Chapter 10: Integrated Marketing Communications

MULTIPLE CHOICE 1. Which of the following statements about integrated marketing communications (IMC) is F L!E? a IMC refers to the strategic, coordinated use of promotion to create one consistent . message. b IMC takes a !"#degree $iew of the customer. . c %he role of mass tele$ision ad$ertising is growing more important to IMC strateg&. . d IMC reduces costs and increases efficienc& because it can reduce or eliminate . redundancies and waste. e %he ke& to IMC is consistenc& and uniformit& of message across all elements of . promotion.

'()* C +. Wh& is promotion based on creati$it& alone likel& to waste $aluable marketing resources? a ,ecause trul& creati$e promotion is too e-pensi$e . b ,ecause the ma.orit& of promotional efforts do not create results in the short term . c ,ecause promotion that is based solel& on creati$it& is no better than one#on#one . personal selling d ,ecause most potential customers simpl& ignore promotion . e 'll of the abo$e are reasons. "

'()* , . %o be successful, firms must mo$e potential customers be&ond mere interest in the product. /ood promotion will stimulate 00000 b& con$incing potential customers of the product1s superiorit& and its abilit& to satisf& specific needs. dedication d action in$estigation e desire c attention .

'()* 2 3. In terms of the 'I4' model, mass communication elements such as ad$ertising and public relations tend to be $er& effecti$e at* a stimulating awareness of and interest in a product. . b e-plaining highl& comple- and technical products. .
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stimulating immediate purchase of a product. c . d marketing high priced products. . e closing the sale. .

'()* ' 9. When firms use a(n) 00000 strateg&, the& focus their promotional efforts toward stimulating demand among final customers, who then e-ert pressure on the suppl& chain to carr& the product. pressuri:ation guerilla IMC push c pull .

'()* C !. In launching its new line of power tools, ,lack and 4ecker spent a considerable amount of time and resources to educate, moti$ate, and compensate members of its suppl& chain. ,& in$esting hea$il& in these t&pes of promotions, ,lack and 4ecker hopes its 00000 strateg& will lead to a more effecti$e product launch. pull push 'I4' placement c institutional .

'()* 4 ;. Which of the following is perhaps the main ad$antage associated with the use of ad$ertising? a It takes little time to de$elop an ad$ertising campaign. . b %he total dollar la&out in ad$ertising is usuall& low. . c It is an e-tremel& cost efficient wa& to reach a large number of people. . d It can <uickl& con$e& a large amount of technical information. . e It can be <uite memorable. .

'()* C =. In a recent campaign, I,M ad$ertised that it pro$ides infrastructure and solutions for e#business. Interestingl&, these messages did not name the compan&1s products or e-plain how their infrastructure and solutions actuall& work. What t&pe of ad$ertising is I,M using?

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ad$ocac& institutional c pioneer .

product competiti$e

'()* , >. %he most widel& used method of setting the ad$ertising budget and planning ad$ertising e-penditures is the 00000 approach. ob.ecti$es and task arbitrar& percentage of sales incremental c competiti$e matching .

'()* , 1". In the conte-t of IMC strateg&, what is the difference between public relations and publicit&? a ?ublic relations deals with positi$e information@ publicit& deals with controlling negati$e . information. b ?ublicit& deals with man& stakeholders@ public relations deals onl& with customers. . c ?ublicit& is normall& done $ia an in#house staff@ public relations is t&picall& outsourced . to a specialist. d ?ublicit& is more narrowl& defined and focused on gaining media attention. . e %here is no difference between public relations and publicit&. "

'()* 4 11. A$erall, what is the ma.or disad$antage associated with the use of public relations and publicit&? a It is normall& $er& e-pensi$e. . b %he amount of negati$e publicit& alwa&s outweighs the good. . c Bew, if an&, customers pa& attention to public relations messages. . d Most people find it to be less credible than ad$ertising. . e %he firm has limited control o$er how the message will be deli$ered or interpreted. .

'()* 2 1+. 00000 is paid personal communication that attempts to inform customers about products and persuade them to purchase those products.

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?ersonal selling )ales promotion c ?ublicit& .

?ublic relations 'd$ertising

'()* ' 1 . In toda&1s econom&, personal selling has e$ol$ed to take on elements of customer ser$ice and marketing research. Wh& is this the case? a It is less e-pensi$e to deli$er ser$ice and conduct research with the sales staff. . b It is more time efficient because salespeople are alread& interacting with customers. . c ?ersonal selling now focuses more on de$eloping relationships than on generating . transactions. d It allows salespeople to earn higher commissions for doing more work. . e (one of the abo$e is correct. "

'()* C 13. 's a method of sales force compensation, 00000 is best suited to situations where aggressi$e selling is re<uired and salespeople ha$e direct control o$er sales outcomes (i.e., their efforts are directl& responsible for meeting sales goals). straight direct commission compensation a combination pa&#as#&ou#go approach salar& c straight salar& .

'()* ' 19. Which sales force compensation s&stem is best suited to situations where salespeople are responsible for pre# and post#sale ser$ice and sales managers want ma-imum control o$er selling e-penses? straight geographic commission allocation a combination straight salar& approach c direct compensation .

'()* 2

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1!.

4espite con$entional thinking, 00000 accounts for the bulk of promotional spending in man& firms. %his is especiall& true for firms selling consumer products in grocer& stores and mass#merchandise retailers. personal selling sales promotion ad$ertising publicit& c public relations .

'()* 4 1;. Which of the following statements best represents the uni$ersal goal of all sales promotion acti$ities? a to increase sales $olume in the long term . b to stimulate customer interest and attention . c to induce product trial and purchase . d to enhance the image of the firm . e to gain the attention of members of the suppl& chain .

'()* C 1=. Which of the following I! #OT a reason that most firms prefer rebates o$er coupons when granting price reductions to customers? a Birms ha$e more control o$er rebates. . b 7ebates can be launched and ended $er& <uickl&. . c 7ebate programs allow firms to collect additional customer information. . d 7ebates are much better at inducing purchase. . e Most customers ne$er bother to redeem rebate offers. .

'()* 4 1>. Which of the following sales promotion methods would &ou recommend to a packaged goods marketer who wants to stimulate trial of a new product? a contest or an in#store product sweepstake demonstration a coupon a point#of# purchase displa& c a free sample of the product .

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'()* C +". ' price reduction offered to channel intermediaries for purchasing specified <uantities of a product at a single time is called a* merchandise push mone& credit. allowance. bu&ing allowance. cooperati$e incenti$e. c selling incenti$e. .

'()* , E!! $ 1. 4iscuss the issues associated with the increasing fragmentation of mass media audiences. Cow are ad$ertisers and media companies coping with the issue? '()* %he traditional media business is hanging on for the ride of its life. %hat ride is called fragmentation and it1s going to fore$er change the wa& both media and ad$ertisers do business. %he problem is that consumers1 attention is being spread across an increasing arra& of media and entertainment choices. %hose choices include the Internet, targeted cable programming, $ideo#on#demand, %iDo (or digital $ideo recorders), i?ods, 4D4s, $ideo games, and wireless phones. %oda&, mass audiences are dwindling fast as consumers spend less time with traditional media such as tele$ision, maga:ines, and newspapers. Consumers now e-pect to use media whene$er and where$er the& want, and on an& de$ice. %he& are no longer wed to full#length tele$ision programming or to leisurel& reading the newspaper. Bor ad$ertisers, these trends are alarming because it is their traditional bread#and#butter demographic that is fragmenting the most. Bor e-ample, the number of 1=# to 3# &ear#old men who watch primetime tele$ision has been declining steadil& since +""". %hose who watch tele$ision increasingl& use %iDo or other 4D7 de$ices to skip ad$ertising. %hese changes are forcing marketers to adapt b& finding newer, more effecti$e wa&s to reach their target audiences. Ane wa& marketers are countering the trend is b& linking sales promotion to target markets through strategic integration into related tele$ision programming. Compan& sponsorship of programming can allow a close connection between brand and target market. In addition to outright sponsorship of popular programs, marketers are also making deals with tele$ision and cable networks to place their products into actual programs. In#program product placements ha$e been successful in reaching consumers as the& are being entertained rather than during the competiti$e commercial breaks. Media companies themsel$es ha$e also been forced to adapt, most notabl& b& fragmenting their content and business models to match their fragmented audiences. Ane wa& that companies ha$e addressed the problem is b& making their content a$ailable on multiple platforms.

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4espite the challenges of reaching fragmented audiences, the trend actuall& has a big side benefit. %he science behind traditional broadcast tele$ision ratings and audience measurement has alwa&s been uncertain. With on#demand ser$ices, ad$ertisers are able to precisel& measure audience characteristics whether the content is deli$ered $ia the Internet, cable, or wireless de$ices. %his one#two punch of profits and precise measurement ma& mark the death of the traditional "#second primetime tele$ision spot. +. 4iscuss the steps in$ol$ed in the 'I4' model of outlining promotional goals. Cow does IMC strateg& shift from one step to the ne-t in the model? Cow does the important of $arious promotional elements $ar& across the steps? '()* 8ltimatel&, the goals and ob.ecti$es of an& promotional campaign culminate in the purchase of goods or ser$ices b& the target market. %he classic model for outlining promotional goals and achie$ing this ultimate outcome is the 'I4' modelEattention, interest, desire, and action*

ttention % Birms cannot sell products if the members of the target market do not know the& e-ist. 's a result, the first ma.or goal of an& promotional campaign is to attract the attention of potential customers.

F Interest % 'ttracting attention seldom sells products. %herefore, the firm must spark interest in the
product b& demonstrating its features, uses, and benefits.

F &esire % %o be successful, firms must mo$e potential customers be&ond mere interest in the
product. /ood promotion will stimulate desire b& con$incing potential customers of the product1s superiorit& and its abilit& to satisf& specific needs.

ction % 'fter con$incing potential customers to bu& the product, promotion must then push them toward the actual purchase.

%he role and importance of specific promotional elements $aries across the steps in the 'I4' model. Mass#communication elements, such as ad$ertising and public relations, tend to be used more hea$il& to stimulate awareness and interest due to their efficienc& in reaching large numbers of potential customers. 'long with ad$ertising, sales promotion acti$ities, such as product samples or demonstrations, are $ital to stimulating interest in the product. %he enhanced communication effecti$eness of personal selling makes it ideall& suited to mo$ing potential customers through internal desire and into action. Ather sales promotion acti$ities, such as product displa&s, coupons, and trial# si:e packaging, are well suited to pushing customers toward the final act of making a purchase. . Identif& and discuss the issues and challenges in$ol$ed in measuring the effecti$eness of an ad$ertising campaign. Is it relati$el& easier to measure effecti$eness before or after the campaign has been implemented? 2-plain.

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'()* 2$aluating the effecti$eness of ad$ertising is one of the most challenging tasks facing marketers. Man& of the effects and outcomes of ad$ertising take a long time to de$elop, especiall& regarding important outcomes such as enhanced brand image, corporate reputation, and positi$e product attitudes. %he effect of ad$ertising on sales lags in some cases, with the effect occurring long after the campaign has ended. %he seemingl& unending methods that can be used to e$aluate ad$ertising effecti$eness further complicate the task of measuring ad$ertising results. )ome methods include e$aluating the achie$ement of ad$ertising ob.ecti$es@ assessing the effecti$eness of ad$ertising cop&, illustrations, and la&outs@ and e$aluating the effecti$eness of $arious media. 2ffecti$eness measures can also look at different market segments and their responses to ad$ertisingEincluding brand image@ attitudes toward the ad$ertising, the brand, or the firm@ and actual customer purchasing beha$ior. 'd$ertising effecti$eness can be e$aluated before, during, or after the campaign. ' pretest attempts to e$aluate the potential effecti$eness of one or more elements of the ad$ertising program. %o pretest ad$ertisements, firms often use a panel of actual or potential bu&ers who .udge one or more aspects of an ad$ertisement. ?retests are founded on the belief that customers are more likel& to know what t&pe of ad$ertising will influence them. 4uring an ad campaign, the compan& t&picall& measures effecti$eness b& looking at actual customer beha$ior patterns such as purchases, responses to toll#free telephone numbers, rate of coupon redemption, page $isits to the firm1s website, or e$en personal communications. %he firm ma& record the number of in<uiries or communication contacts, and .udge ad$ertising effecti$eness based on industr& norms or the firm1s own internal benchmarks. Birms ma& e$en peruse blogs for e$idence of the effecti$eness of their promotional campaigns. %he e$aluation of ad$ertising effecti$eness after a campaign is a posttest. %he nature of the firm1s ad$ertising ob.ecti$es will determine what kind of posttest is most appropriate. Bor e-ample, if a campaign1s ob.ecti$e is to increase brand awareness or create a more fa$orable attitude toward the firm, then the posttest will measure changes in these $ariables. Customer sur$e&s, panels, or e-periments ma& be used to e$aluate a campaign based on communication ob.ecti$es. Birms will also use performance outcomes such as sales or market share changes to determine campaign effecti$eness. 8nfortunatel&, the connection between ad$ertising and these t&pes of outcomes is not alwa&s clear. %he difficult& in linking ad$ertising to sales becomes compounded b& the fact that man& factors can affect sales. Burthermore, most of these factors are be&ond the control of the firm. Bor instance, competitors1 actions, regulator& decisions, changes in economic conditions, and e$en the weather might influence or diminish a firm1s sales or market share during a specific time period when ad$ertising effecti$eness is under scrutin&. 3. 4iscuss the importance of managing negati$e public relations and gi$e e-amples of how firms ha$e handled negati$e e$ents. What can we learn from these e-amples? What do &ou belie$e is the ke& to successfull& managing a negati$e e$ent? '()* Ane of the most important aspects of public relations deals with the une-pected and often unfa$orable public reactions resulting from an ethical or legal in<uir&, unsafe products, accidents, or the contro$ersial actions of emplo&ees and e-ecuti$es. Bor e-ample, all airlines ha$e carefull& planned procedures and personnel in place to respond to an a$iation accident@ howe$er, the& alwa&s face a $er& difficult and distressing situation when these accidents occur. 6ikewise, the news has been filled with ethical and legal scandals in$ol$ing man& firms. Bor e-ample, Microsoft (anti#competiti$e acti$ities) and 'I/ (e-ecuti$e compensation after recei$ing go$ernment bailout monies) ha$e had to deal with negati$e publicit& in recent &ears.

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(egati$e co$erage of a compan&1s problems can ha$e <uick, dramatic, and long# lasting effects. (egati$e publicit& is criticall& important when its effects reduce the degree of trust that customers ha$e in a specific industr& or firm. Bor e-ample, 2--on1s response to the Dalde: accident in 1>=> is one of the classic e-amples of how not to respond to negati$e publicit&. When faced with the massi$e oil spill in 'laska, 2--on failed to communicate effecti$el& with the press and $arious stakeholders. It took se$eral da&s before top e-ecuti$es communicated clearl& how 2--on was going to deal with the en$ironmental disaster. ' single negati$e e$ent, especiall& one that is potentiall& dangerous to customers, can wipe out a compan&1s image and negate the goodwill generated o$er decades. %oda&, the media, and indi$idual consumers, can report incidents through tele$ision and the Internet faster than e$er before. 's a result, negati$e stories recei$e more attention now than in the past. %o a$oid negati$e publicit&, it is $ital to a$oid negati$e incidents and e$ents that can create problems. Birms can achie$e this goal through effecti$e ethical and legal compliance programs, safet& programs, <ualit&#control procedures, and programs designed to enhance emplo&ee integrit&. Cowe$er, no matter how hard a firm tries to a$oid negati$e e$ents, the potential for negati$e incidents and publicit& is alwa&s present. %herefore, all firms should ha$e plans and procedures in place to respond to negati$e e$ents when the& occur. In particular, specific policies and procedures for handling the media and their co$erage of the e$ent are absolutel& necessar&. Ane of the great public relations lessons learned o$er time is that firms must e-pedite news co$erage of negati$e e$ents rather than tr& to block the news or co$er up facts about the incident. 9. 4iscuss the role of sales promotion in consumer markets. In &our answer, identif& se$eral t&pes of consumer sales promotion acti$ities and how the& might be used in an o$erall IMC program. '()* 'n& member of the suppl& chain can initiate consumer sales promotions, but manufacturers and retailers t&picall& offer them. Bor manufacturers, sales promotion acti$ities represent an effecti$e wa& to introduce new products or promote established brands. Coupons and product sampling are fre<uentl& used during new product launches to stimulate interest and trial. 7etailers t&picall& offer sales promotions to stimulate customer traffic or increase sales at specific locations. Coupons and free products are common e-amples, as are in#store product demonstrations. Man& retailers are known for their sales promotions such as the free to&s that come with kid1s meals at Mc4onald1s, ,urger Ging, and other fast food establishments. ' potentiall& limitless $ariet& of sales promotion methods can be used in consumer markets. %ruthfull&, de$eloping and using these methods is limited onl& b& the creati$it& of the firm offering the promotion. Cowe$er, firms will t&picall& offer one or more of the following t&pes of sales promotions to consumers*

F Coupons % Coupons reduce the price of a product and encourage customers to tr& new or
established brands. Coupons can be used to increase sales $olume <uickl&, to attract repeat purchasers, or e$en to introduce new product si:es or models. %o be most effecti$e, coupons need to be accessible, eas& to recogni:e, and eas& to use. Bor the most part, this re<uires that coupons be distributed on packages (the highest redemption rates), through inserts in print ad$ertising, through direct mail, or through in#store displa&s. F 'e(ates % 7ebates are $er& similar to coupons e-cept that the& re<uire much more effort on the consumer1s part to obtain the price reduction. 'lthough consumers prefer coupons because of the ease of use, most firms prefer rebates for se$eral reasons. Birst, firms ha$e more control o$er rebates because the& can be launched and ended $er& <uickl&. )econd, a rebate program allows the firm to collect important consumer information that can be used to build customer databases. %he best reason is that most consumers ne$er bother to redeem rebate offers. %his allows a firm to
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entice customers to purchase a product with onl& a minimal loss of profit. !amp)es % Bree samples are one of the most widel& used consumer sales promotion methods. )amples stimulate trial of a product, increase $olume in the earl& stages of the product1s life c&cle, and encourage consumers to acti$el& search for a product. )amples can be distributed through the mail, attached to other products, and gi$en out through personal selling efforts or in#store displa&s. )amples can also be distributed $ia less direct methods. Bor e-ample, free samples of soap, shampoo, coffee, or sunscreen might be placed in hotel rooms to create consumer awareness of new products. Lo*a)t* Programs % 6o&alt& programs, or fre<uent#bu&er programs, reward lo&al customers who engage in repeat purchases. %hese programs are popular in man& industries due to their potential to dramaticall& increase profits o$er the long term. We are all familiar with the fre<uent#flier programs offered b& ma.or airlines. Ather companies, such as hotels, auto rental agencies, and credit card companies, offer free goods or ser$ices for repeat purchases. Point+o,+Purchase Promotion % ?oint#of#purchase (?A?) promotion includes displa&s, counter pieces, displa& racks, or self#ser$ice cartons that are designed to build traffic, ad$ertise a product, or induce impulse purchases. ?A? promotions are highl& effecti$e because the& are used in a store where consumers make roughl& ;" to =" percent of all purchase decisions. 'nother t&pe of ?A? promotion is an in#store product demonstration. 2-amples of these demonstrations include fashion shows, food preparation demonstrations in grocer& stores, and free makeo$ers in the cosmetics departments of department stores and specialt& stores. Premiums % ?remiums are items offered free or at a minimum cost as a bonus for purchasing a product. 2-amples of premiums include a free car wash with a gasoline fill#up, a free toothbrush with a purchase of a tube of toothpaste, and the to&s offered inside a Mc4onald1s Capp& Meal. ?remiums are good at increasing consumption and persuading consumers to switch brands. Contests and !-eepstakes % Consumer contests, games, and sweepstakes encourage potential consumers to compete for pri:es or tr& their luck b& submitting their names in a drawing for pri:es. In addition to being $aluable information collection tools, contests and sweepstakes are good at attracting a large number of participants and generating widespread interest in a product. ,ecause the& re<uire no skill to enter, sweepstakes are an effecti$e wa& to increase sales or market share in the short term. &irect Mai) % 4irect mail, which includes catalog marketing and other printed material mailed to indi$idual consumers, is a uni<ue categor& because it incorporates elements of ad$ertising, sales promotion, and distribution into a coordinated effort to induce customers to bu&. %he use of direct mail has grown tremendousl& in recent &ears due to consumer time constraints, relati$el& low cost, and the ad$ent of sophisticated database management tools.

Birms can use an& one or all of these consumer promotion methods in their o$erall IMC program. Cowe$er, the choice of one or more methods must be made in consideration of the firm1s IMC ob.ecti$es. Burthermore, the choice must also consider the use of sales promotions b& competitors and whether a particular method in$ol$es ethical or legal dimensions. Consumer sweepstakes, in particular, ha$e specific legal re<uirements to ensure that each entrant has an e<uall& likel& chance of winning.

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