chpt 006 - integrated marketing communication strategy and management
TRANSCRIPT
Chapter 6
Integrated Marketing Communication Strategy and
Management
6-2
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
6-3
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
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Marketing communication is the
process by which information about an
organization and its offerings is
disseminated to selected markets.
What is Marketing Communication?
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Goal of Marketing Communication
Induce initial purchase
Create post purchase
satisfaction
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The availability of an offering
The unique benefits of the offering
The where and how of obtaining and using the offering
Purpose of Marketing Communication
Communication is necessary to inform buyers of the following:
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Marketing Communication Mix
Communications
Mix
PersonalSelling
SalesPromotion
Advertising
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Integrated Marketing Communications (IMC)
The practice of blending
different elements of the
communication mix in
mutually reinforcing ways.
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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?
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Information Requirements in Purchase Decisions
Purchase Process Model
Unawareness
Knowledge
Preference
Purchase
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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
What would your objectives be?
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Reasonable Communication Objectives
Build primary demand
Demand for the product or service class
Build selective demand
Demand for a particular brand, product, or service
Objectives differ depending on stage in product life-cycle:
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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
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Developing an IMC MixFactors 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
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Advertising creates awareness
Salespeople provide information
Sales promotion, brochures, and catalogs
provide descriptions and stimulate trial
Developing an IMC MixInformation Requirements of
Buyers
Analyze the relative value of the communication
tools used at various stages in the purchase-
decision process
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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
Developing an IMC Mix Nature of the Offering
6-20
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
Developing an IMC MixTarget Market Characteristics
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Developing an IMC MixOrganizational Capacity
Perform the activity internally?
Company sales force
Fixed and variable costs
More control
Flexibility
Focused sales effort
Greater availability
Contract it out?
Independent sales representatives
Variable costs only
Acceptable control
Lower personnel costs
Greater flexibility
Increased sales effort
vs.MAKE BUY
Commission paid to independent reps = 5%
Commission paid to company salespeople = 3%
Salary and admin costs for salespeople = $500,000
Cost of company reps
0.03X + $500,000
Cost of independent reps
0.05X=
Solving for X, we get $25 million for the level of sales at which both options will cost the same.
Developing an IMC MixOrganizational Capacity
At what level X of sales would both options cost the same?
Break-Even Chart for Comparing Independent Reps and Company Sales Force
Company Sales Cost ($000)
($1,250)
$3,000
$2,500
$2,000
$1,000
$500
0 5 10 15 20 25 30 35 40
Independent Reps Selling Cost
Company Sales Force Selling Cost
Company Sales ($ Millions)
Developing an IMC MixPush and Pull Strategies
Producer
Retailers andWholesalers
Consumers
PUSH strategy
Retailers andWholesalers
Consumers
PULL strategy
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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
Developing an IMC MixPush and Pull Strategies
Push strategy is typically used when…
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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
Developing an IMC MixIdentifying an Advertising Opportunity
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Communication Mix Budgeting
Formula-based guidelines
Qualitatively-based guidelines
Make the budget commensurate with the
tasks required of the communication
activities
Establishing the size of a communication budget:
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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)
Communication Mix Budgeting
Formula-based Approaches
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Competitive-party approach
Maintain a parity between company’s
communication expenditures and those
of its competitors
All available funds
When introducing a new offering
Communication Mix Budgeting
Qualitatively-based Approaches
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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
Objective-task approach
Communication Mix Budgeting
This method is typically considered the
best approach.
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Television
Radio
Magazine
Newspaper
Billboard
Internet
Communication Mix Budgeting
Advertising Budget Allocation
Each medium consists of vehicles that have
specific characteristics
SIX media:
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Media are mostly chosen based on:
Cost
Reach
Frequency
Audience characteristics
Other considerations:
Purpose of the advertisement
Product needs
Editorial climate
Communication Mix Budgeting
Advertising Budget Allocation
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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)
NC x FC x LC
TANS =
Communication Mix BudgetingSales Force Budget Allocation
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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
Sales Force Budget Allocation Example
Communication Mix Budgeting
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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