Chapter 16

Integrated Marketing
Communications
 Learning Objectives
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.
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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The Nature of Integrated Marketing Communications
(slide 1 of 2)

• Integrated marketing communications – Coordination of promotion and

other marketing efforts for maximum informational and persuasive impact
on customers
• Coordinating multiple marketing tools to produce this synergistic effect requires a
marketer to employ a broad perspective
• A major goal of integrated marketing communications is to send a consistent message
to customers
• Integrated marketing communications also enable synchronization of
promotion elements and can improve the efficiency and effectiveness of
promotion budgets

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The Nature of Integrated Marketing Communications
(slide 2 of 2)
• The concept of integrated marketing communications is increasingly effective for several
reasons
• Because mass media advertising is used less frequently today because of its high cost and lower
effectiveness in reaching some target markets, marketers can now take advantage of more
precisely targeted promotional tools, such as TV, direct mail, the internet, special-interest
magazines, smartphones, mobile applications, social media, sales calls, and outdoor boards
• Database marketing and marketing analytics are allowing marketers to target individual customers
more precisely
• The specific communication vehicles employed and the precision with which they are used
are changing as both information technology and customer interests become increasingly
dynamic
• Integrating and customizing marketing communications while protecting customer privacy
has become a major challenge
• Through digital media, companies can provide product information and services that are
coordinated with traditional promotional activities

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Figure 16.1 – The Communication Process

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 Promotion and the Communication Process (slide 1 of 2)

• Communication – A sharing of meaning through the transmission of information

• Source – A person, group, or organization with a meaning it tries to share with a receiver or
an audience
• Receiver – The individual, group, or organization that decodes a coded message
• Audience – Two or more receivers
• Coding process (encoding) – Converting meaning into a series of signs or symbols
• When coding meaning into a message, the source must consider certain characteristics
of the receiver or audience
• When coding a meaning, a source needs to use signs or symbols that the receiver or
audience uses to refer to the concepts the source intends to convey
• Communications channel – The medium of transmission that carries coded message from
the source to the receiver
• Transmission media include printed words (newspapers and magazines), broadcast
media (television and radio), and digital communication

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Figure 16.2 – Percentage of Users Who Get Their
News from Facebook or Twitter

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Promotion and the Communication Process (slide 2 of 2)

• Decoding process – Converting signs and symbols into concepts and ideas
• Noise – Anything that reduces a communication’s clarity and accuracy
• Feedback – The receiver’s response to a decoded message
• Can be verbal and nonverbal
• In interpersonal communication, feedback occurs through talking, teaching, smiling,
nodding, eye movements, and other body movements and postures
• Channel capacity – The limit on the volume of information a communication
channel can handle effectively

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 The Role and Objectives of Promotion (slide 1 of 2)

• Promotion – Communication to build and maintain relationships by informing and

persuading one or more audiences
• Many organizations spend considerable resources on promotion to build and enhance
relationships with current and potential customers as well as other stakeholders
• For maximum benefit from promotional efforts, marketers strive for proper planning,
implementation, coordination, and control of communications
• Effective management of integrated marketing communication is based on
information about and feedback from customers and the marketing environment,
often obtained from an organization’s marketing information system

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Figure 16.3 – Information Flows Are Important
in Integrated Marketing Communications

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 The Role and Objectives of Promotion (slide 2 of 2)

• How successfully marketers use promotion to maintain positive relationships

depends on some extent on the quantity and quality of information the
organization receives
• Because customers derive information and opinions from many different
sources, integrated marketing communications planning also takes into
account informal methods of communication, such as word of mouth and
independent information sources on the internet

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 Table 16.1 – Possible
Objectives of Promotion

Possible Objectives of Promotion

Create awareness Retain loyal customers
Stimulate demand Facilitate reseller support
Encourage product trial Combat competitive promotional efforts
Identify prospects Reduce sales fluctuations

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 Create Awareness

• For an organization that is introducing a new product or a line extension,

making customers aware of the product is crucial to initiating the product
adoption process
• For existing products, promotional efforts may aim to increase awareness of:
• Brands
• Product features
• Image-related issues (such as organizational size or socially responsive behavior)
• Operational characteristics (such as store hours, locations, and credit availability)

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 Stimulate Demand

• Primary demand – Demand for a product category rather than a specific

brand
• New introductory promotion – Promotion that informs consumers about a
new product
• Selective demand – Demand for a specific brand
• Requires singling out attributes important to potential buyers
• Can be stimulated by:
• Differentiating the product from competing brands in the minds of potential buyers
• Increasing the number of product uses and promoting them through advertising
campaigns, as well as through price discounts, free samples, coupons, consumer
contests and games, and sweepstakes
• Encouraging existing customers to use more of the product

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 Encourage Product Trial

• If customers stall during the evaluation stage, marketers can use certain
types of promotion—such as free samples, coupons, test drives, or limited
free-use offers, contests, and games—to encourage product trial in order to
move them through the product adoption process

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 Identify Prospects

• Certain types of promotional efforts aim to identify customers who are

interested in the firm’s product and are likely potential buyers
• For example, a marketer may run a television advertisement encouraging the viewer to
visit the company’s website and share personal information in order to receive something
of value from the company
• The organization can respond with phone calls, e-mail, or personal contact by
salespeople

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 Retain Loyal Customers

• Maintaining long-term customer relationships is a major goal of most

marketers
• The costs of retaining customers are usually considerably lower than those of acquiring
new ones
• Retention techniques include:
• Frequent-user programs
• Special offers for existing customers
• To retain loyal customers, marketers not only advertise loyalty programs but also use
reinforcement advertising, which assures current users that they have made the right
brand choice and tells them how to get the most satisfaction from the product

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 Facilitate Reseller Support

• Strong relationships with resellers are important to a firm’s ability to maintain

a sustainable competitive advantage
• Various promotional methods can help an organization achieve this goal
• Sharing a portion of retailers’ advertising expenses for promoting the products
• Providing wholesalers and retailers with special offers and buying allowances
• Working with retailers in the presentation and promotion of the products

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 Combat Competitive Promotional Efforts

• At times, a marketer’s objective in using promotion is to offset or lessen the

effect of a competitor’s promotional or marketing programs
• This type of promotional activity does not necessarily increase the organization’s sales or
market share, but it may prevent a sales or market share loss
• A combative promotional objective is used most often by firms in extremely
competitive consumer markets

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 Reduce Sales Fluctuations

• A business cannot operate at peak efficiency when sales fluctuate widely

• Holidays
• Seasonal products
• Promotional activities are often designed to stimulate sales during slumps
• During peak periods, a marketer may refrain from advertising to prevent stimulating sales
to the point at which the firm cannot handle all of the demand
• A company may advertise that customers can be better served by coming in on certain
days

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 Discussion Point
The Objectives of Promotion
• Look at the following examples:
• Apple holds an annual press conference in September in which CEO Tim Cook will be introducing
all of the company’s new products.
• Paula’s Choice includes up to three free samples of its various skin care and makeup products
with each order of $10 or more.
• DirecTV is offering a new streaming-based service with more programming options to compete with
Dish Networks’ SlingTV streaming service.
• Home Depot is offering sales prices on grills through October to extend the selling season.
• Bloomingdale’s rewards program offers points for every purchase made and double points for
cosmetics and fragrance purchases. For every 5,000 points, the consumer receives a $25 gift card.

For each example, identify which objective of promotion is being used.

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 The Promotion Mix

• Promotion mix – A combination of promotional methods used to promote a

specific product
• The four possible elements of a promotion mix are:
• Advertising
• Personal selling
• Public relations
• Sales promotion

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Figure 16.4 – The Four Possible Elements of a
Promotion Mix

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 Advertising (slide 1 of 2)

• Advertising is a paid nonpersonal communication about an organization and its

products transmitted to a target audience through mass media
• Advertising is changing as consumers’ mass media consumption habits are
changing
• Consumers are striving to maximize their presence and impact through digital media
• Ads are being designed that cater to smaller, more personalized audiences
• Traditional media like newspapers are in a decline due to a drop in readership
• Individuals and organizations use advertising to promote goods, services, ideas,
issues, and people
• Being highly flexible, advertising can reach an extremely large target audience or
focus on a small, precisely defined segment

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 Advertising (slide 2 of 2)

• Advantages:
• Is extremely cost-efficient when it reaches a vast number of people at a low cost per
person
• Lets the source repeat the message several times
• Visibility gained from advertising can enhance an organization’s image
• Disadvantages:
• Absolute dollar outlay can be high
• Rarely provides rapid feedback
• Often difficult to measure its effect on sales
• Less persuasive than personal selling
• Has a limited time exposure

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 Personal Selling
• Personal selling is a paid personal communication that seeks to inform customers
and persuade them to purchase products in an exchange situation
• Advantages:
• Involves more specific communication than advertising
• Has greater impact on customers
• Provides immediate feedback
• Limitation:
• Is expensive
• When a salesperson and a customer meet face-to-face, they use several types of
interpersonal communication
• Kinesic communication – Communicating through the movement of head, eyes, arms,
hands, legs, or torso
• Proxemic communication – Communicating by varying the physical distance in face-to-
face interactions
• Tactile communication – Communication through touching

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 Discussion Point
Advertising versus Personal Selling
• Read the following examples of different products to promote:
• Your company has just introduced an organic version of your most popular cereal.
• 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.
• A retail employee sees a potential customer in the store looking at high-efficiency
washing machines.
• HGTV wants to inform viewers about a sweepstakes it is holding that will give one
winner a dream home.

For each example, determine whether advertising or

personal selling is a more appropriate form of promotion.
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 Public Relations
• Public relations is a broad set of communication efforts used to create and maintain
favorable relationships between an organization and its stakeholders
• A component of public relations is publicity
• Publicity is nonpersonal communication in news-story form about an organization or its products,
or both
• Is transmitted through a mass medium at no charge
• Public relations should be viewed as an ongoing program rather than a set of tools to
be used only during crises
• Public relations uses a variety of tools:
• Annual reports
• Brochures
• Event sponsorships
• Sponsorship of socially responsible programs
• Publicity
• News releases
• Press conferences
• Feature articles
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 Sales Promotion

• Sales promotion is an activity or material that acts as a direct inducement,

offering added value or incentive for the product to resellers, salespeople, or
customers
• Examples include:
• Free samples
• Games
• Rebates
• Sweepstakes
• Contests
• Premiums
• Coupons

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 Selecting Promotion Mix Factors

• Promotion resources, objectives, and policies

• Characteristics of the target market
• Push and pull channel policies
• Cost and availability of promotional methods
• Characteristics of the product

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 Promotional Resources, Objectives, and Policies

• The size of an organization’s promotional budget affects the number and

relative intensity of promotional methods included in a promotion mix
• A company’s promotional objectives and policies influence the types of
promotion selected
• Different objectives will require different promotional mixes

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 Characteristics of the Target Market

• Crucial elements of the target market:

• Size
• If the size is limited, the promotion mix will probably emphasize personal selling, which can be
very effective for reaching small numbers of people
• When a product’s market consists of millions of customers, organizations rely on advertising
and sales promotion, because these methods reach masses of people at a low cost per
person
• Geographic distribution
• Personal selling is more feasible if a company’s customers are concentrated in a small area
• When the company’s customers are numerous and dispersed, regional or national advertising
may be more practical
• Demographic characteristics
• Age, income, education, etc., may affect the types of promotional techniques a marketer
selects, as well as the messages and images employed

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 Characteristics of the Product (slide 1 of 2)

• Generally, promotion mixes for business products concentrate on personal

selling, whereas advertising plays a major role in promoting consumer goods
• Marketers of business products use some advertising and occasionally sales promotion
to promote products
• Personal selling is used extensively for consumer durables, such as home appliances,
automobiles, and houses, whereas consumer convenience items are promoted mainly
through advertising and sales promotion
• Public relations appears in promotion mixes for business and consumer products
• A product’s price also influences the composition of the promotion mix
• High-priced products call for personal selling
• For low-priced convenience items, marketers use advertising

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 Characteristics of the Product (slide 2 of 2)
• The stage of a product’s life cycle affects decisions regarding the promotion mix
• Introduction
• Advertising plus personal selling and sales promotion is used to generate awareness for both
business and consumer products
• Growth and Maturity
• Consumer products require heavy emphasis on advertising
• Business products often call for a concentration of personal selling and some sales promotion
• Decline
• Marketers decrease all promotional activities, especially advertising
• Intensity of market coverage is another factor affecting the composition of the
promotion mix
• Intensive distribution
• Advertising, sales promotion
• Selective distribution
• Promotion mixes vary
• Exclusive distribution
• Personal selling
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 Costs and Availability of Promotional Methods
• Costs of promotional methods are major factors to analyze when developing a
promotion mix
• National advertising and sales promotion require large expenditures
• However, if these efforts succeed in reaching extremely large audiences, the cost per
individual reached may be quite small
• Some forms of advertising are relatively inexpensive
• Many small, local businesses advertise products through local newspapers, magazines, radio
and television stations, outdoor displays, internet ads, and signs on mass transit vehicles
• A consideration that marketers explore when formulating a promotion mix is the
availability of promotional techniques
• A firm may find that no available advertising medium effectively reaches a certain target
market
• The problem of media availability becomes more pronounced when marketers advertise
in foreign countries
• Some media may not be available or are illegal
• Regulations or standards for media content may be restrictive

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 Push and Pull Channel Policies

• Push policy – Promoting a product only to the next institution down the
marketing channel
• Normally stresses personal selling
• Pull policy – Promoting a product directly to consumers to develop strong
consumer demand that pulls products through the marketing channel
• Done primarily through advertising and sales promotion
• Push and pull policies are not mutually exclusive; at times, an organization
uses both simultaneously

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Figure 16.5 – Comparison of Push and Pull
Promotional Strategies

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 The Impact of Word-of-Mouth Communications
on Promotion (slide 1 of 2)
• Word-of-mouth communication – Personal informal exchanges of
communication that customers share about products, brands, and companies
• Most customers are likely to be influenced by friends and family members
when they make purchases
• Research has identified a link between word-of-mouth communication and
new-customer acquisition when there is customer involvement and satisfaction
• Effective marketers who understand the importance of word-of-mouth
communication attempt to identify opinion leaders and encourage them to try
their products in the hope that they will spread favorable publicity about them
• Consumers are more likely to share negative word-of-mouth information than
positive word-of-mouth communication

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 The Impact of Word-of-Mouth Communications
on Promotion (slide 2 of 2)
• Electronic word of mouth is communicating about products through websites,
blogs, e-mail, social networks, or online forums
• Consumers are increasingly going online for information and opinions about goods and
services as well as about the companies
• Buzz marketing – An attempt to incite publicity and public excitement
surrounding a product through a creative event
• Viral marketing – A strategy to get consumers to share a marketer’s
message, often through e-mail or online video, in a way that spreads
dramatically and quickly

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 Discussion Point
Chevrolet Corvette
• Chevrolet introduced its seventh generation of the Corvette Stingray with an
innovative integrated marketing strategy. Chevy promoted the Stingray
through more 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.

Describe how Chevy uses different elements of the

promotion mix in its integrated marketing strategy.

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 Discussion Point
Type of Marketing
• Read the following marketing examples:
• The Discovery Channel reminded beach goers about the anniversary of its Shark Week show by
placing surfboards with shark bites in them all along beaches.
• The ALS Ice Bucket Challenge raised $115 million in just two months. 17 million people participated
in the challenge worldwide.
• Volvo Trucks’ videos demonstrated the stability and precision of Volvo’s new dynamic steering
system by having actor Jean-Claude van Damme appear to perform a split between two trucks
moving in reverse.
• Marketers placed LED placards that lit up with shapes of characters from the Cartoon Network’s
Aqua Teen Hunger Force animated television series throughout Boston.

Identify whether the type of marketing is buzz marketing

or viral marketing for each example.

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 Product Placement as Promotion

• Product placement – The strategic location of products or product

promotions within entertainment media content to reach the product’s target
market
• In-program product placements have become a successful method of reaching
consumers

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 Criticisms and Defenses of Promotion (slide 1 of 2)

• Is promotion deceptive?
• Some promotions are deceptive, but not all promotion should be condemned
• Laws, government regulation, and industry self-regulation have helped decrease
deceptive promotion
• Does promotion increase prices?
• If promotion is working to stimulate demand, producing and marketing products in larger
quantities can actually help reduce prices
• Promotion also helps keeps prices lower by facilitating price competition
• Does promotion create needs?
• Promotion does not create needs, but it does capitalize on them by making consumers
aware of needs they already have

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 Criticisms and Defenses of Promotion (slide 2 of 2)

• Does promotion encourage materialism?

• Marketers assert that values are instilled in the home and that promotion does not
change people into materialistic consumers
• Does promotion help customers without costing too much?
• Promotion informs customers about product uses, features, advantages, prices, and
locations where they can buy the products
• Should potentially harmful products be promoted?
• Some critics of promotion, including consumer groups and government officials, suggest
that certain products should not be promoted at all
• Defenders argue that, as long as it is legal to sell a product, promoting that product
should be allowed

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