An Introduction to Integrated Marketing

Communication

What is Promotion?

Communication process in marketing It is used to create a favorable predisposition

toward brand concept, services, idea, or person.

Implementing the three other marketing mix factors

Achieving market segmentation, product differentiation, and positioning

Enhancing revenues and profits

Promotional Mix

A blend of communication tools and activities used by a firm Advertising Sales Promotion Publicity/Public Relations Direct Marketing Interactive/Internet marketing Personal Selling

Advertising

Any paid form of non-personal communication about an organization, product, service or idea by an identified sponsor.

10 Leading Advertisers in Taiwan, 2010

Rank Advertiser Ad Spending (Thousands)

1 寶橋家品 955,310

2 甲山林機構 652,649

3 遠雄集團 626,215

4 佳格食品 593,100

5 葛蘭素史克藥廠 540,661

6 花王 534,640

7 聯合利華 519,726

8 中華電信 480,659

9 統一企業 444,698

10 麗寶建設 436,643

Major Decisions in Advertising

Advertising

Pros: Cost-effective for large audiences Differentiates between similar products, e.g. 多喝水 , 泰山 Twist Water.

Brand equity Empathizes with target audience, e.g.

PayEasy, 維士比 , 寶養米 . Control of the message

Advertising

Cons: Media and production costs

On average, U.S. advertisers pay $332,000 to produce a single 30-second television commercial; Nike’s “The Wall” – $2,000,000.

25,000 ～ 40,000/10sec. Effectiveness difficult to judge Credibility and image problems

Sales Promotion

Activities that provide extra value or incentive to the sales force, distributors or the ultimate consumer and can stimulate immediate sales.

Expenditure in Billions of Dollars

$0 $50 $100 $150 $200 $250 $300 $350

U.S. Advertising

U.S. SalesPromotion

AdvertisingOutside U.S.

2004

1980

Sales Promotion Tools

• Consumer-oriented• [For end-users]

Trade-oriented [For resellers]

EventsEvents

Loyalty ProgramsLoyalty Programs

Bonus Packs Bonus Packs

Refunds/Rebates Refunds/Rebates

Contests/SweepstakesContests/Sweepstakes

PremiumsPremiums

SamplesSamples

CouponsCoupons

CoopAdvertisingCooperativeAdvertising

TradeShowsTradeShows

TrainingPrograms

TrainingPrograms

POP DisplaysPOP Displays

TradeAllowances

Various Uses of Sales Promotion

Introduce new products

Introduce new products

Get existing customers to

buy more

Get existing customers to

buy more

Attract new customers

Attract new customers

Maintain sales in off season

Maintain sales in off season

Increase retail inventories

Increase retail inventories

Tie in advertising &

personal selling

Tie in advertising &

personal selling

Enhance personal selling

Enhance personal selling

Introduce new products

Introduce new products

Get existing customers to

buy more

Get existing customers to

buy more

Attract new customers

Attract new customers

Maintain sales in off season

Maintain sales in off season

Increase retail inventories

Increase retail inventories

Tie in advertising &

personal selling

Tie in advertising &

personal selling

Enhance personal selling

Enhance personal selling

SalesPromotion

SalesPromotion

Combat Competition

Combat Competition

Sales Promotion

Pros: Extra incentive to consumer or retailer Appeals to price sensitive consumer Generates interest in product or ad Easier to measure, e.g. 7-11 Hello Kitty: revenue↑11.82%,

profits↑29.33%.

Cons: Short-run strategy Affects brand image, brand equity Stock problem

Public Relations

Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

News stories, features, sponsorships, and events seem more real and believable to readers than ads do.

Megamarketing (巨行銷 )

Megamarketing is the strategic coordination of economic, psychological, political, and public relations skills, to gain the cooperation of a number of parties in order to enter or operate in a given market.

4Ps + 2Ps (politics & public opinions) Examples: PepsiCo in India, Harley-

Davidson.

Public Relations Tools

Corporate AdvertisingCorporate

Advertising Cause-related

MarketingCause-related

Marketing

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Special EventSponsorship

Cause-related Marketing (公益行銷 , 善因行銷 )

Link the firm’s contributions to a designated cause to customers’ engaging directly or indirectly in revenue-producing transactions with the firm

The creation of the term "cause-related marketing" is attributed to American Express.

Some experts believe that the positive impact on a brand from cause-related marketing may be lessened by sporadic involvement with numerous causes.

Branding: self-branded, co-branded, and jointly-branded.

Public Relations

Pros: Credibility Low cost News value generating word-of-mouth

Cons: Lack of control Negative as well as positive

Publicity (公關宣傳 )

Nonpersonal communications regarding an organization, product, service, or idea not directly paid or run under identified sponsorship.

It usually comes in the form of a news story, editorial, or announcement about an organization and/or its products and services.

Publicity Vehicles

InterviewsInterviewsInterviews Interviews

FeatureArticlesFeatureArticles

SpecialEventsSpecialEvents

NewsReleases

NewsReleases

FeatureArticlesFeatureArticles

SpecialEventsSpecialEvents

NewsReleases

NewsReleases Publicity

VehiclesPublicityVehicles

PressConferences

PressConferences

Advertising vs. Publicity

AdvertisingAdvertising PublicityPublicity

TentativeTentative

LowLow

Low/Unspecified Low/Unspecified

Uncontrollable Uncontrollable

GreatGreat

LowerLower

Measurable Measurable

SchedulableSchedulable

High/Specific High/Specific

HighHigh

SpecifiableSpecifiable

UndeterminedUndetermined

HigherHigher

LittleLittle

FactorFactor

ControlControl

CredibilityCredibility

ReachReach

FrequencyFrequency

CostCost

FlexibilityFlexibility

TimingTiming

Direct Marketing

Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

Four characteristics: nonpublic, immediate, customized, and interactive.

Direct Marketing

DirectResponse

Advertising

DirectResponse

Advertising

DirectMail

DirectMail

CatalogsCatalogs

TelemarketingTelemarketingShoppingChannelsShoppingChannels

DirectMail

DirectMail

TelemarketingTelemarketing

CatalogsCatalogs

ShoppingChannelsShoppingChannels

DirectMarketingDirect

Marketing

InternetSales

InternetSales

Direct Marketing

Pros: Convenience for consumers Selectivity of audience Tailored/ customized communications Easier to measure effects

Cons: Direct mail and telemarketing – too much “Junk mail” image

Personal Selling Personal presentation by the firm’s sales force for

the purpose of making sales and building customer relationships.

Pros: Communication flexibility Customized to consumer Feedback Specific targeting

Cons: High cost per contact Not cost-effective for large audience Low consistency of message