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Chapter 1 1

  1. 1. Promotional Strategy MKT4230 An Introduction to Integrated Marketing Communications Patricia Knowles, Ph.D. Associate Professor Clemson University 1
  2. 2. 2 Promotional Strategy MKT4230 2 The Modern World of Marketing In the past, the only advertising avenues were television, radio, billboards, and printed media. Ads in these media promoted the product or service for sale. Textbook Pages 4 - 5 Rapidly changing media environment: Mass media losing viewers, readers, listeners Digital media targets narrow audience Consumers not content to be passive message recipients Information now obtained from a myriad of sources Today, traditional media are used more and more to drive customers to online sites, where the information can be more detail, colorful, and interactive.
  3. 3. 3 Promotional Strategy MKT4230 3 Volkswagen Strategy The Volkswagen Punch Dub campaign shows how companies are now using integrated marketing communications (IMC) to reach their target audiences. Textbook Page 5 Integrated Marketing Strategy Traditional Mass Media Social Media Sports Team Sponsor Point-of- Sale Kits
  4. 4. 4 Promotional Strategy MKT4230 4 Punch Dub This is the Punch Dub game that was presented via the Volkswagen website. It was designed to be an entertaining and interactive experience. Textbook Pages 3 - 5 Entertaining, Interactive Information
  5. 5. 5 Promotional Strategy MKT4230 5 The Growth of Advertising and Promotion Advertising and promotion have become an integral part of our social and economic systems. It has grown six-fold in the past 30 years. Textbook Pages 5 - 6 Integral Part of Social and Economic Systems Carefully prepared messages delivered to carefully targeted audiences Six-fold increase between 1980 and 2010 New Marketing Channels Internet ads (banner ads, videos, webisodes) Social media Mobile marketing
  6. 6. 6 Promotional Strategy MKT4230 6 The Role of Marketing There are for-profit and non-profit uses of marketing. Textbook Pages 6 - 7 Advertising and Promotion Inform customers of a product or service Convince them of its ability to satisfy their wants or needs Help develop and sustain relationships Nonprofit Organizations Solicit donations Offer intangible social and psychological satisfactions
  7. 7. 7 Promotional Strategy MKT4230 7 What is Marketing? This is the revised definition of Marketing developed by the American Marketing Association in 2007. This revised definition is viewed as being more reflective of the role of non- marketers to the marketing process. Textbook Page 7 The activity, set of institutions, and processes for… creating, communicating, delivering, and exchanging offerings that have… value for customers, clients, partners, and society at large
  8. 8. 8 Promotional Strategy MKT4230 8 What is Valued? There is value in a product, service, and benefits a consumer may experience. Textbook Page 7 Customer’s perception of all the benefits of a product or service weighed against costs of acquiring and consuming it. Benefits can be… • Functional • Experiential • Psychological
  9. 9. 9 Promotional Strategy MKT4230 9 The Marketing Mix The four key elements of marketing. Textbook Pages 7 - 8 The Four Ps Product Price Place Promotion
  10. 10. 10 Promotional Strategy MKT4230 10 Contemporary IMC Approach The contemporary approach to advertising and promotion began in the 1980s. This approach coordinates the various promotional elements and marketing activities that communicate with a firm’s customers. Textbook Pages 8 - 9 Point of Purchase Publicity Interactive Marketing Public Relations Direct Marketing Special Events Packaging Sales Promotion Direct Response Mass Media Advertising
  11. 11. 11 Promotional Strategy MKT4230 11 Growing Importance of IMC Here is the value behind an IMC program, as well as the trends that caused companies to adopt the IMC approach. Textbook Pages 10 - 12 Value of IMC Avoids duplication of marketing efforts Synergy among promotional tools More efficient and effective marketing Rapidly Changing Environment Consumer behavior Technology Media consumption behavior Proliferation of media
  12. 12. 12 Promotional Strategy MKT4230 12 The Marketing Revolution Here are some of the driving forces behind today’s marketing revolution. Textbook Pages 13 - 15 Shift from traditional media ads to other forms of promotion/nontraditional media Internet and social media changing how companies interact with consumers Power shift: Manufacturers to retailers Database marketing Greater ad agency accountability Changes in how ad agencies are compensated
  13. 13. 13 Promotional Strategy MKT4230 13 The Role of IMC in Branding With more and more products and services available to consumers, developing and maintaining brand identity is becoming increasingly important. Well-known brands have a major competitive advantage in today’s marketplace. A well-defined and coordinated IMC plan contributes to overall brand identity and equity. Textbook Pages 15 - 16 Brand Identity Image or Associations Performance Name Packaging Logo Design Symbols
  14. 14. 14 Promotional Strategy MKT4230 14 Building Brands in a Recession Here are the effects that a recession has on consumers. Textbook Pages 15 - 17 Consumers Spend less money Carefully scrutinize purchases Rethink brand loyalties Willing to trade off or down More price sensitive More value conscious
  15. 15. 15 Promotional Strategy MKT4230 15 Building Brands in a Recession Here are the effects that a recession has on companies. Textbook Pages 15 - 17 Companies Reduce advertising budgets Balance discounts/promos w/brand image Must overcome consumer distrust Change product marketing focus Increase online social presence Look for new ways to remain relevant
  16. 16. 16 Promotional Strategy MKT4230 16 Test Your Knowledge Why are marketers decreasing the use of mass media advertising and increasing the use of integrated marketing communications? A. The mass market has become fragmented B. New technologies gave consumers greater control over the communication process C. Use of the Internet and electronic commerce is growing D. Explosive growth in social networking E. All of the above
  17. 17. 17 Promotional Strategy MKT4230 17 The Promotional Mix Here are the basic tools used to accomplish an organization’s communication objectives. Textbook Pages 17 - 25 Interactive/ Internet Marketing Advertising Direct Marketing Personal Selling Sales Promotion Publicity/ Public Relations
  18. 18. 18 Promotional Strategy MKT4230 18 Advertising This is the definition of “advertising.” Textbook Pages 18 - 19 Paid, non-personal communication... • About an organization, product, service, or idea • With an identified sponsor • No immediate feedback from audience
  19. 19. 19 Promotional Strategy MKT4230 19 Non-Personal Media Various forms of mass media and details of the benefits of using them. Textbook Page 18 Mass Media • TV • Radio • Magazines • Newspapers Benefits • Cost effective • Large audiences
  20. 20. 20 Promotional Strategy MKT4230 20 Advertising Classifications Various classifications of advertising. Textbook Page 20 Primary / Selective Demand Business-to-Business Organizations National Retail / Local Professional Trade Consumers
  21. 21. 21 Promotional Strategy MKT4230 21 Forms of Direct Marketing Here are various forms of marketing through which direct sales take place. Textbook Pages 19 - 21 Direct Response Ads Direct Mail Catalogs Database Management Telemarketing Direct Selling Internet Sales Shopping Channels
  22. 22. 22 Promotional Strategy MKT4230 22 Direct Response Advertising Home page of Under Armour’s website through which consumers may purchase directly from the company. Textbook Page 21 / Exhibit 1 - 8
  23. 23. 23 Promotional Strategy MKT4230 23 Direct Response Advertising Major tools of direct marketing, as well as the forces behind the shift to direct marketing. Textbook Page 21 Major Tools Direct Mail Television Magazines Internet Forces for Change Changing Lifestyles Credit Cards Toll-free Numbers Rapid Internet Growth
  24. 24. 24 Promotional Strategy MKT4230 24 Interactive Marketing Various forms of interactive media. Textbook Pages 21 - 22 Interactive Media • Internet • Kiosks • Interactive Television • Cell Phones • Other Mobile Devices
  25. 25. 25 Promotional Strategy MKT4230 25 Interactive Marketing Ways in which the Internet can be used as a marketing tool. Textbook Pages 22 - 23 Internet Activities Advertise products and services Link ads and websites to search engines Offer coupons, contests, sweepstakes Conduct direct marketing Do personal selling Conduct public relations activities Measure advertising and promotions
  26. 26. 26 Promotional Strategy MKT4230 26 Sales Promotion Definition of sales promotion. Textbook Pages 23 - 24 Marketing activities that provide extra value or incentives to the… Sales Force Retailers Ultimate Consumer
  27. 27. 27 Promotional Strategy MKT4230 27 Consumer vs Trade Promotions Differences between consumer and trade-oriented promotions. Textbook Page 23 Consumer-Oriented Trade-Oriented Couponing, sampling, premiums, rebates, contests, sweepstakes, POP materials Wholesalers, distributors, retailers Encourages immediate purchases Promotional/merchandising allowances, price deals, sales contests, trade shows
  28. 28. 28 Promotional Strategy MKT4230 28 Publicity Definition of publicity, as well as its advantages and disadvantages. Textbook Page 24 - 25 High credibility and low cost Not always under company control Is sometimes unfavorable A news story, editorial, or announcement to a mass audience Not directly paid for or run under identified sponsor
  29. 29. 29 Promotional Strategy MKT4230 29 Public Relations Definition of public relations and its primary objective. Textbook Page 25 Management function Evaluates public attitudes Identifies items of public interest Executes a program of action to earn public understanding and acceptance Primary objectives Establish and maintain a positive image of the company among various publics
  30. 30. 30 Promotional Strategy MKT4230 30 Public Relations This ad is part of the American Honda Motor Company’s “Value to America” campaign. Uses publicity and other tools • Special publications • Community activities • Fund-raising events • Sponsorships • Public affairs activities Textbook Page 25 / Exhibit 1 - 12
  31. 31. 31 Promotional Strategy MKT4230 31 Public Relations The final element or an organization’s promotional mix… personal selling. Textbook Page 25 Person-to-Person Communication A seller attempts to assist and/or persuade prospective buyers to make a purchase or act on an idea
  32. 32. 32 Promotional Strategy MKT4230 32 IMC Audience Contact Tools This figure illustrates various IMC audience contact tools. Textbook Page 26 / Figure 1 - 5
  33. 33. 33 Promotional Strategy MKT4230 33 Touch Points: Control vs Impact Here are the four basic categories of touch points. Textbook Page 26 - 27 / Figure 1 - 6
  34. 34. 34 Promotional Strategy MKT4230 34 IMC Planning Model Textbook Page 28 / Figure 1 - 7 Advertising Sales promotion PR/ publicity Personal selling Direct marketing Advertising objectives Sales promotion objectives PR/ publicity objectives Personal selling objectives Direct marketing objectives Message strategy Sales promotion strategy PR/ publicity strategy Personal selling strategy Direct marketing strategy Integrate and implement marketing communications strategies Monitor, evaluate and control IMC Program Internet/ interactive Internet/ interactive objectives Internet/ interactive strategy Promotional program situation analysis Analysis of the communications process Budget determination Develop integrated marketing communications programs Review of marketing plan
  35. 35. 35 Promotional Strategy MKT4230 35 Elements of a Marketing Plan The five basic elements included in most marketing plans. Textbook Page 29 Detailed situation analysis Marketing strategy and program Specific marketing objectives Program for implementing the strategy Process for monitoring & evaluating performance
  36. 36. 36 Promotional Strategy MKT4230 36 Promotional Program Situational Analysis A list of things that must be analyzed prior to initiating a promotional program. Textbook Pages 29 - 33 Internal Firm’s promotional organization/capabilities Review of previous programs and results Assess firm/brand image Assess strengths and weaknesses of product or service External Customer analysis Competitive analysis Environmental analysis
  37. 37. 37 Promotional Strategy MKT4230 37 Analysis of Communications Process The basic communication decisions that must be made. Textbook Pages 33 - 34 Communication Decisions Source and message Communication channels Media mix Costs Marketing goals Communication objectives
  38. 38. 38 Promotional Strategy MKT4230 38 Budget Determination The two questions that must be answered before an IMC program can be implemented. Textbook Page 34 What will the promotional program cost? How will the money be allocated?
  39. 39. 39 Promotional Strategy MKT4230 39 Developing the IMC Program The two important aspects of the advertising program: The creative strategy and the media strategy. Textbook Pages 34 - 35 IMC Strategies Creative Media
  40. 40. 40 Promotional Strategy MKT4230 40 Monitoring, Evaluation, Control The final stage of the IMC planning process. Textbook Page 35 Basic Goals Determine how well the program is doing, and why Problem correction Continual management feedback Input for future promotions/strategies