Integrated Marketing Communication and Pricing Strategies

Chapter 8

Assignment

Mr. Zillur Rahman

Assistant Professor

Department of Business Administration

Shahjalal University of Science & Technology

Reg no: Name

2009731033 Md. Noman Mahmud

2009731038 Nowrose Noor Sakib

2009731050 Mir Masudul Hasan

2009731053 Md. Itkan Uddin

Course Title: Entrepreneurship DevelopmentCourse Code: BAN 434

Submitted To:

Submitted By:

Integrated Marketing Communications (IMC)

A comprehensive marketing communications plan that takes into consideration all the communication disciplines being used and combines them to provide clarity, consistency, and maximum communications impact.

Five Key Features of IMC Start with the customer or prospect. Use any form of relevant contact or touch point. Go through cooperative actions. Build relationships. Affect behavior.

• Increase Market Penetration• Develop Repeat Purchase Behavior• Establish Customer Relationships• Increase Rate of Consumption• Stimulate Demand & Interest• Establish a Product Image• Influence Sales Volume• Develop Sales Leads• Establish Understanding• Build Support & Acceptance

Marketing Communications Objectives

The Basics of a Marketing Communication Plan

MarCom Plan

Define the purpose of the MarCom program

- Accomplish determinations- Stimulate responses - Trigger purchase decision- Build remarkable image - Positive promotion

Step 1

Developing a communication plan

- Analyze firm & target audience- Know the target market- Reach the people likely to buy

Step 2

The Operational Elements of a Marketing Communication Plan

Advertising1

Publicity2

Sponsorship & Special Events3

Personal Selling5

4 Promotion

Any sales presentation that is no-personal in nature and is paid for by an indentified sponsor.

Advertising Objectives Informative Advertising

• To communicate customer value and is used heavily when introducing a new product

Persuasive Advertising• To build brand value and sometimes compare with

competing brands Reminder Advertising

• Maintain customer relationships and keep customers thinking about the product

Advertising

Publicity- any commercial news covered by the media that boosts sales but for which a small company does not pay.

Helpful tactics to stimulate publicity of any business

Writing of article that will interest customers or potential customers

Sponsor an innovative event designed to attract attention

Involve celebrities as spokesperson to promote the products

Contact local TV and radio stations and offer to be interviewed

Publish a newsletter

Publicity

Sponsorship and Special Events

Tips which ensure the most promotional impact from its sponsorship:Look for an event that is appropriate for the businessResearch the event and hosting organization before agreementTry to become a dominant sponsor of the eventClarify the cost and the level of participationGet involved rather than totally rely on the hostsDo not count on sponsorship for entire advertising campaign

Attract a great deal of interest and provide a lasting impression in customer minds.An excellent way to reach the attention of target customers.

• Entrepreneurs have begun to explore new methods of placing their products or services before the targeted market in a subtle fashion which are mostly the combination of several communication forms.

• Communicating information between seller and potential buyer or others in the channel - to influence attitudes and behavior.

• Three major categories:– Personal Selling– Mass Selling (Advertising and Publicity)– Sales Promotion

Promotion

The personal contact between salesperson and potential customers resulting from sales effort.

Oral presentation in a conversation with one or more prospective purchasers for the purpose of making a sale

Represents the most popular promotional effort in terms of financial expenditures and number of people employed

Personal selling

Key Features of Personal Selling:

(1) Dyadic

(2) Flexible

(3) Focused (personalized)

(4) Often results directly in a sale

Benefits of Salesperson’s with Personal Selling

They are enthusiastic & alert to opportunities

Expertise in the products & services

Work from customer’s perspective

Use past success stories

Emphasize on customer satisfaction rather than sales volume

Consider themselves as problem solver

Selecting Advertising Media

Traditional Advertising Media

New Advertising

Media

Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards

Internet Banner ads Viral marketing E- mail Interactive video

Approaches to Determining the Promotional Budget

Percentage of sales A fixed amount of money per past or projected sales Probably the most widely used as it is simple

All available funds/All you can afford Budget what is left over for promotional expenditures New companies often put all available funds into

promotion to penetrate the market

Approaches to Determining the Promotional Budget (cont.)

Competitive parity/Follow the competition Adopt the average ratio for promotional expenses

to sales for the industry or main competitor; or the same absolute amount as a competitor

Objective and task Determine objectives Determine relationship between expenditures and

ability to achieve objective Set a budget that allows the achievement of these

goals

Methods of stretching a Small Advertising Budget

Cooperative Advertising- an arrangement in which a

manufacturing company shares the cost of advertising with a small retailer.

Shared Advertising-an arrangement in which a group of

similar business forms a syndicate to produce generic ads that allow the individual businesses to dub in local information.

PricingA method adopted by a firm to set its selling price.

It usually depends on the firm's average costs, and on the customer's perceived value of the product.

Survival Maximum current profit Maximum market share Maximum market skimming Product-quality leadership

Pricing objectives

Pricing Strategies & Methods for Retailers

Markup

-the difference between the cost of a product or service and its selling price. Markup can be expressed as a percentage of either cost or selling price.

Dollar markup = Retail price – Cost of merchandise

Dollar markup Retail price

Percentage of retail price markup =

Dollar markup Cost of unit

Percentage of cost markup =

Follow-the-Leader Pricing• Established prices followed by some retailers• This pricing policy is not healthy for business• This policy eradicates opportunities to build a

special price image• Make an indistinctive image in customers mind

Below Market Pricing• Create a discount image in the market• Firms hope to attract a sufficient level of

volume to offset the lower profit margin• Most of the time risky for small companies• Needs to eliminate most of the extra services for

price reduction

Pricing Concepts for Manufacturers

Direct Costing & Price Formulation

Absorption Costing – the traditional method of product costing in which all manufacturing and overhead costs are absorbed into the product's total cost.

Variable (direct) Costing – a method of product costing that includes in the product’s cost only those costs that vary directly with the quantity produced.