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17-1McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
17-2
LO1Discuss integrated marketing communication and the communication process.
Describe the promotional mix andthe uniqueness of each component.LO2
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 17, YOU SHOULD BE ABLE TO:
17-3
LO4Describe the elements of the promotion decision process.
Explain the value of direct marketing for consumers and sellers.LO5
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 17, YOU SHOULD BE ABLE TO:
Select the promotional approach appropriate to a product’s target audience, life-cycle stage, and characteristics, as well as stagesof the buying decision and channel strategies.
LO3
17-4
GET ENGAGED…IN THE TWITTERVERSE!
Age of Engagement
17-5
THE COMMUNICATION PROCESSLO1
Promotional Mix
Integrated Marketing Communications (IMC)
• Inform Prospective Buyers
• Persuade Them To Try
• Remind Them of the Benefits
17-6
FIGURE 17-1FIGURE 17-1 The communication process consists of six key elements
17-7
THE COMMUNICATION PROCESSLO1
Communication
Source
Channel of Communication
Message
Receivers
17-8
Encoding Decoding
Field of Experience
Feedback Loop
Feedback Response
Noise
THE COMMUNICATION PROCESSLO1
17-9
The North Face AdWho is the source? What is the message?
How would you decode this ad?
LO1
17-10
FIGURE 17-2FIGURE 17-2 The five elements of the promotional mix
17-11
THE PROMOTIONAL ELEMENTSADVERTISING
LO2
MassSelling
CustomizedInteraction
Advertising
• Paid Aspect
• Nonpersonal
vs.
• Advantages
• Disadvantages
17-12
THE PROMOTIONAL ELEMENTSPERSONAL SELLING
LO2
Personal Selling
• Wasted Coverage
• Advantages • Disadvantages
17-13
THE PROMOTIONAL ELEMENTSPUBLIC RELATIONS
LO2
Public Relations
• Publicity
• Advantages • Disadvantages
17-14
THE PROMOTIONAL ELEMENTSSALES PROMOTION AND DIRECT MARKETING
LO2
Sales Promotion
Direct Marketing
• Advantages
• Disadvantages
• Advantages
• Disadvantages
17-15
IMC—DEVELOPING THE PROMOTIONAL MIXTHE TARGET AUDIENCE
Determine the Balance of the Elements
Coordinate the Promotional Effort
LO2
Assess Target Audience Characteristics
• Consumers • Businesses
17-16
MARKETING MATTERSHow Can You Reach Generation Y?
With Mobile Marketing!
LO2
17-17
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
IMC—DEVELOPING THE PROMOTIONAL MIXTHE PRODUCT LIFE CYCLE
LO3
17-18
FIGURE 17-3FIGURE 17-3 Promotional tools used over the product life cycle of Purina Dog Chow
17-19
Complexity
Risk
Ancillary Services
IMC—DEVELOPING THE PROMOTIONAL MIXPRODUCT CHARACTERISTICS
LO3
17-20
Prepurchase Stage
Purchase Stage
Postpurchase Stage
IMC—DEVELOPING THE PROMOTIONAL MIXSTAGES OF THE BUYING DECISION
LO3
17-21
FIGURE 17-4FIGURE 17-4 How the importance of promotional elements varies during the stages of the consumer purchase decision process
17-22
Push Strategy Pull Strategy
• Direct-to-Consumer
IMC—DEVELOPING THE PROMOTIONAL MIXCHANNEL STRATEGIES
LO3
17-23
FIGURE 17-5FIGURE 17-5 A comparison of push and pull promotional strategies
17-24
FIGURE 17-6FIGURE 17-6 The promotion decision process includes planning, implementation, and evaluation
17-25
The Four “W”s:
DEVELOPING AN IMC PROGRAMDEVELOPING THE PROMOTION PROGRAM
LO4
• Who is the Target Audience?
• What are the Objectives, Budget, & Tools?
• Where Should the Promotion Be Run?
• When Should the Promotion Be Run?
17-26
DEVELOPING AN IMC PROGRAMIDENTIFYING THE TARGET AUDIENCE
LO4
Target Audience
Behaviorial Targeting
17-27
DEVELOPING AN IMC PROGRAMSPECIFYING THE PROMOTION OBJECTIVES
LO4
• Awareness • Trial
• Interest • Adoption
• Evaluation
Hierarchy of Effects
17-28
DEVELOPING AN IMC PROGRAMSETTING THE PROMOTION BUDGET
LO4
Percentage of Sales Budgeting
Competitive Parity Budgeting
All-You-Can-Afford Budgeting
Objective and Task Budgeting
• Matching Competitors • Share of Market
17-29
FIGURE 17-7FIGURE 17-7 U.S. promotion expenditures of the top 10 companies
17-30
USING MARKETING DASHBOARDSHow Much Should You Spend on IMC?
Promotion-to-Sales Ratio
Promotion-to-Sales Ratio (%) =
Total Promotion Expenditures ($)
Total Sales ($)
100
LO4
17-31
DEVELOPING AN IMC PROGRAMLO4
Designing the Promotion
Selecting the Right Promotional Tools
Scheduling the Promotion
17-32
EXECUTING AND ASSESSINGTHE PROMOTION PROGRAM
LO4
IMC Audit
Pretesting
Posttesting
17-33
DIRECT MARKETINGLO5
The Value of Direct Marketing
Technological, Global andEthical Issues in Direct Marketing
The Growth of Direct Marketing
• Direct Orders
• Traffic Generation
• Lead Generation
Priceline Ad
17-34
FIGURE 17-8FIGURE 17-8 Business usage and response rates of popular forms of direct marketing
17-35
MAKING RESPONSIBLE DECISIONSWhat Information Should Be Private”
LO5
DMA
Do-Not-Call
Do Not Mail
Do Not Track
E-Privacy Directive
17-36
MOUNTAIN DEW: USING IMC AND SOCIAL MEDIA TO CREATE AND
PROMOTE A NEW FLAVOR
VIDEO CASE 17
17-37
FIGURE 1FIGURE 1 The seven stages of the Dewmocracy 2 campaign
17-38
VIDEO CASE 17MOUNTAIN DEW
1. What changes in the environment provided the opportunity for the Dewmocracy approach?
17-39
VIDEO CASE 17MOUNTAIN DEW
2. Which of the promotional elements described in Figure17-2 are used by Mountain Dew in its Dewmocracy 2 campaign?
17-40
VIDEO CASE 17MOUNTAIN DEW
3. What are some of the different ways Mountain Dew can assess the success of its campaign?
17-41
Promotional Mix
The promotional mix is the combination of one or more communication tools used to: (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product.
17-42
Integrated Marketing Communications (IMC)
Integrated marketing communications (IMC) is the concept of designing marketing communications programsthat coordinate all promotional activities—advertising, personal selling, sales promotion, public relations, and direct marketing—to provide a consistent message across all audiences.
17-43
Communication
Communication is the processof conveying a message to others and that requires six elements:a source, a message, a channelof communication, a receiver,and the processes of encoding and decoding.
17-44
Source
A source is a company or person who has information to convey during the communication process.
17-45
Message
A message consists of the information sent by a sourceto a receiver during the communication process.
17-46
Channel of Communication
A channel of communicationis the means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver during the communication process.
17-47
Receivers
Receivers consists of consumers who read, hear, or see the message sent by a source during the communication process.
17-48
Encoding
Encoding is the process ofhaving the sender transform an idea into a set of symbols during the communication process.
17-49
Decoding
Decoding is the process ofhaving the receiver take a set of symbols, the message, and transform them back to an idea during the communication process.
17-50
Field of Experience
Field of experience is amutually shared understanding and knowledge that the a sender and receiver apply to a message so that it can be communicated effectively during the communication process.
17-51
Response
A response, in the feedbackloop, is the impact the message had on the receiver’s knowledge, attitudes, or behaviors during the communication process.
17-52
Feedback
Feedback, in the feedback loop, is the sender’s interpretation ofthe response, which indicates whether a message was decoded and understood as intended during the communication process.
17-53
Noise
Noise consists of extraneous factors that can work against effective communication by distorting a message or the feedback received during the communication process.
17-54
Advertising
Advertising is any paid formof nonpersonal communicationabout an organization, good, service, or idea by an identified sponsor.
17-55
Personal Selling
Personal selling consists of the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
17-56
Public Relations
Public relations is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.
17-57
Publicity is a nonpersonal, indirectly paid presentation of an organization, good, or service.
Publicity
17-58
Sales Promotion
Sales promotion is a short-term inducement of value offered to arouse interest in buying a good or service.
17-59
Direct Marketing
Direct marketing is a promotion alternative that uses direct communication with consumersto generate a response in theform of an order, a request for further information, or a visit toa retail outlet.
17-60
Push Strategy
A push strategy involves directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product.
17-61
Pull Strategy
A pull strategy involves directing the promotional mix at ultimate consumers to encourage themto ask the retailer for a product.
17-62
Hierarchy of Effects
The hierarchy of effects is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation,trial, and adoption.
17-63
Percentage of Sales Budgeting
Percentage of sales budgeting involves allocating funds to promotion as a percentage ofpast or anticipated sales, in terms of either dollars or units sold.
17-64
Competitive Parity Budgeting
Competitive parity budgeting involves allocating funds to promotion by matching the competitor’s absolute level of spending or the proportionper point of market share. Also called matching competitors or share of market.
17-65
All-You-Can-Afford Budgeting
All-you-can-afford budgeting involves allocating funds to promotion only after all other budget items are covered.
17-66
Objective and Task Budgeting
Objective and task budgeting involves allocating funds topromotion whereby the company:(1) determines its promotion objectives; (2) outlines the tasks to accomplish these objectives; and(3) determines the promotion cost of performing these tasks.
17-67
Direct Orders
Direct orders is the result of direct marketing offers thatcontain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.
17-68
Lead Generation
Lead generation is the result ofa direct marketing offer designed to generate interest in a productor service and a request for additional information.
17-69
Traffic Generation
Traffic generation is theoutcome of a direct marketing offer designed to motivate people to visit a business.