Chapter 6

Report
Chapter 6
Integrated Marketing
Communication Strategy and
Management
In this chapter, you will
learn about…
1. Integrated Marketing Communication (IMC)
Strategy Framework
2. Information Requirements in Purchase
Decisions
3. Reasonable Communication Objectives
4. Developing an IMC Mix
Information Requirements of Buyers
Nature of the Offering
Target-Market Characteristics
Organizational Capacity
Push versus Pull Communication Strategies
6-2
In this chapter, you will
learn about…
5. Marketing Web Sites and Integrated Marketing
Communications
Purpose of Marketing Web Sites
Leveraging Advertising and Personal
Selling with Promotional Web Sites
6. Communication Mix Budgeting
Communication Budget Allocation
7. Evaluation and Control of the Communication
Process
6-3
What is Marketing
Communication?
Marketing communication is the
process by which information
about an organization and its
offerings is disseminated to
selected markets.
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Goal of Marketing
Communication
Induce initial purchase
Create post purchase
satisfaction
6-5
Purpose of Marketing
Communication
Communication is necessary to inform
buyers of the following:
The availability of an offering
The unique benefits of the offering
The where and how of obtaining and
using the offering
6-6
Marketing Communication
Mix
Personal
Selling
Advertising
Communications
Mix
Sales
Promotion
6-7
Integrated Marketing
Communications (IMC)
The practice of blending
different elements of the
communication mix in
mutually reinforcing ways.
6-8
IMC Strategy Framework
1. What are the information requirements
of target markets?
2. What are the objectives of the strategy?
3. Can some of the communication
activities be combined?
4. What should the budget be and how
should resources be allocated?
5. How should it be timed and scheduled?
6. How should it be evaluated?
6-9
Information Requirements
in Purchase Decisions
Purchase Process Model
Unawareness
Knowledge
Preference
Purchase
6-10
Information Requirements in
Purchase Decisions
Determine how buyers purchase a particular
offering
Roles played by individuals in the buying
center/household
Define the role of information in the
purchase process
When, where, how, and what information is
used for decision making
Determine the perception that consumers
have of the organization and the offering
Sources from which information is sought
6-11
Reasonable Communication
Objectives
Objectives differ depending on stage in
product life-cycle:
Build primary demand
Demand for the product or service
class
Build selective demand
Demand for a particular brand,
product, or service
6-12
Reasonable
Communication Objectives
Requirements
Consistent
Both among themselves and with other
marketing elements
Quantifiable
For measurement and control purposes
Attainable
With an appropriate amount of effort and
expenditure and within a specific time
frame
6-13
Developing an IMC Mix
Factors to be Considered
The information requirements of
potential buyers
The nature of the offering
The nature of the target market
The capacity of the organization
6-14
Developing an IMC Mix
Information Requirements of
Buyers
Analyze the relative value of the communication
tools used at various stages in the purchasedecision process
Advertising creates awareness
Salespeople provide information
Sales promotion, brochures, and catalogs
provide descriptions and stimulate trial
6-15
Developing an IMC Mix
Nature of the Offering
Advertising is useful when an offering is not
complex, is frequently purchased, is relatively
inexpensive, or has benefits that differentiate
it from competition
Personal selling is required when a product is
relatively expensive or its benefits are not
readily apparent
Sales promotion lends itself to nearly every
offering type because of the wide variety of
forms it can assume
6-16
Developing an IMC Mix
Target Market Characteristics
Advertising is effective for communicating an
offering to a mass market that is geographically
scattered
Direct marketing (e.g., Internet) can also be used
to reach a geographically dispersed target
market
Personal selling is useful when a small number
of buyers live in close proximity and purchase
large quantities
6-17
Developing an IMC Mix
Organizational Capacity
MAKE
Perform the activity
internally?
Company sales
force
Fixed and variable
costs
More control
Flexibility
Focused sales
effort
Greater availability
vs.
BUY
Contract it out?
Independent sales
representatives
Variable costs only
Acceptable control
Lower personnel
costs
Greater flexibility
Increased sales
effort
6-18
Developing an IMC Mix
Organizational Capacity
Commission paid to independent reps
= 5%
Commission paid to company salespeople
= 3%
Salary and admin costs for salespeople
= $500,000
At what level X of sales would both options cost the same?
Cost of company reps
Cost of independent reps
=
0.03X + $500,000
0.05X
Solving for X, we get $25 million for the level of sales at
which both options will cost the same.
Break-Even Chart for Comparing Independent
Reps and Company Sales Force
Company Sales Cost
($000)
Independent Reps
Selling Cost
$3,000
$2,500
$2,000
($1,250)
Company Sales
Force Selling Cost
$1,000
$500
0
5
10
15
20
25
30
35
40
Company Sales
($ Millions)
Developing an IMC Mix
Push and Pull Strategies
PUSH strategy
Retailers and
Wholesalers
Consumers
Producer
PULL strategy
Retailers and
Wholesalers
Consumers
Developing an IMC Mix
Push and Pull Strategies
Push strategy is typically used when…
1.
An organization has easily identifiable
buyers
2.
The offering is complex
3.
Buyers view the purchase as being
risky
4.
A product or service is early in its life
cycle
5.
The organization has limited funds for
direct-to-consumer advertising
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Developing an IMC Mix
Identifying an Advertising Opportunity
1.
There is a favorable primary demand for a
product or service category
2.
The product or service to be advertised can
be significantly differentiated from its
competitors
3.
The product or service has hidden qualities
or benefits that can be communicated
through advertising
4.
There are strong emotional buying motives
involved, such as for health, beauty, or
safety
6-23
Marketing Web Sites and
IMC
Transactional Sites
Focus on turning an online browser into
an online buyer. Successful
transactional Web sites feature:
Well-known, branded products and
services
Favorable shopping and buying
experiences (e.g., Gap.com)
6-24
Marketing Web Sites and
IMC
Promotional Sites
Promote a company’s products and
services and provide information on
how items can be used and where
they can be purchased
Can have games, contests,
quizzes with electronic coupons
and other gifts and prizes (e.g.,
Saturn.com)
6-25
Marketing Web Sites and
IMC
Promotional Sites
Can also be used to create a
buzz (word of mouth behavior)
6-26
Marketing Web Sites and
IMC
Viral Sites
Encourages individuals to
forward marketer-initiated
messages to others via e-mail
Procter & Gamble’s Physique shampoo
– People who referred 10 friends to the
shampoo’s promotional web site received
a gift
– The promotion generated 2 million
referrals!
6-27
Leveraging Advertising and
Personal Selling with Promotion
Web Site
Promotional Web sites and the Internet/Webenabled technology that supports them can
leverage advertising and personal selling efforts
Can play a cost-effective role in:
Communication mix
Early stages of the process-need recognition
Development of product specifications
Providing feedback on product/service
performance
6-28
Communication Mix
Budgeting
Make the budget
commensurate with the
tasks required of the
communication
activities
Establishing the size of a communication
budget:
Formula-based guidelines
Qualitatively-based guidelines
6-29
Communication Mix
Budgeting
Formula-based Approaches
Percentage of sales approach
Past sales or anticipated sales can be
used for this approach
Per unit method
Multiply per unit spending with expected
sales volume
Mostly used by durable-goods
manufacturers (e.g., appliance marketers)
6-30
Communication Mix
Budgeting
Qualitatively-based Approaches
Competitive-party approach
Maintain a parity between company’s
communication expenditures and those
of its competitors
All available funds
When introducing a new offering
6-31
Communication Mix
Budgeting
Objective-task approach
1. Define the communication objectives
2. Identify the tasks needed to attain the
objectives
3. Estimate the costs associated with the
performance of these tasks
This method is typically considered the
best approach.
6-32
Communication Mix
Budgeting
Advertising Budget Allocation
SIX media:
Television
Radio
Magazine
Newspaper
Billboard
Internet
Each medium consists of vehicles that have
specific characteristics
6-33
Communication Mix
Budgeting
Advertising Budget Allocation
Media are mostly chosen based on:
Cost
Reach
Frequency
Audience characteristics
Other considerations:
Purpose of the advertisement
Product needs
Editorial climate
6-34
Communication Mix Budgeting
Sales Force Budget Allocation
NS =
NC x FC x LC
TA
NS = number of sales people
NC = number of customers (actual or potential)
FC =
necessary frequency of customer calls
LC =
length of average customer call, including
travel time
TA = average available selling time per
salesperson (less administrative time)
6-35
Communication Mix Budgeting
Sales Force Budget Allocation Example
No. of potential customers
= 2500
No. of calls per customers per year = 4
Travel time per call
= 2 hrs
Number of working hours per year = 1340
2500 x 4 x 2
1340
= 15 salespeople needed
6-36
Evaluation and Control of the
Communication Process
Continuous monitoring of the execution of
any communication to ensure that
communication objectives are being
attained
Should incorporate some measure of
sales or profits
Budgeting
6-37

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