Integrated Marketing Communication Strategy and Management

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Chapter 6

• Integrated Marketing Communication Strategy and
  Management

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In this chapter, you will learn about

• Integrated Marketing Communication (IMC) Strategy
  Framework
• Information Requirements in Purchase Decisions
• Reasonable Communication Objectives
• Developing an IMC Mix
• Information Requirements of Buyers
• Nature of the Offering
• Target-Market Characteristics
• Organizational Capacity
• Push versus Pull Communication Strategies

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In this chapter, you will learn about

• Marketing Web Sites and Integrated Marketing
  Communications
• Purpose of Marketing Web Sites
• Leveraging Advertising and Personal Selling with
  Promotional Web Sites
• Communication Mix Budgeting
• Communication Budget Allocation
• Evaluation and Control of the Communication
  Process

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What is Marketing Communication?

• Marketing communication is the process by which
  information about an organization and its
  offerings is disseminated to selected markets.

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Goal of Marketing Communication

• Induce initial purchase
• Create post purchase satisfaction

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Purpose of Marketing Communication
Communication is necessary to inform buyers of
the following

• The availability of an offering
• The unique benefits of the offering
• The where and how of obtaining and using the
  offering

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Marketing Communication Mix
Communications Mix
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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

• What are the information requirements of target
  markets?
• What are the objectives of the strategy?
• Can some of the communication activities be
  combined?
• What should the budget be and how should
  resources be allocated?
• How should it be timed and scheduled?
• How should it be evaluated?

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Information Requirements in Purchase
DecisionsPurchase Process Model
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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
Objectives differ depending on stage in product
life-cycle

• Build primary demand
• Demand for the product or service class
• Build selective demand
• Demand for a particular brand, product, or service

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Reasonable Communication ObjectivesRequirements

• 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

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Developing an IMC MixFactors 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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Developing an IMC MixInformation Requirements of
Buyers
Analyze the relative value of the communication
tools used at various stages in the
purchase-decision process

• Advertising creates awareness
• Salespeople provide information
• Sales promotion, brochures, and catalogs provide
  descriptions and stimulate trial

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Developing an IMC Mix 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

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Developing an IMC MixTarget Market
Characteristics

• Advertising is effective for communicating an
  offering to a mass market that is geographically
  scattered
• Direct marketing (e.g., Internet) 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

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Developing an IMC MixOrganizational Capacity

• 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

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Developing an IMC MixOrganizational Capacity

• Commission paid to independent reps 5
• Commission paid to company salespeople 3
• Salary and admin costs for salespeople 500,000

At what level X of sales would both options cost
the same?
Solving for X, we get 25 million for the level
of sales at which both options will cost the same.
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Break-Even Chart for Comparing Independent Reps
and Company Sales Force
Company Sales Cost (000)
Independent Reps Selling Cost
3,000
2,500
2,000
(1,250)
Company Sales Force Selling Cost
1,000
500
Company Sales ( Millions)
0
5
10
15
20
25
30
35
40
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Developing an IMC MixPush and Pull Strategies
Producer
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Developing an IMC MixPush and Pull Strategies
Push strategy is typically used when

• An organization has easily identifiable buyers
• The offering is complex
• Buyers view the purchase as being risky
• A product or service is early in its life cycle
• The organization has limited funds for
  direct-to-consumer advertising

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Developing an IMC MixIdentifying an Advertising
Opportunity

• There is a favorable primary demand for a
  product or service category
• The product or service to be advertised can be
  significantly differentiated from its competitors
• The product or service has hidden qualities or
  benefits that can be communicated through
  advertising
• There are strong emotional buying motives
  involved, such as for health, beauty, or safety

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Marketing Web Sites and IMC
Transactional Sites

• 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)

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Marketing Web Sites and IMC
Promotional Sites

• Promote a companys 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)

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Marketing Web Sites and IMC

• Promotional Sites
• Can also be used to create a buzz (word of mouth
  behavior)

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Marketing Web Sites and IMC
Viral Sites Encourages individuals to forward
marketer-initiated messages to others via e-mail

• Procter Gambles Physique shampoo
• People who referred 10 friends to the shampoos
  promotional web site received a gift
• The promotion generated 2 million referrals!

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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

• Communication mix
• Early stages of the process-need recognition
• Development of product specifications
• Providing feedback on product/service performance

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Communication Mix Budgeting
Make the budget commensurate with the tasks
required of the communication activities
Establishing the size of a communication budget

• Formula-based guidelines
• Qualitatively-based guidelines

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Communication Mix BudgetingFormula-based
Approaches

• 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)

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Communication Mix BudgetingQualitatively-based
Approaches

• Competitive-party approach
• Maintain a parity between companys communication
  expenditures and those of its competitors
• All available funds
• When introducing a new offering

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Communication Mix Budgeting
Objective-task approach

• Define the communication objectives
• Identify the tasks needed to attain the
  objectives
• Estimate the costs associated with the
  performance of these tasks

This method is typically considered the best
approach.
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Communication Mix Budgeting Advertising Budget
Allocation

• Television
• Radio
• Magazine
• Newspaper
• Billboard
• Internet

SIX media
Each medium consists of vehicles that have
specific characteristics
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Communication Mix Budgeting Advertising Budget
Allocation

• Media are mostly chosen based on
• Cost
• Reach
• Frequency
• Audience characteristics
• Other considerations
• Purpose of the advertisement
• Product needs
• Editorial climate

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Communication Mix Budgeting Sales Force Budget
Allocation
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)
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Communication Mix Budgeting
Sales Force Budget Allocation Example
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
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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