Chapter 15 – Integrated Marketing Communications and Direct Marketing
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CHAPTER CONTENTS
PAGE
POWERPOINT RESOURCES TO USE WITH LECTURES …………………………………… 15-2
LEARNING OBJECTIVES (LO) ……………………………………………………………………………. 15-3
KEY TERMS ………………………………………………………………………………………………………….. 15-3
LECTURE NOTES
• Chapter Opener: Sometimes Taco Bell Leads to Wedding Bells! …………………………. 15-4
• The Communication Process (LO 15-1)……………………………………………………………. 15-5
APPLYING MARKETING KNOWLEDGE …………………………………………………………… 15-28
BUILDING YOUR MARKETING PLAN ………………………………………………………………. 15-32
VIDEO CASE (VC)
• VC-15: Taco Bell: Using IMC to Help Customers Live Mas! …………………………….. 15-33
IN-CLASS ACTIVITIES (ICA)
• ICA 15-1: An IMC for Lay’s STAX………………………………………………………………… 15-36
• ICA 15-2: An IMC for a Toro Snowthrower …………………………………………………….. 15-40
CONNECT EXERCISES …………………………………………….……………………15-45
• Promotional Mix Elements Click and Drag*
• Promotion Decision Process Click and Drag*
• Taco Bell: Using IMC to Help Customers Live Mas! Video Case
• Push or Pull? Choosing Channel Strategies Click and Drag*
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POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Textbook Figures Slide
Figure 15-1 The six key elements of the communication process……………………………………………. 15-6
Figure 15-2 The five elements of the promotional mix ………………………………………………………….. 15-9
Figure 15-3 The product life cycle illustrates how promotional objectives change …………………… 15-18
Marketing Matters, Making Responsible Decisions, and/or Marketing Insights
Marketing Matters—Hey Marketers. College students are digital and mobile! …………………………. 15-16
Making Responsible Decisions—Ethics: What is the Future of Your Privacy? …………………………. 15-30
Videos
15-1: North Face Ad ………………………………………………………………………………………………………….. 15-8
15-3: Data & Marketing Assoc. ………………………………………………………………………………………….. 15-13
15-5: PHD Media Video ……………………………………………………………………………………………………. 15-27
15-7: Taco Bell Video Case ……………………………………………………….………………………………………. 15-31
In-Class Activities (ICA)
ICA 15-2: An IMC for a Toro Snowthrower ……………………………………………………………………….. 15-38
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LEARNING OBJECTIVES (LO)
After reading this chapter students should be able to:
LO 15-2: Describe the promotional mix and the uniqueness of each component.
LO 15-3: Select the promotional approach appropriate to a product’s target audience, life-cycle
LO 15-5: Explain the value of direct marketing for consumers and sellers.
KEY TERMS
advertising
personal selling
communication
promotional mix
direct marketing
public relations
direct orders
publicity
hierarchy of effects
pull strategy
integrated marketing communications
(IMC)
push strategy
lead generation
sales promotion
traffic generation
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LECTURE NOTES
SOMETIMES TACO BELL LEADS TO WEDDING BELLS!
• Taco Bell customers are interested in the “cool” factor. Some customers even add
Taco Bell to their wedding festivities.
a. Created the Love & Tacos Contest
• Customers submitted a photo or video on Instagram or Twitter telling their
• Taco Bell uses many forms of promotion including television, radio, outdoor,
cinema ads, and public relations.
– Introduced the Quesalupa with TV ad on Super Bowl.
– Advertising modified to emphasize it only uses anti-biotic free chicken
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b. The importance of integrating the various elements of a marketing
communications program.
• Promotion:
• The promotional mix is the combination of one or more communication tools to:
1. Inform prospective buyers about the benefits of the product.
3. Remind them later about the benefits they enjoyed by using the product.
• Marketers often viewed the communication tools as separate and independent.
a. The advertising department often designed and managed its activities without
consulting departments or agencies that had responsibility for sales promotion or
• Integrated marketing communications (IMC):
a. Is the concept of designing marketing communications programs that…
I. THE COMMUNICATION PROCESS [LO 15–1]
[Figure 15-1] Communication is the process of conveying a message to others that
requires six elements: a source, a message, a channel of communication, a receiver, and
the processes of encoding and decoding.
• A source is a company or person who has information to convey.
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• Receivers are consumers who read, hear, or see the message sent by a source.
A. Encoding and Decoding
• Encoding is the process of having the sender transform an idea into a set of
symbols.
• Decoding.
a. Is the reverse of encoding, or…
[Video 15-1: North Face Ad]
• Errors occur during the communication process in several ways:
a. The source may not transform the abstract idea into an effective set of
symbols.
b. A properly encoded message may:
c. The receiver may not transform the set of symbols into the intended idea.
• Field of experience.
a. Is a mutually shared understanding and knowledge that:
• The sender and receiver apply to the message so that…
• It can be communicated effectively.
b. Misinterpretations:
B. Feedback
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• A feedback loop consists of a response and feedback.
a. A response is the impact the message had on the receiver’s knowledge,
C. Noise
• Noise includes extraneous factors that:
a. Can work against effective communication by…
b. Distorting a message or the feedback received.
• Noise occurs when:
LEARNING REVIEW
15-1. What are the six elements required for communication to occur?
Answer: The six elements required for communication to occur are: (1) a source, which
15-2. A difficulty for U.S. companies advertising in international markets is that the
audience does not share the same __________.
15-3. A misprint in a newspaper ad is an example of __________.
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II. THE PROMOTIONAL ELEMENTS [LO 15–2]
[Figure 15-2] Firms use one or more of five promotional alternatives based on either:
• Mass selling.
• Customized interaction.
a. Tactics used between a seller and a prospective buyer.
A. Advertising
• Advertising is any paid form of nonpersonal communication about an
organization, product, service, or idea by an identified sponsor.
a. The paid aspect is important because the space for the advertising message
normally must be bought.
b. An exception is a public service announcement (PSA), in which advertising
time or space is donated.
c. The nonpersonal component involves mass media, which:
• Are nonpersonal.
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e. Once created, the same message is sent to all receivers in a market segment.
e. If an advertiser pretests the message’s pictorial, text, and brand elements, it:
• Can ensure the ad’s ability to capture consumers’ attention.
B. Personal Selling
• Personal selling is the two-way flow of communication between a buyer and
seller, often in a face-to-face encounter, designed to influence a person’s or
group’s purchase decision.
• The advantages of using personal selling are:
c. The salesperson can:
• See or hear the potential buyer’s reaction to the message.
• Modify the message if the feedback is unfavorable.
• The disadvantages of using personal selling are:
C. Public Relations
• Public relations is a form of communication management that seeks to influence
the feelings, opinions, or beliefs about a company and its offerings held by:
a. Customers. d. Suppliers.
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a. Publicity. e. Press conferences.
[Video 15-2: McDonald’s Video]
• Publicity.
a. Is a nonpersonal, indirectly paid presentation of an organization, product, or
service.
d. With publicity, a firm:
• Does not pay for space in a mass medium (such as television or radio).
e. The advantage of using publicity is credibility:
• People believe favorable media stories, reports, and product reviews.
• Publicity is particularly effective when consumers lack prior knowledge of
the product or service.
f. The disadvantage of using publicity is the user’s lack of control. There is no
guarantee a story will:
• Result from inviting media to an event.
• Social media such as Facebook, Twitter, and topic-specific blogs:
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D. Sales Promotion
• Sales promotion is a short-term inducement of value offered to arouse interest in
buying a product or service.
• Along with advertising or personal selling, sales promotions are offered to
intermediaries as well as to ultimate consumers.
• Examples include coupons, rebates, samples, contests, and sweepstakes.
• The advantages of using sales promotion:
a. Often stimulates sales for the duration of a short-term program, such as a
coupon or sweepstakes with an expiration date.
b. Offers value to the consumer in terms of a cents-off coupon or rebate.
d. The federal government regulates some aspects of sales promotions.
E. Direct Marketing
• Direct marketing is a promotion alternative that uses direct communication with
consumers to generate a response in the form of:
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a. An order. c. A visit to a retail outlet.
b. A request for further information.
• This form of communication can take many forms:
a. Face-to-face selling. d. Telemarketing.
[Video 15-3: Data & Marketing Association]
[ICA 15-1: An IMC for Lays STAX]
[ICA 15-2: An IMC for a Toro Snowthrower]
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LEARNING REVIEW
15-4. Explain the difference between advertising and publicity when both appear on
television.
15-5. Cost per contact is high with the __________ element of the promotional mix.
15-6. Which promotional element should be offered only on a short-term basis?
III. INTEGRATED MARKETING COMMUNICATIONS—
DEVELOPING THE PROMOTIONAL MIX
In putting together the promotional mix, a marketer must:
• Determine the balance of the promotional elements used based on:
a. The target audience for the promotion. d. Decision stage of the buyer.
• Coordinate a consistent promotional effort:
a. Since the elements are often the responsibility of different departments…
A. The Target Audience
• Promotional programs are directed to the ultimate consumer, an intermediary
(retailer, wholesaler, or distributor), or both.
• Promotional programs directed to buyers of consumer products use:
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c. Direct marketing to encourage first-time or repeat purchases.
d. Combinations to reach some target audiences.
MARKETING MATTERS
Hey Marketers. College Students are Digital and Mobile!
College students spend more than $545 billion each year, making them an attractive
market for many businesses. The challenge for marketers is that these students are tech-
Guidelines to ensure the success of mobile campaigns directed at college students are:
a. Create a mobile-ready app that is flashy, fun, and has the potential to “go viral.”
b. Create apps that help shoppers make price comparisons and match product
• Promotional programs can be directed to the ultimate consumer, to an
intermediary, or to both:
a. Programs directed to buyers of consumer products often use mass media
because the number of potential buyers is large.
b. Personal selling is used at the place of purchase.
c. Direct marketing bay be used to encourage first-time or repeat purchases.
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B. The Product Life Cycle [LO 15-3]
[Figure 15-3] Shows how the composition of the promotional mix for Purina Dog
Chow changes over the four stages of its product life cycle.
1. Introduction Stage. The objective is to inform and generate awareness.
a. All the promotional mix elements are used at this time, although the use of
2. Growth Stage. The objective is to persuade the consumer to buy the product
rather than substitutes to gain brand preference and solidify distribution.
a. Advertising stresses brand differences.
3. Maturity Stage. The objective is to maintain existing buyers.
4. Decline Stage. The objective is to phase out the product.
a. Little money is spent in the promotional mix.
c. Channel Strategies
1. Push Strategy.
a. [Figure 15-4A] A push strategy directs the promotional mix to channel
15–16
2. Pull Strategy.
a. In some instances, manufacturers face resistance from channel members who
do not want to:
b. [Figure 15-4B] A pull strategy directs the promotional mix at ultimate
consumers to encourage them to ask the retailer for a product.
c. Seeing demand from consumers, retailers order the product from wholesalers,
LEARNING REVIEW
15-7. Promotion programs can be directed to ______, ______ or both.
15-8. Describe the promotional objective for each stage of the product life cycle.
15-9. Explain the differences between a push strategy and a pull strategy.
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IV. DEVELOPING AN IMC PROGRAM [LO 15–4]
Due to high media costs, promotion decisions must be made carefully using a systematic
approach like the strategic marketing process.
• [Figure 15-5] The promotion decision process is divided into developing, executing,
and assessing the promotion program.
A. Identifying the Target Audience
• Target audience. The prospective buyers toward which the program is directed.
B. Specifying Promotion Objectives
• The hierarchy of effects is the sequence of stages a prospective buyer goes
through from initial awareness of a product to eventual action that includes five
stages, which are:
a. Awareness. The consumer’s ability to recognize and remember the product or
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b. Often focuses on a single stage.
• Promotion objectives may consist of the following:
a. Building awareness.
C. Setting the Promotion Budget
• The promotion expenses to reach U.S. households are enormous. Five U.S.
advertisers (Comcast, P&G, AT&T, Amazon, and General Motors) each spend
more than $3 billion annually on promotion.
1. Percentage of Sales.
a. Percentage of sales budgeting:
Chapter 15 – Integrated Marketing Communications and Direct Marketing
APPLYING MARKETING METRICS
How Much Should You Spend on IMC?
Promotion-to-Sales Ratio
Marketers use the promotion-to-sales ratio to assess how effective the IMC program
expenditures are at generating sales. The promotion-to-sales ratio can compare programs
(1) on a year-to–year basis, (2) with competitor’s programs, and (3) with industry averages.
Your Challenge.
You decide to calculate the promotion-to-sales ratio for Dunkin’ Donuts, Starbucks,
[See UMD17PromoSalesRatio.xls]
Your Findings.
The graph on the marketing dashboard is generated from information obtained from
trade publications and annual reports. The chart shows the promotion-to–sales. Dunkin’
Your Actions.
2. Competitive Parity.
a. Competitive parity budgeting:
3. All You Can Afford.
a. All-you-can-afford budgeting allocates funds to promotion only after all
15–20
4. Objective and Task.
a. Objective and task budgeting allocates funds whereby the firm:
• Determines its promotion objectives.
D. Selecting the Right Promotional Tools
• The relative combination of the five basic IMC tools must be specified.
[Video 15-4: Olympics Video]
E. Designing the Promotion
• The central element of a promotion program is the promotion itself.
a. Advertising consists of the copy and artwork for the target audience.
• The design of the promotion:
a. Determines the message that is communicated to the target audience.