MSM5302 Marketing Management

Lecture 11: Promotion “P”

Integrated Marketing Communications (IMC)

Dr. Dushan Jayawickrama

PhD (SUT, Aus), M.Sc. in Mgt (SJP), B.Sc. Mkt. Mgt (SJP), CTHE (Col), SEDA (UK)
Senior Lecturer
Department of Marketing Management
University of Sri Jayewardenepura
dushan@sjp.ac.lk

1
Overview

Introduction to the next element of the marketing mix:

 P = promotion = communication

Present the integrated marketing communications

framework (IMC)
Outline the communications process
Discuss the typical decisions a marketer must make when
communicating
Present two elements of the promotional mix:
 Advertising and Public Relations
Integrated Marketing Communications
“The concept of a company carefully integrating and
coordinating its online and offline communication channels
to deliver a clear, consistent and compelling message about
the organisation and its products.”
(Kotler, et al. 2013: 457)

Interact with the market in a coordinated, integrated manner

Gain synergy from media used

Uses a blend of tools (elements) to meet objectives

Tools (Elements) Used to Communicate

Any marketing communications campaign

will employ a combination of the following
tools depending on their objectives and the
target audience:
 Advertising
 Public relations / publicity
 Sales promotion
 Direct and digital marketing
 Personal selling
 Decisions in Developing IMC…
1. Identify Target Audience
 Affects all communications decisions

2. Determine the Response Sought (comm’n obj)

 Six “Buyer Readiness States”
 Where are they now, where do they need to be moved?

Awareness Knowledge Liking

Preference Conviction Purchase

 … Decisions in Developing IMC…
4. Selecting the Media
 Personal or non-personal communication channels
5. Selecting the Message Source
 Credibility: expert, trustworthy, likeable
6. Collecting Feedback
 Gauge effect on audience
7. Setting the Budget
 Affordable, percentage-of-sales, competitive-parity, objective & task
methods
8. Setting the promotional (IMC) mix
 Promotional Mix: Advertising
Advertising is “Any paid form of
non-personal presentation and
promotion of ideas, goods or
services by an identified
sponsor”
(Kotler, et al., 2013: 456)

$10 billion is
spent each
year on
advertising in
Australia!!
 Advertising Decisions

1.Determine the
objective
2.Set the budget
Same 4 methods apply
3.Develop the strategy
• Message
• Media
4.Evaluate
 3. Advertising Strategy

The message and media choice should blend

harmoniously
i. Creating the Message
a) Message Strategy (what is the general message?)
To gain and hold attention, the message should:
• Follow on from the positioning strategy
• Get consumers thinking or reacting in a certain way
• Identify customer benefits suitable for use as an “appeal”
Appeals should be meaningful, believable, distinctive
• The Big Idea (creative concept)
Simple message = great ad campaign
Visualisation, phrase, or both
 3. Advertising Strategy (cont’d)
b) Message Execution (how it is said)
 How the appeal is brought to life
 Several execution styles:
Testimonial
Testimonial Slice
Sliceof
ofLife
Life
Dramatisation
Dramatisation Evidence
Evidence

Scientific
Scientific Lifestyle
Lifestyle
Evidence
Demonstration
Demonstration
Evidence Typical
Technical
Message
Technical Fantasy
Expertise
Expertise
Execution Fantasy
Styles
Personality
Personality Mood
Mood//Image
Image
Symbol
Symbol

Musical
Musical
 3. Advertising Strategy (cont’d)

ii. Media Decisions

The advertiser next chooses advertising media to carry the message.
The four major steps in media selection are:
1. Deciding on reach, frequency and impact
2. Selecting major media types
3. Selecting specific media vehicles
4. Deciding on media timing
4. Evaluating Advertising

Advertising pre-testing
1. Direct rating: consumer panel rates advertisements
2. Portfolio tests: consumers watch several ads, then recall
3. Laboratory tests: physiological reactions

Advertising post-testing
1. Recall tests: tests power of ad to be noticed and retained
2. Recognition tests: tests impact
Measuring the results of advertising expenditure remains
inexact.
E.g., What sales result from an ad that increases brand awareness by
20% and brand preference by 10%?
 Advertising: Adv’s and Disadvantages
Advantages
Public nature suggests legitimacy
Can repeat – consumers can compare brands
Expressive – can be creative
Large reach – lost cost per exposure
 Disadvantages
 Expensive (now represents about
25% of IMC budget)
 Impersonal – less persuasive than
personal selling
 Asynchronous communication – one
way
Promotional Mix: Public Relations
Another major mass-communication tool
As a mass-communication tool, PR aims to build “good
relations with the company’s various publics by obtaining
favourable publicity, a good ‘corporate image’, and handling
or heading off unfavourable rumours, stories and events.”
(Kotler, et al., 2013: 483 )
Publicity
Fits within the broader PR term and is the most powerful
form
“Activities to promote a company or its products by planting
news about it in media not paid for by the sponsor.” (Kotler, et
al., 2013: 483)
Highly Credible = Highly Believable
 PR Tools

PR seeks to influence the opinions and beliefs held by

customers and other stakeholders, e.g., build brand credibility
or make product announcements, via these tools:
Press relations: news items
Product publicity: press release
Public affairs: promotes understanding of firm, building relations
Lobbying: to promote or defeat legislation
Investor relations: shareholder and financial institutions relations
Development: gaining support from donors or members of NGOs
Counselling: advising mgt about issues, image, position
Achieved via:
News, speeches, special events, written materials, audio-visual
materials, corporate identity materials, community service activities
 The Good and Bad of PR

Advantages
Strong impact on public awareness
Low cost per exposure
Highest credibility – results can be
spectacular

Disadvantages
Difficult to manage
Limited and scattered use
No control
 3. Personal Selling (oldest form)

Personal Selling is:

Two-way personal communication between sales people and individual
customers
Often considered the “interpersonal arm” of communications efforts
Conducted via face-to-face, telephone, video conference, other

Has been around for longer than most professions

Now, often used in complex selling situations and for building long-term
relationships
The salesperson is “the company” in the eyes of the customer
Names of those doing the Selling
 Salespeople
 Sales representatives
 Account executives/representatives
 Sales consultants/engineers
 Agents
 District mangers
 Marketing representatives
 What Makes a Good Sales Person?
Successful salespeople include a variety of people but the best share
four key talents:
Intrinsic motivation
Disciplined work style
The ability to close a sale
The ability to build relationships with customers

Top performers are empathetic, patient, caring, responsive, good

listeners and honest.
Personal Selling
Decisions around the selling function:
1. How to make a sale = the selling process

Prospecting Preapproach Approach

Handling Closing Follow-up

Objections
2. Managing the Sales Function
Who to Hire?
How to delegate tasks?
How to reward staff
4. Sales Promotion: “Buy Now”
“Short-term incentives to encourage purchase or sale of a
product…”
(Kotler, et al., 2013: 498)
Value-adding tool
 A direct inducement that offers extra value to the sales force,
distributors or ultimate consumer, to create an immediate sale

Origins: FMCGs
The term covers a range of incentives that are used with products
promoted via either mass media advertising or by direct and
online methods.
Consumer Sales Promotion Tools

 Samples: in-store, through mail, in magazines…

 Redeemable coupons: get a product or discount on next
purchase
 Cash-back offers: refunds, rebates, need proof of
purchase
 Cents-off deal: discounts or “two for one” deals
 Premiums: free gifts e.g., glass with purchase of whiskey,
or “20% extra”
 Advertising specialties: novelty items for special events,
e.g., key ring
 Patronage rewards (loyalty programs): cash, merchandise
or service reward for regular buyers
 Point-of-purchase (POP) promotions: can include themes
 Contests and games: win a prize by luck or skill
 Sales Promotion

Objectives
 Entice consumers to try a new product or brand
 Lure consumers away from competitors’ products or
brands
 Get consumers to ‘load up’ on a mature product
 Hold and reward loyal customers

Decisions
 Size of the incentive
 Conditions for participation
 How to promote and distribute the program
 The length of the promotion
 Sales promotion budgeting
 Evaluation – measure return on investment
Beware of brand switchers
 Customer Type and Objectives
Type of Objective Desired Result
Customer
Loyal Hold and reward Increase consumption
Load up (stock)
Competitor’s Lure away Break loyalty
Switch to our brand
Brand switchers Lure and entice Choose our brand more often

Price buyers Lure and entice Reduce emphasis on price so

Load up (stock) our brand is preferred
New customers Entice Try our brand – first!

Source: Adapted from Kotler et al 2009; Lamb et al 2009

 Your Task: Which Type of SP?
Type of Objective Desired Result Sales
Customer Promotion
Loyal Hold and Increase consumption
reward Load up (stock)

Competitor’s Lure away Break loyalty

Switch to our brand
Brand Lure and Choose our brand
switchers entice more often
Price buyers Lure and Reduce emphasis on
entice price so our brand is
preferred
New customers Entice Try our brand – first!
 Your Task: Which Type of SP?
Type of Objective Desired Result Sales
Customer Promotion
Loyal Hold and Increase consumption Loyalty programs
reward Load up (stock) Bonus or premiums
Cents-off
Competitor’s Lure away Break loyalty Sampling
Switch to our brand Sweepstakes, contests

Brand switchers Lure and Choose our brand more Coupons, cents-off
entice often Bonus or premiums
Price buyers Lure and Reduce emphasis on price Coupons, cents-off,
entice so our brand is preferred refunds
New customers Entice Try our brand – first! Bonus or premiums
Trade Sales Promotion

Trade or Business-to-Business Promotions

Directing promotions to wholesalers and retailers
Organised by sales and key account managers
More money is spent on trade promotions than
consumer promotions!
Tools
• Prizes / Contests: best merchandising display, highest sales level
• Allowances: for advertising, displays, distribution
• Free goods: reward for buying in large quantity, or carrying range
• Push money: cash or incentives to “push” the mfr’s product
• Conventions / Trade shows: trade exhibitions
 Bringing it all together so
far….
Personal selling is best when: Advg and SP are best when:
Product has high value Product has low value
Product is custom-made Product is standardised
Product is technically complex Product is simple to understand
Few customers Many customers
Consumers are concentrated Customers are geographically dispersed
5. Direct Marketing
Direct (personal) and
Online Marketing involve Media Technique
techniques that use
Mail Direct mail and
mass and targeted catalogues
media to create a “direct
response” from Telephone Telemarketing,
Telesales and
customers SMS
Direct = “techniques Radio, TV and Direct response
used to get consumers press advertising and
to make a purchase from interactive TV
their home, office or Internet and Electronic
other non-retail setting.” Email Interactive
(Lamb et al, 2009: 168) Marketing

ADMA is Australia's principal body

for information based marketing www.adma.com.au
Direct and Online Database Marketing

Entails:
Prospects who interact (or agree to) with the organisation become part of
the database
Interacting with known customers and channel members
One-to-one basis, often in real time
Helps to maintain value-laden relationships
Generates a measurable response using electronic network tools and
technologies
7. Changing Face of IMC
 Viral advertising
 Permission marketing
 Ambient advertising
 Product placement
 Socially Responsible
Communications
 Growing legal and ethical issues due to unfortunate
abuses
 Laws and regulations formed to protect consumers
and govern
 Advertising
• No false or deceptive advertising
• No bait-and-switch advertising
 Personal Selling
• Sales pitch must match advertising claims –
may not lie!
• Cooling off (for home purchases)
• No bribes, no using trade secrets, not
disparage competition (if untrue)
Socially Responsible Communications
Direct marketing activities
• Irritation, unfairness, deception and fraud (ADMA)
• Invasion of privacy (Privacy Commission)
e.g., Cross-referencing Data
• Personal information is interconnected and used
without permission
E.g., bad credit rating
• Access to Lists
e.g., Unwanted mail
• Spamming: unsolicited email to many people to make a
sale
Solution: Ask people first!
 In Summary…

• IMC adopts an integrative approach to managing the communication

function of Marketing
• Advertising has experienced a paradigm shift from dominating
communication budgets, to representing an average of 25%.
• Public relations is often considered the “step child” of marketing
communications: can often be in conflict with marketers instead of working
together.
• Sales promotions are growing to the extent that organisations invariably
assign more of their IMC budget to it than to advertising
• Direct marketing methods will continue to grow as technology advances
• Personal selling is the oldest form of “communication” and is unlikely to ever
be replaced
• Companies are seeking guidance on whether and how to spend on
Sponsorship
• New ways of communicating keeps the world of marketing exciting for all!