Chapter 6

INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT

PREPARED BY:NAFILAH BT ABDUL KHALIDNURUL FATIN BT MOHAMAD

SALWANIAH BT IBRAHIM

6-2

THE OUTLINE

1. Integrated Marketing Communication (IMC) Strategy Framework

2. Information Requirements in Purchase Decisions

3. Reasonable Communication Objectives

4. Developing an IMC Mix

Information Requirements of Buyers

Nature of the Offering

Target-Market Characteristics

Organizational Capacity

Push versus Pull Communication Strategies

6-3

5. Marketing Web Sites and Integrated

Marketing Communications

Purpose of Marketing Web Sites

Leveraging Advertising and Personal

Selling with Promotional Web Sites

6. Communication Mix Budgeting

Communication Budget Allocation

7. Evaluation and Control of the

Communication Process

THE OUTLINE

6-4

Marketing communication is the

process by which information about an

organization and its offerings is

disseminated to selected markets.

What is Marketing Communication?

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Goal of Marketing Communication

Induce initial purchase

Create post purchase

satisfaction

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The availability of an offering

The unique benefits of the offering

The where and how of obtaining and using the offering

Purpose of Marketing Communication

Communication is necessary to inform buyers of the following:

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Marketing Communication Mix

Communications

Mix

PersonalSelling

SalesPromotion

Advertising

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Integrated Marketing Communications (IMC)

The practice of blending

different elements of the

communication mix in

mutually reinforcing ways.

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IMC Strategy Framework

1. What are the information requirements

of target markets?

2. What are the objectives of the strategy?

3. Can some of the communication

activities be combined?

4. What should the budget be and how

should resources be allocated?

5. How should it be timed and scheduled?

6. How should it be evaluated?

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Information Requirements in Purchase Decisions

Purchase Process Model

Unawareness

Knowledge

Preference

Purchase

6-11

Information Requirements in Purchase Decisions

Determine how buyers purchase a particular

offering

Roles played by individuals in the buying

center/household

Define the role of information in the

purchase process

When, where, how, and what information is

used for decision making

Determine the perception that consumers

have of the organization and the offering

Sources from which information is sought

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Reasonable Communication Objectives

Build primary demand

Demand for the product or service class

Build selective demand

Demand for a particular brand, product, or service

Objectives differ depending on stage in product life-cycle:

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Reasonable Communication Objectives

Requirements

Consistent

Both among themselves and with other marketing elements

Quantifiable

For measurement and control purposes

Attainable

With an appropriate amount of effort and expenditure and within a specific time frame

Developing an IMC Mix

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Factors to be Considered

The information requirements of potential buyers

The nature of the offering

The nature of the target market

The capacity of the organization

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INFORMATION REQUIREMENTS OF BUYERS

• Identification of the relative value of communication

tools at various stages in the purchase-decision

process is the starting point in crafting IMC mix.

• Consumer touch points – to design where, when,

and how a potential buyer comes in contact.

• The manager only achieve an effective

communication mix by understanding the

information requirements of their potential buyers.

Developing an IMC Mix

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NATURE OF THE OFFERING

Advertising is useful when an offering is not complex, is frequently purchased, is relatively inexpensive, or has benefits that differentiate it from competition

Personal selling is required when a product is relatively expensive or its benefits are not readily apparent

Sales promotion lends itself to nearly every offering type because of the wide variety of forms it can assume

Developing an IMC Mix

6-17

TARGET MARKET CHARACTERISTICS

Advertising is effective for communicating an offering to a mass market that is geographically scattered

Direct marketing (e.g., radio, print, television) can also be used to reach a geographically dispersed target market

Personal selling is useful when a small number of buyers live in close proximity and purchase large quantities

Developing an IMC Mix

6-18

Developing an IMC Mix

Perform the activity internally?

Company sales force

Fixed and variable costs

More control

Flexibility

Focused sales effort

Greater availability

Contract it out?

Independent sales representatives

Variable costs only

Acceptable control

Lower personnel costs

Greater flexibility

Increased sales effort

vs.MAKE BUY

ORGANIZATIONAL CAPACITY – make-or-buy decision

Commission paid to independent reps = 5%

Commission paid to company salespeople = 3%

Salary and admin costs for salespeople = $500,000

Cost of company reps

0.03X + $500,000

Cost of independent reps

0.05X=

Solving for X, we get $25 million for the level of sales at which both options will cost the same.

Developing an IMC MixOrganizational Capacity

At what level X of sales would both options cost the same?

Break-Even Chart for Comparing Independent Reps and Company Sales Force

Company Sales Cost ($000)

($1,250)

$3,000

$2,500

$2,000

$1,000

$500

0 5 10 15 20 25 30 35 40

Independent Reps Selling Cost

Company Sales Force Selling Cost

Company Sales ($ Millions)

Developing an IMC MixPush and Pull

Strategies

6-21

• Push communication strategy is one in which the offering is push to their target market through a marketing channel.

• Pull communication strategy seeks to create initial interest among potential buyers, ultimately pulling the offering through a marketing channel. (eg: free sample, coupons)

Developing an IMC MixPush and Pull Strategies

Producer

Retailers andWholesalers

Consumers

PUSH strategy

Retailers andWholesalers

Consumers

PULL strategy

6-23

1. An organization has easily identifiable buyers

2. The offering is complex

3. Buyers view the purchase as being risky

4. A product or service is early in its life cycle

5. The organization has limited funds for direct-to-consumer advertising

Developing an IMC MixPush and Pull Strategies

Push strategy is typically used when…

6-24

Identifying an Advertising Opportunity

1. There is a favorable primary demand for a product or service category

2. The product or service to be advertised can be significantly differentiated from its competitors

3. The product or service has hidden qualities or benefits that can be communicated through advertising

4. There are strong emotional buying motives involved, such as for health, beauty, or safety

Developing an IMC Mix

6-25

Marketing Web Sites and IMC

Focus on turning an online browser into an online buyer. Successful transactional Web sites feature:

Well-known, branded products and services

Favorable shopping and buying experiences (e.g., Gap.com)

Transactional Sites

6-26

Promote a company’s products and services and provide information on how items can be used and where they can be purchased

Can have games, contests, quizzes with electronic coupons and other gifts and prizes (e.g., Saturn.com)

Marketing Web Sites and IMC

Promotional Sites

6-27

Promotional SitesCan also be used to create a buzz (word of mouth behavior)

Marketing Web Sites and IMC

6-28

Procter & Gamble’s Physique shampoo

– People who referred 10 friends to the shampoo’s promotional web site received a gift

– The promotion generated 2 million referrals!

Marketing Web Sites and IMC

Viral SitesEncourages individuals to forward marketer-initiated messages to others via e-mail

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Communication mix

Early stages of the process-need recognition

Development of product specifications

Providing feedback on product/service performance

Leveraging Advertising and Personal Selling with Promotion

Web Site

Promotional Web sites and the Internet/Web-

enabled technology that supports them can

leverage advertising and personal selling efforts

Can play a cost-effective role in:

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Communication Mix Budgeting

Formula-based guidelines

Qualitatively-based guidelines

Make the budget commensurate with the

tasks required of the communication

activities

Establishing the size of a communication budget:

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Percentage of sales approach

Past sales or anticipated sales can be

used for this approach

Per unit method

Multiply per unit spending with expected

sales volume

Mostly used by durable-goods

manufacturers (e.g., appliance marketers)

Communication Mix Budgeting

Formula-based Approaches

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Competitive-party approach

Maintain a parity between company’s

communication expenditures and those

of its competitors

All available funds

When introducing a new offering

Communication Mix Budgeting

Qualitatively-based Approaches

6-33

1. Define the communication objectives

2. Identify the tasks needed to attain the objectives

3. Estimate the costs associated with the performance of these tasks

Objective-task approach

Communication Mix Budgeting

This method is typically considered the

best approach.

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Television

Radio

Magazine

Newspaper

Billboard

Internet

Communication Mix Budgeting

Advertising Budget Allocation

Each medium consists of vehicles that have

specific characteristics

SIX media:

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Media are mostly chosen based on:

Cost

Reach

Frequency

Audience characteristics

Other considerations:

Purpose of the advertisement

Product needs

Editorial climate

Communication Mix Budgeting

Advertising Budget Allocation

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NS = number of sales people

NC = number of customers (actual or potential)

FC = necessary frequency of customer calls

LC = length of average customer call, including

travel time

TA = average available selling time per

salesperson (less administrative time)

NC x FC x LC

TANS =

Communication Mix BudgetingSales Force Budget Allocation

6-37

No. of potential customers = 2500

No. of calls per customers per year = 4

Travel time per call = 2 hrs

Number of working hours per year = 1340

2500 x 4 x 2

1340= 15 salespeople needed

Sales Force Budget Allocation Example

Communication Mix Budgeting

6-38

Evaluation and Control of the Communication Process

Continuous monitoring of the execution of

any communication to ensure that

communication objectives are being

attained

Should incorporate some measure of

sales or profits

Budgeting