Marketing communications: integrated marketing communications aspect. Learning outcomes

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1 Marketing communications: integrated marketing communications aspect Lect. Indre Radaviciene Vilnius University/Faculty of Economics Marketing Department Learning outcomes Discuss the role of promotion in the marketing mix Describe the communication process Explain the goals and tasks of promotion Discuss the elements of the promotional mix Discuss the AIDA concept and its relationship to the promotional mix Discuss the concept of integrated marketing communications Describe the factors that affect the promotional mix Integrated Marketing Communications Planning Model Review of Marketing Plan Promotional Program Situation Analysis Analysis of the Communications Process Budget Determination Develop Integrated Marketing Communications Programs Advertising Sales Promotion PR/ Publicity Personal Selling Direct Marketing Internet/ Interactive Advertising Objectives Sales Promotion Objectives PR/ Publicity Objectives Personal Selling Objectives Direct Marketing Objectives Internet/ Interactive Objectives Message Strategy Sales Promotion Strategy PR/ Publicity Strategy Personal Selling Strategy Direct Marketing Strategy Internet/ Interactive Strategy Integration & Implementation of Marketing Communications Strategies Monitor, Evaluate & Control Promotional Program 1

2 Coca cola also use IMC The role of promotion in the marketing mix Few goods or services can survive in the marketplace without effective promotion communication by marketers that inform, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. The role of promotion in the marketing mix Few goods or services can survive in the marketplace without effective promotion communication by marketers that inform, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. 2

3 Promotional strategy A plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, sales promotion, and social media. Role of promotion in the marketing mix (I) The marketing manager determines the goals of company s promotional strategy in light of the firm s overall goals for the marketing mix product, price, place, promotion. Using these overall goals, marketers combine the elements of the promotional strategy (the promotional mix) into coordinated plan. The promotion plan then becomes an integral part of the marketing strategy for reaching the target market. Role of promotion in the marketing mix (II) Overall marketing objectives Promotional mix Marketing mix Product Price Place Promotion Advertising Public relations Sales promotion Social media Target market Promotion plan 3

4 Competitive advantage The main function of a marketer s promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition. Competitive advantage one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors. What has changed? Promotional strategies have changed a great deal over the years as many target customer segments have become harder and harder to reach. Informative television advertisements are no longer enough, forcing marketers to think more creatively. Marketing communication Promotional strategy is closely related to the process of communication. As humans, we assign meaning to feelings, ideas, facts, attitudes, and emotions. Communication is the process by which meanings are exchanged or shared through a common set of symbols. 4

5 Target market Marketers communicate information about the company and its products to the target market and various publics through its promotion programs. Example: Nestle Nestle was one of many companies that had to apologize after traces of horse meat were found in supermarkets and manufactured food goods across Europe in While business communication is often used to promote products and services, it must also be used, at times, to acknowledge mistakes and propose new paths forward. Interpersonal communication Interpersonal communication is direct, faceto-face communication between two or more people. When communicating face-to-face, people see the other person s reaction and can respond almost immediately. A salesperson speaking directly with customer is an example of an interpersonal marketing communication. 5

6 Mass Communication Mass communication involves communicating a concept or message to large audiences. A great deal of marketing communication is directed to consumers as a whole, usually through a mass medium such as television or newspapers. When a company advertises, it generally does not personally know the people with whom it is trying to communicate. The communication process Marketers are both senders and receivers of messages. As senders, marketers attempt to inform, persuade, and remind the target market to adopt courses of action compatible with the need to promote the purchase of goods and services. As receivers, marketers attune themselves to the target market in order to develop the appropriate messages, adapt existing messages, and spot new communication opportunities. Most marketing communication is two-way nature of communication process. Communication process: the sender and encoding The sender is the originator of the message in the communication process. In an interpersonal conversation, the sender may be a parent, a friend, or a salesperson. For an advertisement, press release, or social media campaign, the sender is the company or organization itself. It can sometimes be difficult to tell who the sender of promotional message is, especially in the case of bold, avantgarde advertisements. Sometimes, senders intentionally obfuscate their identities in order to build buzz around an advertisement. 6

7 Encoding Encoding is the conversion of the sender s ideas and thoughts into a message, usually in the form of words or signs. A basic principle of encoding is that what the source says but what receiver hears. Concrete words and pictures. Communication process: the sender and encoding Sender Encoding the message Marketing manager Advertising manager Advertising agency Other consumers Advertisement Sales presentation Store display Coupon Press release Social media Message transmission Transmission of message requires a channel a voice, radio, newspaper, computer, smart phone, or other communication medium. In two way conversation such as a sales pitch given by a sales representative to potential client, reception is normally high. Similarly, when the message is a recommendation from a friend, the reception is high as well. 7

8 Noise By contrast, the desired receivers may or may not detected the message when it is mass communicated because most media are cluttered by noise anything that interferes with, distorts, or slows down the transmission. In some media over-crowded with advertisers, such as newspapers and television, the noise level is high and the reception level is low. The receiver and decoding Marketers communicate their message through a channel to costumers, or receivers, who will decode the message. It is important to note that there can be multiple receivers as consumers share their experiences and their recommendations online through social networks and other types of social media. Online conversations Online conversations are becoming an increasingly influential way to promote products and services. Receivers can easily share new information with their friends and followers on social media, and those new receivers can then share that information as well. This leads to a more diverse interrelationship between senders and receivers of social media message. 8

9 Decoding (I) Decoding is the interpretation of the language and symbols sent by the source through a channel. Common understanding between two communicators, or a common frame of reference, is required for effective communication. Marketing managers must ensure a proper mach between the message to be conveyed and the target market s attitudes and ideas. Decoding (II) When people receive a message, they tend to manipulate it reflect their own biases, needs, experiences, and knowledge. Therefore differences in age, social class, education, culture, and ethnicity an lead to miscommunication. In fact, researchers have found that consumers misunderstand a large proportion of both printed and television communications. Standardization or adaptation? Marketers targeting consumers in foreign countries must also worry about the translation and possible miscommunication of theirs promotional message by other cultures. Global marketers must decide whether to standardize or customize the message for each global market in which they sell. 9

10 Encoding and decoding message NOISE Other advertisements News articles Other store displays Encoding the message Message channel Decoding the message Advertisement Sales presentation Store display Coupon Press release Social media Media Salesperson Retail store Local news show Receiver interpretation of message Feedback In interpersonal communication, the receiver s response to message is direct feedback to the source. Feedback may be verbal, as in saying I agree, or nonverbal, as nodding, smiling, frowning, or gesturing. Feedback can also occur digitally, as in Facebook like. Feedback measurements Mass communicators are often cut off from direct feedback, so they must rely on market research, social media, or analysis of viewer responses for indirect feedback. They might use such measurements as the percentage of television viewers who recognized, recalled, or stated that they were exposed to the company s messages. Indirect feedback enables mass communicators to decide whether to continue, modify, or drop message. 10

11 Internet and social media impact on the communication model (I) The Internet and social media have had an impact on the communication model in two major ways. First, consumers are now able to become senders (as opposed to only brands being senders). A consumer who makes a recommendation on Facebook is essentially a sender, meaning that the communication model is much more complicated today than it was just a few years ago. Internet and social media impact on the communication model (II) Second, the communication model shows the feedback channel as primarily impersonal and numbers driven. In the traditional communication process, marketers can see the results of consumer behavior ( for example, a drop or rise in sales) but are able to explain those changes only by using their judgment. Today, customers use social media platforms like Facebook and Twitter to comment publically on marketing efforts. These platforms enable marketers to personalize the feedback channel by opening the door for direct conversations with customers. Communication process NOISE Other advertisements News articles Other store displays Sender Encoding the message Message channel Decoding the message Receiver Marketing manager Advertising manager Advertising agency Other consumers Advertisement Sales presentation Store display Coupon Press release Social media Media Salesperson Retail store Local news show FEEDBACK CHANNEL Receiver interpretation of message Market research Sales results Change in market share Social media Customers Viewers/ listeners News media Clients 11

12 The goals of promotion Promotion, on the other hand, seeks to modify behavior and thoughts in some way. Promotion can perform one or more of four tasks: inform the target audience, persuade target audience, remind the target audience, or connect with the audience. Informing Informative promotion seeks to covert an existing need into a want or to stimulate interest in a new product. It is generally more prevalent during the early stages of the product life cycle. Informative messages are important for promoting complex ad technical such automobiles, computers, and investment services. Informative promotion is also important for a new brand being introduces into an old product class. Persuading Persuasive promotion is designed to stimulate a purchase or an action. Persuasion typically becomes the main promotion goal when the product enters the growth stage of its life cycle. By this time, the target market should have the general product awareness and some knowledge of how the product fulfill its wants. At this time, the promotional message emphasizes the product s real and perceived competitive advantages, often appealing to emotional needs, such love, belonging, self-esteem, and ego satisfaction. 12

13 Experiential Marketing Examples Reminding Reminder promotion is used to keep the products and brand in the public s mind. This type of promotion prevails during the maturity stage of the life cycle. Its purpose is simply to trigger a memory. Connecting The idea behind social media is to form relationships with customers and potential customers through technological ties such as Facebook, Twitter, You Tube, or other social media platforms. By facilitating this exchange of information through a transparent process, brand are increasingly connecting with their customers in hopes they become brand advocates that promote the brand through their own social network. Tools for connection include social networks, social games, social publishing tools, as well as social commerce. 13

14 The promotional mix Most promotional strategies use several ingredients which may include advertising, personal selling, and social media to reach a target market. That combination is called the promotional mix. Advertising Advertising is any form of impersonal paid communication in which the sponsor or company is identified. Traditional media such as television, radio, newspapers, magazines, pay-per-click online advertising, display advertising, direct mail, billboards, and transit advertising (such on buses and taxis and bus stops) are most commonly used to transmit advertisements to costumers. Other options include Web sites, , blogs, videos, and interactive games. One of the primary benefits of advertising is its ability to communicate to a large number of people at one time. Although the cost per contact in advertising is very low, the total cost to advertising on a national basis. Public relations Public relations is the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance. Marketers use public relations not only to maintain a positive image but also to educate the public about company s goals and objectives, introduce new products, and help support the sales effort. 14

15 Publicity A public relations program can generate favorable publicity public information about a company, product, service, or issue appearing in the mass media as a news item. However, although organizations do not directly pay for publicity, it should be not viewed as free. Preparing news releases, staging special events and persuading media personnel to broadcast or print publicity messages cost money. Sales promotion Sales promotion consists of all marketing activities other than personal selling, advertising, and public relations that stimulate consumer purchasing and dealer effectiveness. Sales promotion is generally shot-run tool used to stimulate immediate increases in demand. Sales promotion include free samples, contests, premiums, trade shows, vacation giveaways and coupons. It also includes experiential marketing whereby marketers create events that enable customers to connect with brands. Research shows that sales promotion complements advertising by yielding faster sales responses. Personal selling Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Traditional methods of personal selling include a planned presentation to one or more prospective buyers for the purpose of making sale. Whether it takes place face-to-face or over the phone, personal selling attempts to persuade the buyer to accept a point of view. 15

16 Social media Social media are promotion tools to facilitate conversations and other interactions among people online. Consumers are able to speak directly to other consumers, the company, and Web communities. Social media include blogs, microblogs (such as Twitter), podcasting (online audio and video broadcasts), and social networks (such as Tumblr, Pinterest, and Snapchat). Social media have become a layer in promotional strategy Social media are ubiquitous it just depends on how deep that layers goes for each brand. The rise of blogging, for example, has created a completely new way for marketers to manage their image, connect with consumers, and generate interest in and desire for their companies products. Now marketers are using social media as integrated aspects of their campaigns and as way to extend the benefits of their traditional media. The communication process and the Promotional mix (I) The internet has changed how business promote their brands. Traditionally, marketing managers have been in charge of defining the essence of the brand. This included complete brand control and mostly one-way communication between the brand and customers. All of the contest and messages were focused on defining and communicating the brand value. The communication space is increasingly controlled by the consumer, as is the brand message. 16

17 The communication process and the Promotional mix (II) Instead of repetition, social media rely on the idea of customization and adoption of the message. Information is positioned as more valuable as opposed to being strictly entertaining. Probably the most important aspect is the idea of consumer-generated content, whereby consumers are able to both take existing content and modify it or create completely new content for brand. Digital media types As a result of the impact of social media as well as the proliferation of new platforms, tools, and ideas, promotional tactics an also be categorized according to media type - paid, earned, or owned. Digital media types OWNED MEDIA - Web sites - Blogs - Social media Social media is concentrated here, between owned and earned media, with some (but not much) paid media depending on the strategy. PAID MEDIA - Banner ads - Sponsored posts EARNED MEDIA - Media coverage - SEO - Publicity activities 17

18 Paid, earned and owned media Paid media is based on the traditional advertising model, whereby a brand pays for media space. Earned media is based on a public relations or publicity model. Owned media is new form of promotional tactic where brands are becoming publishers of their own content in order to maximize the brand s value to consumers as well as increase their search rank in Google. Save the Troy Library "Adventures In Reverse Psychology" Marketing communication: interactive aspect 18

19 Characteristics of the elements in the promotional mix Mode of communication Communicator control over situation Amount of Feedback Advertising Indirect and impersonal Public Relations Usually indirect and impersonal Sales Promotion Usually indirect and impersonal Personal Selling Direct and face-to face Social Media Indirect but instant Low Moderate to low Moderate to low High Moderate Little Little Little to moderate Much Much Speed of Feedback Delayed Delayed Varies Immediate Intermediate Direction of message Control over message content Identification of sponsor Speed in reaching large audience Message Flexibility One-way One-way Mostly one - way Two-way Two-way, multiple ways Yes No Yes Yes Varies, generally no Yes No Yes Yes Yes Fast Usually fast Fast Slow Fast Same message to all audience Usually no direct control over message audience Same message to varied targets Tailored to prospective buyer Some of the most targeted opportunities Promotional goals and the AIDA concept The ultimate goal of any promotion is to get someone to buy a good or service or, in the case of nonprofit organizations, to take some action (for example, donate blood). AIDA concept a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action. AIDA model framework (I) 19

20 AIDA model framework (II) Attention The advertiser must first gain the attention of target market. A firm can not sell something if the market does not know that the good or service exist. The communicator s task is to build awareness, perhaps just name recognition, with simple messages. Consumers must become aware of the brand. This isn t as straightforward as it seems. The brand name needs to be made focal to get consumers to become aware. Interest Simple awareness of a brand seldom leads to a sale. The next step to create interest in the product. If target members know the product, how do they feel about it? If consumer somewhat unhappy and dissatisfied - it is necessary to first find a solution and then can communicate its renewed quality. 20

21 Desire Potential customers for the Apple ipad may like the concept of a portable tablet computer, but they may not necessarily think that it is better than laptop or smartphone. In this case, the communicator must try to build consumer preference by promoting quality, value, performance and other features. The communicator needs to measure audience preference before and after the campaign. Action Some potential target market customers may have been persuaded to buy an ipad but had jet to make actual purchase. Although convinced consumer may not engage in immediate purchase. They wait for more information or plan to act later. Perhaps the consumer may motivate target consumers by offering the product at a low price, offering a premium, or letting consumers evaluate and conduct trials prior to actual purchase. Example: AIDA and Apple ATTENTION INTEREST DESIRE ACTION Apple use a number of media outlets to gain the attention of target market Next, it arranges ipad demonstrations and develops target messages to create interest among innovators and early adopters. Then, Apple creates brand preference and convinces potential customers that they want the new ipad. Finally, having been attracted to the new ipad and convinced that they need it, customers purchase the ipad. 21

22 The promotional mix and AIDA Attention Interest Desire Action Advertising Public Relations Sales Promotion Personal Selling Social Media Very effective Somewhat effective Not effective Product life cycle and promotional mix Preintroduction publicity; small am amounts of advertising near introduction Heavy advertising and public relations to build awareness; sales promotion to induce trial; personal selling to obtain distribution Heavy advertising and public relations to build brand loyalty; decreasing use of sales promotion; personal selling to maintain distribution Advertising slightly decreased more persuasive and reminder in nature; increased use of sales promotion to build market share; personal selling to maintain distribution Advertising and public relations drastically decreased; sales promotion and personal selling maintained at low levels Push and Pull strategies Push strategy a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise. Pull strategy a marketing strategy that stimulates consumer demand to obtain product distribution. 22

23 Push and Pull strategies Integrated marketing communications (I) Ideally, marketing communications from each promotional mix element (personal selling, advertising, sales promotion, social media, and public relations) should be integrated. That is, the message reaching the consumer should be the same regardless of whether it is from an advertisement, a salesperson in the field, a magazine article, a Facebook fan page, or a coupon in newspaper. Integrated marketing communications (II) Integrated marketing communications (IMC) the careful coordination of all promotional messages for a product or a service to ensure the consistency of messages at every contact point at which a company meets the consumer. Following the concept of IMC, marketing managers carefully work out the roles that various promotional elements will play in the marketing mix. Timing of promotional activities is coordinated, and the results of each campaign are carefully monitored to improve future use of the promotional mix tools. 23

24 Integrated marketing communications (III) The IMC concept has been growing in popularity for several reasons. First, the proliferation of thousands of media choices beyond traditional television has made promotion a more complicated task. Instead of promoting a product just through mass-media options, like television and magazines, promotional messages today can appear in many varied sources. Integrated Marketing Communications Planning Model Review of Marketing Plan Promotional Program Situation Analysis Analysis of the Communications Process Budget Determination Develop Integrated Marketing Communications Programs Advertising Sales Promotion PR/ Publicity Personal Selling Direct Marketing Internet/ Interactive Advertising Objectives Sales Promotion Objectives PR/ Publicity Objectives Personal Selling Objectives Direct Marketing Objectives Internet/ Interactive Objectives Message Strategy Sales Promotion Strategy PR/ Publicity Strategy Personal Selling Strategy Direct Marketing Strategy Internet/ Interactive Strategy Integration & Implementation of Marketing Communications Strategies Monitor, Evaluate & Control Promotional Program Why IMC? 24

25 Five Key Features of IMC 1. Start with the customer or prospect. 2. Use any form of relevant contact or touch point. 3. Speak with a single voice. 4. Build relationships. 5. Affect behavior. Key IMC Feature # 1 The Consumer or Business Customer Must Represent the Starting Point for All Marketing Communications Activities Takeaway: Consumers in Control Outside-in approach: learn the media preferences and lifestyles of customers/prospects to know the best contexts to reach them with brand messages. Reduced Dependence on Mass Media Consumers are increasingly in control of their media choices for acquiring information about brands. Selecting the appropriate IMC tools Media-Neutral Approach Identify Marcom Program Goals Determine Best Way to Allocate Marketing Budget 25

26 Key IMC Feature # 2 Use any and all marketing communication tools that are up to the task Takeaway: 360-Degree Branding A brand s touch points should be everywhere the target audience is. Not all touch points are equally engaging Surround customers/prospects with the message, but not to the point of being irritatingly present. Key IMC Feature # 3 Multiple messages must speak with a single voice Takeaway: A brand s positioning statement must: Present a clear idea of the brand in its target market s mind Consistently deliver the same unified message across all media channels on all occasions. Key IMC Feature # 4 Build long relationships with consumers Takeaway: Loyalty programs promote long-term relationships between customers and brands that lead to customer retention. Experiential marketing programs can create brand experiences that make positive and lasting impressions on customers. 26

27 Key IMC Feature # 5 Don t lose focus of the ultimate objective: affect behavior Takeaway: The goal of IMC is to influence the target audience in such a way that the audience engages in a specific desired behavior. The effectiveness of an IMC program is judged by its success in terms of its ultimate influence on behavior. Roadblocks to implementing IMC Integration requires tight coordination among all elements of a marketing communication program. Few providers of marketing communication services have the diversity of skills required to execute an IMC program. Direct-to-customer advertising is more difficult than a mass media campaign. The greatest challenge is making sure that all marketing communication tools are consistently executed. Marketing communication implementation decisions Marcom Program Implementation Decisions Mixing Elements Creating Messages Selecting Media Establishing Momentum 2010 South-Western, a part of Cengage Learning. 27

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