Chapter 16
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LO 16-1 Define integrated marketing
communications
LO 16-2 Describe the steps of the communication
process
LO 16-3 Recognize the definition and objectives of
promotion
LO 16-4 Summarize the four elements of the
promotion mix
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LO 16-5 Explain the factors that are used to
determine a product’s promotion mix
LO 16-6 Describe how word-of-mouth
communication affects promotion
LO 16-7 Discuss how product placement impacts
promotion
LO 16-8 List major criticisms and defenses of
promotion
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O Coordination of promotion and other
marketing efforts for maximum
informational and persuasive impact
O Fosters long-term relationships and efficient
use of promotional resources
O Coordinating multiple marketing tools to
produce this synergistic effect requires a
marketer to employ a broad perspective
LO 16-1
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O Integrated marketing communication
is increasingly accepted
O Consistent message to customers
O Coordinate/manage promotional efforts
O Synchronization of promotional elements
O Use more precisely targeted promotional tools
O Use of database marketing
O Protect consumer privacy
LO 16-1
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O Communications – A sharing of
meaning through the transmission of
information
O Source – A person, group, or
organization with a meaning it tries to
share with a receiver or an audience
LO 16-2
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O Receiver – The individual, group, or
organization that decodes a coded
message
O Coding Process (Encoding) –
Converting meaning into a series of
signs or symbols
LO 16-2
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LO 16-2
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O Communication Channel – The
medium of transmission that carries
coded message from the source to
the receiver
O Decoding Process – Converting signs
or symbols into concepts and ideas
LO 16-2
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O Noise – Anything that reduces a
communication’s clarity and accuracy
O Feedback – The receiver’s response to
a decoded message
O Channel Capacity – The limit on the
volume of information a
communication channel can handle
effectively
LO 16-2
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LO 16-2
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O Communication to build and maintain
favorable relationships by informing
and persuading one or more
audiences to view an organization
positively and to accept its products
O Promotion’s goal is to stimulate product
demand and build customer relationships
O Most organizations expend a large amount of
resources on promotion
LO 16-3
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LO 16-3
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LO 16-3
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O Awareness is crucial to initiating the
product adoption process for new
products
O For existing products, promotional
efforts create increased awareness of
O Brands
O Product features
O Image-related issues
O Operational characteristics
LO 16-3
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O Primary Demand
O Demand for a product category rather than a
specific brand
O Pioneer Promotion
O A way to stimulate primary demand
O Promotion that informs consumers about a new
product
O Selective Demand
O Demand for a specific brand
LO 16-3
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LO 16-3
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O If customers stall in the evaluation
stage, marketers can use methods to
encourage product trial in order to
move them to product adoption
O Trial Techniques:
O Free samples
O Coupons
O Test drives
O Limited free-use offers
O Contests
O Games
LO 16-3
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O Certain types of promotional efforts
aim to identify customers who are
interested in the firm’s product and
are likely potential buyers
O Techniques Include:
O Television advertisement encouraging the
viewer to visit the company’s website to share
information and receive something of value
O Company should respond with phone calls, e-mail, or
personal contact by salesperson
LO 16-3
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O The primary goal of marketing is to
maintain long-term customer
relationships
O Keeping current customers is less costly than
acquiring new customers
O Retention techniques include:
O Frequent-user programs
O Special offers for existing customers
LO 16-3
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O Listening to the customer
O Loyalty programs to reward most-valued
O
O
O
O
LO 16-3
customers
e-Communications – e-newsletters, e-cards, or
e-alerts
Interactive promotions – Sweepstakes and
contests
Events – Seminars, workshops, etc.
Client appreciation programs – Invitations to
special events, etc.
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O Strong relationships with resellers are
important to an organization’s ability
to maintain a sustainable competitive
advantage
O Various promotional methods help
achieve this goal
O Resellers view promotion as form of support
O Share promotional expense
O Special offers/buying allowances
LO 16-3
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O Promotional activities may aim to
offset or lessen the effect of a
competitor’s promotional and
marketing activities
O This type of promotional activity does not
necessarily increase sales or market share
O A combative promotional objective is
used most often by firms in highly
competitive consumer markets
LO 16-3
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O A business cannot operate at peak
efficiency when sales fluctuate widely
O Holidays
O Seasonal products
O Promotional activities are often
designed to stimulate sales during
slumps
LO 16-3
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O Promotion mix: A combination of promotional
methods used to promote a specific product
LO 16-4
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O A paid nonpersonal communication
about an organization and its
products transmitted to a target
audience through mass media
O Advertising is changing as mass media
consumption habits are changing
O The Internet and digital media aim at smaller,
more targeted audiences
O Advertising is highly flexible and can reach large
or small audiences depending on need
LO 16-4
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O Advantages:
O Cost-efficient when it reaches a vast number of people
at a low cost per person
O It lets the source repeat the message several times
O Visibility gained from advertising can enhance a firm’s
image
O Disadvantages:
O Absolute dollar outlay is high
O Rarely provides rapid feedback
O Difficult to measure its effect on sales
O Less persuasive than personal selling
O Generally limited time exposure
LO 16-4
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O A paid personal communication that
seeks to inform customers and
persuade them to purchase products
in an exchange situation
O Advantages:
O Is a more specific form of advertising
O Has greater impact on consumers
O Provides immediate feedback
O Limitations:
O Is expensive
O Is labor intensive and time consuming
LO 16-4
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 Farmers is heavily engaged in personal
selling, with 50,000 exclusive or independent
sales agents. These agents cover a specific
sales territory and inform potential
customers about the benefits of buying
 Farmers Insurance Group
insurance through Farmers.
was founded in 1928. It is
 Farmers also engages heavily in advertising.
one of the nation’s largest
While independent sales agents might
insurers in auto, home, and
choose different advertising methods in their
small business insurance.
region, the business itself has become wellknown for television commercials featuring
actor J.K. Simmons. Simmons portrays a
professor at Farmers University who teaches
students about accidents and disasters.
These advertisements are a recruitment tool.
However, by inserting humor into the
commercials Farmers also creates awareness
among customers.
LO 16-4
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LO 16-4
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 Read the following examples of different
products to promote. Determine whether
advertising or personal selling is a more
appropriate form of promotion.
 Your company has just developed a new type





of bubblegum.
An aircraft manufacturer is ready to market its
new specialized plane for business executives.
A firm is trying to sell a piece of expensive
equipment to a factory.
Pepsi wants to remind customers about the
good taste of its Pepsi cola.
An retail employee sees a potential customer
in the store staring uncertainly at a Dell
laptop.
The Travel Channel wants to inform viewers
about a sweepstakes they are holding that
will send the winners to the Bahamas.
LO 16-4
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O Kinesic Communication
O Body language; communicating through the
movement of head, eyes, arms, hands, legs, or
torso
O Proxemic Communication
O Communicating by varying the physical distance
between two parties in face-to-face interactions
O Tactile Communication
O Communication through touching
LO 16-4
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O A broad set of communication efforts
used to create/maintain favorable
relationships between organization
and stakeholders
O Publicity is a non-personal communication in a
news-story form about an organization, its
products, or both
O Is transmitted through a mass medium at no charge
O Public relations should be viewed as an ongoing
program during crises and good times
LO 16-4
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O Publicity
O Annual reports
O Brochures
O Event sponsorships
O Sponsorship of socially responsible
programs
O Press releases/Conferences/Feature
articles
LO 16-4
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O Activities or materials that act as a
direct inducement, offering added
value or incentive for the product to
resellers, salespeople, or customers
O Free samples
O Games
O Rebates
O Sweepstakes
O Contests
O Premiums
LO 16-4
O Coupons
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Resources,
Objectives,
Policies
Push and Pull
Channel
Policies
Characteristics
of the Target
Market
Promotional
Mix
Cost and
Availability of
Promotional
Methods
LO 16-5
Characteristics
of the Product
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O The size of an organization’s
promotional budget affects the
number and intensity of promotional
methods used
O A company’s objectives and policies
influence the types of promotions
used
O Different objectives will require different
promotional mixes
LO 16-5
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O Crucial Elements of the Target Market:
O Size
O Often drives what promotional elements are chosen
O Small target markets often rely on personal selling
O Geographic distribution
O Dispersed customers often rely more heavily on
advertising
O Demographic characteristics
O Age, income, education, etc. will affect consumers’
media consumption patterns and are important
considerations when developing the promotion mix
LO 16-5
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O Business products concentrate on:
O Personal selling
O Sales promotion
O Consumer products concentrate on:
O Convenience goods = advertising
O Durables and expensive products = personal
selling
O Both = public relations
O Product price is an important factor
LO 16-5
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O The stage of a product’s life cycle
affects decisions regarding the
promotion mix
O Introduction
O Advertising plus personal selling and sales promotion
to generate awareness
O Growth/Maturity
O Consumer goods = advertising
O Business advertising = personal selling and sales
promotion
O Decline
O Reduction of all promotional activities
LO 16-5
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O Intensive Distribution
O Advertising, sales promotion
O Selective Distribution
O Promotion mixes vary
O Exclusive Distribution
O Personal selling
LO 16-5
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O National Advertising / Sales Promotion
O Have higher expense but low cost per individual
O International Promotion
O Can be difficult because of lack of promotional
channels
O Personal selling
O Is dependent on recruiting and hiring qualified
sales people
LO 16-5
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O Push Policy
O Promoting a product only to the next institution
down the marketing channel
O Pull Policy
O Promoting a product directly to consumers to
develop strong consumer demand that pulls
products through the marketing channel
O Organizations may use both push and
pull policies at the same time
LO 16-5
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LO 16-5
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 Chevy promoted the Stingray through more
 Chevrolet introduced its
seventh generation of the
Corvette Stingray with an
innovative integrated
marketing strategy.
exclusive avenues such as auto shows and
cover stories in major newspapers and auto
magazines. The company also created a
digitalized version of the car for the Sony
PlayStation game Gran Turismo.
 Publicity is key for a product like this because
it creates excitement and interest in the
market. In 2013 the Stingray won Automobile
of the Year honors from Automobile
magazine.
 It is important that Chevrolet dealers be
informed about the benefits and special
features of the vehicle for when they sell to
customers.
 Describe how Chevy uses different elements
of the promotion mix in its integrated
marketing strategy.
LO 16-5
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O Word-of-Mouth (WOM)
Communication
O Personal, informal exchanges of communication
that customers share with one another about
products, brands, and companies
O Most customers are likely to be influenced by
friends and family members when making
purchases
O Effective WOM relies on marketers identifying
opinion leaders
O Electronic WOM is becoming increasingly
important
LO 16-6
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LO 16-6
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O Buzz Marketing
O An attempt to incite publicity and public
excitement surrounding a product though a
creative event
O Viral Marketing
O A strategy to get consumers to share a marketer’s
message, often through email or online video, in a
way that spreads dramatically and quickly
LO 16-6
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 An advertising agency for Zynga wanted to
 Read the following
marketing examples.
Identify whether the
type of marketing is
buzz marketing or
viral marketing:
catch consumers’ attention, so it took the
unusual step of gluing fake $25,000 dollar bills
to sidewalks in San Francisco to advertise
Zynga’s game Mafia Wars.
 Dove’s “Real Beauty Sketches” videos did not
advertise a product, but rather demonstrated
that women often perceive themselves as less
beautiful than others perceive them to be. The
highly popular videos got millions of hits.
 CareerBuilder.com released a funny online
video featuring a chimp wearing a suit in hopes
that Internet users would forward it to their
friends.
 Marketers placed LED placards that lit up with
shapes of characters from the cartoon network
Aqua Teen Hunger Force throughout Boston.
LO 16-6
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O A form of advertising that
strategically locates products or
product promotions within
entertainment media to reach the
product’s target market
O In-program product placements have become a
successful method of reaching consumers,
rather than relying on commercial breaks
O Has become more important as more
consumers bypass advertisements through
digital video recorders, TiVo, and the Internet
LO 16-7
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O Is promotion deceptive?
O Some are, but not all promotion should be
condemned
O Laws, government regulation, and industry selfregulation have helped decrease deceptive
promotion
O Does promotion increase prices?
O If promotion is working to stimulate demand,
producing and marketing larger quantities can
actually help reduce prices
LO 16-8
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O Does promotion create needs?
O Marketing does not create needs, but makes
consumers aware of needs they already have
O Does promotion encourage
materialism?
O Marketers assert that values are instilled at
home and promotion does not change people
into materialistic consumers
LO 16-8
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O Does promotion help customers
without costing too much?
O Promotions inform customers about a
product’s uses, features, advantages, prices, or
purchase locations
O Should potentially harmful products
be promoted?
O Defenders argue that, as long as it is legal to sell
a product, promoting it should also be allowed
LO 16-8
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