Professional Documents
Culture Documents
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
An Overview of Chapter-I overview of the field of advertising and promotion and its role in the marketing process the concepts of marketing and relationship marketing also introduces the concept of integrated marketing communications (IMC), its evolution, and examines how various marketing and promotional elements must be coordinated to communicate effectively. importance of the IMC perspective in planning and executing advertising and promotional programs.
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value of strategically integrating the various communication functions rather than having them operate autonomously. adaptation by marketers to a changing environment, particularly with respect to consumers, technology, and media. various elements of the promotional mix are introduced in this chapter along with a brief discussion of these basic tools of IMC. examines the various tasks and responsibilities involved in advertising and promotion management and a model of the integrated marketing communications planning process is presented
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Chapter Objectives
1. Examine the growing importance of advertising and promotional elements in the marketing programs of domestic and foreign companies. 2. Introduce the concept of integrated marketing communications (IMC). 3. Importance of IMC perspective in planning, executing advertising and promotional programs. 4. Introduce the various elements of promotional mix and role in an IMC program. 5. Evaluate how various marketing and promotional elements are coordinated to communicate effectively. 6. Introduce a model of IMC planning process and examine the steps in developing this marketing communications program.
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Only Vegas-Vignette
The changing roles of advertising and promotional strategy in modern marketing. Importance of an organizations promotional efforts in various industries and markets. Might include the automotive market, the beer industry, soft drinks, and consumer electronics.
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Only Vegas campaign in vignette, is a good example of how R&R Partners and the Las Vegas Convention and Visitors Authority (LVCVA) uses an integrated marketing communications to market the city of Las Vegas. Not only as a tourist destination but also as a site for conferences & conventions.
GROWTH OF ADVT. AND PROMOTION 1. A&P are integral to our social and economic systems. Advertising evolved into a vital communication system for consumers and businesses. 2. In market-based economies, consumers rely on advertising and other forms of promotion. 3. In providing them information they influence making purchase decisions. 4.Corporations rely on advertising and promotion to help them market their products and services
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Statistics
In 1980, advertising expenditures in the U.S. were $53 billion and $49 billion was spent on sale promotion. By 2005 an estimated $276 billion was spent on advertising while sales promotion expenditures increased to more than $300 billion!
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U.S. Advertising
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
1. Billions more are spent on domestic and foreign companies in other promotional areas like: Direct marketing, event sponsorship, interactive marketing, personal selling and public relations. 3. Tremendous growth in expenditures for A&P reflect growth of U.S. and global economies. 4. Expansion-minded marketers take advantage of integrated marketing opportunities through mostly event sponsorship and use of Internet.
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What is Marketing ?
Since 1984 (two decades), the American Marketing Association, that represents Marketing professionals in US and Canada, defined marketing as: The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
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The above definition of marketing focused on exchange as a central concept along with Various other activities involved in marketing Process. However, many experts argue that exchange is the core phenomenon for study in marketing. Therefore it can focus on the Nature of Exchange i.e. what is needed for this process to occur. This includes: 1. two or more parties with something of value to one another. 2. A desire and ability to give value to the other party; and a way for the parties to communicate with one another. 13
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What is Marketing?
Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. Value Relationship marketing Mass customization Customer relationship management (CRM)
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing Views
Views marketing as being more strategic in nature and focuses on the important role marketing plays in developing and sustaining relationships with customers and delivering value to them.
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Value
Value is the customers perception of all of the benefits of a product or service weighed against acquiring. Benefits can be functional, experiential or psychological. Costs include money paid for the product or service as well as other factors such as acquiring information, making the purchase and others.
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Relationship Marketing
Marketers are seeking more than just a one-time exchange or transaction with customers. Demanding and want personalized products and services tailored to their specific needs and wants
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Mass Customization
Flexible manufacturing systems which have led to the mass customization, company can make a product or deliver a service in response to an individual customers needs in a cost-effective way.
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Lifetime value
They give emphasis on the lifetime value of a customer. Companies recognize that it is not less than 5 times more cost effective to retain customers than to acquire new ones.
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Marketing Mix
The four elements of the marketing mix are product, price, place, and promotion. IMC focuses on the promotion element of the marketing mix. Promotional program is a part of a viable marketing strategy, coordinated with other marketing mix variables. This leads into the concept of integrated marketing communications.
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
IMC Genesis
In the 1990s many companies are moving toward the concept of integrated marketing communications (IMC). Coordinating the various promotional elements along with other marketing activities that communicate with a firms customers. Ad agencies to coordinate the use of a variety of promotional tools rather than relying primarily upon media advertising.
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Point of purchase
Publicity
Special events
Media Advertising
Packaging
Direct response
Interactive marketing
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Packaging
Sales promotion
Direct response
Media Advertising
Public relations
Interactive marketing
Direct marketing
Special events
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IMC Definition
American Association of Advertising Agencies (4As) developed one of the first definitions of integrated marketing communications defining it as:
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A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.
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Don Schultz of Northwestern University, who has been one of the major proponents and thought leaders in the area, developed a new definition of IMC which is as follows:
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IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences. The goal of IMC is to generate short-term financial returns and build long-term brand value.
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
IMC
Importance of relevant audience Multiple relevant audiences Demand for accountability and Demand for accountability Measurement of Outcomes
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Toward
Multiple forms of communication Multiple forms of communication Ex- Trade oriented sales promo.. Specialized media Specialized media Ex: TV Network Retailer dominance Ex: Promo Retailer dominance mix Data-based marketing Greater agency accountability
Performance-based compensation
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1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Disney 8. McDonalds 9. Marlboro 10. Mercedes
$67.52 $59.94 $53.38 $46.99 $35.59 $26.45 $26.44 $26.01 $24.84 39 $21.19
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Promotion Mix
promotional mix is defined as the basic tools or elements that are used to accomplish organizations objectives. The role and function of each promotional mix element in the marketing program can be discussed along with its advantages and limitations.
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Advertisingany paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor.
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Direct Marketing is a system of marketing through which organizations communicate directly with target customers, to generate a response and/or a transaction. Direct marketing was traditionally not been considered as an element of promotional mix. However, because it has become such an integral part of integrated marketing communications program of many organizations, it is viewed as a component of promotional mix.
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Direct Marketing
Shopping Channels Catalogs
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Telemarketing
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive/Internet Marketing Interactive media allow for to-and-fro flow of information, whereby uses can participate and modify the content of information. The major interactive medium is the Internet, and is a global collection of computer networks linking both public and private computer systems. While the most prevalent perspective on the Internet is that it is an advertising medium, it is actually a medium that can be used to communicate other elements of the promotional mix including sales promotion, direct marketing, and public relations
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The Internet
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Sales Promotion Marketing activities that provide extra value or incentive to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into two major categories: consumer-oriented and trade-oriented activities.
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Combat competition
Sales Promotion
Enhance personal selling Maintain sales in off season
Trade Allowances POP Displays Training Programs Trade Shows Coop Advertising
Consumeroriented
[For end-users]
Tradeoriented
[For resellers]
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Publicity
and
PR
Publicity: Non-personal communications about an organization, product, service or idea that is not directly paid for nor run under identified sponsorship. Public Relations: A management function which evaluates public attitudes, identifies the public policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance.
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Publicity Vehicles
Feature Articles
News Releases
Publicity Vehicles
Interviews
Press Conferences
Special Events
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Publicity Vehicles
Special Publications
Community Activities
Corporate Advertising
Cause-related Marketing
The distinction should be made between publicity and public relations. In fact, broader purpose positive public relations generally has a objective than publicity, as its is to establish and maintain a image of the company among public.
Publicity is an important communications technique used in public relations; however other tools may also be used.
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Personal Selling Direct person-to-person communication whereby a seller attempts to assist and/or persuade prospective buyers to purchase a companys product or service or act on an idea.
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Classifications of Advertising
National Advertising
Consumers
Business-to-Business Advertising
Professional Advertising
Trade Advertising
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Organizations 58
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Low Tentative
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Internet/ interactive
Out-of-home media
Direct marketing
Target Audience
Personal selling
Point-ofpurchase (displays, packaging)
Sales Promotion
Word-ofmouth
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2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Integratedmarketingcommunications management It is defined as the process of planning, executing, evaluating, and controlling the use of the various promotional-mix elements to effectively communicate with target audiences. It involves coordinating the promotional mix elements to develop a controlled and integrated program of effective marketing communication.
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This process is guided by the development of the integrated marketing communications plan which provides the framework for developing, implementing, and controlling an organizations IMC program and activities.
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Integrate and implement marketing communications strategies Monitor, evaluate and control IMC Program
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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IMCExercise This exercise is designed to give an opportunity to think more about the concept of integrated marketing communications. How it might be used by a company.
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Choose a specific company and discuss how this firm can use the concept of integrated marketing communications in developing a promotional program for one of its products or services. You should analyze all of the companys promotional mix elements including advertising, direct marketing, interactive media, sales promotion, publicity/public relations, sponsorships, branded entertainment and personal selling and discuss how each one is used in the integrated marketing communications program. 69
You should also consider how other marketing mix elements such as the brand name, package, price and other factors communicate with the companys target audience. Is this company using all of the promotion mix tools in its marketing communications program? Are they integrated and sending a consistent image and message?
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