W6 Case Discussion
Principles of Marketing 4.0
Jeff Tanner and Mary Anne Raymond
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CHAPTER 11
Integrated Marketing Communications and Traditional Media Marketing
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LEARNING OBJECTIVES
Understand the meaning of integrated marketing communications (IMC).
Understand why organizations may change their promotional strategies to reach different audiences.
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INTEGRATED MARKETING COMMUNICATIONS
Integrated marketing communications (IMC) provide an approach designed to deliver one consistent message to buyers through an organization’s promotions.
Integrated marketing communications have become so important because of changes in communication technology and instant access to information through tools such as the Internet and use of social media.
With IMC, organizations can coordinate their messages to build the brand and develop strong customer relationships while also helping customers satisfy their needs.
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CHANGING MEDIA
As the media landscape changes, the money organizations spend on different types of communication will change as well.
Some forecasts indicate that companies will spend almost 27 percent of their total promotional budgets, or $160 billion on electronic or non-traditional media by 2012.
The use of mobile marketing and out-of-home advertising for promotions has gained popularity.
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KEY TAKEAWAYS
As the media landscape changes, marketers may change the type of promotions they use in order to reach their target markets.
With changing technology and social media (e.g., Facebook), less money is being budgeted for traditional media such as magazines and more money is budgeted for “non-traditional media.”
Regardless of the type of media used, marketers use integrated marketing communications (IMC) to deliver one consistent message to buyers.
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LEARNING OBJECTIVES
Understand the different components of the promotion (communication) mix and why organizations may consider all components when designing the IMC program.
Outline the differences between types of communication that target many people simultaneously versus the types of communication that target individuals.
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PROMOTIONAL MIX ELEMENTS
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Advertising
Consumer sales promotion
Trade promotions
Direct marketing
Professional selling
ADVERTISING
Media used:
Television
Magazines and newspaper
Internet
Direct mail
Radio
Mobile devices
Social media—Facebook, blogs, Twitter
PAYING TO DISSEMINATE A MESSAGE THAT IDENTIFIES A BRAND (PRODUCT OR SERVICE) OR THE ORGANIZATION BEING PROMOTED TO MANY PEOPLE AT ONE TIME
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CONSUMER SALES PROMOTIONS
They are often called trade promotions in B2B marketing because they are targeted to channel members who conduct business or trade with consumers.
Direct marketing: the delivery of personalized promotional materials to consumers via mail, catalogs, Internet, e-mail, telephone, and direct-response advertising.
SHORT-TERM INCENTIVES SUCH AS COUPONS, CONTESTS, GAMES, REBATES, AND MAIL-IN OFFERS THAT SUPPLEMENT THE ADVERTISING AND SALES EFFORTS
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PROFESSIONAL SELLING
Professional selling is more often used by business-to-business marketers than by business-to-consumer marketers.
INTERACTIVE, PAID APPROACH TO MARKETING THAT INVOLVES A BUYER AND A SELLER
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SPONSORSHIPS
Sponsorships enhance a company’s image and usually generate public relations.
Public relations: communication designed to improve and to promote the image and products of an organization.
With an increasing amount of money being spent on sponsorships, they have become an important component of the promotion mix.
FINANCIAL SUPPORT FOR EVENTS, VENUES, OR EXPERIENCES AND PROVIDE THE OPPORTUNITY TO TARGET SPECIFIC GROUPS
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KEY TAKEAWAYS
Technology is changing the way businesses and individuals communicate.
Organizations use Integrated Marketing Communications (IMC) to deliver a consistent message across all components of the promotion mix.
The promotion (communication) mix is composed of advertising, professional selling, public relations, sponsorships (events and experiences), sales promotion, direct marketing, and online media, including social media.
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LEARNING OBJECTIVES
Understand that different factors can affect the promotion mix.
Understand the communication process.
Understand different types of message problems.
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FACTORS THAT INFLUENCE SELECTION OF PROMOTION MIX
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THE COMMUNICATION PROCESS
The perceptual process: how a person decides what to pay attention to and how to interpret and remember different things, including information in advertising.
The communication process: illustrates how messages are sent and received.
Interference, or noise, can distort marketing messages.
Purchasing a product provides the sender with feedback, which often tells the seller that you saw information and wanted to try the product.
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THE COMMUNICATION PROCESS
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KEY TAKEAWAYS
Many factors, such as a firm’s marketing budget, the type of product, regulations, target customers, and competitors, influence what composes the promotion mix.
Depending on what medium is used, marketers use the communication process to encode or translate ideas into messages that can be correctly interpreted (decoded) by buyers.
However, marketers must determine how to get consumers’ attention and avoid as much interference and noise as possible.
Perceptual processes include how a person decides what to pay attention to and how to interpret and remember different things.
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LEARNING OBJECTIVES
Understand what a unique selling proposition is and how it is used.
Understand different types of promotion objectives.
Identify different message strategies.
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UNIQUE SELLING PROPOSITION (USP)
A unique selling proposition, or USP, is a specific benefit that consumers will remember.
When deciding on a message strategy, organizations must consider:
the audience
the objectives of the promotion
the media
the budget
the USP
the product
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PROMOTION OBJECTIVES
Demand for a product category is termed primary demand.
Demand for a specific brand is termed selective demand.
The AIDA model includes several different promotion objectives, including attention, interest, desire, and action.
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MESSAGE CHARACTERISTICS
Some of the common advertising appeals are humorous, emotional, frightening (fear), rational (informative), and environmentally conscious.
An open-ended message allows the consumer to draw his or her own conclusion.
A closed-ended message draws a logical conclusion.
The beginning and the end of the message should be strong and include the brand name.
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KEY TAKEAWAYS
Organizations must determine promotion objectives, or what they want to accomplish with their promotions.
For example, if a company has a new brand they may want to generate awareness or attention.
Later, they may focus on persuading customers to buy their brand.
Each brand needs to have a unique selling proposition (USP) for customers to remember and want their product.
Depending on their objectives and their USP, marketers must develop a message strategy.
Some companies prefer humor or rational appeals while others may use a fear appeal.
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LEARNING OBJECTIVES
Understand the different ways in which promotion budgets can be set.
Understand how the budget can be allocated among different media.
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THE PROMOTION BUDGET
Percent of last year’s sales method: A budgeting technique based on a set percentage of current or projected sales.
Affordable method: A budgeting technique whereby companies spend what they think they can afford promoting a product.
Competitive parity method: A budgeting method whereby companies make sure their promotion budgets are comparable to their competitors’.
Objective and task method: A budget based on a company’s promotion objectives and the costs of the activities and tasks necessary to accomplish those objectives.
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THE PROMOTION BUDGET
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THE PROMOTION BUDGET
Part of the budgeting process includes deciding how much money to allocate to different media.
Mobile marketing continues to become more popular as a way to reach specific audiences.
Spending on mobile ads is expected to grow 80 percent from $1.45 billion in 2011 to $2.61 billion in 2012 . A big part of the growth is due to the mobile search business of Google.
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KEY TAKEAWAYS
Companies can determine how much to spend on promotion several different ways.
The percent of sales method, in which companies use a set percentage of sales for their promotion, is often the easiest method to use.
Small companies may focus on what they think they can afford while other organizations may try to keep their promotions relatively equal to their competitors’.
The objective and task approach takes objectives into consideration and the costs of the tasks necessary to accomplish objectives in order to determine the promotion budget.
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LEARNING OBJECTIVES
Understand the difference between media and vehicles.
Explain the similarities and differences between advertising and direct marketing.
Understand the benefits of direct marketing and what types of direct marketing organizations often utilize.
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ADVERTISING, MEDIA, VEHICLE
Advertising: paid promotion that has an identified sponsor and reaches many people at one time.
Media: the general types of communication (television, radio) available for advertisers.
Vehicle: the specific means, such as a particular magazine or a specific television show, within a medium to reach a selected target market.
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DIRECT MARKETING
It can be personalized and ask consumers to make a call to action, which is a desired response.
However, direct marketing is very intrusive and many consumers may ignore attempts to reach them.
ALLOWS ORGANIZATIONS TO TARGET A SPECIFIC SET OF CUSTOMERS, MEASURE THE RETURN ON INVESTMENT, AND TEST DIFFERENT STRATEGIES BEFORE IMPLEMENTING TO TALL TARGETED CONSUMERS
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TELEMARKETING
Telemarketing can be extremely effective for charitable organizations and different service firms and retailers.
Because some consumers have negative perceptions of telemarketers many organizations do not use it.
The Do Not Call Registry prevents calling to phone numbers registered with the Federal Trade Commission.
INVOLVES DIRECT MARKETING BY PHONE
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DIRECT RESPONSE MARKETING
They want consumers to call to purchase the product or to get more information.
The Internet provides the preferred direct-response medium for direct marketing because it is less expensive and easier for the organization to utilize.
INCLUDES AN OFFER AND A CALL TO ACTION
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KEY TAKEAWAYS
Advertising is paid for communication that has an identified sponsor and reaches many people at one time.
Once companies decide on different media (e.g., magazines or television), they must also select specific vehicles (e.g., Sports Illustrated or the Super Bowl), Direct marketing allows organizations to target specific individuals and use direct response advertising.
Telemarketing, the Internet, direct mail, and catalogs are popular direct marketing methods.
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LEARNING OBJECTIVES
Understand the concept of public relations and why organizations allocate part of their promotional budgets to it.
Understand what the different types of public relations tools are.
Explain how sponsorships work.
Explain what a product placement is.
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PUBLIC RELATIONS
Good public relations efforts can help a firm create rapport with its customers, promote what it has to offer, and supplement its sales efforts.
Puts a positive spin on news stories and is often perceived as more neutral and objective than other forms of promotion.
Public relations materials include:
Press releases
Publicity
News conferences
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PUBLIC RELATIONS
Many organizations that engage in public relations have in-house PR departments, media relations groups, or investor relations groups.
Other organizations sometimes hire external PR firms or advertising agencies to find and create public relations opportunities for them.
PR specialists must build relationships with people at different media outlets to help get their stories placed.
PR specialists also help political campaign managers generate positive information in the press.
They handle crisis communication and put a positive view on situations when something bad happens to an organization or person.
In foreign markets, PR agencies may help ensure product concepts are understood correctly.
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PRESS RELEASES
Public relations personnel prepare press releases hoping that the news media will pick them up and disseminate the information to the public.
There is no guarantee that the media will use a press release.
Some of the PR opportunities that companies may seek to highlight include charity events, awards, new products, company reports, and things they are doing to improve the environment or local community.
NEWS STORY WRITTEN BY AN ORGANIZATION TO PROMOTE A PRODUCT, ORGANIZATION, OR PERSON
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PRESS RELEASES
Press releases and other PR activities can also be used for damage control purposes.
Crisis communication: the process of countering the negative effects of bad publicity.
Just as press releases can be used to promote the good things an organization or person does, press conferences can also be held when a company is simply seeking good PR.
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ONLINE REPUTATION MANAGEMENT
Online reputation management (ORM): monitoring what’s being said online about your company in order to influence people’s perceptions.
Can be used to:
Dispute false information and bogus reviews.
Enhance the firm’s reputation (avoid paying for positive reviews).
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SPONSORSHIPS
A sponsorship involves paying a fee to have your name associated with different things, such as the following:
A particular venue (Wrigley Field, the Staples Center)
A superstar’s apparel (Tiger Woods wearing Nike hats and shirts)
An event (the AT&T National Golf Tournament, the Chick-fil-A Peach Bowl)
A cause (M&M’s sponsorship of the Special Olympics)
An educational workshop or information session
A NASCAR vehicle (by Pfizer, the maker of Viagra)
Over two-thirds of the sponsorships in North America are for sports, followed by entertainment and causes.
Cause-related marketing: one of the fastest-growing types of sponsorships.
It occurs when a company supports a nonprofit organization in some way.
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PRODUCT PLACEMENTS
Typically, a company pays a fee to have one of its products placed, though it may be free if it’s part of the plot.
As consumers continue to skip commercials and advertisements with DVRs, the number of product placements is expected to increase.
GETTING A COMPANY’S PRODUCT INCLUDED AS PART OF A TELEVISION SHOW, MOVIE, VIDEO GAME, SPECIAL EVENTS, OR BOOK
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KEY TAKEAWAYS
Public relations (PR) are the activities organizations engage in to create a positive image for a company, product, service, or a person.
A press release, which is a commonly used PR tool, is designed to generate publicity, but there is no guarantee journalists will use it in the stories they write.
Online reputation management (ORM) is an important part of PR because negative information and images about a company can spread like wildfire online.
Sponsorships are designed to increase brand awareness, improve a company’s image, and reach target markets.
Product placements are designed to generate exposure, brand awareness, and interest in a product.
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LEARNING OBJECTIVES
Describe the different types of sales promotions companies use to get customers to buy their products.
Understand the different types of sales promotions companies use with their business customers.
Understand why sales promotions have become such an integral part of an organization’s promotion mix.
Differentiate between a push and pull strategy.
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DIFFERENT TYPES OF SALES PROMOTIONS
Sales promotions: activities that supplement a company’s advertising, public relations, and personal selling efforts.
Samples
Coupons
Premiums
Contests
Rebates
Loyalty programs: sales promotions designed to get repeat business.
Frequent-flier programs
Hotel programs
Shopping cards
In business-to-business marketing, sales promotions are called trade promotions.
Experiential marketing allows customers to physically interact with a brand using as many of their senses as possible.
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DIFFERENT TYPES OF SALES PROMOTIONS
Trade show: an event in which firms display and demonstrate their offerings to other organizations they hope will buy them.
Conventions, or meetings, with groups of professionals also provide a way for sellers to show different products to potential customers.
Sales contests provide incentives for salespeople to increase their sales.
Trade allowances give channel partners different incentives to push a product.
Free merchandise can also be used to get retailers to sell products to consumers.
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PUSH VS. PULL STRATEGY
Businesses must also decide whether to use a push strategy, a pull strategy, or both push and pull strategies.
A push strategy involves promoting a product to businesses (middlemen) who push the product through to final consumers.
Companies use a pull strategy when they target final consumers with promotions.
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KEY TAKEAWAYS
Companies use sales promotions to get customers to take action (make purchases) quickly.
Sales promotions increase the awareness of products, help introduce new products, and often create interest in the organizations that run the promotions.
Coupons, contests, samples, and premiums are among the types of sales promotions aimed at consumers.
Trade promotions, or promotions aimed at businesses, include trade shows, sales contests, trade allowances, and push money.
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