or unhealthy products that can be legally sold and purchased? Support your answer. This is an effective question for raising the issue of what is legal and what is ethical with regard to promotional activity. Some of the possible concerns students should consider: a) Does restriction of advertising to appropriate audiences constitute censorship? b) How does the age of the target market relate to how ethical or unethical promotions are? There is a difference between promoting products to children and promoting products to informed adults. ANSWERS TO MARKETING APPLICATIONS 1. The overall objective of promotion is to stimulate demand for a product. Through television advertising, the American Dairy Association promotes the benefits of drinking milk, a campaign that aims to stimulate primary demand. Advertisements for a specific brand of milk focus on stimulating selective demand. Identify two television commercials, one aimed at stimulating primary demand and one aimed at stimulating selective demand. Describe each commercial and discuss how each attempts to achieve its objective. Students’ examples will vary, but they should support their answers with solid explanations. Primary demand refers to demand for a product category rather than for a specific brand of product—through pioneer promotion. Selective demand refers to demand for a specific brand, a marketer employs promotional efforts that point out the strengths and benefits of a specific brand. 2. Developing a promotion mix is contingent on many factors, including the type of product and the product’s attributes. Which of the four promotional methods—advertising, personal selling, public relations, or sales promotion—would you emphasize if you were developing the promotion mix for the following products? Explain your answers. a. Washing machine b. Cereal c. Halloween candy d. Compact disc While certain products are better suited to certain promotional methods, encourage students to be creative. Almost all of the products could benefit from advertising because they can be targeted to a variety of demographics through several different mediums. Personal selling works well for high end products, such as washing machines. Public relations involve interactions between an organization and its stakeholders, which might be necessary for candy because consumers consider it to be unhealthy. All the products could use sales promotion to create an added incentive. 3. Suppose marketers at Falcon International Corporation have come to you for recommendations on how to promote their products. They want to develop a comprehensive promotional campaign and have a generous budget with which to implement their plans. What questions would you ask them, and what would you suggest they consider before developing a promotional program? Students’ answers will vary widely, but they should use the “Selecting Promotion Mix Elements” section in the text as an outline for their questions. This includes establishing the company resources, objectives, and policies; the characteristics of the desired target market; the characteristics of their product and their brand; costs and availability of promotional methods; and their desire for a push channel or a pull channel policy. 4. Marketers must consider whether to use a push or a pull policy when deciding on a promotion mix (see Figure 15.4). Identify a product for which marketers should use each policy and a third product that might best be promoted using a mix of the two policies. Explain your answers. Students’ answers will vary based on the products they choose. A firm that uses a pull policy promotes the product only to the next institution down the marketing channel through personal selling. A firm that uses a pull policy promotes directly to consumers to develop strong consumer demand for its products, primarily through advertising and sales promotion. 5. The SMART car was launched in the United States in 2008, thereby establishing the American “micro-car” category. Sales of SMART cars to date have not met expectations, but the introduction of the iQ from Scion and plans for small vehicles at Toyota, Hyundai, and other car manufacturers suggest that the micro-car category is not going away. An ongoing challenge for the manufacturers of micro-cars, however, is overcoming the rumors that circulate about the miniscule machines, notably the idea that micro-cars are unsafe and useless without a back seat. Develop a very simple questionnaire of four to five items and survey 10 to 15 friends or family members about their beliefs on micro-cars. Based on this information, develop a budget in terms of percentage of sales revenue to be spent for advertising, personal selling, sales promotion, and public relations. Students’ answers will vary based on their survey results, which should help them match consumer opinions of micro-cars to specific promotion methods. 6. Develop your analytical and communication skills using the Role-Play Exercises Online at www.cengagebrain.com. Students can visit the website and develop their analytical and communication skills. ANSWERS TO INTERNET EXERCISE Myspace Myspace is not just for friends. It is also a unique promotional platform for musical artists, especially unsigned and independent artists. By creating a Myspace page, musicians can share their songs, post important dates, or even blog. Myspace music pages are different from record company websites because they feel more personal. Artists also take advantage of MySspace’s viral nature by allowing other Myspace members to post their pictures, songs, and music videos on their own Myspace profile pages. Visit the website at http://music.myspace.com, and look for your favorite artist or discover a new one. 1. Who is the target market for members? Myspace’s target market is musicians who wish to share their music with other members as well as people who are interested in music. 2. What is being promoted to these individuals? For musicians, Myspace is offering them a chance to “be discovered” when members listen to their music, find information about their tour dates, and share songs. For music lovers, Myspace provides a way to listen to music for free and find new artists and bands to follow. 3. What are the promotional objectives of this website? Students should look at Table 15.2 for objectives of promotion. For Myspace, the primary objectives are to create awareness, retain customers, stimulate demand, and combat competitive promotional efforts. 4. Is word-of-mouth communication occurring at this website? Explain. Word-of-mouth communication is personal, informal exchanges of communication that customers share with one another about products, brands, and companies. When Myspace members interact with each other and promote each others’ music, they are engaging in world-of-mouth communication. ANSWERS TO DEVELOPING YOUR MARKETING PLAN The information obtained from these questions should assist students in developing various aspects of their marketing plan found in the Interactive Marketing Plan exercise at www.cengagebrain.com. 1. Review the communication process in Figure 15.1. Identify the various players in the communication process for promotion of your product. Students should think about all the potential individuals and organizations who might be involved in communications regarding their product—from manufacturer, to distributor, to wholesalers and retailers, to end consumers. They should also think about advertisements and marketing efforts and how different audiences might interpret these messages. 2. What are your objectives for promotion? Use Table 15.2 as a guide in answering this question. Students’ answers will differ depending on the product they chose. Whether it is a new good, new service, or an established good or established service will affect objectives for promotion. The intended target audience will also change promotional objectives. Likely, all students will share the objective of increasing market share and profitability. 3. Which of the four elements of the promotional mix are most appropriate for accomplishing your objectives? Discuss the advantages and disadvantages of each. The four elements of the promotion mix are advertising, personal selling, public relations, and sales promotion. Students’ answer will vary depending on which of the four elements are most appropriate for accomplishing their particular objectives. However, most marketers will find that a combination of all of the promotion mix elements will be necessary at some point when promoting a product. 4. What role should word-of-mouth communications, buzz marketing, or product placement play in your promotional plan? Word-of-mouth communications, buzz marketing, and product placement are all increasingly important elements of a promotional plan. Students will likely find all three of these to be essential elements of their promotional efforts as they seek to market their products. Word-of-mouth communications and particularly buzz marketing can be valuable parts of a promotional strategy for a new product because they tend to be relatively lower in cost than other means of promotion. COMMENTS ON VIDEO CASE 15: FRANK PEPE’S PIZZERIA NAPOLETANA USES POSITIVE WORD-OF-MOUTH TO BECOME A PREMIERE PIZZERIA Summary This case discusses how a pizzeria successfully uses integrated marketing communication. Positive word-of-mouth marketing about the company’s products has increased its customer base. The pizzeria uses personal selling to communicate the value of its products when customers enter the store. It also uses advertising such as direct mail and digital marketing on sites like Facebook and Twitter. A major form of sales promotion that the pizzeria uses is free pizza the week before opening a new store. Finally, the company makes use of public relations through fundraisers and donations. Frank Pepe’s Pizzeria Napoletana has become an expert at using all four parts of the promotion mix to attract customers. Questions for Discussion 1. What are the various promotion elements that Pepe’s uses to communicate with customers? Pepe’s uses personal selling to communicate the value of its products when customers enter the store. It also uses advertising such as direct mail and digital marketing on sites like Facebook and Twitter. A major form of sales promotion that the pizzeria uses is free pizza the week before opening a new store. The company also makes use of public relations through fundraisers and donations. These different components coupled with a premium product and quality experience has led many customers to tell others about the company (word-of-mouth marketing). 2. What role does word of mouth play in Pepe’s integrated marketing communications? Word-of-mouth marketing is one of the strongest forms of marketing because consumers tend to trust other consumers. Pepe’s uses a combination of strong customer relationships, premium product offerings, and strong integrated marketing to create customer satisfaction. These satisfied customers often tell their friends and family about their positive experience with Pepe’s, leading to additional customers. 3. Evaluate free pizza as a form of sales promotion in Pepe’s success. Pepe’s provides a week of free pizza before opening a new location. This allows the company to attract new customers who might not have known about Pepe’s before and also helps employees to break in new ovens and become familiar with Pepe’s culture. Not only does this form of sales promotion allow customers to try Pepe’s quality product, but it also builds goodwill and a positive image among the community. Solution Manual for Foundations of Marketing William M. Pride, O. C. Ferrell 9781305361867, 9781305405769, 9780357033760
Download
Close
Close
