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CHAPTER 15
Integrated Marketing Communications
TEACHING RESOURCES QUICK REFERENCE GUIDE
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Purpose and Perspective
IRM, p. 1
Lecture Outline
IRM, p. 2
Discussion Starters
IRM, p. 11
Class Exercises
IRM, p. 13
Chapter Quiz
IRM, p. 15
Semester Project
IRM, p. 16
Answers to Issues for Discussion and Review
IRM, p. 17
Answers to Developing Your Marketing Plan
IRM, p. 21
Comments on Video Case 15
IRM, p. 22
PowerPoint Slides
Instructor’s website
Note: Additional resources may be found on the accompanying student and instructor websites at
www.cengagebrain.com.
PURPOSE AND PERSPECTIVE
This chapter is the first of three dealing with promotion decisions and activities. Its primary objective is to
give students an overview of promotion and integrated marketing communications. First, the chapter
shows how integrated marketing communications (IMC) provides the maximum informational and
persuasive impact on customers. Then, it examines the communication process. After that, it presents a
theoretical foundation on which to build an understanding of promotion. The first part of this chapter
focuses on the nature of IMC, the communication process, the role of promotion in organizations, and the
objectives of promotion. Next, the chapter introduces the concept of the promotion mix and briefly
describes the major elements. Then it analyzes a number of factors which affect marketers’ decisions
when selecting specific ingredients to include in a promotion mix for a product. At the end of this chapter,
it examines such issues as word–of-mouth communications and their effects on promotion, product
placement, and some criticisms and defenses of promotion.
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LECTURE OUTLINE
I. The Nature of Integrated Marketing Communications
A. Integrated marketing communications is the coordination of promotion and other marketing
efforts to ensure maximum informational and persuasive impact on customers.
B. A major goal of integrated marketing communications is to send a consistent message to customers.
C. Because various units both inside and outside most companies have traditionally planned and
implemented promotional efforts, customers have not always received consistent messages.
D. Mass media advertising is used less today than in the past because of high cost and lower
effectiveness in reaching some target markets.
E. More precisely targeted promotional tools, such as cable and TV, direct mail, the Internet, special–
interest magazines, DVDs, cell phones, mobile applications, and outdoor boards are available.
1. Database marketing also allows marketers to be more precise in targeting individual
customers.
F. Today, a number of promotion-related companies provide one-stop shopping to clients seeking
advertising, sales promotion, and public relations, thus reducing coordinating problems for the
sponsoring company.
G. Rising costs have also meant upper management demands systematic evaluations of
communication efforts and reasonable return on investments.
H. The specific communication vehicles employed and the precision with which they are used are
changing as both information technology and customer interests become increasingly dynamic.
I. Today, marketers and customers have nearly unlimited access to data about each other.
1. Integrating marketing communications and customizing it for consumers, while also
protecting customer privacy, has become increasingly difficult.
2. The sharing of information and use of technology to facilitate communication between
buyers and sellers are essential for successful customer relationship management.
II. The Communication Process
A. Communication can be defined as a sharing of meaning. Implicit in this definition is the notion of
transmission of information because sharing necessitates transmission.
B. Communication begins with a source, which is a person, group, or organization with a meaning it
attempts to share with an audience. (Figure 15.1)
C. A receiver is the individual, group, or organization that decodes a coded message; an audience is
two or more receivers.
D. To transmit meaning, a source must convert the meaning into a series of signs or symbols
representing ideas or concepts. This is called the coding process or encoding.
E. To share meaning, the source should use signs or symbols familiar to the receiver or audience.
1. Persuasive messages from a source are more effective when the appeal matches an
individual’s personality.
a. Marketers that understand this realize the importance of knowing the target market
and ensuring that messages, such as advertisements, use language understood by the
target market and that depicts behaviors acceptable within the culture.
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F. When coding a meaning, a source needs to use signs or symbols the receiver or audience uses for
referring to the concepts the source intends to convey.
G. To share a coded meaning with the receiver or audience, a source selects and uses a
communications channel, the medium of transmission carrying the coded message from the
source to the receiver or audience.
H. In the decoding process, signs or symbols are converted by the receiver into concepts and ideas.
Seldom does a receiver decode exactly the same meaning the source intended.
I. Noise is anything that reduces the clarity and accuracy of the communication. It has many sources
and may affect any or all parts of the communication process.
1. Noise sometimes arises within the communications channel itself.
2. Noise will occur if the source uses signs or symbols that are unfamiliar to the receiver or
have a different meaning than the one intended.
3. Noise may also originate in the receiver; a receiver may be unaware of a coded message
because his or her perceptual processes block it out.
J. The receiver’s response to a decoded message is feedback to the source.
1. During feedback, the receiver or audience provides the original source with a response to the
message. Thus, communication can be viewed as a circular process.
2. During face-to-face communication, both verbal and nonverbal feedback can be immediate,
enabling communicators to quickly adjust their messages to improve the effectiveness of
their communication.
3. When mass communication like advertising is used, feedback is often slow and difficult to
recognize.
a. Some relevant and timely feedback can occur in the form of sales increases, inquiries
about products, or changes in attitude or brand awareness levels.
K. Each communication channel is limited on the volume of information it can effectively handle.
This limit, called channel capacity, is determined by the least efficient component of the
communication process.
III. The Role and Objectives of Promotion
A. Promotion is communication that builds and maintains favorable relationships by informing and
persuading one or more audiences to view an organization positively and accept its products.
1. Many organizations spend considerable resources on promotion to build and enhance
relationships with current and potential customers as well as other stakeholders.
a. Marketers indirectly facilitate favorable relationships by focusing information about
company activities and products on interest groups, current and potential investors,
regulatory agencies, and society in general.
b. Some organizations promote responsible use of potentially harmful products.
c. Companies sometimes promote programs that help selected groups.
(1) Cause-related marketing links the purchase of products to philanthropic efforts
for one or more causes to help boost sales and generate goodwill.
2. For maximum benefit from promotional efforts, marketers strive for proper planning,
implementation, and control of communications.
3. Promotional objectives vary widely from one organization to another and within
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organizations over time.
B. Create Awareness
1. For an organization that is introducing a new product or a line extension, making customers
aware of the product is crucial to initiating the product adoption process.
2. For existing products, promotional efforts aim to increase awareness of brands, product
features, image-related issues, and/or operational characteristics.
C. Stimulate Demand
1. When an organization is the first to introduce an innovative product, it tries to stimulate
primary demand—demand for a product category rather than for a specific brand of
product through pioneer promotion.
a. Pioneer promotion informs potential customers about the product: what it is, what it
does, how it can be used, and where it can be purchased.
2. Selective demand is demand for a specific brand.
a. Marketers employ promotional efforts that point out the strengths and benefits of a
specific brand.
b. Advertising campaigns, price discounts, free samples, coupons, consumer contests and
games, and sweepstakes are promotional activities that stimulate selective demand.
D. Encourage Product Trial
1. Promotion activities are necessary to move customers through the product adoption process.
a. Free samples, coupons, test drives, or limited free-use offers, contests, and games
make product trial convenient and low risk for potential customers.
E. Identify Prospects
1. Certain types of promotional efforts are directed at identifying customers who are interested
in the firm’s product and are most likely to buy it.
2. Advertisements may direct prospects to provide information via websites to receive
something of value from the company.
a. Customers who respond usually have higher interest in the product, and the
organization can follow up with them.
F. Retain Loyal Customers
1. Maintaining long-term customer relationships is a major goal of most marketers.
2. The costs of retaining customers are usually lower than those for acquiring new ones.
3. Common promotional activities directed at retaining loyal customers are frequent-user
programs and special offers for existing customers only.
4. Reinforcement advertising assures current users they have made the right choice.
G. Facilitate Reseller Support
1. Reseller support is a two-way street: producers generally want to provide support to resellers
to assist in selling their products, and in turn they expect resellers to support their products.
2. Strong relationships with resellers are important to an organization’s ability to maintain a
sustainable competitive advantage.
a. Use of various promotional methods helps organizations achieve this goal.
H. Combat Competitive Promotional Efforts
1. Promotional activities do not necessarily increase the organization’s sales or market share,
but may prevent a sales or market share loss.
2. A combative promotional objective is most common in extremely competitive consumer
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products markets.
I. Reduce Sales Fluctuations
1. Demand for many products varies because of climate, holidays, or seasons.
2. Promotional techniques are often designed to stimulate sales during sales slumps or low–
demand periods.
IV. The Promotion Mix
A. When an organization combines specific methods to manage the integrated marketing
communications for a particular product, that combination constitutes the promotion mix for that
product.
B. The four possible elements of a promotion mix are advertising, personal selling, public relations,
and sales promotion.
1. For some products, organizations use all four elements; for other products, only two or three.
C. Advertising
1. Advertising is a paid non-personal communication about an organization and its products
transmitted to a target audience through mass media, such as television, radio, the Internet,
newspapers, magazines, direct mail, outdoor displays, and signs on mass transit vehicles.
2. Advertising is changing as consumers’ mass media consumption habits change. Marketers
now utilize more digital media that are designed to cater to smaller, more personalized
audiences.
3. Individuals and organizations use advertising to promote goods, services, ideas, issues, and
people.
4. Because advertising is highly flexible, it can reach a large target audience or focus on a
small, precisely defined segment.
5. Advertising offers several benefits.
a. It is extremely cost-efficient when it reaches a vast number of people at a low cost per
person.
b. It lets the source repeat the message several times.
c. The visibility an organization gains from advertising can enhance its image.
6. Advertising also has several disadvantages.
a. Even though the cost per person reached may be low, the absolute dollar outlay can be
extremely high, thus limiting and sometimes preventing the use of advertising in a
promotion mix.
b. It rarely provides rapid feedback.
c. It is difficult to measure the effects of advertising on sales.
d. Advertising ordinarily has less persuasive impact on customers than personal selling.
e. The time available to communicate a message is often very short, even limited to a
few seconds.
D. Personal Selling
1. Personal selling is a paid, personal communication that seeks to inform customers and
persuade them to purchase products in an exchange situation.
2. Personal selling is most extensively used in the business-to-business market and also in the
business-to-consumer market for high-end products such as homes, cars, electronics, and
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furniture.
3. Like advertising, personal selling has both advantages and limitations.
a. The cost of reaching one person through personal selling is considerably more than
through advertising, but personal selling efforts often have greater impact on
customers.
b. Personal selling provides immediate feedback.
4. When a salesperson and a customer meet face–to-face, they use several types of interpersonal
communication.
a. A salesperson and customer frequently use kinesic communication, or
communication through the movement of one’s head, eyes, arms, hands, legs, or torso.
b. Proxemic communication, a less obvious form of communication used in personal
selling situations, occurs when either party varies the physical distance which
separates them.
c. Tactile communication is communicating through touching.
E. Public Relations
1. Public relations is a broad set of communication efforts used to create and maintain favorable
relationships between an organization and its stakeholders.
2. Public relations uses a variety of tools, including annual reports, brochures, event
sponsorship, and sponsorship of socially responsible programs aimed at protecting the
environment or helping disadvantaged individuals.
3. Publicity, another public relations tool, is non-personal communication in news-story form
about an organization, its products, or both, which is transmitted through a mass medium at
no charge.
4. Unpleasant situations and negative events may generate unfavorable public relations for an
organization; effective marketers have policies and procedures in place to help manage
public relations problems.
5. Public relations should not be viewed as a set of tools to be used only during crises, but as an
ongoing program.
F. Sales Promotion
1. Sales promotion is an activity or material that acts as a direct inducement offering added
value or incentive for the product to resellers, salespeople, or customers. Examples include
free samples, games, rebates, sweepstakes, contests, premiums, and coupons.
2. Sales promotion should not be confused with promotion; sales promotion is just one part of
the comprehensive area of promotion.
3. Marketers spend more on sales promotion than on advertising, and sales promotion is a
faster-growing area than advertising.
4. Unlike advertising and personal selling, marketers’ use of sales promotion tends to be
irregular, particularly when used to promote seasonal products.
5. Marketers frequently rely on sales promotion to improve the effectiveness of other
promotion-mix elements.
6. An effective promotion mix requires the right combination of advertising, personal selling,
public relations, and sales promotion.
V. Selecting Promotion Mix Elements
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A. Marketers vary the compositions of promotion mixes for many reasons. A promotion mix can
include all four elements, but frequently a marketer selects fewer than four.
B. Promotional Resources, Objectives, and Policies
1. The size of an organization’s promotional budget affects the number and relative intensity of
promotional methods included in the promotion mix.
2. If a company’s promotional budget is extremely limited, the firm is likely to rely on personal
selling because it is easier to measure a salesperson’s contribution to sales than to measure
the effect of advertising.
3. Businesses must have sizable promotional budgets to use regional or national advertising and
sales promotion activities.
4. An organization’s promotional objectives and policies also influence the types of promotion
selected.
a. If a company’s objective is to create mass awareness of a new convenience good, its
promotion mix is likely to lean heavily toward advertising, sales promotion, and
possibly public relations.
b. If a company hopes to educate consumers about the features of a durable good, its
promotion mix may combine a moderate amount of advertising, possibly some sales
promotion, and a great deal of personal selling because this is an excellent way to
inform customers about such products.
c. If an organization’s objective is to produce immediate sales of nondurable services,
the promotion mix will probably stress advertising and sales promotion.
C. Characteristics of the Target Market
1. The size, geographic distribution, and demographic characteristics of an organization’s target
market help dictate the ingredients to be included in a product’s promotion mix.
a. If the size of the market is limited, the promotion mix will probably emphasize
personal selling because it can be effective for reaching a small number of people.
When markets for a product consist of millions of customers, organizations rely on
advertising and sales promotion.
b. If a company’s customers are concentrated in a small geographic area, personal selling
is more feasible than if the customers are dispersed across a vast region. Advertising
may be more practical when the company’s customers are numerous and not
concentrated.
c. Demographic characteristics such as age, income, or education level may dictate the
types of promotional techniques a marketer selects.
D. Characteristics of the Product
1. Generally, promotion mixes for business products concentrate on personal selling, whereas
consumer goods promotion relies on advertising. However, this generalization should be
treated cautiously; producers of business products do use some advertising to promote goods.
2. Marketers of highly seasonal products may have to emphasize advertising and sales
promotion, because off-season sales may be insufficient to support an extensive year-round
sales force.
3. A product’s price influences the composition of the promotion mix.
a. High-priced products call for more personal selling because consumers associate
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greater risk with the purchase of such products and usually want the advice of a
salesperson.
b. For low-priced convenience items, marketers use advertising rather than personal
selling.
4. A product’s use also affects the combination of promotional methods. Service businesses
often use tangible products to promote their intangible services.
E. Costs and Availability of Promotional Methods
1. The costs of promotional methods and the availability of promotional techniques are major
factors to analyze when developing a promotion mix.
2. National advertising and sales promotion efforts require large expenditures; however, if they
reach extremely large numbers of people, the cost per individual may be quite small.
3. Although there are numerous media vehicles within the United States, an organization may
find that no available advertising medium effectively reaches a certain target market.
F. Push and Pull Channel Policies
1. One element marketers should consider is whether to use a push policy or a pull policy.
a. With a push policy, the producer promotes the product only to the next institution
down the marketing channel.
b. With a pull policy, the firm promotes directly to consumers with the intention of
developing a strong consumer demand for the products.
2. Push and pull policies are not mutually exclusive and an organization may use both policies
simultaneously at times.
VI. The Growing Importance of Word–of-Mouth Communications
A. Depending on the type of customers and the products involved, buyers to some extent rely on
word-of-mouth communication from personal sources, such as family members and friends.
1. Word-of-mouth communication is personal informal exchanges of communication that
customers share with one another about products, brands, and companies.
a. Most customers are likely to be influenced by friends and family members when
making purchases.
b. Word-of-mouth communication is very important when people are selecting
restaurants and entertainment along with automotive, medical, legal, banking, and
personal services, such as hair care.
B. Effective marketers who understand the importance of word–of-mouth communication attempt to
identify opinion leaders and encourage them to try their products in the hopes that they will spread
favorable publicity about them.
C. Customers are increasingly going online for information and opinions about goods and services as
well as about the companies.
1. Electronic word of mouth is communicating about products through websites, blogs, e-mail,
social networks, or online forums.
a. At consumer-oriented websites, consumers can learn about other consumers’ feelings
toward and experiences with specific products.
b. Users can also search within product categories and compare consumers’ viewpoints
on various brands and models.
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2. Electronic word-of-mouth communication is considered particularly important for consumers
who wish to stay abreast of trends. Many websites set and report on trends, and marketers
increasingly must cater to these sites in order to garner positive reviews.
D. An approach called buzz marketing is an attempt to incite publicity and public excitement
surrounding a product through a creative event.
1. Buzz marketing works best as a part of an integrated marketing communication program that
also uses advertising, personal selling, sales promotion, and publicity.
2. Marketers should take care that their buzz marketing events do not violate laws or have the
potential to be misconstrued or cause undue alarm (for example, sidewalk paintings).
E. Viral marketing is a strategy to get consumers to share a marketer’s message, often through e-mail
or online videos such as YouTube, in a way that spreads quickly and dramatically.
F. Word of mouth, no matter how it is transmitted, is not effective in all product categories.
1. It seems to be most effective for new–to-market and more expensive products.
2. Despite the obvious benefits of positive word of mouth, marketers must also recognize the
potential dangers of negative word of mouth, particularly in dealing with online platforms
that reach more people and encourage consumers to “gang up” on a company or product.
VII. Product Placement
A. Product placement is a form of advertising that strategically locates products or product
promotions within entertainment media to reach the product’s target markets.
B. In-program product placements have been successful in reaching consumers as they are being
entertained rather than in the competitive commercial break periods.
VIII. Criticisms and Defenses of Promotion
A. A number of specific criticisms have been lodged against promotional activities (Table 15.3).
1. There are two main reasons for such criticism: promotion does have flaws, and it is a highly
visible business activity that pervades our daily lives.
B. Is Promotion Deceptive?
1. Although no longer widespread, some deceptive or misleading promotion still occurs.
2. Laws, government regulation, and industry self-regulation have helped decrease deceptive
promotion.
C. Does Promotion Increase Prices?
1. Promotion is often blamed for higher prices, but if promotion is working to stimulate
demand, producing and marketing larger quantities can actually help reduce prices.
2. Promotion can also help keep prices lower by facilitating price competition.
D. Does Promotion Create Needs?
1. Critics of promotion claim promotion manipulates consumers by persuading them to buy
products they do not need. But without promotion, many needs would still exist.
2. Marketing does not create needs, but capitalizes on them.
E. Does Promotion Encourage Materialism?
1. Promotions are sometimes criticized for encouraging materialism.
2. Even if there was no promotion, it is likely there would still be some materialism among
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some groups.
F. Does Promotion Help Customers Without Costing Too Much?
1. Consumers do benefit, for promotions inform them about a product’s uses, features,
advantages, prices, or purchase locations, allowing them to make more intelligent buying
decisions.
G. Should Potentially Harmful Products Be Advertised?
1. Organizations are often criticized for promoting products associated with unhealthy
activities.
2. Those who defend such promotion argue that as long as it is legal to sell a product,
promoting it should also be allowed.
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DISCUSSION STARTERS
Discussion Starter 1: Selling You the Brand Using IMC (integrated marketing communication)
ASK: How could integrating marketing tools assist you in getting the job you want?
http://www.youtube.com/watch?v=R6FqxxYABvU&feature=related
Discussion Starter 2: Web 2.0 and Social Media
ASK: How many of you use Facebook or Twitter every day?
ASK: Why are organizations that use social media as part of the IMC program cautioned to have “a
thick skin”?
understand their customers and be prepared to respond to criticism.
Discussion Starter 3: Favorite Commercials
ASK: What are your favorite print ads or television commercials? What works well and why?