Pride/Hughes/Kapoor Business, 109th Edition

Audio Review Transcript

Chapter 156 Developing Integrated Marketing Communications

1. Describe integrated marketing communications

Promotion is communication about an organization and its products, which is

intended to inform, persuade, or remind target-market members. The particular

combination of promotion methods a firm uses to reach a target market is called its

promotion mix or marketing communications mix. Advertising, personal selling, sales

promotion, and public relations may be combined in varying degrees to achieve

marketing and organizational goals. Integrated marketing communications is

coordination of promotion efforts to ensure maximum informational and persuasive

impact on customers. Until recently, suppliers of marketing communications were

specialists—advertising agencies did advertising campaigns, sales promotion firms

provided sales promotion activities, and public relations firms engaged in PR efforts. (LO

1 ends)

2. Understand the role of promotion

Promotion's basic role is to facilitate exchanges directly or indirectly by informing

individuals, groups, or organizations and influencing them to accept a firm’s products or

to have more positive feelings about the firm. How does promotion accomplish this? By

combining the elements of a promotion mix to best get the message to the target market.

The promotion mix contains four elements: (1) advertising is a paid, non-personal

message communicated to a select audience through a mass medium; (2) personal selling

is personal communication aimed at informing customers and persuading them to buy a

firm’s products; (3) sales promotion is the use of activities or materials as direct

inducements to customers or salespersons; and (4) public relations are communication

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activities used to create and maintain favorable relations between an organization and

various public groups, both internal and external. (LO 2 ends)

3. Explain the purpose of the three types of advertising

Of all the elements in the promotion mix, advertising is the most visible.

Advertising may be classified in one of three ways: primary demand, selective demand,

or institutional. The purpose of primary-demand advertising is to increase the demand for

all products within a given industry, such as milk, orange juice, or pork. Selective

demand (or brand) advertising is used to sell a particular brand of product and is by far

the most common type. Within this category is advertising aimed at persuading people to

make purchases within a short time, called immediate-response advertising, and

advertising aimed at keeping a firm’s name or product before the public, called reminder

advertising. Comparative advertising looks at the specific features of two or more

identified brands. The last type, institutional advertising, is used to enhance a firm’s

image or reputation. (LO 3 ends)

4. Describe the advantages and disadvantages of the major advertising media

Firms use advertising media, various forms of mass communication to reach their

audience. Newspaper advertising accounts for about 137.74% of all advertising

expenditures, the vast majority of which is bought by local retailers. Newspaper

advertising is relatively inexpensive and targeted locally; on the downside, though, it has

a short life span, color reproduction is not high quality, and it can’t target specific

demographic groups effectively.

Magazine advertising accounts for about 4.97% of advertising expenditures.

Advertisers can reach very specific market segments using magazines. Other advantages

include high-quality color reproduction and a longer life span; but the cost is much higher

and they lack timeliness.

Direct-mail advertising is promotional material mailed directly to individuals.

Some organizations use direct e-mail. It is the most selective medium, although its

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success depends on up-to-date mailing lists. It is relatively costly, and accounts for

almost 210.75% of all expenditures.

Yellow pages advertising, consisting of simple listings or display advertisements

presented under specific product categories appears in both print and online telephone

directories. An advantage of Yellow Pages advertising is that customers use it to save

time in finding products, to find information quickly, and to learn about products and

marketers. Unlike other types of advertising media, Yellow Pages advertisements are

purchased for one year and cannot be changed. In 20085, advertisers spent $14.2 billion

on yellow-pages advertising, which accounts for about 5.02% of total advertising

expenditures. Approximately 85 percent of yellow pages advertising space is used by

local advertisers instead of national advertisers.

Out-of-home advertising consists of short promotional messages on billboards,

posters, signs, and transportation vehicles. It accounts for about 2.2% of advertising

expenditures. It allows a marketer to focus geographically and it is inexpensive, but the

message must be limited to a few words.

Television ranks first in advertising revenue, with almost 25% of advertising

expenditures. TV provides advertisers with considerable access to consumers. Firms may

buy network time, which means their messages will be broadcast by hundreds of stations,

or local time on a single station that covers a particular geographic area. Advertisers may

sponsor an entire show, participate with other sponsors, or buy spot time for a single

commercial between programs. Marketers also may pay a fee to have a product appear in

a TV program or movie, an activity called product placement. Another option is an

infomercial, a program-length televised commercial message resembling an

entertainment or consumer affairs program. Television advertising is expensive, both to

buy time as well as to prepare the ad. It also has a very short life span.

Radio accounts for about 6.67.4% of advertising expenditures. Radio can be used

selectively and can be less expensive than other media. The disadvantages are the lack of

visual images and small audience size.

The last medium is also the newest: the Internet, which accounts for 4.1 2. 9 % of

total advertising expenditures and is growing. The most common type is the banner ad, a

rectangular graphic that may contain interactivity and animation at the top of most

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consumer websites. Other types include the sponsorship or co-branded ad, which

contains the firm’s name and editorial content; and the interstitial ad, which pops up

when a viewer clicks on a website. Disadvantages include the relatively simplistic nature

of the ads that can be produced and the lack of evidence that net browsers actually pay

attention to the ads. (LO 4 ends)

5. Identify the major steps in developing an advertising campaign

An advertising campaign includes 8 steps. Step 1 is identifying and analyzing the

target audience. The target audience is the group of people toward which a firm’s

advertisements are directed. Step 2 is defining the advertising objectives. The objectives

should include the firm’s current position, indicate how far and in what direction the

company wishes to go, and specify a time period to achieve the goals. Step 3 is creating

the advertising platform. An advertising platform includes the important selling points or

features that an advertiser wants to emphasize. Step 4 is determining the advertising

appropriation. This is the total amount of money designated for advertising in a given

period. Step 5 is developing the media plan. A media plan specifies exactly which media

will be used and when the advertisements will appear. Step 6 is creating the advertising

message. The content and form of a message are influenced by the product’s features, the

characteristics of the target market, the objectives of the campaign, and the choice of

media. Step 7 is executing the campaign. This requires extensive planning, scheduling,

and coordination because many tasks must be completed on time. And finally, Step 8 is

evaluating advertising effectiveness. Success should be measured in terms of the original

objectives, before, during, and /or after the campaign.

In order to help coordinate all these activities, a firm may hire an advertising

agency, an independent firm that plans, produces, and places advertising for its clients.

Although some critics claim that advertising is wasteful and deceptive, evidence

points to the contrary. Among advertising benefits are that it is the most effective and

least expensive means of communicating product information, it encourages competition,

it pays for much of our news coverage and entertainment programming, and it provides

many and varied job opportunities. (LO 5 ends)

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6. Recognize the various kinds of sales persons, the steps in the personal selling process,

and the major sales management tasks

The second element in the promotional mix is personal selling. This is the most

adaptable method of marketing communication because the person who is presenting the

message can modify it to suit the individual buyer. There are several kinds of

salespersons. An order getter is responsible for selling the firm’s products to new

customers and increasing sales to present customers. This is sometimes called creative

selling. In contrast, an order taker handles repeat sales in ways that maintain positive

relationships with customers. Depending on the firm, inside order takers may receive

incoming mail and telephone orders, or they may be salespersons in retail stores. Outside,

or field order takers travel to customers. Order takers often produce most of their firms’

sales. Sales support personnel aid in selling but are more involved in locating prospects,

educating customers, building goodwill for the firm, and providing follow-up service.

These support personnel include the missionary salesperson, who is generally employed

by the manufacturer, and who visits retailers to persuade them to buy the manufacturer’s

products; the trade salesperson, who is generally employed by a food producer or

processor, and who assists customers in promoting products, especially in retail stores;

and the technical salesperson, who assists the company’s current customers in technical

matters.

Though no two selling situations are exactly alike and no two salespeople perform

in exactly the same way, most follow a six step procedure. (1) prospecting, (2)

approaching the prospect, (3) making the presentation, (4) answering objections, (5)

closing the sale, and (6) following up.

Sales managers are responsible for facilitating the efforts of the sales force by

hiring and training effective salespeople, setting objectives for them, developing a

training program, formulating a fair compensation plan, and motivating them. They are

also responsible for creating sales territories and evaluating sales performance. (LO 6

ends)

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7. Describe sales promotion objectives and methods

The third component of the promotion mix is sales promotion, the activities or

materials that are direct inducements to customers or salespersons. Generally, the

objectives of sales promotion are to draw new customers, to encourage trial purchases of

a new product, to invigorate sales of a mature brand, to boost sales to current customers,

to reinforce advertising, to increase traffic in retail stores, to steady irregular sales

patterns, to build up reseller inventories, to neutralize competitive promotional efforts,

and to improve shelf space and displays. They accomplish this by using one or more of

the several promotional methods available to them. Most of these methods or techniques

are either consumer sales promotion methods that they are designed to attract consumers

to particular retail stores and motivate them to purchase certain new or established

products; or trade sales promotion methods, which are designed to encourage wholesalers

and retailers to stock and actively promote a manufacturer’s product.

Marketers may use one or more of several promotional methods. A rebate is a

return of part of the purchase price of a product. A coupon reduces the retail price of a

particular item by a stated amount at the time of purchase. A sample is a free product

given to customers to encourage trial and purchase. A premium is a gift that a producer

offers the customer in return for buying its product. A frequent-user incentive is a

program developed to reward customers who engage in repeat or frequent purchases. A

point-of-purchase display is promotional material placed within a retail store. It may hold

merchandise or inform customers about the features of the product and encourage them to

buy it. A trade show is an industry-wide exhibit at which many sellers display their

products. A buying allowance is a temporary price reduction to resellers for purchasing

specified quantities of a product. Finally, cooperative advertising is an arrangement

whereby a manufacturer agrees to pay a certain amount of the retailer’s media cost for

advertising the manufacturer’s product. (LO 7 ends)

8. Understand the types and uses of public relations

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The fourth and final component of the promotion mix is public relations, the

broad set of activities used to create and maintain favorable relationships between the

organization and various public groups , both internal and external. . PR professionals

prepare brochures, newsletters, company magazines, annual reports, and news releases.

Other tools include speeches and event sponsorship.

Some PR tools are associated with publicity, which is communication in news-

story form about an organization, its products, or both. Publicity is transmitted through

the mass media at no charge. The most common type of publicity is the news release, a

typed page of about 300 words provided by an organization to the media as a form of

publicity. Other publicity tools are the feature article, a piece (of up to 3,000 words),

prepared by an organization for inclusion in a particular publication; a captioned

photograph, a picture accompanied by a brief explanation; and a press conference, a

meeting at which invited media personnel hear important news announcements and

receive supplementary textual materials and photographs. Public relations can be used to

enhance the reputation of an organization and also to reduce the unfavorable effects of

negative events. (LO 8 ends)

9. Identify the factors that influence the selection of promotion-mix ingredients

How do marketers select promotion mix ingredients? They develop a promotional

campaign. A promotional campaign is a plan for combining and using the four

promotional methods: advertising, personal selling, sales promotion, and public relations,

in a particular promotion mix to achieve one or more marketing goals. Marketing

objectives that can be satisfied by promotional activities include (1) providing

information, (2) increasing market share, (3) positioning a product, which is developing a

product image in buyers’ minds relative to the images they have of competing products,

and (4) stabilizing sales. Factors that can influence the selection of promotion mix

elements include the budget, organizational objectives, the characteristics of the target

market or markets, and the availability of certain promotional methods. (LO 9 ends)

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