CHAPTER FIFTEEN

INTEGRATED MARKETING
COMMUNICATIONS

Text by Profs. Gene Boone & David Kurtz

Multimedia Presentation by
Prof. Milton Pressley
The University of New Orleans

15-1
Copyright 2001 by Harcourt, Inc. All rights reserved.

CHAPTER OBJECTIVES

Relate the concept of integrated marketing

communications to the development of the
optimal promotional mix
Explain the relationship of promotional
strategy to the process of communication
List the objectives of promotion
Explain the concept of the promotional mix
and its relationship to the marketing mix

15-2
Copyright 2001 by Harcourt, Inc. All rights reserved.

CHAPTER OBJECTIVES
Discuss the role of sponsorships and direct

marketing in integrated marketing

communications planning
Identify the primary determinants of a
promotional mix
Contrast the two major alternative promotional
strategies
Compare to the primary methods of developing
a promotional budget
Defend promotion against common public
criticisms
15-3
Copyright 2001 by Harcourt, Inc. All rights reserved.

Chapter Overview

Promotion: function of informing,

persuading, and influencing the consumers
purchase decision
Marketing Communications: transmission
from a sender to a receiver of a message
dealing with the buyer-seller relationship

15-4
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Integrated Marketing
Communications

Integrated marketing communications (IMC):

Coordination of all promotional activities media
advertising, direct mail, personal selling, sales
promotion, and public relations to produce a
unified customer-focused promotional message
Success of any IMC program depends critically on
identifying the members of an audience and
understanding what they want

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15-5
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THE COMMUNICATIONS PROCESS

Table 15.1: Relating Promotion to the Communications Process

15-6
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THE COMMUNICATIONS PROCESS

An effective promotional message accomplishes

three tasks:
It gains the receivers attention
It achieves understanding by both receiver and
sender
It stimulates the receivers needs and suggests
an appropriate method of satisfying them
The above tasks are related to the AIDA concept
(Attention-Interest-Desire-Action) an
explanation of the steps through which an
individual reaches a purchase decision

15-7
Copyright 2001 by Harcourt, Inc. All rights reserved.

Global Difficulties With the

Communication Process

In China: KFCs slogan: Finger lickin good

came out as Eat your fingers off
Also in China: Coca-Cola had thousands of signs
made using the translation: Ke-kou-ke-la
Depending on the dialect this means . . .
Bite the wax tadpole, or
Female horse stuffed with wax
In Taiwan: Pepsis slogan, Come alive with the
Pepsi generation came out as Pepsi will bring
your ancestors back from the dead
Copyright 2001 by Harcourt, Inc. All rights reserved.
Copyright 2001 by Harcourt, Inc. All rights reserved.

15-8

Objectives of
Promotion

Provide
Information

Traditional function of promotion was

to inform the market about the
availability of a particular good or
service
Marketers still direct large portions of
current promotional efforts at providing
information

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Copyright 2001 by Harcourt, Inc. All rights reserved.

Objectives of
Promotion

Increase
Demand

Some promotions are aimed at

increasing primary demand, the desire

for a general product category
More promotions are aimed at
increasing selective demand, the desire
for a specific brand

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Objectives of
Promotion

Differentiate
the Product

Product differentiation is a frequent

objective
Homogenous demand for many products
results when consumers regard the firms
output as virtually identical to its
competitors then, the firm has virtually
no control over marketing variables
Product differentiation permits more
flexibility in marketing strategy

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Objectives of
Promotion

Promotion can explain the greater

ownership utility of a product to
buyers, thereby accentuating its value
and justifying a higher price

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Accentuate
Products
Value

Objectives of
Promotion

For the typical firm, sales fluctuations

may result from cyclical, seasonal, or
irregular demand
Stabilizing these variations is often an
objective of promotional strategy

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Stabilize
Sales

The Promotional Mix

Personal
Selling

Nonpersonal
Selling

Promotional mix:
blend of personal
selling and
nonpersonal selling
(including advertising,
sales promotion, direct
marketing, and public
relations) designed to
achieve promotional
objectives
15-14

Copyright 2001 by Harcourt, Inc. All rights reserved.

Nonpersonal Selling
Advertising
Advertising

Advertising: paid,
nonpersonal
communication through
various media by a
business firm, not-forprofit organization, or
individual identified in
the message with the
hope of informing or
persuading members of
a particular audience
15-15

Copyright 2001 by Harcourt, Inc. All rights reserved.

Nonpersonal Selling
Sales
Sales promotion
promotion

Sales promotion: marketing activities other than

personal selling, advertising, and publicity that
stimulates consumer purchasing and dealer
effectiveness (includes displays, trade shows,
coupons, premiums, contests, product
demonstrations, and various nonrecurrent selling
efforts)
Trade promotion: sales promotions aimed at
marketing intermediaries rather than ultimate
consumers

15-16

Copyright 2001 by Harcourt, Inc. All rights reserved.

Nonpersonal Selling

Direct
Direct marketing
marketing

Direct marketing: direct

communications other
than personal sales
contact between buyer
and seller, designed to
generate sales,
information requests, or
store visits

15-17
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Nonpersonal Selling

Public
Public relations
relations

Public relations: firms

communications and
relationships with its
various publics
Publicity: stimulation of
demand for good, service,
place, idea, person, or
organization by unpaid
placement of commercially
significant news or
favorable media
presentations
15-18

Copyright 2001 by Harcourt, Inc. All rights reserved.

Advantages

Table 15.2: Relating Promotion to the Communications Process

Personal
Sales
Direct
Public
Selling
Promotion
Marketing Relations
Advertising
Permits
Reachesa
Producesan
Generates Createsa
measurement largegroupof immediate
an
positive
of
potential
consumer
immediate attitude
effectiveness. consumersfor response.
response.
towarda
arelatively
productor
Elicitsan
Attracts
Coversa
lowpriceper attentionand
company.
immediate
wide
exposure.
response.
createsproduct audience
Enhances
Allowsstrict awareness.
with
credibility
Tailorsthe
targeted
ofaproduct
messagetofit controlover
Allowseasy
thecustomer. thefinal
measurement advertising. or
message.
company.
ofresults.
Allows
Canbe
Providesshort complete,
adaptedto
customized,
termsales
eithermass
personal
increases.
audiencesor
message.
specific
Produces
Continued
audience
measurable on next
segments.
slide . . .
results.

15-19
Copyright 2001 by Harcourt, Inc. All rights reserved.

Table 15.2: Relating Promotion to the

Communications Process (Continued)

Disadvantages

Personal
Selling

Sales
Direct
Advertising Promotion Marketing
Reliesalmost Doesnot
Is
Suffers
exclusively permit
nonpersona fromimage
uponthe
totally
linnature. problem.
abilityofthe accurate
Isdifficult Involvesa
salesperson. measuremen to
highcost
Involveshigh tofresults.
differentiat perreader.
costper
Usually
efrom
Dependson
contact.
cannotclose competitor qualityand
sales.
sefforts.
accuracyof
mailing
lists.
Mayannoy
consumers.

Public
Relations
Maynot
permit
accurate
measureme
ntofeffect
onsales.
Involves
mucheffort
directed
toward
nonmarketi
ngoriented
goals.

15-20
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SPONSORSHIPS

Sponsorship: provision of funds for a

sporting or cultural event in exchange
for a direct association with the events;
in e-commerce, a long-term linkage
between a Web site and a marketer
Sponsor IBM is
prominently
featured on the
Sydney
2000 Olympic
WebSite
15-21
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Telemarketing

Telemarketing: promotional
presentation involving the use
of the telephone for outbound
contacts by salespeople or
inbound contacts initiated by
customers who want to obtain
information and place orders

PhotoDisc

15-22
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Electronic Direct
Marketing Channels

Web advertising is an important

component of electronic direct
marketing
E-mail direct marketing is a
natural and easy extension of
traditional direct mail marketing

15-23
Copyright 2001 by Harcourt, Inc. All rights reserved.

DEVELOPING AN OPTIMAL
PROMOTIONAL MIX
Nature of Market
Nature of Product
Stage in PLC
Price
Funds Available

Factors that influence the

effectiveness of a
promotional to mix:
Nature of the market
Nature of the product
Stage in the product
life-cycle
Price
Funds available for
promotion

Copyright 2001 by Harcourt, Inc. All rights reserved.

Table 15.3: Factors Influencing Choice of Promotional Mix

PersonalSelling

Advertising

Natureofthemarket
Numberofbuyers
Geographic
concentration
Typeofcustomer
Natureoftheproduct
Complexity
Service
requirements
Typeofgoodor
service
Useoftradeins
Stageintheproductlife
cycle

Limitednumber
Concentrated
Businesspurchaser

Largenumber
Dispersed
Ultimateconsumer

Custommade,complex
Considerable
Business
Tradeinscommon

Standardized
Minimal
Consumer
Tradeinsuncommon

Oftenemphasizedatevery
stage;heavyemphasisinthe
introductoryandearlygrowth
stagesinacquaintingmarketing
intermediariesandpotential
consumerswiththenewgood
orservice

Oftenemphasizedatevery
stage;heavyemphasisin
thelatterpartofthegrowth
stage,aswellasthe
maturityandearlydecline
stages,topersuade
consumerstoselect
specificbrands

Price

Highunitvalue

Lowunitvalue

Copyright 2001 by Harcourt, Inc. All rights reserved.

15-25

PULLING AND PUSHING

PROMOTIONAL STRATEGIES

Pulling strategy: promotional effort by a seller to

stimulate demand among final users, who will
then exert pressure on the distribution channel to
carry the good or service, pulling it though the
marketing channel
Pushing strategy: promotional effort by a seller
to members of the marketing channel intended to
stimulate personal selling of the good or service,
thereby pushing it through the marketing channel

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15-26
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Table 15.4: Promotional Budget Determination

Method

Description

Example

Percentageof
salesmethod

Promotionalbudgetissetasa
Lastyearwespent$10,500on
specifiedpercentageofeitherpast promotionandhadsalesof$420,000.
orforecastedsales.
Nextyearweexpectsalestogrowto
$480,000,andweareallocating$12,000
forpromotion.

Fixedsumper
unitmethod

Promotionalbudgetissetasa
predetermineddollaramountfor
eachunitsoldorproduced.

Ourforecastcallsforsalesof14,000
units,andweallocatepromotionatthe
rateof$65perunit.

Meeting
competition
method

Promotionalbudgetissetto
matchcompetitorspromotional
outlaysoneitheranabsoluteor
relativebasis.

Promotionaloutlaysaverage4percent
ofsalesinourindustry.

Taskobjective
method

Oncemarketersdeterminetheir
specific,promotionalobjectives,
theamount(andtype)of
promotionalspendingneededto
achievethemisdetermined.

Bytheendofnextyear,wewant75
percentoftheareahighschoolstudents
tobeawareofournew,highly
automatedfastfoodprototypeoutlet.
Howmanypromotionaldollarswillit
take,andhowshouldtheybespent?

15-27
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MEASURING THE
EFFECTIVENESS OF PROMOTION
Two basic measurement tools:
Direct sales results measures the effectiveness

of promotion by revealing the specific impact

on sales revenues for each dollar of
promotional spending
Indirect evaluation concentrates on quantifiable
indicators of effectiveness like:
Recall - how much members of the target
market remember about specific products or
advertisements
Readership size and composition of a
messages audience
15-28

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Measuring Online
Promotions

Two major techniques for setting online

advertising rates:
Cost per impression (CPM), technique that
related the cost of an ad to every thousand
people who read it
Cost per response (click-throughs), which
assumes that those who actually click on an ad
want more information
15-29

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STRATEGIC IMPLICATIONS
Its difficult to overstate the impact of the Internet

on the promotional mix for 21st Century firms

Both small and large firms are on the Web
Entrepreneurs have found a lucrative new launch
pad for their enterprises
Online companies must buy advertising
electronic and traditional
Online and offline firms both spend about $50 to
get each new customer
IMC will continue to play an important role as the
Internet brings the global community closer
together
15-30

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