Integrated Marketing Communications

INTEGRATED MARKETING COMMUNICATIONS

Course Information

  • Course Name: Integrated Marketing Communication

  • Course Code: BUAD 100: SP26

  • Week 4 Date: Monday, February 23, 2026

Weekly Focus

  • Monday: Topics include Integrated Marketing Communications & Advertising, Pricing.

  • Wednesday: Quiz 1, with an introduction to finance, starting with accounting.

    • Quiz 1 Topics: Topics cover introduction to business, business types, business environments, marketing strategies, strategic marketing models and frameworks, teamwork, and communications.

    • Study Aids: Study guides include questions from pre-class materials and key concepts discussed in class.

  • Assignment Due: Interview Questions & AI Tools

MARKETING COMMUNICATION AN OVERVIEW

Definition of Marketing Communication

  • Marketing Communication encompasses everything an organization expresses and does.

  • The primary goal is to influence consumer attitudes and behaviors.

  • Involves various techniques including:

    • Advertising

    • Personal Selling

    • Sales Promotions

    • Public Relations

    • Direct Marketing

Goals of Marketing Communication

  • Inform: Educate consumers about goods and services.

  • Remind: Encourage continued use of certain brands.

  • Persuade: Influence consumers in favor of one brand over another.

  • Build Relationships: Foster connections with consumers.

DIFFERENT COMMUNICATIONS AND GOALS

Examples of Communication Goals

  • Inform: Example from Naked Juice, promoting fruit drink benefits: "Whether you're into fly fishing or yoga…"

  • Persuade: Suggestive messaging to choose a brand over competitors.

  • Remind: Keeping the brand top-of-mind for consumers.

INTEGRATED MARKETING COMMUNICATION

Components of Integrated Marketing Communication

  • Advertising: Non-personal communication reaching large audiences via mass media.

  • Personal Selling: Involves direct interaction to address consumer needs and preferences.

  • Direct and Interactive Marketing: Engaging consumers directly.

  • Public Relations: Managing the public image and relationships with various stakeholders.

  • Sales Promotion: Incentives to stimulate sales immediately.

  • Consistency: Maintaining a consistent brand image across all touchpoints.

Models of Communication

  • One-to-Many Model:

    • Methods: Advertising, Sales Promotion, Public Relations

    • Direction: Marketer → Consumers

  • One-to-One Model:

    • Methods: Direct Marketing, Personal Selling

    • Direction: Marketer → Single Consumer

  • Many-to-Many Model:

    • Methods: Buzz building, Social Media

    • Direction: Consumers ↔ Marketers

PROMOTIONAL PLANNING

Steps in Promotional Plan

  1. Identify target audience.

  2. Determine communication objectives.

  3. Determine and allocate the budget.

  4. Design the promotion mix.

  5. Evaluate the effectiveness of the communication campaign.

PREPARING PROMOTIONAL BUDGET

Budgeting Techniques

  • Top-down budgeting: Budget developed from the top of the organization.

  • Percent-of-Sales Method: Budget set at a certain percentage of the previous year’s sales.

  • Competitive-Parity Method: Matching competitors' budgets.

  • All-You-Can-Afford Method: Allocation of leftover funds.

  • Bottom-up budgeting: Objectives and tasks dictate the budget allocation.

Promotion Budgeting Methods

  • Objective-and-Task Method: Goals are established, then budget is created to meet those goals.

ADVERTISING

Characteristics of Advertising

  • Non-personal communication via mass media.

  • Ability to reach a vast audience simultaneously.

  • Flexible appeal options (rational, emotional, reminder).

Advertising Costs

  • 2026 Super Bowl Advertising:

    • Average 30-second spot costs approximately $8 Million.

    • Top-tier slots can exceed $10 Million.

    • Overall investments range from $9 Million to over $20 Million accounting for production and additional network event inclusions.

    • Notable 14% increase from 2025 average of $7-$8 Million.

MEDIA PLANNING

Focus Areas

  • Message Delivery: Identify the intended message.

  • Target Audience: Determine who should receive it.

  • Exposure Frequency: Plan how often and where the message will be depicted.

MEDIA SCHEDULING

Scheduling Decisions

  • Choose between continuous versus pulsing media schedules.

  • Utilize metrics like:

    • Cost per thousand (CPM)

    • Reach

    • Frequency

    • Gross Rating Points (GRP)

GROSS RATING POINTS (GRPS)

Definition and Calculation

  • Gross Rating Points = (Number of ads placed) x (Percentage of target audience who sees the ads).

  • For example: If 20% of the audience watches a show and 10 ads are placed, the GRP is 10imes20=20010 imes 20 = 200.

COSTS OF TV ADVERTISING

Examples of TV Advertising Costs

  • NBC Sunday Night Football: $665,677 per 30-second spot.

  • FOX Thursday Night Football: $434,078 per spot.

  • Other programs like "This Is Us" and "The Big Bang Theory" have respective costs of $433,866 and $285,934.

PERSONAL SELLING

Key Features

  • Involves direct personal interaction for customer needs.

  • Critical components include:

    • Listening

    • Customizing offers

    • Closing the sale

  • Most effective for intricate products requiring a relationship focus.

  • Provides immediate feedback but requires long-term commitment and investment.

DIRECT MARKETING

Definition and Characteristics

  • Targets specific demographics based on psychographics or demographics.

  • Effective for precise marketing activities.

  • Common forms include:

    • Non-public outreach

    • Immediate response features

    • Customized messaging

    • Interactive engagement with consumers.

PUBLIC RELATIONS

Purpose and Impact

  • Build positive relationships and enhance corporate image through publicity.

  • Effective in managing public perception at lower costs compared to traditional advertising.

  • Plays a crucial role in brand building strategically.

SALES PROMOTION

Definition

  • Activities providing direct incentive for purchase to resellers, salespeople, or consumers.

Promotional Examples

  • Free samples, games, rebates, sweepstakes, contests, premiums, coupons.

  • Sales promotions often consume a larger budget than traditional advertising.

PROMOTED PRODUCTS STRATEGIES

Goals for Existing and New Customers

  • For existing customers:

    • Increase purchase quantities.

    • Accelerate purchase frequency.

    • Mitigate brand switching.

  • For new customers:

    • Encourage switching and increase primary demand.

COMPARING ELEMENTS OF TRADITIONAL PROMOTIONAL MIX

Advertising vs. Sales Promotion

  • Advertising Benefits: Control over message, large reach, diverse appeal.

  • Sales Promotion Benefits: Immediate purchase encouragement for price-sensitive consumers but risks lowering perceived brand value.

Evaluation of Other Promotional Types

  • Public Relations: Low cost, high credibility but lacks control over message

  • Personal Selling: Flexible but costly per contact.

  • Direct Marketing: Target-specific but perceived negatively by consumers.

SUMMARY OF PROMOTIONAL STRATEGIES

  • Promotion is essential. Understand various promotional types.

  • Key considerations include product knowledge, audience insight, medium selection, and effective messaging.

PRICING FACTORS AND CONSIDERATIONS

Factors to Consider When Setting Prices

  • Fixed and Variable Costs

  • Market Competition

  • Business Objectives

  • Proposed Brand Positioning Strategies

  • Consumer Group Willingness to Pay

Pricing Objectives

  • Survival Strategy: Pricing just enough to cover costs.

  • Penetration Pricing Strategy: Pricing low initially to gain market share.

  • Market Skimming Pricing Strategy: Initially high pricing to maximize margins.

UNDERSTANDING MARKET PENETRATION

Example and Comparison

  • Fabletics by Kate Hudson offers complete outfits for $25 including shipping and exchanges.

  • Distinction from Predatory Pricing: Predatory pricing involves strategically lowering prices to eliminate competition, which is illegal in the U.S.

DYNAMIC PRICING

Definition and Application

  • Pricing that varies based on demand, illustrated by fluctuating theme park ticket prices based on season and peak demand period.

DEMAND SENSITIVITY

Evaluating Consumer Price Sensitivity

  • Using scenarios—comparing coach vs. first-class pricing and gauging consumer responses.

Understanding Price Elasticity of Demand

  • Elastic goods are often luxury items with many substitutes; inelastic goods are necessities.

  • Price elasticity reflects how quantity demanded responds to price changes—greater significance in luxury goods.

CALCULATING PRICE ELASTICITY

Formula and Examples

  • Price elasticity calculation:

    • ext{Elasticity} = rac{ ext{% change in quantity demanded}}{ ext{% change in price}}

    • Example: A price increase causes a demand drop of 10%; if price increases by 2%, elasticity = rac−102=−5rac{-10}{2} = -5.

Further Examples with Entrée Pricing in Restaurants

  • An increase from $10 to $15 causes quantity drops from 100 to 50:

    • % change in quantity demanded = rac{50-100}{100} = -50 ext{%}

    • % change in price = rac{15-10}{10} = 50 ext{%}

    • Resulting price elasticity = 1.

BREAK-EVEN ANALYSIS

Key Terminology in Pricing Analysis

  • Fixed Cost: Total recurring costs.

  • Variable Cost: Costs contingent on production levels.

  • Contribution Margin: Revenue minus variable costs.

Break-even Volume Calculation

  • The process helps determine how many units must be sold to cover total costs.

  • Formula: extBreak−evenVolume=racextFixedCostsextPrice−VariableCostext{Break-even Volume} = rac{ ext{Fixed Costs}}{ ext{Price - Variable Cost}}.

Example of Restaurant Break-even Analysis

  • Given:

    • Fixed Costs: $100,000

    • Variable Cost: $5 per entrée

    • Selling Price: $25

  • Calculate break-even volume:

    • Contribution Margin = $25 - $5 = $20

    • Break-even Volume = rac100,00020=500extentreˊesrac{100,000}{20} = 500 ext{entrées} per month.

PRICING TYPES AND STRATEGIES

Customer Lifetime Value (CLV)

  • Dependent on:

    • Cost to acquire the customer.

    • Annual profits generated by that customer.

    • Contribution Margin

    • Expected purchasing life of the customer.

  • Formula: extCLV=mimesL−ACext{CLV} = m imes L - AC, where:

    • mm = contribution margin per customer per year

    • LL = customer lifespan in years

    • ACAC = acquisition cost per customer.

Customer Lifetime Value Example

  • Example:

    • Acquiring customer costing $10, generating $40 in revenue annually, with variable cost of $20 and lifespan of 5 years.

    • Calculation:

    • m=40−20=20m = 40 - 20 = 20

    • extCLV=20imes5−10=90ext{CLV} = 20 imes 5 - 10 = 90.

    • Important aspects include retention and churn rates, and factoring the time value of money.

PSYCHOLOGICAL PRICING CONCEPTS

Overview of Psychological Pricing

  • Price perceptions impact consumer behavior; higher prices can be associated with quality.

  • Sale signage and discounts influence consumer purchase behavior.

Examples of Psychological Pricing

  • Price ends in .99 signifies a bargain and influences purchase decisions.

  • Pricing should reflect consumer cognitive biases.

REFERENCE PRICES IN CONSUMER PRICING

Strategy Importance

  • Consumers reference prices when evaluating offers.

  • Pricing examples cite discounts and prices from well-known retailers to create perceptions of value.

Odds and Ends in Pricing Techniques

  • Odd-Even Pricing Strategy: Uses fractional pricing instead of whole numbers, i.e., $9.99 vs. $10.00.

  • Price Bundling: Bundling items together at perceived lower rates, reducing cognitive effort.

  • Sunk Costs: Previous costs influence future decisions although they should not (e.g., commitment to season tickets).

Price Perceptions Research Study

  • A study highlighted how perceived price impacts pain tolerance during a shock treatment; higher-priced placebos were rated as less painful.

FINAL PRICING SELECTION CONSIDERATIONS

Factors to Weigh

  • Analyze competitor reactions.

  • Supplier and sales force response to pricing changes.

  • Customer reactions are critical to final price adjustment decisions.