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Kotler Summary - Chapter 20: Designing and Managing Integrated Marketing Communications

Description: Chapter notes for the famous marketing textbook by Kotler

A View of the Communication Process

The marketing communications mix (promotions mix) consists of five modes:
  1. Advertising
  2. Sales Promotion
  3. Public relations and publicity
  4. Personal selling - face to face intervention
  5. Direct Marketing - mail, telephone or fax
We now view communications as the management of the customer buying process over time. To communicate effectively marketers need to understand the fundamental elements underlying effective communications.  Sender and receiver are two elements that represent the major parties; message and media represent communication tools; encoding, decoding, response and feedback represent communication functions; and noise is random and competing messages. For the message to be effective, the senders encoding process must mesh with the receivers decoding process.

The sender's task is to get his message through to the target audience. These are potential problems:
  1. Selective audience - people are bombarded by too many messages, so hard to get their attention
  2. Selective distortion - people twist message to hear what they want. Add things that are not there (amplification) and ignore things that are there (leveling)
  3. Selective recall - difficult to get message in person's long term memory
Fiske and Hartley outline for effective communication.
  1. The greater the monopoly of communication source, the greater the recipient's change or effect in favor of the source.
  2. Communication effects are greatest when message is in line with receiver's existing opinions, beliefs, and dispositions. ⇒ resonate
  3. Communication can produce the most effective shifts on unfamiliar, peripheral issues, which do not lie at the center of the recipient's value system. ⇒ new
  4. Communication is more likely to be effective where the source is believed to have expertise, high status, or likeability. -> expert
  5. The social context group or reference group will mediate the communication and influence whether or not the communication is accepted.

Developing Effective Communications

  1. Identify the Target Audience
    • Image Analysis - need to assess the audience's current image (the set of beliefs, ideas, and impressions that a person holds regarding an object. People's attitudes and actions toward an object are highly conditioned by that object's image) of your company or products
    • Familiarity scale—Never Heard of, Heard of Only, Know a Little Bit, Know a Fair Amount, Know Very Well.
    • Favorability scale: Very Unfavorable, Somewhat Unfavorable, Indifferent, Somewhat Favorable, Very favorable.
    • Semantic Differential – a tool used to research the specific content of its image. This involves the following steps.
      • Develop a set of relevant dimensions - get customers to identify the dimensions they would use in thinking about a project. For example, people think about health care when you ask about a hospital
      • Reduce the set of relevant dimensions
      • Administer the instrument to a sample of respondents - respondents rate dimensions on a scale
      • Average the results
      • Check on the image variance
  2. Determining the Communication Objectives - the marketer is seeking responses from target audience:
    • cognitive - put something in consumers mind
    • affective - change consumers mind
    • behavioral - get the consumer to act
    Response hierarchy model - different models for consumer response stages. All the models assume that the buyer passes through responses in listed order (see book for illustrated model).
  3. Designing the Message - after defining desired audience response, develop an effective message. The message should gain attention, hold interest, arouse desire, and elicit action.
Formulating Message requires solving four problems:
  1. Message Content - what to say to the target audience. In determining the best message, want appeal, theme, idea or unique selling proposition.
    • Rational appeal—appeal to audience's self-interest.
    • Emotional appeal—attempt to stir up negative or positive emotions that motivate purchase.
    • Moral appeal—directed at what is right and proper.
  2. Message Structure - structure and content of message. How to say message.
    • Stimulus Ambiguity - Best ads ask questions and let audience to reach conclusions.
    • Two sided arguments - praise products advantages and shortcomings. Appropriate when product must overcome some sort of negativity. Tend to work better with an educated audience
    • One sided arguments - only praise product. Work best with audiences that are initially predisposed to the communicator's position.
  3. Message Format - how to say it symbolically. Also physical format of message, i.e.: headlines, copy, illustration, color, and sounds are all important.
  4. Message Source - who should say message. Messages delivered by attractive or popular sources achieve higher attention and recall.
    • Credibility - spokesperson must be credible. Individual should be exhibit expertise, trustworthiness, and likeability.
Selecting The Communication Channels - must select effective channels of communication. There are two types of communication channels:

Personal Communication Channel
Involves 2 or more persons communicating directly with each other. Provides opportunity for individualizing the presentation and feedback. Further distinctions are:
  • Advocate Channels - company sales people contacting the target market
  • Expert Channels - consist of independent experts making statements to target buyers.
  • Social Channels - consist of neighbors friends etc, talking to target market.
Steps to stimulate personal influence - influence is very important to potential buyers
  1. Identify influential individuals and devote extra effort.
  2. Create opinion leaders by supplying certain people with the product on attractive terms
  3. Work through community influentials, disc jockeys, class presidents, etc.
  4. Use influential people in testimonial advertising.
  5. Develop advertising that has high conversation value
  6. Develop word of mouth referral channels
  7. Establish an electronic forum
Non-personal Communication Channels
Carry message without personal contact.
Media; Events; Atmospheres—packaged environment, i.e.: elegant hotels are furnished extravagantly

Promotions

Establishing a Total Promotion Budget - how to decide on budget. Four methods:
  1. Affordable method - What the company can afford. Ignores role of promotion as an investment.
  2. Percentage of Sales method - Poor because views sales as determiner of promotion rather than a result. Leads to budget set by the availability of funds rather than by market opportunities.
  3. Competitive parity method - achieves share of voice parity with their competitors. Should not base your spending on competitors spending, doesn't make sense.
  4. Objective and Task method - most desirable method. Develop budget by defining specific objectives, tasks that must be performed to achieve objectives, and the costs of the respective tasks.
Deciding on Promotion Mix - distributing the total promotion dollars between these promotional tools:
  1. Advertising - some distinctive qualities are:
    • Public presentation - adv. is highly public mode of communication
    • Persuasiveness - is a persuasive medium that allow seller to repeat a message many times
    • Amplified expressiveness - dramatize the product and the company through art, color and sound
    • Impersonality - is not as compelling as company sales rep.
    • Advertorials - print ads designed to look like newspaper article
    • Infomercials
  2. Sales Promotion - diverse. Offer three distinctive benefits. Use sales promotions to create a stronger and quicker response. Effects are useful for short run strategy.
    • Communication - gain attention and usually provide info that leads consumer to product
    • Incentive - incorporate concession or inducement that gives value to customer
    • Invitation - include distinct invitation to engage in the transaction now.
  3. Public Relations and Publicity
    • High credibility - news stories and features add authenticity and credibility
    • Ability to catch buyers of guard –
    • Dramatization - like advert., has ability for dramatizing a company or product
  4. Personal Selling - most cost effective tool at later stages of the buying process. Three distinctive benefits:
    • Personal confrontation - interactive relationship between two people
    • Cultivation - allows relationships to exist between buyers and sellers
    • Response - makes buyer feel obligated to listen to sales talk, even if response is a polite 'no thank you'
  5. Direct marketing - there are different forms, but they all share these characteristics:
    • non-public - message addressed to specific person
    • Customized - message can be customized to appeal to the addressed individual
    • Up-to-Date - message can be prepared very quickly for delivery
    • Interactive - can be altered depending on person's response
Factors in setting the promotion mix - must consider several factors when setting promotion mix
  1. Type of Product Market - promotional tool utilization varies between consumer and business markets. Business markets concentrate on personal selling, while consumer markets concentrate on advertising. However, advertising can help business markets:
    • awareness building
    • comprehension building- explain new features and their uses
    • efficient reminding
    • lead generation - ads and brochures can generate leads for sales
    • reassurance - reminds customer how to use product and reassure them about purchase
  2. Personal selling can improve consumer markets:
    • increased stock position - persuade dealers to take more stock and devote more shelf space to product
    • enthusiasm building
    • missionary selling - sales reps can sign up more dealers to carry company's brands
  3. Push vs. Pull Strategy
    Push strategy - involves manufacturer marketing activities (sales force and trade promotion) directed at channel intermediaries. Goal is to induce the intermediary to order and carry the product and promote it to end users. Appropriate where there is low brand loyalty in a category, brand choice is made in the store, product is an impulse item or product benefits are well understood.
    Pull strategy - involves marketing activities (advertising and consumer promotion) directed at end users. Purpose is to induce them to ask intermediary for the product and thus induce the intermediary to order the product from the manufacturer. Appropriate when there is high brand loyalty and high involvement in the category, people perceive differences between brands, and people choose the brand before they go to the store.
Company Market Rank - top ranking brands derive more benefit from advertising than sales promotion

Measuring the Promotion's Results - after implementing the promotional plan, communicator must measure its impact on the target audience. Collect feedback from audience about recognizing or recalling the message, how many times they saw it, what points they recall, how they felt about the message, and their previous and current attitudes toward the product and company. Should also collect behavioral measures of audience's response, such as how many people bought the product, liked it, and talked to other about it.

Managing and Coordinating Integrated Marketing Communications - integrate all communication disciplines for better clarity, consistency and maximization of communication. This is an innovative idea.