14 Reviewing and Extending the Concepts

Objectives Review and Key Terms

Objectives Review

In this chapter, you learned how companies use integrated marketing communications (IMC) to communicate customer value. Modern marketing calls for more than just creating customer value by developing a good product, pricing it attractively, and making it available to target customers. Companies also must clearly and persuasively engage current and prospective consumers and communicate that value to them. To do this, they must blend five promotion mix tools, guided by a well-designed and implemented IMC strategy.

Objective 14-1 Define the five promotion mix tools for communicating customer value. (pp 400401)

A company’s total promotion mix—also called its marketing communications mix—consists of the specific blend of advertising, personal selling, sales promotion, public relations, and direct and digital marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships. Advertising includes any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. In contrast, public relations focuses on building good relations with the company’s various publics. Personal selling is personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Firms use sales promotion to provide short-term incentives to encourage the purchase or sale of a product or service. Finally, firms seeking immediate response from targeted individual customers use direct and digital marketing tools to engage directly with customers and cultivate relationships with them.

Objective 14-2 Discuss the changing communications landscape and the need for integrated marketing communications. (pp 401406)

The explosive developments in communications technology and changes in marketer and customer communication strategies have had a dramatic impact on marketing communications. Advertisers are now adding a broad selection of more-specialized and highly targeted media and content—including online, mobile, and social media—to reach smaller customer segments with more-personalized, interactive messages. As they adopt richer but more fragmented media and promotion mixes to reach their diverse markets, they risk creating a communications hodgepodge for consumers. To prevent this, companies have adopted the concept of integrated marketing communications (IMC). Guided by an overall IMC strategy, the company works out the roles that the various promotional tools and marketing content will play and the extent to which each will be used. It carefully coordinates the promotional activities and the timing of when major campaigns take place.

Objective 14-3 Outline the communication process and the steps in developing effective marketing communications. (pp 406413)

The communication process involves nine elements: two major parties (sender, receiver), two communication tools (message, media), four communication functions (encoding, decoding, response, and feedback), and noise. To communicate effectively, marketers must understand how these elements combine to communicate value to target customers.

In preparing marketing communications, the communicator’s first task is to identify the target audience and its characteristics. Next, the communicator has to determine the communication objectives and define the response sought, whether it be awareness, knowledge, liking, preference, conviction, or purchase. Then a message should be constructed with an effective content and structure. Media must be selected, both for personal and nonpersonal communication. The communicator must find highly credible sources to deliver messages. Finally, the communicator must collect feedback by watching how much of the market becomes aware, tries the product, and is satisfied in the process.

Objective 14-4 Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix. (pp 413420)

The company must determine how much to spend for promotion. The most popular approaches are to spend what the company can afford, use a percentage of sales, base promotion on competitors’ spending, or base it on an analysis and costing of the communication objectives and tasks. The company has to divide the promotion budget among the major tools to create the promotion mix. Companies can pursue a push or a pull promotional strategy—or a combination of the two. People at all levels of the organization must be aware of the many legal and ethical issues surrounding marketing communications. Companies must work hard and proactively at communicating openly, honestly, and agreeably with their customers and resellers.

Key Terms

Objective 14-1

Objective 14-2

Objective 14-3

Objective 14-4

Discussion and Critical Thinking

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Discussion Questions

  1. 14-1 Name and describe the five major promotion tools used in a company’s marketing communications mix. (AASCB: Communication)

  2. A blue star icon. 14-2 Discuss content marketing and how marketers are ­using a new framework that builds on how and by whom marketing content is created, controlled, and distributed. (AACSB: Communication)

  3. 14-3 What is integrated marketing communications (IMC), and how does a company go about implementing it? (AACSB: Communication)

  4. A blue star icon. 14-4 Discuss the two broad types of communication channels used by marketing communicators to distribute messages. (AACSB: Communication)

  5. 14-5 How does a company determine its promotional budget? (AACSB: Communication)

Critical Thinking Exercises

  1. A blue star icon. 14-6 Identify a new consumer food or beverage product. Using the major promotion tools, design a promotion campaign for the product. Identify how you are using both push and pull strategies. (AACSB: Communication; Use of IT; Reflective Thinking)

  2. 14-7 In a small group, select an advertisement that appropriately addresses each aspect of the communication process shown in Figure 14.2. Illustrate how each element is represented in the company’s advertisement. Discuss how the advertisement, by itself, does or does not constitute effective marketing communication for the product. (AACSB: Communication; Reflective Thinking)

  3. 14-8 According to a Nielsen Global Survey, consumers are more likely to support companies that they perceive as socially responsible. Find three examples of advertisements that incorporate socially responsible marketing messages. Do these advertisements increase your likelihood of buying from the company sponsoring them? Explain. (AACSB: Communication; Ethical Reasoning; Reflective Thinking)

Applications and Cases

Online, Mobile, and Social Media Marketing #withoutshoes

Blake Mycoskie launched TOMS with a commitment to donate one pair of shoes for every pair sold. In May 2015, TOMS took to the social media with a campaign to extend its philanthropic mission. For each Instagram post showing bare feet and using the hashtag #withoutshoes, TOMS donated a pair of shoes to a child in need. The campaign demonstrated the company’s commitment to its cause while expertly piggybacking on a common Instagram trend. The #withoutshoes campaign resulted in the donation of 296,243 pairs of shoes and won a Silver Anvil Award of Excellence from the Public Relations Society of America. TOMS’s many one-for-one programs for shoes and now necessities such as eyewear, water, and even “kindness” (anti-bullying training) help build strong customer relationships and brand community.

  1. 14-9 Explain how TOMS used public relations for the #withoutshoes campaign as part of the company’s promotion mix. It what ways did this tool helped promote TOMS? (AACSB: Communication, Reflective Thinking)

  2. 14-10 Research the internet for more information on how TOMS engages consumers using promotion tools. Choose two specific campaigns and evaluate TOMS’s promotion strategies for both. (AACSB: Communication, Reflective Thinking, Use of IT)

Marketing Ethics An Ethical Promotion?

A Unilever brand in Thailand ran into some problems with one of its promotion campaigns, the “Citra 3D Brightening Girls Search.” Citra Pearly White UV Body Lotion is marketed as a skin-whitening product. Skin whitening is popular in many Asian countries because lighter skin color is associated with higher economic status. However, this belief is not created by marketers. Anthropologists point out that Asian cultures, and Thailand in particular, have long histories of associating darker skin tones with outdoor peasants and field workers and lighter skin tones with higher socioeconomic status. Citra’s advertising was criticized because it showed two female students—one lighter-skinned than the other—and asked them what would make them “outstanding in uniform.” The darker girl seemed confused and didn’t answer, while the lighter girl answered with Citra’s product slogan. After considerable social media outcry, Citra pulled the ad, but it did not stop a related scholarship competition. The competition offered a 100,000 baht ($3,200) prize for the college student best demonstrating “product efficacy” – that is, the whitest skin. The company claims its products help people feel good about themselves and enhance their self-esteem.

  1. 14-11 Because lighter skin and skin whitening are popular in Thailand, is it wrong for marketers to offer and promote products that encourage this belief and behavior? Explain why or why not. (AACSB: Communication; Reflective Thinking; Ethical Reasoning)

  2. 14-12 Find other examples of marketers creating controversy by promoting culture-based products that could be viewed as inappropriate by others outside of that culture. (AACSB: Communication; Reflective Thinking)

Marketing by the Numbers Advertising-to-Sales Ratios

Using the percent of sales method, an advertiser sets its budget at a certain percentage of current or forecasted sales. However, determining what percentage to use is not always clear. Many marketers look at industry averages and competitor spending for comparisons. Websites and trade publications publish data regarding industry averages to guide marketers in setting the percentage to use.

  1. 14-13 Find industry advertising-to-sales ratio data. Why do some industries have higher advertising-to-sales ratios than others? (AACSB: Communication; Use of IT; Reflective Thinking)

  2. 14-14 Determine the advertising-to-sales ratios for two competing companies and compare them to the industry advertising-to-sales ratio found above. Why do you think there is a difference between competitors and the industry average? (AACSB: Communication; Use of IT; Analytical Reasoning; Reflective Thinking)

Video Case OXO

You might know OXO for its well-designed, ergonomic kitchen gadgets. But OXO’s expertise at creating handheld tools that look great and work well has led it to expand into products for bathrooms, garages, offices, babies’ rooms, and even medicine cabinets. In the past, this award-winning manufacturer has managed to move its products into almost every home in the United States by relying on a consistent and in some cases nontraditional marketing strategy.

But in a highly competitive and turbulent market, OXO has focused on evaluating and modifying its marketing strategy in order to grow the brand. This video demonstrates how OXO is using strategic planning to ensure that its marketing strategy results in the best marketing mix for the best and most profitable customers.

After viewing the video featuring OXO, answer the following questions:

  1. 14-15 What is OXO’s mission?

  2. 14-16 What are some of the market conditions that have led OXO to reevaluate its marketing strategy?

  3. 14-17 How has OXO modified its marketing mix? Are these changes in line with its mission?

Company Case Volvo Trucks: Integrated Marketing Communications of Epic Proportions

When you think of Volvo, you probably think of the boxy and sedate, practical and safe automobiles made in Sweden—the ones professors and young, married couples with children use to cart their groceries home. This story is about another Volvo—the ­Volvo Group, maker of trucks. And not just SUVs or pickups, mind you. We’re talking about full-sized, heavy-duty semi-trucks and trailers, mining and construction vehicles, and buses. Once one and the same with Volvo cars. the Volvo Group is now a separate company and one of the largest producers of commercial trucks in the world under various brands including Renault Trucks, Mack Trucks, UD Trucks, and its largest, Volvo Trucks.

A few years ago, Volvo Trucks faced a big challenge. It was preparing for its first major product launch in 20 years—five new truck models in one year. With that launch, Volvo Trucks needed an integrated communication strategy that would achieve a lofty goal—to get people worldwide to talk about its commercial trucks. Volvo Trucks wasn’t just interested in creating buzz among its normal target set of corporate truck buyers. It wanted to appeal to regular folks in a way that would heighten their awareness of the brand, elevate the brand’s cool factor, and get people talking, sharing, and supporting the brand from Singapore to Swaziland. How it accomplished this—and how Volvo Trucks keeps the brand in the public eye today—is an advertising coup of epic proportions.

A Consumer Approach

Typically, when a B-to-B company wants to promote a new product, it goes through an agency that specializes in its industry. That’s what Volvo Trucks did previously, working with various agencies through different types of traditional media including print advertising, PR, and direct mail. But as it prepared to unleash its all-new line of heavy-duty trucks, the Swedish trucking firm realized that the media landscape had fundamentally changed since its last major launch. And the new media world called for a different approach to broadcasting the brand’s message—something unique that would outsmart competitors.

Rather than go through a B-to-B agency with experience in commercial trucks, Volvo Trucks enlisted Forsman & Bodenfors—one of Sweden’s leading creative agencies with a history of groundbreaking consumer campaigns for the likes of IKEA, UNICEF, and Volvo Cars. As Forsman & Bodenfors developed the campaign, its research revealed two important insights about commercial trucks. First, long-haul truckers love their trucks, forming an emotional connection with them that resembles the relationship between regular drivers and their daily rides. Second, a large volume of influencers have an impact on truck-buying decisions—a set that includes friends, family members, colleagues, bosses, and even the clients and businesses whose products the trucks carry.

Armed with these insights, the team set out to create an integrated campaign that would amaze experienced truckers by showcasing the new trucks’ features while simultaneously captivating the general public with breathtaking demonstrations. Traditional television advertising was out of reach budgetwise. It was also not a good fit for the kinds of messages the campaign needed to communicate or the types of buzz the agency hoped to create. So Forsman & Bodenfors turned to social media. The result was a campaign dubbed “Live Tests,” a fully integrated promotional effort rooted in a series of documentary-style films designed to have impact on a Hollywood scale.

Appealing to the Masses with “Live Tests”

The first film to go up on Volvo Trucks’ YouTube channel was “The Ballerina,” a three-minute “making of”–style video in which world record–holding highliner Faith Dickey walked a wire between two speeding Volvo trucks, completing the run just in time to duck as the trucks entered two opposing sides of a tunnel, violently snapping the tight wire. The video was designed to demonstrate the tremendous steering precision of the new Volvo trucks. Although the “Live Tests” campaign eventually panned out into a multi-feature, long-running campaign, it was only after “The Ballerina” was posted that the campaign’s strategy began to take shape. “When you create for YouTube, you can’t plan too much in advance because you really don’t know how… popular an idea or piece of film will be,” recounts Bjorn Engström, senior partner with the ad agency.

After that first successful effort, Volvo Trucks and the agency created a set of five more films. In “The Technician,” a Volvo semi roars over the head of an engineer buried up to his neck in sand, demonstrating the truck’s 12-inch ground clearance. “The Hook” provides a dramatic testimonial of the strength of Volvo truck tow hooks, given by Volvo Trucks president Claes Nilsson as he stands perched atop a Volvo truck with trailer suspended high above a harbor. “Hamster” demonstrates “ease of steering,” with a tiny hamster named Charlie steering a huge mining dump truck by running on an exercise wheel attached to the truck’s steering wheel. And in an interactive 360-degree experience illustrating maneuverability, “The Chase” provides the point of view of a Volvo truck as it runs from bulls through the tight streets of a Spanish town.

The timed release of each of these videos was accompanied by various supporting promotional efforts designed to extend the campaign’s message and drive traffic to YouTube. Volvo Truck sponsored print ads in the trucking press as well as interviews with Volvo engineers, released in both print and video. The videos had another purpose—to increase the social media fan base for Volvo Trucks, building toward the campaign’s grand finale. In little more than a year and on the eve of the debut of the campaign’s dramatic video climax, the number of Volvo Trucks YouTube subscribers had increased 2,300 percent to 85,000 while the Volvo Trucks Facebook page experienced a 1,700 percent increase in fans to 290,000.

But it was the final installment in the first round of the “Live Tests” campaign that hit the ball out of the park. In “Epic Split,” martial arts superstar Jean-Claude Van Damme stood with one foot on the mirrors of two side-by-side shiny new gold Volvo trucks as they moved progressively farther apart in reverse, stabilizing their distance at the point where the Muscles from Brussels is poised in full and perfect splits. The dramatic video highlighted Volvo Dynamic Steering—an electronically controlled mechanism that adjusts 2,000 times per second for unsurpassed precision. Within a month, the video had drawn 60 million YouTube hits, going on to become the most viral non–Super Bowl automotive ad of all time. Also by the end of the month, Volvo Trucks delivered 31 percent more trucks to dealers than it had for the same month the previous year.

The Synergy of IMC

Although each piece of the “Live Tests” campaign was laudable in itself, the sum of the parts produced a result more impressive than any of the stunts performed in the campaign videos. According to Forsman & Bodenfors, the campaign produced more than 100 million video views, 8 million social media shares, and more than 20,000 editorial features. It also produced thousands of video spoofs good for another 50 million views, including “Greetings from Chuck,” a video for the holidays featuring a CGI Chuck Norris performing splits on the wings of two Lockheed C-5s while a lit-up, tree-shaped pyramid of military paratroopers stood on his head. In all, the media impact of the campaign was valued at more than $170 million. The campaign received so many awards—including the Creative Effectiveness Grand Prix at Cannes—that Advertising Age dubbed Volvo Trucks the “Most Awarded Advertiser of the Year.”

The campaign also produced measurable behaviors among target customers. In a survey of 2,200 commercial truck owners, half of those who saw the videos indicated they were more likely to choose Volvo for their next purchase, while a third of respondents had either contacted a dealer or visited a Volvo Trucks website. “If we talk to our salespeople in our 140 markets all over the world,” said Anders Vilhelmsson, PR director for Volvo Trucks, “they tell us very often one of the first things prospective customers bring up in conversation is the viral film.”

With all this success achieved on a shoestring budget, it’s no surprise that Volvo Trucks extended the “Live Tests” campaign. Following the same model set by the first six videos, the team produced some unlikely pieces, including a race between a Volvo tractor and a supercar as well as a hidden-camera exposé showing the reaction of a valet as a Volvo truck pulls up in front of a black-tie casino. But the most recent video became one of the most successful entries of the campaign to date. “Look Who’s Driving” puts a darling British four-year-old behind the remote controls of the Volvo FMX—a dump truck that the ad proclaims is “the toughest truck we ever built.”

Rather than just a clever series of stunts for the sake of stunts, “Live Tests” pulled off a monumental task. By selecting features with high relevance to both its new models and the target audience, Volvo communicated those features through stories that captivated viewers everywhere. The campaign achieved the goal of successfully launching five new trucks, with phase two ultimately producing a social media fan base double the size of the one Volvo Trucks had achieved following the first phase of the campaign. The campaign has also helped Volvo Trucks to achieve record sales and market share worldwide. Even more amazing, Volvo Trucks did all that on a shoestring budget. In the world of integrated marketing communications, “Live Tests” is truly an epic.

Questions for Discussion

  1. 14-18 Which promotional mix elements does Volvo Trucks use?

  2. 14-19 How does the “Live Tests” campaign demonstrate the characteristic of integrated marketing communication? What grade would you give “Live Tests” on integration effectiveness?

  3. 14-20 Is the consumer marketing approach taken by “Live Tests” appropriate for all B-to-B marketers? Explain.

  4. 14-21 What challenges does Volvo Trucks face in maintaining the success it has achieved with this campaign?

Sources: Steve Skinner, “Sweden’s Secrets to Success with Trucks,” Owner Driver, June 22, 2016, www.ownerdriver.com.au/industry-news/1606/swedens-secrets-to-success-with-trucks/; Tessa Wegert, “How Volvo Trucks Turned B2B Video into a Viral Art Form,” Contently, March 18, 2016, https://contently.com/strategist/2016/03/08/volvo-trucks-turned-b2b-video-viral-artform/; David Griner, “A 4-Year-Old Pilots a Volvo Truck in Rollicking Follow-Up to ‘Epic Split,’” Adweek, December 3, 2015, www.adweek.com/print/168418; Meg Carter, “How Volvo Trucks Pulled Off an Epic Split and Game-Changing Campaign,” Fast Company, June 18, 2016, www.fastcocreate.com/3031654/cannes/how-volvo-trucks-pulled-off-an-epic-split-and-a-game-changing-campaign; David Griner, “Undivided Attention: How ‘Epic Split’ Became the Buzziest Ad at Cannes,” Adweek, June 16, 2014, www.adweek.com/print/158248; and “Six Years of Ambitious Integrated Campaigns,” www.dandad.org/en/d-ad-integrated-marketing-campaigns/, accessed July 2016.

MyMarketingLab

Go to mymktlab.com for Auto-graded writing questions as well as the following Assisted-graded writing questions:

  1. 14-22 Name and describe the types of appeals marketers use when designing ­marketing communication messages. What message structure issues must be considered when creating messages?

  2. 14-23 Select an advertisement for a national brand. What type of appeal is the ­advertiser using? Describe the message structure used. Create an advertisement for the brand that communicates the same information but uses a ­different type of appeal and message structure.

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