Kerin 13 e CH06

CHAPTER 6
Integrated Marketing
Communication Strategy and
Management
2013 Pearson Education, Inc. publishing as Prentice Hall
Slide 6-1
AFTER READING THIS CHAPTER

YOU SHOULD BE ABLE TO:
1. Describe the practice and
framework of integrated marketing
communications.
2. Explain the process of how buyers
purchase an offering.
3. Select the appropriate
communication approach based on
an offerings marketing strategy
and life cycle.
Slide 6-2

4. Describe the factors that influence
the development of the integrated
marketing communication mix.
5. Compare a push versus a pull
communication strategy.
6. Describe the types of marketing
websites.
Slide 6-3

7. Identify the different approaches
used to formulate a
communications budget.
8. Discuss the mechanisms for
evaluating and controlling the
marketing communication process.
Slide 6-4
MARKETING COMMUNICATION
Marketing communication is the
process by which information about
a firm and its offerings is disseminated
to selected markets.
Its goals are to:
Induce
Initial Trial
Achieve
Postpurchase
Satisfaction
Generate
Repeat Sales
Slide 6-5
Communication informs buyers of the:
Availability of an offering
Unique benefits of the offering
Where and how to obtain and use the
offering
The message should be:

Desirable to
the Target
Market
Exclusive to
the Offering
Believable as to
the Offerings
Benefits
Slide 6-6
Advertising
Personal
Selling
Marketing
Communication
Mix
Public
Relations
Sales
Promotion
Direct
Marketing
Slide 6-7
Integrated marketing communication is the
practice of blending different elements of the
communication mix in mutually reinforcing ways
to inform, persuade, and induce consumer action.
Examples:
Advertising
Personal
Selling
Sales
Promotion
Develop offering awareness and

comprehension
Obtain final conviction and purchase
Increase purchase intention and
induce actual purchase
Slide 6-8
CHAPTER 6: INTEGRATED MARKETING

COMMUNICATION STRATEGY AND MANAGEMENT
INTEGRATED
MARKETING
COMMUNICATION
STRATEGY FRAMEWORK
Slide 6-9
INTEGRATED MARKETING
COMMUNICATION STRATEGY DECISIONS
1. What are the info requirements of target markets?
2. What objectives must the communication strategy achieve?
3. How might the mix of communication activities be
combined to convey information to target markets?
4. How much should be budgeted for communicating with
target markets and how should resources be allocated
among various communication activities?
5. How should the communication be timed and scheduled?
6. How should the communication process be evaluated?
Slide 6-10

INFORMATION
REQUIREMENTS IN
PURCHASE DECISIONS
Slide 6-11
INFORMATION REQUIREMENTS IN
PURCHASE DECISIONS
The purchase (or purchase funnel) process
model describes how buyers purchase a
particular offering and defines the role of
information
Awareness
Consideration
Preference
Purchase
At any point in time:

Different buyers are in different stages of the
model
Each stage requires a different communication
strategy
Slide 6-12
PURCHASE DECISIONS
Purchase Decision Roles
Purchaser
Influencer
Decision
Maker
Consumer
A person may play more than one role

In a joint purchase decision, the roles
may be played by different individuals
Slide 6-13
PURCHASE DECISIONS
Purchase Decision Roles
The role consumers play is a prerequisite

for successfully determining:
The communication message itself
To whom the message should be directed
How the message should be communicated
Slide 6-14
PURCHASE DECISIONS
To communicate effectively, a marketer must know:
What
Information consumers think is

necessary (price, location, size, etc.).
Where
Consumers will seek it (newspapers,

the Internet, friends, etc.).
When
Consumers will seek it (how far in

advance, on what days, etc.).
How
Consumers will apply the

information obtained.
Slide 6-15

SETTING REASONABLE
COMMUNICATION
OBJECTIVES
Slide 6-16
SETTING REASONABLE
COMMUNICATION OJBECTIVES
Communication objectives depend on:
The offering-market
strategies of the firm
The stage of the

offering life cycle
Slide 6-17
SETTING REASONABLE
Communication objectives for offeringmarket strategies:
Market
Development
Market
Penetration
Emphasize more
frequent offering usage
Build preference for or

loyalty to the offering
Stimulate awareness
and trial of the offering
Slide 6-18
SETTING REASONABLE
Communication goals for the offering life cycle:
Selective Demand
Primary Demand
Demand for the offering class
Demand for a brand or offering
Occurs early in the life cycle
Occurs later in the life cycle
The message focuses on:
Substitute offerings exist
Introducing the benefits

of an offering
Overcoming the
objections to the offering
The message:
Focuses on the benefits of a
specific brand or offering
Differentiates the offering from

competitive
ones
2013 Pearson Education, Inc. publishing as Prentice
Hall
Slide 6-19
SETTING REASONABLE
Communication objectives must be:
Articulated
For both the IMC program and the

marketing communication tools
Consistent
Among themselves and with

other marketing elements
Quantifiable
Attainable
For measurement and evaluation

purposes
With an appropriate amount of effort
and expenditure
Within a specific time frame
Slide 6-20

DEVELOPING AN
INTEGRATED
MARKETING
COMMUNICATION MIX
Slide 6-21
DEVELOPING AN INTEGRATED
MARKETING COMMUNICATION MIX
Factors to consider when designing the
communication mix are:
Information
Requirements
of Buyers
Nature of the
Target Markets
Nature of the
Offering
Capacity of the
Organization
Slide 6-22
Information Requirements of Buyers
Analyze the value of the communication

tools used at various stages in the
purchase-decision process
Identify consumer touch points to designate
where, when, and how a customer or
prospective buyer comes in contact with an
offering, a firm, or a brand message
Slide 6-23
Nature of the Offering
Personal selling is used for a highly technical

offering, one whose benefits are not readily
apparent or is relatively expensive
Advertising is appropriate when the offering:

Is not complex
Is frequently purchased
Is relatively inexpensive
Has benefits that

differentiates it from
competing offerings
Sales promotion is used to induce consumer action

Slide 6-24
Target Market Characteristics
Use personal selling when target consumers:

Consist of a small number of potential buyers
Exist in close proximity to one another
Purchase in large quantities
Use advertising and direct marketing when

a mass market is geographically scattered
Slide 6-25
Target Market Characteristics
Many consumer-oriented firms:

Substitute mail and telephone solicitations
for mass media advertising
Use the Internet to complement advertising
Many industrial-oriented firms use Internet

advertising to supplement personal selling
Slide 6-26
Organizational Capacity
Make Decision
Perform the
communication
mix activity
internally with own
human resources
Buy Decision
Buy, contract, or
outsource the
communication
mix activity
externally with
outside experts
Slide 6-27
MAKE-OR-BUY DECISION FACTORS

Economic
Dimension
Costs
Make
Fixed
Cost
Variable
Cost
Company
Sales
Force
Buy
Independent
Sales
Reps
Variable Cost
Behavioral Dimensions
Availability
Control
Flexibility
Effort
Selects,
trains, and
supervises
personnel
Change
sales-call
patterns
and
customers;
transfer
personnel
Represent
only firms
product
line
Sales rep
may not exist
in geographic
area;
can
relocate
Selection,
training and
supervision
done as well
by agencies
at no cost
to firm
Fixed
investment
in sales force
is minimal
Increased
since
sales reps
must live on
commissions
Venturesome
spirit
motivates
sales reps
to go
wherever
effective
demand
exists
Slide 6-28
MAKE-OR-BUY DECISION EXAMPLE

Company
Sales Force
Commission
3%
Salary and
Administration
$500,000
Independent
Sales Reps
Commission
5%
Break-even sales level
At what sales level (X) would a company sales force

cost more or less than independent sales reps?
[Hint: This is a form of break-even analysis.]
Set the cost equations for both types of sales reps

equal to each other to solve for the sales level (X)
Slide 6-29

Cost of Company
Sales Force
Cost of Independent
Sales Reps
Commission
Commission
Salary and
Administration
Setting the cost equations equal to each other solves for the break-even sales level:
)+
0.03
Commission
Salary and
Administration
+ $500,000
$500,000
X
Commission
= 0.05
= 0.02
= $25,000,000
Slide 6-30

The break-even sales volume (X) at which the
costs of a company sales force and independent
sales representatives are equal is $25 million.
Cost of Company
Sales Force
Break-even Sales Level (X)
Cost of Independent
Sales Reps
= $25,000,000
Company
Sales Force
Use if expected sales volume is > $25 million
Independent
Sales Reps
Use if expected sales volume is < $25 million

Slide 6-31
EXHIBIT 6.1: BREAK-EVEN CHART FOR COMPARING

INDEPENDENT SALES REPRESENTATIVES AND A
COMPANY SALES FORCE
Slide 6-32
MAKE-OR-BUY DECISION
Advertising make-or-buy decisions:
Intermediaries (wholesalers, retailers,
and dealers) may assume advertising costs
and placement responsibilities
Example: In cooperative advertising, a
manufacturer and intermediaries share
the costs of advertising or sales promotion
Slide 6-33
PUSH VERSUS PULL COMMUNICATION

STRATEGIES
Push Strategy
Pull Strategy
Producer
Producer
Wholesalers
Wholesalers
Retailers
Retailers
Consumers
Consumers
The offering is pushed through a

marketing channel to buyers in a
sequential fashion
Buyers demand the product from

intermediaries, pulling the offering
through a marketing channel
Slide 6-34

STRATEGIES
Push Strategy
Concentrates on building relationships
with channel intermediaries
Advertisements are likely to appear
in trade journals and magazines
Sales aids and contests used as incentives
to gain shelf space and distribution
Personal selling emphasized with
wholesalers and retailers
Slide 6-35

STRATEGIES
Push Strategy
Personal selling is used with resellers when:
An organization has easily identifiable buyers
The offering is complex
Buyers view the purchase as being risky
An offering is early in its life cycle
The firm has limited funds for direct-to-consumer

advertising
Slide 6-36

STRATEGIES
Pull Strategy
Seeks to create initial interest for an offering

among potential buyers who in turn demand it
from intermediaries through the channel
Employs heavy consumer advertising, free samples,

and coupons to stimulate consumer awareness and
interest
Wholesalers and retailers must be willing and able

to implement selling and sales promotion programs
from manufacturers
Slide 6-37

STRATEGIES
Pull Strategy
An advertising opportunity exists for an offering
when:
Favorable primary demand exists for an offering category
It can be significantly differentiated from its competitors
It has hidden qualities or benefits that can be portrayed

effectively through advertising
There are strong emotional buying motives involved

Slide 6-38

MARKETING WEBSITES
AND INTEGRATED
MARKETING
COMMUNICATIONS
Slide 6-39
MARKETING WEBSITES AND IMC

Website
Marketing
Website
Is a place where a provider makes available

information to Internet users
Engages buyers/potential buyers in

interactive communication to sell a firms
offerings or move them closer to a purchase
Transactional
Website
Promotional
Website
Is an electronic storefront that tries

to convert online browsers into
online buyers
Promotes a firms offerings and
provides information on how they are
used and where they are purchased
Slide 6-40

Transactional Websites
Feature well-known, branded offerings

Have a technological infrastructure
designed to create a favorable
shopping and buying experience
Are a form of direct distribution
Slide 6-41

Promotional Websites
Engage visitors with an interactive experience

involving games and contests
Provide prizes, such as electronic coupons
Generate awareness of, interest in, and trial

of a firms offerings
Support a firms advertising program and

traditional marketing channels
Are used for customer research and feedback

Slide 6-42

Word of
Mouth
Is a powerful information sources

that involves brand and offering
recommendations from friends
Buzz
Consists of word-of-mouth behavior
Viral
Marketing
Is an Internet-enabled strategy to:

Encourage individuals to forward marketerinitiated messages to others via email
Offer consumers incentives for referrals
Slide 6-43

Are cost effective in the:
Early stages of the process-need recognition
Development of product specifications
Supplier search
Evaluation and selection of the buying process
Providing feedback on offering performance

Slide 6-44

COMMUNICATION MIX
BUDGETING
Slide 6-45
COMMUNICATION MIX BUDGETING

Make the communication budget
commensurate with the tasks required
of the communication activities
The more important communication is in a
marketing strategy, the larger the amount
of funds that should be allocated to it
Set the budget so that the marginal costs
of communication equals the marginal
revenues resulting from it
Slide 6-46

Budgeting Approaches
Percentage
of Sales
Fixed Dollar
Amount per
Offering Unit
Most widely used approach

Past or anticipated sales are used as the basis
When sales rise, communication expenses rise
Simple to calculate
Which comes firstsales or communication?
Is not flexible or market-oriented
Budget equals the per-unit allocation multiplied
by the number of units expected to be sold
Used by durable-goods manufacturers
Slide 6-47

Budgeting Approaches
Competitive
Parity
Balances the firms and competitors

communication expenses
Uses advertising share of voice
Expressed as a percentage of total advertising
by all competitors in a market at a point in time
All Available
Funds
Employed in introducing a new offering for

which maximum exposure is desired
Used by nonprofit organizations
ObjectiveTask
Objectives are set for a communication program

Costs are based on the tasks to achieve the goals
Slide 6-48

Objective-Task
Involves three steps:
Define the communication objectives
Identify the tasks needed to attain the objectives
Estimate the costs associated with the
performance of these tasks
Is the best but most difficult method to apply

Slide 6-49
COMMUNICATION BUDGET
ALLOCATION
A communication budget must be allocated

across a firms communication tools
As a percentage of their communication
budget:
Marketers of consumer products and services
spend more for advertising
Marketers of industrial products and services
spend more for personal selling
Slide 6-50
ALLOCATION
Six types of mass media to be selected:
Television
Radio
Newspapers
Outdoor
Magazines
Internet
Slide 6-51
ALLOCATION
These media or channels, consists of:
Vehicles
Specific entities in which ads

can appear
MassAppeal
Vehicles that appeal to a broad

audience
SelectiveAppeal
Vehicles that appeal to a narrow

audience
Slide 6-52
ALLOCATION
Media can also be:
Wholesaler
Horizontal
Producer
-or-
Retailer
-or-
V
e
r
t
i
c
a
l
Reaching
only one
level of a
marketing
channel
Producer
Wholesaler
Reaching more than one

level of a marketing channel
Retailer
Slide 6-53
ALLOCATION
Media selection is based on these factors:
Cost
Reach
Frequency
Audience
Expressed as cost per thousand (CPM) readers or

viewers to facilitate cross-vehicle comparisons
The number of buyers potentially exposed to an
advertisement in a particular vehicle
The number of times buyers are actually exposed
to an ad in a given time period
Frequency
Total exposure = Reach
The more closely target markets characteristics match
those of a vehicles audience, the more appropriate it is
Slide 6-54
ALLOCATION
Other media selection considerations:
The purpose of the ad (image building, etc.)
Ads emphasizing product needs:

Price and immediate purchaseplace in
newspapers
Products requiring color illustration and detailed
explanationplace in magazines
The editorial climate of the vehicle
Offerings whose purchase is seasonal or

geographical
Slide 6-55
ALLOCATION
Media timing strategies include:
Blitz
Strategy
Continuity
Strategy
Pulse
Strategy
Concentrating advertising dollars in a

relatively short time period when new
products or services are introduced
Spending advertising dollars over the
long term to maintain continuity
Concentrating its advertising but also
attempts to maintain some semblance
of continuity
Slide 6-56
SALES FORCE BUDGET ALLOCATION:

HOW MANY SALES REPS?
NS
= Number of sales reps
NC
= Number of customers (actual or potential)
FC
= Necessary frequency of customer calls
LC
= Length of average customer call; includes travel time
TA
= Average available selling time per sales rep

NS
NC
FC
LC
TA
Note: The time period is normally one business year.

Slide 6-57
SALES FORCE BUDGET ALLOCATION:

HOW MANY SALES REPS?
Example:
NS
NC
= Number of sales reps
NS
NC
= 2,500 potential customers
FC
= 4 customer calls per year
LC
= 2 hours average customer call; includes travel time
TA
= 1,340 average available selling time per sales rep
NS
NS
=
=
FC
LC
=
TA
2,500 4 2
1,340
15 sales reps needed
Slide 6-58
SALES FORCE BUDGET ALLOCATION

A sales force should be allocated based on:
Organization and marketing objectives
Offering characteristics
Competitor and industry practices
Have sales representatives specialize in:

Certain offerings
Customer types
Combination of these
Slide 6-59

EVALUATION AND
CONTROL OF THE
COMMUNICATION
PROCESS
Slide 6-60
EVALUATION AND CONTROL OF

THE COMMUNICATION PROCESS
Continuously monitor the execution of
any communication plan or strategy to
ensure that the communication objectives
(sales, profits, etc.) are being met
Use budgeting to add/delete funds for
specific communication activities as a
form of control
Use incremental analysis to evaluate and
control advertising, personal selling, and
expenditures
Slide 6-61
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
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CHAPTER 6

2013 Pearson Education, Inc. publishing as Prentice Hall

AFTER READING THIS CHAPTER

AFTER READING THIS CHAPTER

2013 Pearson Education, Inc. publishing as Prentice Hall

AFTER READING THIS CHAPTER

2013 Pearson Education, Inc. publishing as Prentice Hall

2013 Pearson Education, Inc. publishing as Prentice Hall

The message should be:

2013 Pearson Education, Inc. publishing as Prentice Hall

Develop offering awareness and

CHAPTER 6: INTEGRATED MARKETING

CHAPTER 6: INTEGRATED MARKETING

2013 Pearson Education, Inc. publishing as Prentice Hall

At any point in time:

A person may play more than one role

The role consumers play is a prerequisite

Information consumers think is

Consumers will seek it (newspapers,

Consumers will seek it (how far in

Consumers will apply the

CHAPTER 6: INTEGRATED MARKETING

2013 Pearson Education, Inc. publishing as Prentice Hall

The stage of the

Build preference for or

2013 Pearson Education, Inc. publishing as Prentice Hall

Demand for a brand or offering

Occurs early in the life cycle

Occurs later in the life cycle

The message focuses on:

Substitute offerings exist

Introducing the benefits

Differentiates the offering from

For both the IMC program and the

Among themselves and with

For measurement and evaluation

CHAPTER 6: INTEGRATED MARKETING

2013 Pearson Education, Inc. publishing as Prentice Hall

Analyze the value of the communication

Personal selling is used for a highly technical

Advertising is appropriate when the offering:

Has benefits that

Sales promotion is used to induce consumer action

Use personal selling when target consumers:

Use advertising and direct marketing when

Many consumer-oriented firms:

Many industrial-oriented firms use Internet

2013 Pearson Education, Inc. publishing as Prentice Hall

MAKE-OR-BUY DECISION FACTORS

2013 Pearson Education, Inc. publishing as Prentice Hall

MAKE-OR-BUY DECISION EXAMPLE

Break-even sales level

At what sales level (X) would a company sales force

Set the cost equations for both types of sales reps

MAKE-OR-BUY DECISION EXAMPLE

2013 Pearson Education, Inc. publishing as Prentice Hall

MAKE-OR-BUY DECISION EXAMPLE

Use if expected sales volume is > $25 million

Use if expected sales volume is < $25 million

EXHIBIT 6.1: BREAK-EVEN CHART FOR COMPARING

2013 Pearson Education, Inc. publishing as Prentice Hall

2013 Pearson Education, Inc. publishing as Prentice Hall

PUSH VERSUS PULL COMMUNICATION