The following lecturette will give you my perspective on what I think are the key course concepts from this week's text readings. As usual, it truly is my objective not to restate the author's views, or merely to summarize the readings. Rather, I'd like to introduce some new concepts (sometimes challenging our author's viewpoints) and hopefully, creating a thinking and applications process/dynamic which will enhance our learning. It's my objective to continue to provide you with new insight into how the famous four P's are relevant for the next millennium. With that said, let's move into our discussion of the "P" of Promotion (a two week discussion). We will be discussing what is know as the Promotional Mix (five specific marketing tools). In addition, we will discuss Integrated Marketing Communications (IMC) which is a synergistic use of the five promotional mix tools. The Promotional Mix has generally been considered to include four marketing tools; Advertising, Public Relations, Sales Promotion, and Personal Selling. However, in recent years, a new fast rising star has been added. The fifth IMC tool is Direct Marketing. It's important to recognize that most companies do not utilize these tools effectively. They certainly don't use all the tools in an integrated fashion to maximize synergy. This is of course what IMC is all about, using the best possible mixture of the five tools in an integrated fashion where the synergistic effects of the chosen mix are far greater than any of the tools used "stand alone". It's interesting to note here that there has been a shrinking of marketing budgets in most companies today. This is due to the fact that our marketing budgets are still being calculated by percentages of sales or profits or some arbitrary internal cost plus based figure. If you think about it, we have intense price war pressure and no distinctive competency, all due to the intense competitive pressures created by the exponential gains in technology. The short term pressure to perform has all but eliminated the strategic market planning approach. It is important to note that the IMC tools I'll be introducing are very MEASURABLE (when used together) and this will be important when you attempt to get an approved budget which is customer driven (but probably more than your CFO is willing to part with). It will be important to identify each of the 5 IMC tools as well as how they are properly used Some of the tools are used well in the beginning (front end) of the IMC strategy and some are used better at the end (back end). Some tools are used specifically to create image and awareness, others to motivate response, and still others, to create and reinforce relationships. In this the first of two lectures on IMC, I will discuss the first two tools; Advertising and Public Relations. In the next lecture, I'll discuss Personal Selling, Sales Promotion, and Direct Marketing. Advertising is commonly known and used throughout the world. It includes all forms of broadcast media including; T.V. radio, print, and outdoor (i.e. billboards, buses, benches). These mediums are generally only one dimensional communications and certainly not measurable (unless other tools, specifically response motivators are used). Today, these mass media tools yield only about 1% or less response rates (when used stand alone). There are however, some strong elements of advertising and some very important functions which advertising carries out. It is a great image and awareness tool. Marketers are able to reach large audiences very creatively through this medium. It is most often effective to use advertising (broadcast media) on the front end of an IMC strategy when image and awareness is needed (such as when introducing a new product or service). In some cases, the medium can be used on the back end of an IMC strategy such as when the marketers brand is already highly recognizable and is in fact the cornerstone of the marketing strategy (i.e. Coke or Nike). There are very few companies in the world however that can use broadcast media effectively as a back end brand building strategy (it's just simply cost prohibitive). Advertising when used stand alone is very expensive and it's wasteful. As we've discussed, this medium usually reaches about 99% non prospects and even when it does reach a prospect, it is difficult to get a response or measure who that prospect is and how he/she feels. The reason it is so difficult is because there is so much noise and clutter in the marketplace. Most consumers in fact, have developed selective retention, meaning that we are bombarded by so many mass media messages per day that we can't possibly retain them all. What selective retention says, is that we will only retain that which is timely and relevant, pre-qualified, and specifically meets our time and convenience needs. Advertisers will try to sell us space based on two very famous words; Reach and Frequency. The reach argument says that advertising is cost effective because it reaches so many people in a single exposure (hence the word reach). The second argument that is used is the frequency argument. Advertisers state that through multiple exposures, consumers will be pre-disposed to buy certain products or services. They say it may take 3, 13, 34, or who knows how many, but that eventually, consumers (like sheep or zombies) will buy the marketers product. IMHO, the reach and frequency arguments traditionally used to sell broadcast media are no longer valid in the marketplace. The customer tunes out irrelevant messages no matter how creative they are dispelling the frequency argument. Reach arguments are blown out of the water because they are not cost effective (as the ad agencies tell us) When you consider that about 99% of the "reached" audience are non prospects, then, advertising is hugely expensive on a cost per exposure basis. In summarizing our discussions about advertising, let's say that it is best used on the front end of an IMC strategy to create image and awareness and is a great creative tool. However, it is very expensive and wasteful on a cost per exposure basis. It is also only a one dimensional monologue message which creates no dialogue opportunities for the consumer. We can't knock on the T.V. set and ask why 4 out of 5 doctors recommend a certain product. When used stand alone, it is completely non measurable. With so much noise and clutter and overkill in the marketplace, consumers now practice selective retention only remembering that which is timely and relevant and meets the time and convenience needs of the customer. Advertising must be integrated with other IMC tools to be effective, particularly response motivators (commonly coming in the form of temporary sales promotions). Public Relations is the second tool being discussed in this week's Lecture. Public Relations is definitely the most misunderstood, most misused of all the IMC tools. Public Relations by definition is non paid for broadcast media. It is generally the free use of broadcast media (no high cost expenditures). The trouble with most PR (according to the "experts") is that it is negative and companies can't control when it is used or how it is presented to the public. I believe just the opposite. In fact, I believe that PR is very controllable when used strategically and when used as a part of the IMC plan. PR can be used pro-actively and strategically and can be used to create distinct competitive advantages. Look at Apple Computer over the years or Nordstrom for example. They have each greatly benefited from the positive strategic use of Public Relations. When was the last time you saw a "paid for" Nordstrom's commercial? Can't remember right? Why is it that PR is only used when a needle is allegedly found in a Pepsi can, or when someone dies eating a Jack in the Box hamburger? Why is it that PR is almost never used as a part of the promotional mix? Think about this fact. Every marketing plan out there is focused on advertising in some way or another and it's not measurable or very effective. If I wanted to create a protected insulated customer relationship, if I wanted to create some sort of distinct competitive advantage, I'd try PR because since it is the most frequently misunderstood and infrequently used tool, I'll have a better chance of creating relationships and distinctive competencies than I will through the use of traditional broadcast media. Remember that for PR to be used to create distinctive competencies, it must be highly relational and usually targeted to specific media channels (such as the editors of our industry trade publications). If a relationship can be established with these type of media, we can defeat our competition, even if our products and services are not unique or superior.