The Affordable Care Act was signed into law by President Barack Ob.docx

The Affordable Care Act was signed into law by President
Barack Obama in March 2010. Many of the provisions of the
law directly affect health care providers. Review the following
topic materials:
1. "About the Affordable Care Act"
2. "Health Care Transformation: The Affordable Care Act and
More"
What are the most important elements of the Affordable Care
Act in relation to community and public health? What is the role
of the nurse in implementing this law?
Copyright © 2016 Pearson Education, Inc.
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Chapter
23
Managing a Holistic Marketing Organization for the Long Run
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Learning Objectives
What are important trends in marketing practices?
What are the keys to effective internal marketing?
How can companies be socially responsible marketers?
What tools are available to help companies monitor and improve
their marketing activities?
What do marketers need to do to succeed in the future?

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Trends in
Marketing
PracticesReengineeringOutsourcingBenchmarkingSupplier
partneringCustomer
partneringMergingGlobalizingFlatteningFocusingJustifyingAcce
leratingEmpoweringBroadeningMonitoringUncovering
With globalization, deregulation, market fragmentation,
consumer empowerment, environmental concerns, and all the
remarkable developments in communication technology, the
world has unquestionably become a very different place for
marketers. Table 23.1 summarizes some important shifts in
marketing realities.
Reengineering. Appointing teams to manage customer-value-
building processes and break down walls between departments.
Outsourcing. Buying more goods and services from outside
domestic or foreign vendors.
Benchmarking. Studying “best practice companies” to improve
performance.
Supplier partnering. Partnering with fewer but better value-
adding suppliers.
Customer partnering. Working more closely with customers to

add value to their operations.
Merging. Acquiring or merging with firms in the same or
complementary industries to gain economies of scale and scope.
Globalizing. Increasing efforts to “think global” and “act local.”
Flattening. Reducing the number of organizational levels to get
closer to the customer.
Focusing. Determining the most profitable businesses and
customers and focusing on them.
Justifying. Becoming more accountable by measuring,
analyzing, and documenting the effects of marketing actions.
Accelerating. Designing the organization and setting up
processes to respond more quickly to changes in the
environment.
Empowering. Encouraging and empowering personnel to
produce more ideas and take more initiative.
Broadening. Factoring the interests of customers, employees,
shareholders, and other stakeholders into the activities of the
enterprise.
Monitoring. Tracking what is said online and elsewhere and
studying customers, competitors, and others to improve business
practices.
Uncovering. Using data mining and other analytical methods to
develop deep insights into customers and how they behave.
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Internal MarketingInternal marketing requires that everyone in
the organization accept the concepts and goals of marketing and
engage in identifying, providing, and communicating customer
value
in a networked enterprise, every functional area can interact
directly with customers. Marketing no longer has sole
ownership of customer interactions; it now must integrate all
the customer-facing processes so customers see a single face
and hear a single voice when they interact with the firm.
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Organizing the Marketing DepartmentFunctional
organizationGeographic organizationProduct- or brand-
management organizationMarket-management
OrganizationMatrix-management Organization
Modern marketing departments can be organized in a number of
different, sometimes overlapping ways: functionally,
geographically, by product or brand, by market, or in a matrix.
Functional Organization In the most common form of marketing
organization, functional specialists report to a marketing vice
president who coordinates their activities.
Geographic Organization A company selling in a national
market often organizes its sales force (and sometimes its

marketing) along geographic lines. The national sales manager
may supervise four regional sales managers, who each supervise
six zone managers, who in turn supervise eight district sales
managers, who each supervise 10 salespeople. Some companies
are adding area market specialists (regional or local marketing
managers) to support sales efforts in high-volume markets.
Product- or Brand-Management Organization Companies
producing a variety of products and brands often establish a
product- (or brand-) management organization. This does not
replace the functional organization but serves as another layer
of management. A group product manager supervises product
category managers, who in turn supervise specific product and
brand managers.
Market-Management Organization When customers fall into
different user groups with distinct buying preferences and
practices, a market-management organization is desirable.
Market managers supervise several market-development
managers, market specialists, or industry specialists and draw
on functional services as needed. Market managers of important
markets might even have functional specialists reporting to
them.
Matrix-Management Organization Companies that produce many
products for many markets may adopt a matrix organization
employing both product and market managers.
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Functional Organization

Figure 23.1 shows five specialists. Others might include a
customer service manager, a marketing planning manager, a
market logistics manager, a direct marketing manager, and a
digital marketing manager.
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HUB-AND-SPOKE SYSTEM
A product-management organization makes sense if the
company’s products are quite different or there are more than a
functional organization can handle. This form is sometimes
characterized as a hub-and-spoke system. The brand or product
manager is figuratively at the center, with spokes leading to
various departments representing working relationships (see
Figure 23.2).
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Brand/Product
Manager Tasks
Develop long-range/competitive
strategy
Prepare marketing plan/sales forecast
Work with agencies
Increase support among sales force
Gather intelligence
Initiate product improvements

The product-management organization lets the product manager
concentrate on developing a cost-effective marketing program
and react more quickly to new products in the marketplace; it
also gives the company’s smaller brands a product advocate.
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Product-/Brand-Management OrganizationProduct-Management
organization disadvantages
Managers may lack authority to carry out responsibilities
Managers rarely achieve functional expertise
The system often proves costly
Managers normally manage brand for a short time
Market fragmentation makes it harder to develop national
strategy
Managers focus company away from customer relationships
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Product-/Brand-Management OrganizationProduct teams
Brand-asset management team (BAMT)Eliminate product
manager positions for minor productsCategory management
A second alternative in a product-management organization is
product teams. There are three types: vertical, triangular, and
horizontal (see Figure 23.3). The triangular and horizontal
product-team approaches let each major brand be run by a
brand-asset management team (BAMT) consisting of key

representatives from functions that affect the brand’s
performance. The company consists of several BAMTs that
periodically report to a BAMT directors committee, which itself
reports to a chief branding officer. This is quite different from
the way brands have traditionally been handled.
A third alternative is to eliminate product manager positions for
minor products and assign two or more products to each
remaining manager. This is feasible when two or more products
appeal to a similar set of needs. A cosmetics company doesn’t
need product managers for each product because cosmetics
serve one major need—beauty. A toiletries company needs
different managers for headache remedies, toothpaste, soap, and
shampoo because these products differ in use and appeal.
In a fourth alternative, category management, a company
focuses on product categories to manage its brands. Procter &
Gamble (P&G), a pioneer of the brand-management system, and
other top packaged- goods firms have made a major shift to
category management, as have firms outside the grocery
channel. Diageo’s shift to category management was seen as a
means to better manage the development of premium brands. It
also helped the firm address the plight of under-performing
brands.
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Market-Management OrganizationMarket-centered
organizationsCustomer-management organization
Market managers are staff (not line) people, with duties like
those of product managers. They develop long-range and annual

plans for their markets and are judged by their market’s growth
and profitability. Because this system organizes marketing
activity to meet the needs of distinct customer groups, it shares
many advantages and disadvantages of product-management
systems. Many companies are reorganizing along market lines
and becoming market-centered organizations. Xerox converted
from geographic selling to selling
by industry, as did IBM and Hewlett-Packard.
When a close relationship is advantageous, such as when
customers have diverse and complex requirements and buy an
integrated bundle of products and services, a customer-
management organization, which deals with individual
customers rather than the mass market or even market segments,
should prevail.
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A Creative
Marketing OrganizationShift to customer-focusAppoint
marketing officer & task forceGet outside helpChange reward
systemHire marketing talentDevelop in-house marketing
trainingInstall marketing planning systemEstablish annual
recognition programShift to a process-outcome focusEmpower
employees
Many companies realize they’re not yet really market and
customer driven—they are product and sales driven.
Transforming into a true market-driven company requires,
among other actions: (1) developing a company-wide passion
for customers; (2) organizing around customer segments instead

of products; and (3) understanding customers through
qualitative and quantitative research. The task is not easy, but
the payoffs can be considerable. See “Marketing Insight: The
Marketing CEO” for concrete actions a CEO can take to
improve marketing capabilities.
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Socially Responsible Marketing
Effective internal marketing must be matched by a strong sense
of ethics, values, and social responsibility. Taking a more
active, strategic role in corporate social responsibility is
thought to benefit not just customers, employees, community,
and the environment but also shareholders. Firms feel they also
benefit in different ways, as Figure 23.4 illustrates.
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Corporate Social Responsibility
Researchers Raj Sisodia, David Wolfe, and Jag Sheth believe
humanistic companies make great companies. They see “Firms
of Endearment” as those with a culture of caring that serve the
interests of their stakeholders, who are defined by the acronym
SPICE: Society, Partners, Investors, Customers, and Employees.
Sisodia and colleagues believe Firms of Endearment create a
love affair with stakeholders. The authors see the 21st-century

marketing paradigm as creating value for all stakeholders and
becoming a beloved firm. Table 23.2 lists firms receiving top
marks as Firms of Endearment from a sample of thousands of
customers, employees, and suppliers.
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Corporate Social ResponsibilityLegal behaviorEthical
behaviorSocial responsibility behavior & socially responsible
business modelsSustainability & greenwashing
Legal Behavior Organizations must ensure every employee
knows and observes relevant laws. For example, it’s illegal for
salespeople to lie to consumers or mislead them about the
advantages of buying a product.
Ethical Behavior Business practices come under attack because
business situations routinely pose ethical dilemmas: It’s not
easy to draw a clear line between normal marketing practice and
unethical behavior. Some issues can generate controversy or
sharply divide critics, such as acceptable marketing to children.
Social Responsibility Behavior Marketers must exercise their
social conscience in specific dealings with customers and
stakeholders. Some top-rated companies for corporate social
responsibility are Whole Foods, Walt Disney, Coca- Cola,
Johnson & Johnson, and Google. Companies that innovate
solutions and values in a socially responsible way are most
likely to succeed. Companies such as The Body Shop, Working
Assets, and Smith & Hawken are also giving social
responsibility a more prominent role, as has Newman’s Own.
More firms are coming to believe corporate social responsibility

in the form of cause marketing and employee volunteerism
programs is not just the “right thing” but also the “smart thing
to do.
Sustainability Sustainability—the ability to meet humanity’s
needs without harming future generations—now tops many
corporate agendas. Major corporations outline in great detail
how they are trying to improve the long-term impact of their
actions on communities and the environment. Coca-Cola,
AT&T, and DuPont have even installed Chief Sustainability
Officers. Heightened interest in sustainability has also
unfortunately resulted in greenwashing, which gives products
the appearance of being environmentally friendly without living
up to that promise.
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Cause-Related MarketingLinks the firm’s contributions toward a
designated cause to customers’ engaging directly or indirectly
in revenue-producing transactions with the firm
Is part of corporate societal marketing (CSM)
Many firms blend corporate social responsibility initiatives with
marketing activities. Minette Drumwright and Patrick Murphy
define CSM as marketing efforts “that have at least one
noneconomic objective related to social welfare and use the
resources of the company and/or of its partners.” Drumwright
and Murphy also include traditional and strategic philanthropy
and volunteerism in CSM.
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Cause-Related Marketing
Builds brand awareness
Enhances brand image
Establishes brand credibility
Evokes brand feelings
Creates brand community
Elicits brand engagement
A successful cause-marketing program can improve social
welfare, create differentiated brand positioning, build strong
consumer bonds, enhance the company’s public image, create a
reservoir of goodwill, boost internal morale and galvanize
employees, drive sales, and increase the firm’s market value.
Consumers may develop a strong, unique bond with the firm
that transcends normal marketplace transactions.
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Cause-Related MarketingAlign focus area with your
missionEvaluate institutional “will” and resourcesAnalyze
competitors’ cause positioningChoose partners carefullyDon’t
underestimate program nameDevelop cross-functional strategy
teamLeverage your assets with partner(s)Communicate through
every channelGo localInnovate
Designing a Cause Program Firms must make a number of
decisions in designing and implementing a cause-marketing
program, such as how many and which cause(s) to choose and

how to brand the cause program. “Marketing Memo: Making a
Difference: Top 10 Tips for Cause Branding” provides some
tips from a top cause-marketing firm.
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Social MarketingSocial marketing by nonprofits or government
organizations furthers a cause
Cause-related marketing supports a cause. Social marketing by
nonprofit or government organizations furthers a cause, such as
“say no to drugs” or “exercise more and eat better.
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Social Marketing
Choosing the right goal or objective for a social marketing
program is critical. Should a family-planning campaign focus on
abstinence or birth control? Should a campaign to fight air
pollution focus on ride sharing or mass transit? Table 23.3
illustrates the range of possible objectives.
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Social Marketing
Choose target markets ready to respond
Promote doable behavior in simple terms
Explain the benefits in compelling terms
Make it easy to adopt the behavior
Develop attention-grabbing messages
Use education-entertainment approach
While social marketing uses a number of different tactics to
achieve its goals, the planning process follows many of the
same steps as for traditional products and services (see Table
23.4).
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Marketing Implementation/Control
Table 23.5 summarizes the characteristics of a great marketing
company, great not for what it is but for what it does. Great
marketing companies know the best marketers thoughtfully and
creatively devise marketing plans and then bring them to life.
Marketing implementation and control are critical to making
sure marketing plans have their intended results year after year.
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Marketing Implementation/ControlMarketing implementation
The process that turns marketing plans into action assignments

and ensures they accomplish the plan’s stated objectives
Marketing resource management (MRM) software
A brilliant strategic marketing plan counts for little if not
implemented properly. Strategy addresses the what and why of
marketing activities; implementation addresses the who, where,
when, and how. They are closely related: One layer of strategy
implies certain tactical implementation assignments at a lower
level. For example, top management’s strategic decision to
“harvest” a product must be translated into specific actions and
assignments.
Marketing resource management (MRM) software provides a set
of Web-based applications that automate and integrate project
management, campaign management, budget management, asset
management, brand management, customer relationship
management, and knowledge management. The knowledge
management component consists of process templates, how-to
wizards, and best practices. Software packages can provide what
some have called desktop marketing, giving marketers
information and decision structures on computer dashboards.
MRM software lets marketers improve spending and investment
decisions, bring new products to market more quickly, and
reduce decision time and costs.
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Marketing Implementation/ControlMarketing control
The process by which firms assess the effects of their marketing
activities and programs and make necessary changes and
adjustments
Annual Plan Control

Profitability Control
Efficiency Control
Strategic Control
Table 23.6 lists four types of needed marketing control: annual-
plan control, profitability control, efficiency control, and
strategic control.
Annual-Plan Control Annual-plan control ensures the company
achieves the sales, profits, and other goals established in its
annual plan.
Profitability Control Companies should measure the
profitability of their products, territories, customer groups,
segments, trade channels, and order sizes to help determine
whether to expand, reduce, or eliminate any products or
marketing activities.
Efficiency Control. Some companies have established a
marketing controller position to work out of the controller’s
office but specialize in improving marketing efficiency. These
marketing controllers examine adherence to profit plans, help
prepare brand managers’ budgets, measure the efficiency of
promotions, analyze media production costs, evaluate customer
and geographic profitability, and educate marketing staff on the
financial implications of marketing decisions.
Strategic Control Each company should periodically reassess its
strategic approach to the marketplace with a good marketing
audit. Companies can also perform marketing excellence
reviews and ethical/social responsibility reviews.
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Annual plan controlMarketing metrics
Sales metrics
Customer readiness to buy metrics
Customer metrics
Distribution metrics
Communication metrics
At its heart is management by objectives (see Figure 23.5).
First, management sets monthly or quarterly goals. Second, it
monitors performance in the marketplace. Third, management
determines the causes of serious performance deviations.
Fourth, it takes corrective action to close gaps between goals
and performance.
Marketers today have better marketing metrics for measuring
the performance of marketing plans (see Table 23.7 for some
samples).73 Four tools for the purpose are sales analysis,
market share analysis, marketing expense-to-sales analysis, and
financial analysis. The chapter appendix outlines them in detail.
*
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Strategic ControlMarketing audit
A comprehensive, systematic, independent, and periodic
examination of a company’s or business unit’s marketing
environment, objectives, strategies, and activities, with a view
to determining problem areas and opportunities and
recommending a plan of action to improve the company’s
marketing performance

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Strategic ControlMarketing audit’s characteristics
Comprehensive
Systematic
Independent
Periodic
Let’s examine the marketing audit’s four characteristics:
1. Comprehensive—The marketing audit covers all the major
marketing activities of a business, not just a few trouble spots
as in a functional audit.
2. Systematic—The marketing audit is an orderly examination
of the organization’s macro- and micromarketing environments,
marketing objectives and strategies, marketing systems, and
specific activities.
3. Independent—Self-audits, in which managers rate their own
operations, lack objectivity and independence. Usually,
however, outside consultants bring the necessary objectivity,
broad experience in a number of industries, familiarity with the
industry being audited, and undivided time and attention.
4. Periodic—Firms typically initiate marketing audits only after
failing to review their marketing operations during good times,
with resulting problems. A periodic marketing audit can benefit
companies in good health as well as those in trouble.
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Marketing Audit Components
Marketing environment

Marketing strategy
Marketing organization
Marketing systems
Marketing productivity
Marketing function
The marketing audit examines six major components of the
company’s marketing situation. Table 23.8 lists the major
questions.
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The Marketing Excellence Review
The three columns in Table 23.9 distinguish among poor, good,
and excellent business and marketing practices. The profile
management creates from indicating where it thinks the business
stands on each line can highlight where changes could help the
firm become a truly outstanding player in the marketplace.
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The Future of MarketingThe coming years will see:
The demise of the marketing department and the rise of holistic
marketing
The demise of free-spending marketing and the rise of ROI
marketing
The demise of marketing intuition and the rise of marketing

science
The demise of manual marketing and the rise of both automated
and creative marketing
The demise of mass marketing and the rise of precision
marketing
To succeed in the future, marketing must be more holistic and
less departmental. Marketers must achieve wider influence in
the company, continuously create new ideas, and strive for
customer insight by treating customers differently but
appropriately. They must build their brands more through
performance than promotion. They must go electronic and win
through building superior information and communication
systems.
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Holistic MarketingCRMPRMDatabase marketing & data
miningContact center management & telemarketingDigital
marketing & social mediaPR marketingBrand-building & brand-
asset managementExperiential marketingIntegrated marketing
communicationsProfitability analysis
To accomplish these changes and become truly holistic,
marketers need a new set of skills and competencies listed on
this slide.
*
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Chapter
20
Managing Mass Communications: Advertising, Sales
Promotions, Events and Experiences, and Public Relations
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Learning Objectives
What steps are required in developing an advertising program?
How should marketers choose advertising media and measure
their effectiveness?
How should sales promotion decisions be made?
What are the guidelines for effective brand-building events and
experiences?
How can companies exploit the potential of public relations?
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Developing and Managing
an Advertising Program

Advertising can be a cost-effective way to disseminate
messages, whether to build a brand preference or to educate
people. In developing an advertising program, marketing
managers must always start by identifying the target market and
buyer motives. Then they can make the five major decisions
known as “the five Ms”:
1. Mission: What are our advertising objectives?
2. Money: How much can we spend and how do we allocate our
spending across media types?
3. Message: What should the ad campaign say?
4. Media: What media should we use?
5. Measurement: How should we evaluate the results?
These decisions are summarized in Figure 20.1.
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Developing and Managing
an Advertising ProgramSetting the advertising
objectivesDeciding on the advertising budgetDeveloping the
advertising campaignChoosing mediaEvaluating advertising
effectiveness
An advertising objective (or goal) is a specific communications
task and achievement level to be accomplished with a specific
audience in a specific period of time. We classify advertising
objectives according to whether they aim to inform, persuade,
remind, or reinforce. These goals correspond to stages in the
hierarchy-of-effects model discussed in Chapter 19.
Informative advertising aims to create brand awareness and
knowledge of new products or new features of existing
products. Consumer packaged goods companies like Colgate,

General Mills, and Unilever will often focus on key product
benefits.
Persuasive advertising aims to create liking, preference,
conviction, and purchase of a product or service. Some
persuasive advertising is comparative advertising, which
explicitly compares the attributes of two or more brands.
Comparative advertising works best when it elicits cognitive
and affective motivations simultaneously and when consumers
are processing advertising in a detailed, analytical mode.
Reminder advertising aims to stimulate repeat purchase of
products and services. Expensive, four-color Coca-Cola ads in
magazines remind people to purchase Coca-Cola.
Reinforcement advertising aims to convince current purchasers
they made the right choice. Automobile ads often depict
satisfied customers enjoying special features of their new car.
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Setting the
Advertising Objectives
Informative
Persuasive
Reminder
Reinforcement
An advertising objective (or goal) is a specific communications
task and achievement level to be accomplished with a specific
audience in a specific period of time. We classify advertising
objectives according to whether they aim to inform, persuade,

remind, or reinforce. These goals correspond to stages in the
hierarchy-of-effects model discussed in Chapter 19.
Informative advertising aims to create brand awareness and
knowledge of new products or new features of existing
products. Consumer packaged goods companies like Colgate,
General Mills, and Unilever will often focus on key product
benefits.
Persuasive advertising aims to create liking, preference,
conviction, and purchase of a product or service. Some
persuasive advertising is comparative advertising, which
explicitly compares the attributes of two or more brands.
Comparative advertising works best when it elicits cognitive
and affective motivations simultaneously and when consumers
are processing advertising in a detailed, analytical mode.
Reminder advertising aims to stimulate repeat purchase of
products and services. Expensive, four-color Coca-Cola ads in
magazines remind people to purchase Coca-Cola.
Reinforcement advertising aims to convince current purchasers
they made the right choice. Automobile ads often depict
satisfied customers enjoying special features of their new car.
*
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Deciding on the Advertising Budget
Stage in the product life cycle
Market share and consumer base
Competition and clutter
Advertising frequency
Product substitutability

Although advertising is treated as a current expense, part of it is
really an investment in building brand equity and customer
loyalty. Here are five specific factors to consider when setting
the advertising budget:
1. Stage in the product life cycle—New products typically merit
large advertising budgets to build awareness and gain consumer
trial. Established brands usually are supported by lower
advertising budgets, measured as a ratio to sales.
2. Market share and consumer base—High-market-share brands
usually require less advertising expenditure as a percentage of
sales to maintain share. Building share by increasing market
size requires larger expenditures.
3. Competition and clutter—In a market with a large number of
competitors and high advertising spending, a brand must
advertise more heavily to be heard. Even advertisements not
directly competitive to the brand create clutter and a need for
heavier advertising.
4. Advertising frequency—The number of repetitions needed to
put the brand’s message across to consumers has an obvious
impact on the advertising budget.
5. Product substitutability—Brands in less-differentiated or
commodity-like product classes (beer, soft drinks, banks, and
airlines) require heavy advertising to establish a unique image.
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Deciding on the Advertising BudgetAdvertising elasticity
Concave or S-shaped
The predominant response function for advertising is often
concave but can be S-shaped. When it is S-shaped, some

positive amount of advertising is necessary to generate any
sales impact, but sales increases eventually flatten out.
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Developing the Advertising CampaignMessage generation and
evaluation
Positioning of an ad—what it attempts to convey about the
brand
Creative brief
Open sourcing/crowdsourcing
Advertisers are always seeking “the big idea” that connects with
consumers rationally and emotionally, distinguishes the brand
from competitors, and is broad and flexible enough to translate
to different media, markets, and time periods. Fresh insights are
important for creating unique appeals and position.
A good ad normally focuses on one or two core selling
propositions. As part of refining the brand positioning, the
advertiser should conduct market research to determine which
appeal works best with its target audience and then prepare a
creative brief, typically one or two pages. This is an elaboration
of the positioning strategy and includes considerations such as
key message, target audience, communications objectives (to
do, to know, to believe), key brand benefits, supports for the
brand promise, and media.
How many ad themes should the advertiser create before
choosing one? The more themes explored, the higher the
probability of finding an excellent one. Fortunately, an ad
agency’s creative department can inexpensively compose many

alternatives in a short time by drawing still and video images
from computer files. Marketers can also cut the cost of creative
dramatically by using consumers as their creative team, a
strategy sometimes called “open sourcing” or “crowdsourcing.”
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Developing the Advertising CampaignCreative development and
execution
Advertising medium (television, print, and radio advertising
media)
The ad’s impact depends not only on what it says but, often
more important, on how it says it. Creative execution can be
decisive. Every advertising medium has advantages and
disadvantages. Here, we briefly review television, print, and
radio advertising media.
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Developing the Advertising CampaignTelevision ads
Vividly demonstrates product attributes
Persuasively explains consumer benefits
Portrays usage imagery/brand
personality
Product/brand can be overlooked
Creates clutter
Easy to ignore or forget ads
Television is generally acknowledged as the most powerful

advertising medium and reaches a broad spectrum of consumers
at low cost per exposure. Properly designed and executed TV
ads can still be a powerful marketing tool that improves brand
equity, sales, and profits. In the highly competitive insurance
category, advertising can help a brand to stand out.
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Developing the Advertising CampaignPrint ads
Provide detailed product information
Flexibility in design and placement
Can be fairly passive
Newspapers popular for local ads
In steady decline
Poor reproduction quality
Short shelf life
Researchers report that the picture, headline, and copy in print
ads matter in that order. The picture must draw attention. The
headline must reinforce the picture and lead the person to read
the copy. The copy must be engaging and the brand’s name
prominent.
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Developing the Advertising CampaignPrint ad evaluation
criteria
Is the message clear at a glance?
Is the benefit in the headline?
Does the illustration support the headline?

Does the first line of the copy support or explain the headline
and illustration?
Is the ad easy to read and follow?
Is the product easily identified?
Is the brand or sponsor clearly identified?
In judging the effectiveness of a print ad, marketers should be
able to answer yes to these questions about its execution.
*
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Developing the Advertising CampaignRadio ads
Occurs in the car and out of home
Main advantage is flexibility
Ads are relatively inexpensive
Can be schedule to air quickly
Effective when run in morning
Can be extremely creative
Can tap into the listener’s imagination
Radio is a pervasive medium: Ninety-three percent of all U.S.
citizens age 12 and older listen daily and for about 20 hours a
week on average, numbers that have held steady in recent years.
*
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Developing the Advertising CampaignLegal and social issues
Advertisers must not make false claims
Must not use false demonstrations
Must not create ads with the capacity to deceive

Must avoid bait-and-switch advertising
Radio is a pervasive medium: Ninety-three percent of all U.S.
citizens age 12 and older listen daily and for about 20 hours a
week on average, numbers that have held steady in recent years.
*
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Choosing MediaReach, frequency, and impact
Media selection is finding the most cost-effective media to
deliver the desired number and type of exposures to the target
audience. The advertiser seeks a specified advertising objective
and response from the target audience—for example, a target
level of product trial. This level depends on, among other
things, level of brand awareness. Suppose the rate of product
trial increases at a diminishing rate with the level of audience
awareness, as shown in Figure 20.2(a). If the advertiser seeks a
product trial rate of T *, it will be necessary to achieve a brand
awareness level of A*.
The next task is to find out how many exposures, E *, will
produce a level of audience awareness of A*. The effect of
exposures on audience awareness depends on the exposures’
reach, frequency, and impact:
Reach (R). The number of different persons or households
exposed to a particular media schedule at least once during a
specified time period.
Frequency (F). The number of times within the specified time
period that an average person or household is exposed to the
message.

Impact (I). The qualitative value of an exposure through a given
medium (thus, a food ad should have a higher impact in Bon
Appetit than in Fortune magazine).
Figure 20.2(b) shows the relationship between audience
awareness and reach. Audience awareness will be greater the
higher the exposures’ reach, frequency, and impact. There are
important trade-offs here. Suppose the planner has an
advertising budget of $1,000,000 and the cost per thousand
exposures of average quality is $5. This means 200,000,000
exposures ($1,000,000 ÷ [$5/1,000]). If the advertiser seeks an
average exposure frequency of 10, it can reach 20,000,000
people (200,000,000 ÷ 10) with the given budget. But if the
advertiser wants higher-quality media costing $10 per thousand
exposures, it will be able to reach only 10,000,000 people
unless it is willing to lower the desired exposure frequency.
*
18-*
Choosing MediaTotal number of exposures (E)
Gross Rating Points (GRP): E = R X FWeighted number of
exposures (WE)
WE = R X F X I
The relationship between reach, frequency, and impact is
captured in the following concepts:
Total number of exposures (E). This is the reach times the
average frequency; that is, E = R X F, also called the gross
rating points (GRP). If a given media schedule reaches 80
percent of homes with an average exposure frequency of 3, the
media schedule has a GRP of 240 (80 X 3). If another media

schedule has a GRP of 300, it has more weight, but we cannot
tell how this weight breaks down into reach and frequency.
Weighted number of exposures (WE). This is the reach times
average frequency times average impact, that is WE = R X F X
I.
Reach is most important when launching new products, flanker
brands, extensions of well-known brands, and infrequently
purchased brands or when going after an undefined target
market. Frequency is most important where there are strong
competitors, a complex story to tell, high consumer resistance,
or a frequent-purchase cycle.
*
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Choosing MediaChoosing among major media types
The media planner must know the capacity of the major
advertising media types to deliver reach, frequency, and impact.
The major advertising media along with their costs, advantages,
and limitations are profiled in Table 20.1. Media planners make
their choices by considering factors such as target audience
media habits, product characteristics, message requirements,
and cost.
*
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Choosing MediaPlace advertising options
Billboards

Public spaces
Product placement
Point of Purchase
Place advertising, or out-of-home advertising, is a broad
category including many creative and unexpected forms to grab
consumers’ attention where they work, play, and, of course,
shop. Popular options include billboards, public spaces, product
placement, and point of purchase.
Billboards use colorful, digitally produced graphics,
backlighting, sounds, movement, and unusual— even 3D—
images. Public spaces: ads are appearing in such unconventional
places as movie screens, airplane bodies, and fitness equipment,
as well as in classrooms, sports arenas, office and hotel
elevators, and other public places. Product placement: marketers
pay $100,000 to $500,000 so their products will make cameo
appearances in movies and on television. There are many ways
to communicate at the point of purchase (P-O-P), including ads
on shopping carts, cart straps, aisles, and shelves and in-store
demonstrations, live sampling, and instant coupon machines.
*
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Choosing MediaEvaluating alternate media
Need to demonstrate reach/effectivenessSelecting specific
media vehicles
Media planner must choose most cost-effective vehicles and
must estimate audience size, composition, media cost, and cost
per thousand persons reached
Nontraditional media can often reach a very precise and captive
audience in a cost-effective manner, with ads anywhere

consumers have a few seconds to notice them. The message
must be simple and direct. Outdoor advertising, for example, is
often called the “15-second sell.” It’s more effective at
enhancing brand awareness or brand image than at creating new
brand associations.
Media planners are using more sophisticated measures of
effectiveness and employing them in mathematical models to
arrive at the best media mix. Many advertising agencies use
software programs to select the initial media and make
improvements based on subjective factors.
*
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Choosing MediaSelecting media timing and allocation
In choosing media, the advertiser makes both a macroscheduling
and a microscheduling decision. The macroscheduling decision
relates to seasons and the business cycle. Suppose 70 percent of
a product’s sales occur between June and September. The firm
can vary its advertising expenditures to follow the seasonal
pattern, to oppose the seasonal pattern, or to be constant
throughout the year. The microscheduling decision calls for
allocating advertising expenditures within a short period to
obtain maximum impact. Suppose the firm decides to buy 30
radio spots in September. The left side of Figure 20.3 shows
that advertising messages for the month can be concentrated
(“burst” advertising), dispersed continuously throughout the
month, or dispersed intermittently. The top side shows they can
be beamed with a level, rising, falling, or alternating frequency.
The chosen pattern should meet the marketer’s communications
objectives and consider three factors. Buyer turnover expresses

the rate at which new buyers enter the market; the higher this
rate, the more continuous the advertising should be. Purchase
frequency is the number of times the average buyer buys the
product during the period; the higher the purchase frequency,
the more continuous the advertising should be. The forgetting
rate is the rate at which the buyer forgets the brand; the higher
the forgetting rate, the more continuous the advertising should
be.
*
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Choosing MediaSelecting media timing and allocation
Continuity
Concentrated
Flighting
Pulsing
In launching a new product, the advertiser must choose among
continuity, concentration, flighting, and pulsing.
Continuity means exposures appear evenly throughout a given
period. Generally, advertisers use continuous advertising in
expanding markets, with frequently purchased items, and in
tightly defined buyer categories.
Concentration calls for spending all the advertising dollars in a
single period. This makes sense for products with one selling
season or related holiday.
Flighting calls for advertising during a period, followed by a
period with no advertising, followed by a second period of
advertising activity. It is useful when funding is limited, the
purchase cycle is relatively infrequent, or items are seasonal.

Pulsing is continuous advertising at low levels, reinforced
periodically by waves of heavier activity. It draws on the
strengths of continuous advertising and flights to create a
compromise scheduling strategy. Those who favor pulsing
believe the audience will learn the message more thoroughly
and at a lower cost to the firm.
*
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Evaluating Advertising EffectivenessCommunication-effect
research
In-home tests, trailer tests, theater tests, on-air testsSales-effect
research
Historical approach
Experimental data
Most advertisers try to measure the communication effect of an
ad—that is, its potential impact on awareness, knowledge, or
preference. They would also like to measure its sales effect.
Communication-effect research, called copy testing, seeks to
determine whether an ad is communicating effectively.
Marketers should perform this test both before an ad is put into
media and after it is printed or broadcast. Table 20.2 describes
some specific advertising pretest research techniques.
The sales impact is easiest to measure in direct marketing
situations and hardest in brand or corporate image-building
advertising. Companies want to know whether they are
overspending or underspending on advertising. One way to
answer this question is to work with the formulation shown in
Figure 20.4. A company’s share of advertising expenditures
produces a share of voice (proportion of company advertising of

that product to all advertising of that product) that earns a share
of consumers’ minds and hearts and, ultimately, a share of
market.
Researchers can measure sales impact with the historical
approach, which uses advanced statistical techniques to
correlate past sales to past advertising expenditures. Other
researchers use experimental data to measure advertising’s sales
impact.
*
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Sales PromotionA collection of incentive tools, mostly short
term, designed to stimulate quicker or greater purchase of
particular products or services by consumers or the trade
Whereas advertising offers a reason to buy, sales promotion
offers an incentive. Some sales promotion tools are consumer
franchise building. They impart a selling message along with
the deal, such as free samples, frequency awards, coupons with
a selling message, and premiums related to the product. Sales
promotion tools that are typically not brand building include
price-off packs, consumer premiums not related to a product,
contests and sweepstakes, consumer refund offers, and trade
allowances.
*
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Sales PromotionEstablishing objectives
For consumers, retailers, and the sale force

Sales promotion objectives derive from communication
objectives, which derive from basic marketing objectives for the
product.
For consumers, objectives include encouraging more frequent
purchases or purchase of larger-sized units among users,
building trial among nonusers, and attracting switchers away
from competitors’ brands. If some of the brand switchers would
not have otherwise tried the brand, promotion can yield long-
term increases in market share.56 Ideally, consumer promotions
have short-run sales impact and long-run brand equity effects.
For retailers, objectives include persuading retailers to carry
new items and more inventory, encouraging off-season buying,
encouraging stocking of related items, offsetting competitive
promotions, building brand loyalty, and gaining entry into new
retail outlets.
For the sales force, objectives of promotion include encouraging
their support of a new product or model, encouraging more
prospecting, and stimulating off-season sales.
*
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Sales PromotionSelecting consumer promotion tools
The promotion planner should take into account the type of
market, sales promotion objectives, competitive conditions, and
each tool’s cost-effectiveness. The main consumer promotion
tools are summarized in Table 20.3. Manufacturer promotions in

the auto industry, for instance, are rebates, gifts to motivate
test-drives and purchases, and high-value trade-in credit.
Retailer promotions include price cuts, feature advertising,
retailer coupons, and retailer contests or premiums.
*
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Sales PromotionSelecting trade promotion tools
Forward buying and diverting retailers
Manufacturers use a number of trade promotion tools (see Table
20.4). They award money to the trade (1) to persuade the
retailer or wholesaler to carry the brand; (2) to persuade the
retailer or wholesaler to carry more units than the normal
amount; (3) to induce retailers to promote the brand by
featuring, display, and price reductions; and (4) to stimulate
retailers and their sales clerks to push the product.
Manufacturers often find it difficult to police retailers to make
sure they are doing what they agreed to do and increasingly
insist on proof of performance before paying any allowances.
Manufacturers face several challenges in managing trade
promotions.
Some retailers are doing forward buying—that is, buying a
greater quantity during the deal period than they can
immediately sell. The manufacturer must then schedule more
production than planned and bear the costs of extra work shifts
and overtime.
Some retailers are diverting, buying more than needed in a
region where the manufacturer offers a deal and shipping the
surplus to their stores in non-deal regions.

Manufacturers handle forward buying and diverting by limiting
the amount they will sell at a discount or by producing and
delivering less than the full order in an effort to smooth
production.
*
18-*
Sales PromotionSelecting business and sales force promotion
tools
Companies spend billions of dollars on business and sales force
promotion tools (see Table 20.5) to gather leads, impress and
reward customers, and motivate the sales force. They typically
develop budgets for tools that remain fairly constant from year
to year. For many new businesses that want to make a splash to
a targeted audience, especially in the B-to-B world, trade shows
are an important tool, but the cost per contact is the highest of
all communication options.
*
18-*
Sales PromotionDeveloping the program
Incentive size
Conditions
Duration
Distribution vehicle
Timing
Total sales promotion budget

In deciding to use a particular incentive, marketers must first
determine its size. A certain minimum discount is necessary if
the promotion is to succeed. Second, the marketing manager
must establish conditions for participation. Incentives might be
offered to everyone or to select groups. Third, the marketer
must decide on the duration of the promotion. Fourth, the
marketer must choose a distribution vehicle. A 50-cents-off
coupon can be distributed in the product package, in stores, by
mail, online, or in advertising. Fifth, the marketing manager
must establish the timing of promotion and, finally, the total
sales promotion budget. The cost of a particular promotion
consists of the administrative cost (printing, mailing, and
promoting the deal) and the incentive cost (cost of premium or
cents-off, including redemption costs), multiplied by the
expected number of units sold. The cost of a coupon deal
recognizes that only a fraction of consumers will redeem the
coupons.
*
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Sales PromotionImplementing and evaluating the program
Lead time
Sell-in time
Sales/scanner data
Consumer surveys
Experiments
Marketing managers’ implementation and control plans must
cover lead time and sell-in time for each individual promotion.
Lead time is the time necessary to prepare the program prior to
launching it. Sell-in time begins with the promotional launch
and ends when approximately 95 percent of the deal
merchandise is in the hands of consumers. Manufacturers can

evaluate the program using sales data, consumer surveys, and
experiments.
*
18-*
Events and ExperiencesEvents objectives
To identify with a target market or lifestyle
To increase salience of company/product name
To create/reinforce key brand image associations
To enhance corporate image
To create experiences and evoke feelings
To express commitment to the community or on social issues
To entertain key clients or reward employees
To permit merchandising/promotional opportunities
Marketers report a number of reasons to sponsor events, which
are listed on this slide.
*
18-*
Events and ExperiencesMajor sponsorship decisions
Choosing events
Designing sponsorship programs
Measuring sponsorship activities
Making sponsorships successful requires choosing the
appropriate events, designing the optimal sponsorship program,
and measuring the effects of sponsorship.
Choosing Events Because of the number of sponsorship

opportunities and their huge cost, many marketers are becoming
more selective. The event must meet the marketing objectives
and communication strategy defined for the brand.
Designing Sponsorship Programs Many marketers believe the
marketing program accompanying an event sponsorship
ultimately …
21-*
Chapter
21
Managing Digital Communications: Online, Social Media, and
Mobile
21-*
Learning Objectives
What are the pros and cons of online marketing?
How can companies carry out effective social media campaigns?
What are some tips for enjoying positive word of mouth?
What are important guidelines for mobile marketing?
21-*
Online MarketingCategories of online marketing

communications
Web sites
Search ads
Display ads
e-mail
The variety of online communication options means companies
can offer or send tailored information or messages that engage
consumers by reflecting their special interests and behavior.
*
21-*
Online Marketing
AdvantagesCan offer or send tailored information/messagesCan
trace effects by UVs clicks on a page/adContextual
placementCan place advertising based on search engine
keywords
DisadvantagesConsumers can screen out most messagesAds can
be less effective than they appear (bogus clicks)Lost control
over online messages via hacking/vandalism
The pros clearly can outweigh the cons, and the Internet is
attracting marketers of all kinds. The Internet also offers the
advantage of contextual placement, which means marketers can
buy ads on sites related to their own offerings.
*
21-*

Figure 21.1
Major Media Time Spent Per Day
Marketers must go where the customers are, and increasingly
that’s online. Of the time U.S. consumers spend with all media,
almost half is spent online (see Figure 21.1). Customers define
the rules of engagement, however, and insulate themselves with
the help of agents and intermediaries if they so choose. They
define what information they need, what offerings they’re
interested in, and what they’re willing to pay.
Digital advertising continues to show much more rapid growth
than traditional media. In fact, total digital ad spending in 2013
was estimated to have grown to $42.8 billion, which meant it
surpassed TV advertising (at $40.1 billion) for the first time.
*
21-*
Online MarketingCommunication Options
Web sites
Search ads
Display ads
E-Mail
A company chooses which forms of online marketing will be
most cost-effective in achieving communication and sales
objectives. The options include Web sites, search ads, display
ads, and e-mail.
Companies must design Web sites that embody or express their

purpose, history, products, and vision and that are attractive on
first viewing and interesting enough to encourage repeat visits.
Search ADS An important component of online marketing is
paid search or pay-per-click ads. Thirty-five percent of all
searches are reportedly for products or services.
Display ads or banner ads are small, rectangular boxes
containing text and perhaps a picture that companies pay to
place on relevant Web sites. Interstitials are advertisements,
often with video or animation, that pop up between page
changes within a Web site or across Web sites.
E-mail allows marketers to inform and communicate with
customers at a fraction of the cost of a d-mail, or direct mail,
campaign. E-mails can be very productive selling tools. The rate
at which they prompt purchase has been estimated to be at least
three times that of social media ads, and the average order value
is thought to be 17 percent higher.
*
21-*
Online MarketingWeb sites
Ease of use
Physical attractiveness
MicrositesSearch ads
Paid search or pay-per-click ads
Search engine optimization (SEO)
Visitors will judge a site’s performance on ease of use and
physical attractiveness.13 Ease of use means: (1) The site
downloads quickly, (2) the first page is easy to understand, and

(3) it is easy to navigate to other pages that open quickly.
Physical attractiveness is ensured when: (1) Individual pages
are clean and not crammed with content, (2) typefaces and font
sizes are very readable, and (3) the site makes good use of color
(and sound). Besides their Web sites, companies may employ
microsites, individual Web pages or clusters of pages that
function as supplements to a primary site. They’re particularly
relevant for companies selling low-interest products.
In paid search, marketers bid in a continuous auction on search
terms that serve as a proxy for the consumer’s product or
consumption interests. Advertisers pay only if people click on
the links, but marketers believe consumers who have already
expressed interest by engaging in search are prime prospects.
Average click-through in terms of the percentage of consumers
who click on a link is about 2 percent, much more than for
comparable online display ads, which range from .08 for
standard banner ads with graphics and images to .14 for rich
media (expandable banners) ads that incorporate audio and/or
video. Search engine optimization (SEO) describes activities
designed to improve the likelihood that a link for a brand is as
high as possible in the rank order of all nonpaid links when
consumers search for relevant terms.
*
21-*
Seven Key Design Elements of a Web site
Commerce
Content
Community
Customization
Communication
Connection

Jeffrey Rayport and Bernard Jaworski propose that effective
sites feature seven design elements they call the 7Cs (see Figure
21.2).11 To encourage repeat visits, companies must pay special
attention to context and content factors and embrace another
“C”—constant change.
• Context. Layout and design
• Content. Text, pictures, sound, and video the site contains
• Community. How the site enables user-to-user communication
• Customization. Site’s ability to tailor itself to different users
or to allow users to personalize the site
• Communication. How the site enables site-to-user, user-to-
site, or two-way communication
• Connection. Degree that the site is linked to other sites
*
21-*
Maximize the Marketing Value of e-mails
Give the customer a reason to respond
Personalize the content of your e-mails
Offer something instead of direct mail
Make it easy to opt and unsubscribe
Combine e-mail and social media
“Marketing Memo: How to Maximize the Marketing Value of E-
mails” provides some important guidelines for launching
productive e-mail campaigns.
• Give the customer a reason to respond. Offer powerful
incentives for reading e-mail pitches and online ads, such as

trivia games, scavenger hunts, and instant-win sweepstakes.
• Personalize the content of your e-mails. Williams-Sonoma
reported a tenfold increase in response rates when it adopted
personalized e-mail offerings based on individuals’ on-site and
catalog shopping behavior. An engaging subject line is
especially critical. One expert notes, “You really have about
five seconds to grab them or they are clicking out.”
• Offer something the customer can’t get via direct mail.
Because e-mail campaigns can be carried out quickly, they can
offer time-sensitive information. Travelocity sends frequent e-
mails pitching last-minute cheap airfares, and Club Med pitches
unsold vacation packages at a discount.
• Make it easy for customers to opt in as well as unsubscribe.
Run controlled split tests to explore how location, color, and
other factors affect “Sign Up Now” messages. Controlled split
tests assemble online matched samples of consumers with one
sample given a test message that manipulates one factor and the
other being a status quo control. Online customers also demand
a positive exit experience. Dissatisfied customers leaving on a
sour note are more likely to spread their displeasure to others.
• Combine e-mail with other communications such as social
media. Southwest Airlines found the highest number of
reservations occurred after an e-mail campaign followed by a
social media campaign. Papa John’s was able to add 45,000 fans
to its Facebook page through an e-mail campaign inviting
customers to participate in a “March Madness” NCAA
basketball tournament contest.
*
21-*
Social MediaMeans for consumers to share text, images, audio,
and video information with each other and with companies, and
vice versa

Online communities/forums
Blogs
Social networks
Social media allow marketers to establish a public voice and
presence online. They can cost-effectively reinforce other
communication activities. Because of their day-to-day
immediacy, they can also encourage companies to stay
innovative and relevant. Marketers can build or tap into online
communities, inviting participation from consumers
and creating a long-term marketing asset in the process.
There are three main platforms for social media: (1) online
communities and forums, (2) blogs (individual blogs and blog
networks such as Sugar and Gawker), and (3) social networks
(like Facebook, Twitter, and YouTube).
Online Communities and Forums Online communities and
forums come in all shapes and sizes. Many are created by
consumers or groups of consumers with no commercial interests
or company affiliations. Others are sponsored by companies
whose members communicate with the company and with each
other through postings, text messaging, and chat discussions
about special interests related to the company’s products and
brands.
Blogs Blogs, regularly updated online journals or diaries, have
become an important outlet for word of mouth. There are
millions in existence, and they vary widely, some personal for
close friends and families, others designed to reach and
influence a vast audience. One obvious appeal of blogs is that
they bring together people with common interests.
Social Networks Social networks have become an important
force in both business-to-consumer and business-to-business

marketing. Major ones include Facebook, one of the world’s
biggest; LinkedIn, which focuses on career-minded
professionals; and Twitter, with its 140-character messages or
“tweets.” Different networks offer different benefits to firms.
*
21-*
Social MediaSocial media are rarely the sole source of
marketing communications for a brand
Only some consumers want to engage with some brands, and,
even then, only some of the time
Social media allow marketers to establish a public voice and
presence online. They can cost-effectively reinforce other
communication activities. Because of their day-to-day
immediacy, they can also encourage companies to stay
innovative and relevant. Marketers can build or tap into online
communities, inviting participation from consumers
and creating a long-term marketing asset in the process.
There are three main platforms for social media: (1) online
communities and forums, (2) blogs (individual blogs and blog
networks such as Sugar and Gawker), and (3) social networks
(like Facebook, Twitter, and YouTube).
Online Communities and Forums Online communities and
forums come in all shapes and sizes. Many are created by
consumers or groups of consumers with no commercial interests
or company affiliations. Others are sponsored by companies
whose members communicate with the company and with each
other through postings, text messaging, and chat discussions
about special interests related to the company’s products and

brands.
Blogs Blogs, regularly updated online journals or diaries, have
become an important outlet for word of mouth. There are
millions in existence, and they vary widely, some personal for
close friends and families, others designed to reach and
influence a vast audience. One obvious appeal of blogs is that
they bring together people with common interests.
Social Networks Social networks have become an important
force in both business-to-consumer and business-to-business
marketing. Major ones include Facebook, one of the world’s
biggest; LinkedIn, which focuses on career-minded
professionals; and Twitter, with its 140-character messages or
“tweets.” Different networks offer different benefits to firms.
*
21-*
Word of MouthFace-to-face and phoneOnline
Viral marketing (“word of mouse”)
Contrary to popular opinion, most word of mouth is not
generated online. In fact, research and consulting firm Keller
Fay notes that 90 percent occurs offline, specifically 75 percent
face to face and 15 percent over the phone. Viral marketing is a
form of online word of mouth, or “word of mouse,” that
encourages consumers to pass along company-developed
products and services or audio, video, or written information to
others online.
*

21-*
Creating
Word-of-Mouth Buzz
Identify and devote effort to influentials
Supply key people with product samples
Work through community influentials
Develop WOM referral channels
Provide compelling info to pass along
“Marketing Memo: How to Start a Buzz Fire” describes some
techniques to increase word of mouth.
Identify influential individuals and companies and devote extra
effort to them. In technology, influencers might be large
corporate customers, industry analysts and journalists, selected
policy makers, and early adopters. Companies can trace online
activity to identify more influential users who may function as
opinion leaders.
Supply key people with product samples. Chevrolet selected
about 900 people with a Klout online influence score of more
than 50 (of a possible 100) and gave them a free three-day
rental of the Chevy Volt, resulting in 46,000 tweets and more
than 20.7 million largely positive blog posts about the electric
car.
Work through community influentials. Ford’s prelaunch “Fiesta
Movement” campaign invited 100 handpicked young Millennials
to live with the Fiesta car for six months. Drivers were chosen
based on their online experience with blogging and size and
quality of their online social network as well as a video they
submitted about their desire for adventure. After the six months

of trial usage, the campaign had drawn 4.3 million YouTube
views, more than 500,000 Flickr views, more than 3 million
Twitter impressions (the number of times a tweet is read), and
50,000 potential customers, 97 percent of whom were not
already Ford owners.
Develop word-of-mouth referral channels to build business.
Professionals will often encourage clients to recommend their
services. Weight Watchers found that word-of-mouth referrals
from someone in the program had a huge impact on business.
Provide compelling information that customers want to pass
along. Companies shouldn’t communicate with customers in
terms better suited for a press release. Make it easy and
desirable for a customer to borrow elements from an e-mail
message or blog. Information should be original and useful.
Originality increases the amount of word of mouth, but
usefulness determines whether it will be positive or negative.
*
21-*
Measuring the Effects of Word of MouthAdvertising, PR, and
digital agenciesDemographic information or proxies for that
information and cookiesGatorade’s “Mission Control Center”
21-*
Mobile Marketing
Is uniquely tied to one user
Is virtually always “on”
Allows for immediate consumption

Is highly interactive
Wharton’s David Bell notes four distinctive characteristics of a
mobile device: (1) It is uniquely tied to one user; (2) it is
virtually always “on” given it is typically carried everywhere;
(3) it allows for immediate consumption because it is in effect a
channel of distribution with a payment system; and (4) it is
highly interactive given it allows for geotracking and picture
and video taking.
*
21-*
Mobile MarketingMobile apps
Bite-sized software programs that can be downloaded to smart
phones
In a short period of time, thousands of apps have been
introduced by companies large and small. Many companies are
adding apps to their marketing toolkit.
*
21-*
Mobile MarketingBeing concise is critical
Copy should be only 50% of screen
Brands should limit ads to phrase pair
Put brand logo in corner of ad frame
Use only one or two bright colors
Calls to action should be in a bright color

Even with newer-generation smart phones, the Web experience
can be very different for users given smaller screen sizes,
longer download times, and the lack of some software
capabilities. Marketers are wise to design simple, clear, and
clean sites, paying even greater attention than usual to user
experience and navigation.
*
21-*
Mobile MarketingAcross markets
In developed Asian markets, mobile marketing is fast becoming
a central component of customer experiences
Although a growing population segment uses smart phones and
tablets for everything from entertainment to banking, different
people have different attitudes toward and experiences with
mobile technology. U.S. marketers can learn much about mobile
marketing by looking overseas.
In developing markets, high smart-phone penetration also makes
mobile marketing attractive. A pioneer in China, Coca-Cola
created a national campaign asking Beijing residents to send
text messages guessing the high temperature in the city every
day for just over a month for a chance to win a one-year supply
of Coke products. The campaign attracted more than 4 million
messages over the course of 35 days.
*

21-*
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Chapter
19
Designing and Managing Integrated Marketing Communications
18-*
Learning Objectives
What is the role of marketing communications?
What is the marketing communications mix?
How do marketing communications work?
What are the major steps in developing effective
communications?
How should the communications mix be set and evaluated?
What is an integrated marketing communications program?
18-*
The Role of Marketing CommunicationsMarketing
communications
The means by which firms attempt to inform, persuade, and
remind consumers about the products and brands they sell

In a sense, they represent the voice of the company and its
brands; they are a means by which the firm can establish a
dialogue and build relationships with consumers. By
strengthening customer loyalty, they can contribute to customer
equity. Marketing communications also work by showing
consumers how and why a product is used, by whom, where, and
when. Consumers can learn who makes the product and what the
company and brand stand for, and they can become motivated to
try or use it. Marketing communications allow companies to
link their brands to other people, places, events, brands,
experiences, feelings, and things.
*
18-*
Marketing Communications MixAdvertisingSales
promotionEvents and experiencesPublic relations and
publicityOnline and social media marketingMobile
marketingDirect and database marketingPersonal selling
The marketing communications mix consists of eight major
modes of communication:
1. Advertising—Any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified sponsor
via print media (newspapers and magazines), broadcast media
(radio and television), network media (telephone, cable,
satellite, wireless), electronic media (audiotape, videotape,
videodisk, CD-ROM, Web page), and display media (billboards,
signs, posters).
2. Sales promotion—A variety of short-term incentives to
encourage trial or purchase of a product or service including
consumer promotions (such as samples, coupons, and

premiums), trade promotions (such as advertising and display
allowances), and business and sales force promotions (contests
for sales reps).
3. Events and experiences—Company-sponsored activities and
programs designed to create daily or special brand-related
interactions with consumers, including sports, arts,
entertainment, and cause events as well as less formal activities.
4. Public relations and publicity—A variety of programs
directed internally to employees of the company or externally to
consumers, other firms, the government, and media to promote
or protect a company’s image or its individual product
communications.
5. Online and social media marketing—Online activities and
programs designed to engage customers or prospects and
directly or indirectly raise awareness, improve image, or elicit
sales of products and services.
6. Mobile marketing—A special form of online marketing that
places communications on consumer’s cell phones, smart
phones, or tablets.
7. Direct and database marketing—Use of mail, telephone, fax,
e-mail, or Internet to communicate directly with or solicit
response or dialogue from specific customers and prospects.
8. Personal selling—Face-to-face interaction with one or more
prospective purchasers for the purpose of making presentations,
answering questions, and procuring orders.
*
18-*
Common Communication Platforms
Table 19.1 lists examples of these platforms, but company
communication goes beyond these. The product’s styling and

price, the shape and color of the package, the salesperson’s
manner and dress, the store decor, and the company’s stationery
all communicate something to buyers. Every brand contact
delivers an impression that can strengthen or weaken a
customer’s view of a company.
*
18-*
How Does Marketing Communications Work?The
communications process models
Macromodel of the communications process
Micromodel of consumer responses
Marketers should understand the fundamental elements of
effective communications. Two models are useful: a
macromodel and a micromodel.
*
18-*
Figure 19.1
Elements in Communications Process
Figure 19.1 shows a macromodel with nine key factors in
effective communication. Two represent the major parties—
sender and receiver. Two represent the major tools—message
and media. Four represent major communication functions—
encoding, decoding, response, and feedback. The last element in

the system is noise, random and competing messages that may
interfere with the intended communication.
Senders must know what audiences they want to reach and what
responses they want to get. They must encode their messages so
the target audience can successfully decode them. They must
transmit the message through media that reach the target
audience and develop feedback channels to monitor the
responses. The more the sender’s field of experience overlaps
that of the receiver, the more effective the message is likely to
be. Note that selective attention, distortion, and retention
processes—first introduced in Chapter 6—may be operating.
*
18-*
Figure 19.2
Response Hierarchy Models
Micromodels of marketing communications concentrate on
consumers’ specific responses to communications. Figure 19.2
summarizes four classic response hierarchy models. All these
models assume the buyer passes through cognitive, affective,
and behavioral stages in that order. This “learn-feel-do”
sequence is appropriate when the audience has high involvement
with a product category perceived to have high differentiation,
such as an automobile or house. An alternative sequence, “do-
feel-learn,” is relevant when the audience has high involvement
but perceives little or no differentiation within the product
category, such as airline tickets or personal computers. A third
sequence, “learn-do-feel,” is relevant when the audience has
low involvement and perceives little differentiation, such as

with salt or batteries. By choosing the right sequence, the
marketer can do a better job of planning communications.
*
18-*
Micromodel of Consumer ResponsesWith an ideal ad campaign:
The right consumer is exposed to the message at the right place
and time
The ad causes the consumer to pay attention
The ad reflects consumer’s level of understanding of brand
The ad positions points-of-difference and points-of-parity
The ad motivates consumers to consider purchase
The ad creates strong brand associations
To increase the odds of success for a communications campaign,
marketers must attempt to increase the likelihood that each step
occurs. The challenges in achieving success with
communications necessitate careful planning.
*
18-*
Developing Effective Communications
Figure 19.3 shows the eight steps in developing effective
communications.
*

18-*
Developing Effective CommunicationsIdentify the target
audienceSet the communications objectives
Establish need for category
Build brand awareness
Build brand attitude
Influence brand purchase intention
The process must start with a clear target audience in mind:
potential buyers of the company’s products, current users,
deciders, or influencers, as well as individuals, groups,
particular publics, or the general public. The target audience is
a critical influence on the communicator’s decisions about what
to say, how, when, where, and to whom.
Set the Communications ObjectivesEstablish need for
category—Establishing a product or service category as
necessary for removing or satisfying a perceived discrepancy
between a current motivational state and a desired motivational
state.
2. Build brand awareness—Fostering the consumer’s ability to
recognize or recall the brand in sufficient detail to make a
purchase.
3. Build brand attitude—Helping consumers evaluate the
brand’s perceived ability to meet a currently relevant need.
4. Influence brand purchase intention—Moving consumers to
decide to purchase the brand or take purchase-related action.
*
18-*

Developing Effective CommunicationsDesign the
Communications
Message strategy
Creative strategy
Message source
Formulating the communications to achieve the desired
response requires answering three questions: what to say
(message strategy), how to say it (creative strategy), and who
should say it (message source).
Message Strategy In selecting message strategy, management
searches for appeals, themes, or ideas that will tie in to the
brand positioning and help establish points-of-parity or points-
of-difference. Some of these appeals or ideas may relate
directly to product or service performance (the quality,
economy, or value of the brand); others may relate to more
extrinsic considerations (the brand as being contemporary,
popular, or traditional).
Creative Strategy Communications effectiveness depends on
how well a message is expressed as well as on its content. If a
communication is ineffective, it may mean the wrong message
was used or the right one was poorly expressed. Creative
strategies are the way marketers translate their messages into a
specific communication. We can broadly classify them as either
informational or transformational appeals. An informational
appeal elaborates on product or service attributes or benefits. A
transformational appeal elaborates on a nonproduct-related
benefit or image.
Message Source Research has shown that the source’s
credibility is crucial to a message’s acceptance. The three most
often identified sources of credibility are expertise,
trustworthiness, and likability. Expertise is the specialized

knowledge the communicator possesses to back the claim.
Trustworthiness describes how objective and honest the source
is perceived to be. Friends are trusted more than strangers or
salespeople, and people who are not paid to endorse a product
are viewed as more trustworthy than people who are paid.
Likability describes the source’s attractiveness, measured in
terms of candor, humor, and naturalness.
*
18-*
Creative StrategyInformational appeals
One-sided vs. two-sided argumentsTransformational appeals
Negative/fear vs. positive appeals
You might expect one-sided presentations that praise a product
to be more effective than two-sided arguments that also mention
shortcomings. Yet two-sided messages may be more
appropriate, especially when negative associations must be
overcome. Two-sided messages are more effective with more
educated audiences and those who are initially opposed. The
order in which arguments are presented is important. In a one-
sided message, presenting the strongest argument first arouses
attention and interest, important in media where the audience
often does not attend to the whole message. With a captive
audience, a climactic presentation might be more effective. For
a two-sided message, if the audience is initially opposed, start
with the other side’s argument and conclude with your strongest
argument.
Communicators use negative appeals such as fear, guilt, and
shame to get people to do things (brush their teeth, have an
annual health checkup) or stop doing things (smoking, abusing

alcohol, overeating). Fear appeals work best when they are not
too strong, when source credibility is high, and when the
communication promises, in a believable and efficient way, that
the product or service will relieve the fear it arouses. Messages
are most persuasive when they moderately disagree with
audience beliefs. Stating only what the audience already
believes at best just reinforces beliefs, while messages too much
at variance with those beliefs will be rejected. Communicators
also use positive emotional appeals such as humor, love, pride,
and joy. Motivational or “borrowed interest” devices—such as
cute babies, frisky puppies, popular music, and provocative sex
appeals—are often employed to attract attention and raise
involvement with an ad.
*
18-*
Message sourceMessages delivered by attractive or popular
sources can achieve higher attention and recall
The most credible source will score high on all three
dimensions—expertise, trustworthiness, and likability. If a
person has a positive attitude toward a source and a message or
a negative attitude toward both, a state of congruity is said to
exist. But what happens if a consumer hears a likable celebrity
praise a brand she dislikes? Charles Osgood and Percy
Tannenbaum believe attitude change will take place that
increases the amount of congruity between the two evaluations.
The consumer will end up respecting the celebrity somewhat
less or the brand somewhat more. If she encounters the same
celebrity praising other disliked brands, she will eventually
develop a negative view of the celebrity and maintain negative
attitudes toward the brands. The principle of congruity implies

that communicators can use their good image to reduce some
negative feelings toward a brand but in the process might lose
some esteem with the audience.
*
18-*
Developing Effective CommunicationsSelect the
communications channels
Personal communications
Nonpersonal channels
Personal communications channels let two or more persons
communicate face to face or person to audience through a
phone, surface mail, or e-mail. They derive their effectiveness
from individualized presentation and feedback and include
direct marketing, personal selling, and word of mouth. We can
draw a further distinction between advocate, expert, and social
communications channels. Advocate channels consist of
company salespeople contacting buyers in the target market.
Expert channels consist of independent experts making
statements to target buyers. Social channels consist of
neighbors, friends, family members, and associates talking to
target buyers.
Nonpersonal channels are communications directed to more than
one person and include advertising, sales promotions, events
and experiences, and public relations.
Integration of Communications Channels Although personal
communication is often more effective than mass
communication, mass media might be the major means of
stimulating it. Mass communications affect personal attitudes

and behavior through a two-step process. Ideas often first flow
from radio, television, and print to opinion leaders or consumers
highly engaged with media and then from these influencers to
less media-involved population groups.
*
18-*
Establish the Marketing Communications BudgetAffordable
methodPercentage-of-sales methodCompetitive-parity
methodObjective-and-task method
How do companies set their communications budgets? We will
describe four common methods: the affordable method, the
percentage-of-sales method, the competitive-parity method, and
the objective-and-task method.
Affordable Method Some companies set the communications
budget at what they think they can afford.
Percentage-of-Sales Method Some companies set
communication expenditures at a specified percentage of current
or anticipated sales or of the sales price.
Competitive-Parity Method Some companies set their
communications budgets to achieve share-of-voice parity with
competitors.
Objective-and-Task Method The most defensible approach, the
objective-and-task method, calls upon marketers to develop
communications budgets by defining specific objectives,
identifying the tasks that must be performed to achieve these
objectives, and estimating the costs of performing them. The

sum of these costs is the proposed communications budget.
*
18-*
Objective-and-Task Method
Establish market share goal
Select % of market reached by advertising
Estimate % of prospects who should try brand
Calculate ad impressions per 1% trial rate
Find gross rating points to be purchased
Calculate budget for cost of gross rating point
1. Establish the market share goal. The company estimates 50
million potential users and sets a target of attracting 8 percent
of the market—that is, 4 million users.
2. Select the percentage of the market that should be reached by
advertising. The advertiser hopes to reach 80 percent of the
market (40 million prospects) with its advertising message.
3. Estimate the percentage of aware prospects who should be
persuaded to try the brand. The advertiser would be pleased if
25 percent of aware prospects (10 million) tried Sunburst. It
estimates that 40 percent of all triers, or 4 million people, will
become loyal users. This is the market share goal.
4. Calculate the number of advertising impressions per 1
percent trial rate. The advertiser estimates that 40 advertising
impressions (exposures) for every 1 percent of the population
will bring about a 25 percent trial rate.
5. Find the number of gross rating points to be purchased. A
gross rating point is one exposure to 1 percent of the target
population. Because the company wants to achieve 40 exposures
to 80 percent of the population, it will want to buy 3,200 gross
rating points.

6. Calculate the necessary advertising budget on the basis of the
average cost of buying a gross rating point. Suppose it costs an
average of $3,277 to expose 1 percent of the target population
to one impression. Then 3,200 gross rating points will cost
$10,486,400 (= $3,277 X 3,200) in the introductory year.
The objective-and-task method has the advantage of requiring
management to spell out its assumptions about the relationship
among dollars spent, exposure levels, trial rates, and regular
usage.
*
18-*
Selecting the Marketing Communications MixAdvertisingSales
promotionEvents and experiencesPublic relations and
publicityOnline and social media marketingMobile
marketingDirect and database marketingSales force
Companies must allocate their marketing communications
budget over the eight major modes of communication—
advertising, sales promotion, events and experiences, public
relations and publicity, online and social media marketing,
mobile marketing, direct and database marketing, and the sales
force. Within the same industry, companies can differ
considerably in their media and channel choices.
*
18-*
Marketing Communications Mix CharacteristicsAdvertising

Pervasiveness
Amplified expressiveness
ControlSales Promotion
Ability to be attention-getting
Incentive
Invitation
Advertising Advertising reaches geographically dispersed
buyers. It can build up a long-term image for a product (Coca-
Cola ads) or trigger quick sales (a Macy’s ad for a weekend
sale).
1. Pervasiveness—Advertising permits the seller to repeat a
message many times. It also allows the buyer to receive and
compare the messages of various competitors. Large-scale
advertising says something positive about the seller’s size,
power, and success.
2. Amplified expressiveness—Advertising provides
opportunities for dramatizing the company and its brands and
products through the artful use of print, sound, and color.
3. Control—The advertiser can choose the aspects of the brand
and product on which to focus communications.
Sales Promotion Companies use sales promotion tools—
coupons, contests, premiums, and the like—to draw a stronger
and quicker buyer response, including short-run effects such as
highlighting product offers and boosting sagging sales. Sales
promotion tools offer three distinctive benefits:
1. Ability to be attention-getting—They draw attention and may
lead the consumer to the product.
2. Incentive—They incorporate some concession, inducement,
or contribution that gives value to the consumer.
3. Invitation—They include a distinct invitation to engage in the
transaction now.
*

18-*
Marketing Communications Mix CharacteristicsEvents and
experiences
Relevant
Engaging
ImplicitPublic relations and publicity
High credibility
Ability to reach hard-to-find buyers
Dramatization
Events and Experiences Events and experiences offer many
advantages as long as they have the following characteristics:
1. Relevant—A well-chosen event or experience can be seen as
highly relevant because the consumer is often personally
invested in the outcome.
2. Engaging—Given their live, real-time quality, events and
experiences are more actively engaging for consumers.
3. Implicit—Events are typically an indirect soft sell.
Public Relations and Publicity Marketers tend to underuse
public relations, yet a well-thought-out program coordinated
with the other communications-mix elements can be extremely
effective, especially if a company needs to challenge
consumers’ misconceptions. The appeal of public relations and
publicity is based on three distinctive qualities:
1. High credibility—News stories and features are more
authentic and credible to readers than ads.
2. Ability to reach hard-to-find buyers—Public relations can
reach prospects who prefer to avoid mass media and targeted
promotions.
3. Dramatization—Public relations can tell the story behind a
company, brand, or product.

*
18-*
Marketing Communications Mix CharacteristicsOnline and
social media marketing
Rich
Interactive
Up to dateMobile marketing
Timely
Influential
Pervasive
Online and Social Media Marketing Online marketing and
messages can take many forms to interact with consumers when
they are in active search mode or just browsing and surfing
online for something to do. They share three characteristics:
1. Rich—Much information or entertainment can be provided—
as much or as little as a consumer might want.
2. Interactive—Information can be changed or updated
depending on the person’s response.
3. Up to date—A message can be prepared very quickly and
diffused through social media channels.
Mobile Marketing Increasingly, online marketing and social
media rely on mobile forms of communication and smart phones
or tablets. Three distinguishing characteristics of mobile
marketing are:
1. Timely—Mobile communications can be very time-sensitive
and reflect when and where a consumer is.
2. Influential—Information received or obtained via a smart
phone can reach and influence consumers as they are making a
purchase decision.

3. Pervasive—Consumers typically carry their smart phones
everywhere, so mobile communications are at their fingertips.
*
18-*
Marketing Communications Mix CharacteristicsDirect and
database marketing
Personal
Proactive
ComplementaryPersonal selling
Customized
Relationship-oriented
Response-oriented
Direct and Database Marketing The advent of “Big Data” has
given marketers the opportunity to learn even more about
consumers and develop more personal and relevant marketing
communications. Three noteworthy characteristics of direct and
database marketing are:
1. Personal—Personal facts, opinions, and experiences can be
stored in massive databases and incorporated into personal
messages.
2. Proactive—A direct marketing piece can create attention,
inform consumers, and include a call to action.
3. Complementary—Product information can be provided that
helps other marketing communications, especially in terms of e-
commerce. A good catalog might spur online shopping.
Personal Selling Personal selling is the most effective tool at
later stages of the buying process, particularly in building up
buyer preference, conviction, and action. It has three notable
qualities:

1. Customized—The message can be designed to appeal to any
individual.
2. Relationship-oriented—Personal selling relationships can
range from a matter-of-fact selling relationship to a deep
personal friendship.
3. Response-oriented—The buyer is often given personal
choices and encouraged to directly respond.
*
18-*
Setting the Marketing Communications MixType of product
market
Consumer vs. business marketers
Advertising/sales promotion vs. personal sellingProduct life-
cycle stage
Consumer marketers tend to spend comparatively more on sales
promotion and advertising; business marketers tend to spend
comparatively more on personal selling. In general, personal
selling is used more with complex, expensive, and risky goods
and in markets with fewer and larger sellers (hence, business
markets).
Advertising combined with personal selling can increase sales
over personal selling alone. Corporate advertising can improve
a company’s reputation and improve the sales force’s chances of
getting a favorable first hearing and early adoption of the
product.
An effectively trained company sales force can make four
important contributions:
1. Increase stock position—Sales reps can persuade dealers to

take more stock and devote more shelf space to the company’s
brand.
2. Build enthusiasm—Sales reps can build dealer enthusiasm by
dramatizing planned advertising and communications support
for the company’s brand.
3. Conduct missionary selling—Sales reps can sign up more
dealers.
4. Manage key accounts—Sales reps can take responsibility for
growing business with the most important accounts.
Product Life-Cycle Stage In the introduction stage of the
product life cycle, advertising, events and experiences, and
publicity have the highest cost-effectiveness, followed by
personal selling to gain distribution coverage and sales
promotion and direct marketing to induce trial. In the growth
stage, demand has its own momentum through word of mouth
and interactive marketing. Advertising, events and experiences,
and personal selling all become more important in the maturity
stage. In the decline stage, sales promotion continues strong,
other communication tools are reduced, and salespeople give the
product only minimal attention.
*
18-*
Setting the Marketing Communications MixBuyer-readiness
stage
Communication tools vary in cost-effectiveness at different
stages of buyer readiness. Figure 19.4 shows the relative cost-
effectiveness of three communication tools. Advertising and
publicity play the most important roles in the awareness-
building stage. Customer comprehension is primarily affected

by advertising and personal selling. Customer conviction is
influenced mostly by personal selling. Personal selling and sales
promotion are most helpful in closing the sale. Reordering is
also affected mostly by personal selling and sales promotion
and somewhat by reminder advertising. Note too that online
activities can affect virtually any stage.
*
18-*
Measuring Communication Results
After implementing the communications plan, the
communications director must measure its impact. Members of
the target audience are asked whether they recognize or recall
the message, how many times they saw it, what points they
recall, how they felt about the message, and what are their
previous and current attitudes toward the product and the
company. The communicator should also collect behavioral
measures of audience response, such as how many people
bought the product, liked it, and talked to others about it.
Figure 19.5 provides an example of good feedback
measurement. We find 80 percent of the consumers in the total
market are aware of brand A, 60 percent have tried it, and only
20 percent who tried it are satisfied. This indicates that the
communications program is effective in creating awareness, but
the product fails to meet consumer expectations. In contrast, 40
percent of the consumers in the total market are aware of brand
B and only 30 percent have tried it, but 80 percent of them are
satisfied. In this case, the communications program needs to be
strengthened to take advantage of the brand’s potential power.
*

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