Marketing Chapter 16 Homework Sponsorship Involves Advertising Direct Mail And Sales

464 Part 6 Promotional Decisions

CHAPTER 16

INTEGRATED MARKETING COMMUNICATIONS, ADVERTISING, AND PUBLIC

RELATIONS

CHAPTER OVERVIEW

Chapter 16 is the first of two chapters devoted to analyzing the third marketing mix variable—promotion.

Promotion puts the whole picture together. It is the function of informing, persuading, and influencing the

consumer’s purchase decision.

The text focuses on technological advances and how they have dramatically changed the way marketers

now transmit a message from a sender to a receiver. Each message that people receive tells them

something about the brand, company, or organization. So a company needs to coordinate all these

messages. All communications need to give the same clear message so that the promotion gets

maximum total impact and consumers don’t tune out.

This chapter introduces the concept of IMC, then describes the elements of a firm’s promotional mix—

personal and nonpersonal selling —and the characteristics that determine the success of the mix.

The next segment of this chapter deals with advertising, which is the most visible form of nonpersonal

promotion, and marketers often use it together with sales promotion to create effective promotional

campaigns.

The chapter looks at the roles of public relations, publicity, and cross-promotion in an organization’s

promotional strategy. Finally the chapter concludes by identifying factors that influence the effectiveness

of a promotional mix.

Changes in the 17th Edition

The chapter has been updated and revised in several ways.

• The Opening Vignette and Evolution of a Brand feature Starbucks, a global chain that has

become synonymous with upscale coffee drinks. “Starbucks Serves Up Successful Marketing

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 465

‘Brew’” highlights the strategies adopted by Starbucks to build its relationship with its customers.

Starbucks’ marketing approach is multi-layered and reaches across various platforms. Its

interactive web page invites customers to share their personal Starbucks experiences. Adopting a

mobile marketing strategy, it offers a number of incentives through its loyalty program, My

Starbucks Rewards. The secret of its success lies in its ability to identify, understand, and shape

its clientele.

• Career Readiness outlines ideas for building and maintaining a network for your career and

future job prospects. For more details see “Tips for Career Networking.”

• Video Case 16.2 includes a video featuring the strategies used by Pepe’s Pizzeria, a popular

pizza chain.

LECTURE OUTLINE

Opening Vignette and Evolution of a Brand—“Starbucks Serves Up Successful Marketing ‘Brew’”

What do you think accounts for Starbucks’ success? How does the company use social media to

connect with its customers?

Chapter Objective 1: Define integrated marketing communications and how it relates to the

development of an optimal promotional mix.

Key Terms: promotion, marketing communications, integrated marketing communications (IMC)

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1. Promotion and the marketing mix

a. Promotion is the communication link between buyers and

sellers; it is the function of informing, persuading, and

influencing a consumer’s purchase decision

Marketing

Success—H&M

Integrates Its

Beckham

Campaign

How can retailers

reach and serve

target markets?

2. Integrated marketing communications

a. To prevent loss of attention, marketers are turning to

integrated marketing communications (IMC), which

coordinates all promotional activities to produce a unified,

customer-focused message

i. IMC is broader than marketing communications and

promotional strategy

ii. It uses database technology to refine the

understanding of the target audience, segment this

audience, and select the best type of media to reach

each segment

b. Marketers use this concept to develop customer-oriented

marketing programs, with the customer at the heart of the

communications

c. Rather than separating the parts of the promotional mix,

IMC looks at these elements from the consumer’s

viewpoint—as information about the brand or the company

d. IMC broadens promotion to include all the ways a customer

has contact with an organization; without this integrated

approach, a firm may send conflicting messages that

confuse potential buyers

e. The success of any IMC program depends on identifying the

members of an audience and understanding what they want,

otherwise the wrong message may be sent

f. IMC not only delivers messages to the intended audiences,

but also gathers feedback from them

g. The increase in media options provides more ways to give

consumers product information

i. This can also create information overload

i. Using IMC, marketers can more easily create a unified

personality for the brand and narrowly focus plans to reach

Career

Readiness—Tips

for Career

Networking

3. Importance of teamwork

a. IMC requires big-picture view of promotional planning, a

total strategy including all marketing activities, not just

promotion

b. IMC requires that everyone involved in every aspect of

promotion work together as a team, presenting a consistent

message at every point of customer contact

c. This saves time and money while avoiding duplication of

efforts

f. Networking, a form of teamwork, is an important skill for

building a career

4. Role of databases in effective IMC programs

a. The dramatic growth of the Internet has allowed marketers

to gather more information faster and to organize it more

easily

b. By sharing this detailed knowledge with all relevant parties,

a company can lay the foundation for a successful IMC

program

i. The move from mass marketing to customer-specific

marketing (seen in online promotion) requires

information

ii. It requires not only a way to identify and

communicate with the target market, but also a way

to gather information about each prospective

customer

Assessment check questions

1.1. Define promotion. Promotion is the function of informing, persuading,

and influencing the consumer’s purchase decision.

1.2. What is the difference between marketing communications and

Chapter Objective 2: Describe the communication process and how it relates to the AIDA

concept.

Key Terms: sender, message, receiver, AIDA concept, encoded, decoded, feedback, noise,

channel

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Table 16.1 Relating

Promotion to the

Communication

Process. Besides

the three listed,

think of other types

of promotions and

1. The communication process

a. Similar to individuals, firms worry that their message may

c. In any communication, the sender acts as the source in the

communication system in trying to convey a message—

information, advice, or a request—to a receiver, who

decodes and responds to the communication

d. An effective message accomplishes three tasks:

i. It gains the receiver’s attention

e. These three tasks are related to the AIDA concept

2. The AIDA concept

a. The AIDA concept, stands for attention-interest-desire-

action, the steps consumers take in reaching a purchase

decision

i. First, the promotional message must gain attention

ii. It then seeks to arouse interest in the product

b. Encoding and decoding

i. These promotional messages must be encoded—

translated into understandable terms—and

transmitted through a communications channel

ii. They are then decoded in the receiver’s

interpretation of the message

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 469

iii. Feedback—the receiver’s response—completes the

process

messages, ignoring the rest

c. AIDA concept and online marketers

i. AIDA can help marketers understand online sales

ii. They must know how many people are looking at a

site, how often they come to view a message, what

d. Feedback

i. Feedback—the receiver’s response to the

message—allows marketers to evaluate the

effectiveness of the message and tailor their

responses accordingly

ii. Feedback may take the form of favorable attitude

changes toward a product line, purchases of the

item, or even nonpurchases

e. Noise

i. Noise is anything that interferes with or interrupts the

message—in the form of physical problems such as

bad radio or television reception, or conceptual

problems such as poor appeals or use of

inappropriate media

ii. Noise is interference at some stage in the

communication process, including misinterpretations

470 Part 6 Promotional Decisions

Assessment check questions

2.1. Identify the four steps of the AIDA concept. The four steps of the AIDA

concept are attention, interest, desire, and action.

2.2. What is noise as it relates to the communication process? Noise

represents interference at some stage in the communication process.

Chapter Objective 3: Identify the seven elements of the promotional mix.

Key Terms: promotional mix, personal selling, nonpersonal selling, advertising, product

placement, sales promotion, direct marketing, public relations, publicity, guerrilla marketing, buzz

marketing, campus ambassadors, viral marketing, sponsorship

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1. Elements of the promotional mix

a. Like the marketing mix, the promotional mix requires a

carefully designed blend of variables to satisfy the needs of a

company’s customers and achieve organizational objectives

b. The promotional mix works like a subset of the marketing

mix, with its own product, distribution, promotion, and pricing

elements

c. The two main components of the promotional mix are

personal selling and nonpersonal selling

d. Nonpersonal selling includes advertising, sales promotion,

direct marketing, public relations, and guerrilla marketing

2. Personal selling

a. Personal selling refers to a seller’s promotional presentation

conducted on a person–to-person basis with a buyer

3. Nonpersonal selling

a. Nonpersonal selling includes advertising, product placement,

sales promotion, direct marketing, public relations, and

guerrilla marketing

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 471

i. Advertising and sales promotion are usually

regarded as the most important forms of

nonpersonal selling

b. Advertising

i. Advertising is any paid, nonpersonal communication

through various media about an organization,

intended to inform, persuade, or remind members of

a particular audience

c. Product placement

i. Product placement involves paying a fee in

exchange for using or showing an item in a movie or

TV show

ii. It is a form of nonpersonal selling

d. Sales promotion

i. Sales promotion consists of marketing activities

(other than personal selling, advertising, public

relations, and guerrilla marketing) that stimulate

consumer purchasing and dealer effectiveness

ii. This broad category includes displays, trade shows,

coupons, contests, samples, premiums, and

demonstrations

e. Direct marketing

i. Direct marketing is the use of direct communication

472 Part 6 Promotional Decisions

to a consumer or business recipient

ii. It is designed to generate a response in the form of

an order (direct purchase), a request for further

electronic promotions

f. Public relations and publicity

i. Public relations refer to a firm’s communications and

relationships with its various publics—including

customers, suppliers, stockholders, employees, the

government, and the general public

ii. Public-relations programs can deal with either formal

or informal contacts

iii. Publicity is the nonpersonal stimulation of demand

for a good, service, person, cause, or organization

through unpaid placement of significant news about

g. Guerrilla marketing

i. Guerrilla marketing is a relatively new approach that

involves innovative, unconventional, low-cost

techniques to grab consumer attention

ii. It is often used by firms with insufficient funds to

conduct a full marketing program, though at times

even successful corporations have tried it

iii. Often these firms cannot afford the high costs

involved in traditional print and broadcasting media,

and so need an innovative, low-cost way of reaching

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 473

4. Advantages and disadvantages of types of promotion

a. Each type of promotion has its advantages and

disadvantages

b. Advertising—creates instant awareness, builds brand equity,

delivers the message to mass audiences, but is expensive

and its effectiveness is difficult to measure

c. Product placement—can be very effective in putting an

image before mass audiences, but is very expensive and can

5. Sponsorships

a. Sponsorship consists of an organization providing money or

in-kind resources in exchange for a direct association with an

event or activity

b. Sponsorship involves advertising, direct mail and sales

promotion, publicity in the form of media coverage, and

personal selling

c. Commercial sponsorship is not new. It dates back to ancient

Rome

474 Part 6 Promotional Decisions

Assessment check questions

3.1. Differentiate between personal and nonpersonal selling. Personal

selling involves a promotional presentation conducted on a person–to–

3.2. What are the six major categories of nonpersonal selling? The six

3.3. How is sponsorship different from advertising? Although sponsorship

generates brand awareness, the sponsor has little control over the

message or even the coverage, unlike advertising.

Chapter Objective 4: Name the three basic advertising objectives and the two basic

categories of advertising.

Key Terms: advertising, product advertising, institutional advertising, informative advertising,

persuasive advertising, reminder advertising

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1. Advertising is closely associated with IMC. IMC involves a message

dealing with buyer-seller relationships, while advertising seeks to

inform or persuade customers.

3. Types of advertising

a. There are two broad categories of advertising: product and

institutional advertising

b. Product advertising is nonpersonal selling of a particular

4. Objectives of advertising

a. Advertising serves three main purposes:

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 475

i. To inform

ii. To persuade

iii. To remind

b. These three objectives can be used by marketers

individually or in conjunction with each other

c. Informative advertising

i. Informative advertising seeks to develop the initial

demand for a good, service, organization, person,

place, idea, or cause

d. Persuasive advertising

i. Persuasive advertising is designed to increase

demand for an existing good, service, organization,

person, place, idea, or cause

ii. It is a competitive method suited to the growth stage

and early maturity stage of the product lifecycle

e. Reminder advertising

i. Reminder advertising strives to reinforce previous

promotional activity by keeping the name of the

f. Traditionally, marketers thought of advertising objectives as

direct sales goals. Today, advertising is a way to achieve

the communication objectives of informing, persuading, and

reminding customers

i. Advertising attempts to condition consumers to adopt

favorable viewpoints toward a promotional message

ii. The goal of an advertisement is to improve the

likelihood that a consumer will buy the good or

service

iii. To get the best value for their investment, firms must

first determine their advertising objectives

g. Reasons for using advertisements

i. To enhance consumer perceptions of quality in a

good or service

Assessment check questions

4.1. What are the goals of institutional advertising? Institutional advertising

4.2. At what stage in the product lifecycle are informative ads used?

Chapter Objective 5: Identify the four major advertising strategies.

Key Terms: comparative advertising, celebrity testimonials, clutter, retail advertising, cooperative

advertising, interactive advertising

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Figure 16.2

Elements of the

Advertising

Planning Process

Which element do

you think is most

critical to the

work, or would it

lead to problems?

1. Advertising strategies

a. Effective advertising strategies accomplish at least one of

three tasks:

i. Informing

ii. Persuading

iii. Reminding

2. Comparative advertising

a. Comparative advertising is a promotional strategy that

emphasizes advertising messages with direct or indirect

comparisons to dominant brands in the industry

i. Firms whose products are not the leaders in their

markets often favor this format

ii. In contrast, market leaders seldom acknowledge in

their advertising that competing products even exist

b. A generation ago, comparative advertising was not the norm

and was often frowned upon

c. Today regulators such as the Federal Trade Commission

3. Celebrity testimonials

a. Celebrity testimonials involve well-known individuals who

endorse or promote a particular product or service

b. They have become popular ways to increase advertising

readership in a cluttered promotional environment and

improve overall effectiveness of a message

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 477

i. The number of celebrity ads and the dollars spent on

them have increased in recent years

ii. It is important for companies to be sure their brand’s

tie to a celebrity makes sense and is genuine

c. Advantages of using celebrities:

i. Improved product recognition in a media

environment crammed with hundreds of competing

ads and commercials, referred to as clutter

ii. A celebrity testimonial generally succeeds when the

person is a credible source of information for the

product being promoted

d. Disadvantages of using celebrities:

i. A celebrity who endorses too many products may

create marketplace confusion

ii. If a celebrity is involved in a scandal or has legal

problems, response to ads is affected

e. Some firms have avoided potential personality conflicts by

using cartoon characters as endorsers

i. They always say the right thing

ii. They do what marketers want them to do

iii. They cannot get into scandals

4. Retail advertising

a. Retail advertising includes all ads by retail stores that sell

products directly to the consuming public

i. While it accounts for a good portion of total

advertising expenditures, its effectiveness varies

widely

ii. Consumers may respond with suspicion or

b. Retail stores once viewed advertising as a secondary

activity, but this is changing

c. In cooperative advertising, a retailer often shares advertising

costs with a manufacturer or wholesaler, improving dealer

relations and strengthening vertical links in the marketing

5. Interactive advertising

a. Interactive advertising involves two-way promotional

messages sent through communication channels that

encourage recipients to take an active part in the

promotional effort

b. The term has become synonymous with e-marketing and

the Web, but it also includes formats such as interactive

kiosks in shopping malls and text messages on cell phones

6. Creating an advertisement

a. Marketers spend billions of dollars a year on advertising in

the U.S. alone

b. With so many dollars at stake, they must create effective

and memorable ads that increase sales and enhance a

firm’s image

c. Research has led to the creation of better ads by pinpointing

goals that ads need to accomplish

i. Common goals include educating the public about a

product’s features, enhancing brand loyalty, or

7. Translating advertising objectives into advertising plans

a. Once a company defines its objectives, it can develop its

advertising plan

i. Marketing research helps managers make strategic

decisions that guide choices in technical areas such

as budgeting, copywriting, scheduling, and media

selection

ii. Posttests measure the effectiveness of an ad and

provide feedback on any needed adjustments (see

details later in chapter)

8. Advertising messages

a. The strategy for creating a message starts with the benefits

a product offers and moves to the creative concept phase

b. In this phase, an appropriate visual and verbal message is

created in an ad with meaningful, believable, and distinctive

appeals

c. Ads are not created individually but are part of specific

campaigns

Assessment check questions

5.1. What is comparative advertising? Comparative advertising makes

5.2. What makes a successful celebrity testimonial? Successful celebrity

5.3. What is an advertising campaign? An advertising campaign is a series

5.4. What are an advertisement’s three main goals? Advertising’s three

main goals are to educate consumers about product features, enhance

brand loyalty, and improve consumer perception of the brand.

Chapter Objective 6: Describe the various types of advertising appeals and their uses.

Key Terms: headlines, illustrations, body copy, signature, advergames, banners, missiles,

keyword ads, advertorials, interstitials, adware, social network advertising

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1. Advertising appeals

a. The advertising appeal, or tone of an ad, can be practical or

480 Part 6 Promotional Decisions

Figure 16.3

Elements of a

Typical Ad. Which

elements caught

your eye first?

Which did you

barely notice? Did

they involve certain

shapes? Certain

colors? Which gave

you the most

information? Which

might give the

quickest impression

emotional, serious or funny, informational or abstract

b. Several types of appeals can be used in ads to portray a

certain tone or feeling, including those based on fear,

humor, or sex

i. Fear—implies that incorrect buying decisions could

lead to illness, injury, or other negative

consequences, but can backfire if viewers tune out

statements they perceive as too strong or not

credible

2. Developing and preparing ads

a. The development and preparation of an ad should flow

logically from the promotional theme selected

b. Regardless of the chosen target, all ads should:

i. Gain attention and interest

ii. Inform and/or persuade

iii. Eventually lead to a purchase or other desired action

c. Four major elements of a print ad:

i. Headline—should grab interest and attention, along

with illustrations

ii. Illustrations—include photographs, drawing, artwork

3. Creating interactive ads

a. Web users want engaging, lively content that takes

advantage of the medium’s capabilities and goes beyond

what they find elsewhere

b. The Web offers several advantages that help create

interactive ads by:

i. featuring speed as a key element

such as banners, pop-ups, keywords ads, advertorials, and

interstitials

d. Some Internet ads can be initially entertaining, but many are

perceived as intrusive and unwanted

i. Advergames are either online games that promote

products, or ads and product placements inserted

into games

ii. Banners, strip messages placed in high visibility

areas of frequently visited websites; most common

e. Social networking advertising is advertising on sites such as

Facebook and LinkedIn

i. This type of advertising is gaining attention as firms

spend an estimated $4 billion a year on this mode of

Assessment check questions

6.1. What are some common emotional appeals used in advertising?

6.2. What are the main types of interactive ads? Interactive ads include

Internet banners, pop-ups, keyword ads, advertorials, advergames, and

interstitials.

Chapter Objective 7: Compare the seven different advertising media.

Key Terms: broadcast media, narrowcasting, junk mail, out–of-home advertising, augmented

1. Media selection

a. Media selection is a key decision in developing an

482 Part 6 Promotional Decisions

advertising strategy as it carries the firm’s message to its

audience

b. The media selected must be capable of accomplishing the

three communications objectives of informing, persuading,

and reminding potential customers of the good, service,

person, or idea advertised

2. Television

a. Television—network and cable combined—accounts for 40

cents of every advertising dollar spent in the world

b. Television can reach local and national markets

c. Virtual ads are banner-type logos and brief messages that

are superimposed onto coverage of sports or other events

f. In response to cable growth, declining ratings, and soaring

costs, network stations have refocused strategies with a

heavy emphasis on the Internet to capture younger

audiences

g. Cable TV offers access to more narrowly defined target

audiences than other broadcasting media can provide,

referred to as narrowcasting

h. Advantages of television advertising:

i. Powerful impact on viewers

ii. Mass coverage

i. Disadvantages of television advertising:

i. Loss of control of the promotional message to the

telecaster, which can lead to loss of impact

ii. High costs

iii. Some public distrust

iv. Lack of selectivity because specific shows may not

Chapter 16 Integrated Marketing Communications, Advertising, and Public Relations 483

reach consumers in a target market

v. Certain types of products are not allowed (tobacco

3. Radio

a. In recent years, radio has become one of the fastest

growing media alternatives

b. Consumers with little time use radio for immediate

information and instant entertainment

c. Marketers frequently use radio advertising to reach local

audiences. But in recent years, it has played an increasingly

important role as a national—and even global—listening

favorite

i. Thousands of Internet radio users listen to online

d. Advantages of radio:

i. Can reach a local audience, and increasingly a

national as well as global audience

ii. Can reach people while they drive as they represent

a captive audience

iii. The variety of stations allow advertisers to easily

target audiences and tailor messages

e. Disadvantages of radio:

i. Highly segmented audiences

4. Newspapers

a. Newspaper advertising continues to dominate local markets,

accounting for slightly less than $18 billion of annual

advertising expenditures