An Introduction to Integrated Marketing Communication

An Introduction to Integrated Marketing Communication

Lecture-1

Incredible India capture the world through Integrated Communications

Marketing: American Marketing Association (AMA), the organization that represents marketing professionals in the United States and Canada, defined marketing as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

This definition of marketing focused on exchange as a central concept in marketing and the use of the basic marketing activities to create and sustain relationships with customers

Marketing Focuses on Relationships and Value

AMA adopted a revised definition of marketing in 2004, which is as follows:

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Value is the customer’s perception of all of the benefits of a product or service weighed against all the costs of acquiring and consuming it. Benefits can be functional (the performance of the product), experiential (what it feels like to use the product), and/or psychological (feeling such as self-esteem or status that result from owning a particular brand). Costs include the money paid for the product or service as well as other factors such as acquiring information about the product/service, making the purchase, learning how to use it, maintaining the product, and disposing of it. The focus on customer relationships and value has led many companies to emphasize relationship marketing, which involves creating, maintaining, and enhancing long-term relationships with individual customers as well as other stakeholders for mutual benefit.

Advances in information technology, along with flexible manufacturing systems and new marketing processes, have led to mass customization, whereby a company can make a product or deliver a service in response to a particular customer’s needs in a cost-effective way.

Marketers are giving more attention to the lifetime value of a customer because studies have shown that reducing customer defections by just 5 percent can increase future profit by as much as 30 to 90 percent. As companies focus more attention on customer retention, many are developing customer relationship management (CRM) programs.

Consumers can log on to the Dell website and build their own computers or to NikeiD.com to design personalized athletic shoes and other products.

Marketing Mix

These four Ps—product, price, place (distribution), and promotion—are elements of the marketing mix. The basic task of marketing is combining these four elements into a marketing program to facilitate the potential for exchange with consumers in the marketplace.

The primary is on one element of the marketing mix: the promotional variable

Understanding Marketing Communication

Marketing communication is an important P of marketing. It involves all activities concerned with effectively communicating product information to selected target audience.

A target audience is the group of consumers to whom marketing communication messages are directed.

All marketing communication is done with a purpose . The prime purpose of communication is to seek a cognitive, affective and behavioural response.

Marketing Communication Mix

Marketing communication is the set of all tools to promote a product. We can divide these marketing communication mix tools in to High and Low control messages.

High Control messages are those elements of the communication mix over which an organization has greater control since they can be explicitly planned, executed and delivered to consumers. E.g. Advertising, sales Promotion, Direct Marketing, Special events etc.

Low control messages are spontaneous and not designed formally. E.g. an organisation’s crisis management, Shareholders Interaction, Employee Behaviour, Gossip, Consumer word of Mouth etc.

COMMUNICATION MIX TOOLS

Traditionally the promotional mix has included four elements: advertising, sales promotion, publicity/public relations, and personal selling.

Each element of the promotional mix is viewed as an integrated marketing communications tool that plays a distinctive role in an IMC program. Each may take on a variety of forms. And each has certain advantages.

Advertising

Interactive/ Internet marketing

Sales promotion

Direct marketing

Publicity/ public relations

Personal selling

Unconventional Media

Packaging

Point of Purchase (POP) or Merchandise Material

Advertising Specialities

Sponsorships

Event Marketing

Trade shows and Exhibits

Customer Service

ADVERTISING

The non-personal

presentation of

ideas and

products by an

identified sponsor.**PAID FOR**

ADVERTISING

The word advertising is derived from its Latin root ad verter, which means “to turn towards” and to attract attention to”.

According to “Philip Kotler” & American Marketing Association. The advertising is any paid form of non personal presentation of

Ideas

Goods

Services by an identified sponsor that is called Advertising.

Objectives of Advertising

Inform

Persuade

Remind

Reinforce

Types of Advertising: Classified on the basis of the nature or purpose of advertisement

Brand Building Advertisement

Tactical Advertising- Direct Response Advertising

National Advertising

Retail Advertising

Public Service Advertising

Corporate Advertising

Trade Advertising

SALES PROMOTION

stimulate purchasesincrease store traffic

2 for 1 Sale

Buy One, Get One Free

$2 off after 8PM on Tuesday

GOAL is to enhance and speed up the effectiveness of the other three.

Marketing activities-other than personal selling, advertising and public relations-that stimulate consumer buying and dealer effectiveness.

SALES PROMOTION

Free samplesFree samples

ContestsContests

PremiumsPremiums

Trade ShowsTrade Shows

Vacation GiveawaysVacation Giveaways

CouponsCoupons

Popular Toolsfor

Consumer SalesPromotion

Popular Toolsfor

Consumer SalesPromotion

SALES PROMOTION TOOLS

direct communication

with consumers

to generate a response in the form of an order,

a request for further information,

or a visit to a retail outlet.

DIRECT MARKETING

Slide 18-55

DIRECT MARKETING

• The Growth of Direct Marketing

Direct Orders

• The Value of Direct Marketing

Lead Generation

Traffic Generation

• Technological, Global, andEthical Issues in Direct Marketing

Slide 18-56

FIGURE 18-9 Direct marketing expenditures, sales, and employment by medium

The marketing function thatevaluates public attitudes, identifies areas within the organization that

the public may be interested in, and executes a program of action to earn

public understanding and acceptance.

PUBLIC RELATIONS/ PUBLICITY

PUBLICITYPUBLIC RELATIONS

Creating demand

for a business or

product by placing

news about it in

the media

Internet/Interactive Marketing

The internet is the ultimate direct marketing medium and fastest growing advertising medium. While internet remains the most powerful digital media other interactive media also allow for active participation from or interactivity with the recipient.

In other words , Interactive media allow two way communication b/w organisation and its audiences. E.g. mobile telephony, Computer games, Kiosk based terminals, Interactive television, Electronic storage media, etc.

Ways the Internet Can Be Used as a Source of Publicity

A company web site can be used to obtain and display positive feedback.

“Tae-Bo has really changed my life. I’ve lost weight, toned-up, and feel better than ever.”

-Susie Wells, CA

Ways the Internet Can Be Used as a Source of Publicity

A business’s goods, services, or web site might be mentioned in an Internet newsgroup.

OnlineNews.com

Car shopping on the webBuying a car on the web just got easier! Autobytel.com will help you get the financing, pick out the model, color and extras. Then they provide a quote from a local dealer. All at the touch of a keypad.

PERSONAL SELLINGThe PERSONAL presentation of a product

or company to one or more potential buyers

the two-way flow of communication between

a buyer and seller, often in face-to-face

encounter, designed to influence a person’s

or group’s purchase decision or group’s

purchase decision.

PERSONAL SELLING

A method of carefully coordinating all promotional

activities to produce a consistent, unified message that

is customer focused.

I can send it out, but how do I know what was received ?

INTEGRATED MARKETING COMMUNICATIONS

NoiseNoise

SourceSource EncodingMessage

EncodingMessage

FeedbackChannel

FeedbackChannel

MessageChannel

MessageChannel

DecodingMessage

DecodingMessage ReceiverReceiver

THE COMMUNICATION PROCESS

The process by which we exchange or share meanings through a common set of symbols.

Criteria for Selecting Media

Communication Mode Communication Mode

Communication ControlCommunication Control

Feedback AmountFeedback Amount

Feedback SpeedFeedback Speed

Message Flow DirectionMessage Flow Direction

Message Content ControlMessage Content Control

Sponsor IdentificationSponsor Identification

Reaching Large Audience Reaching Large Audience

Message FlexibilityMessage Flexibility

The promotional mix

Slide 18-23

FIGURE 18-A Factors that influence the use of promotional tools

Slide 18-24

INTEGRATED MARKETING COMMUNICATIONS—DEVELOPING THE PROMOTIONAL MIX

• The Target Audience

Slide 18-27


• The Product Life Cycle

Introduction Stage

Growth Stage

Maturity Stage

Decline Stage

Slide 18-28

FIGURE 18-3 Promotional tools used over the product life cycle of Purina Dog Chow

Slide 18-30


• Product Characteristics

Complexity

Risk

Ancillary Services

Slide 18-32


• Stages of the Buying Process

Prepurchase Stage

Purchase Stage

Postpurchase Stage

Slide 18-33

FIGURE 18-4 How the importance of promotional elements varies during the stages of consumer’s purchase decision

Slide 18-34


• Channel Strategies

Push Strategy

Pull Strategy

• Direct-to-Consumer

Slide 18-35

FIGURE 18-5 A comparison of push and pull promotional strategies

Slide 18-41

DEVELOPING AN IMC PROGRAM

• Identifying the Target Audience

Hierarchy of Effects

• Awareness

• Interest

• Specifying Promotion Objectives

• Evaluation

• Trial

• Adoption

Slide 18-42

FIGURE 18-6 The promotion decision process

Slide 18-45


• Setting the Promotion Budget

Percentage of Sales Budgeting

Competitive Parity Budgeting (Matching Competitors or Share of Market)

All-You-Can-Afford Budgeting

Objective and Task Budgeting

Slide 18-46

FIGURE 18-7 U.S. promotion expenditures by companies in 2003

Slide 18-47

FIGURE 18-8 The objective and task approach

Slide 18-48


• Selecting the Right Promotional Tools

• Designing the Promotion

• Scheduling the Promotion

ETHICS AND SOCIAL RESPONSIBILITY ALERT

How Do You Like Your E-Mail? “Opt-out” or “Opt-in” Are Your Choices

Slide 18-58

Corporate Plan (Corporate Objectives and Strategies)

Marketing Plan( Marketing Objectives and strategies)

Steps involved in the Marketing PlanSituational AnalysisSet Marketing ObjectivesDevise Marketing StrategiesFrame Implementation factorMonitor and evaluate performance

IMC Plan(IMC Objectives and strategies)

• Situational Analysis• Determine a Problem or Opportunity• Determine the Communication Objectives• Determine the Budget• Develop IMC Strategies

• Select Target Audience• Arrive at the Communication Mix• Design Message strategies• Determine Media strategies

• Implement strategies and monitor activities• Evaluate the Planning Process

Reasons for Growing IMC Importance

Decreasing Impact of Traditional Advertising

Proliferation of new ways to reach Consumers

Demand for greater Accountability

Growth of Database Marketing

Growth of International Marketing

Emphasis on Relationship Marketing

Tighter Control over Communication

Changing Compensation structure of agencies

Need For a single Brand Custodian

Need for creating brand identity: Brand, Brand Recognition, Brand Identity, Brand equity.

Benefits of IMC

IMC provides greater:

Brand Differentiation

Accountability with in a firm

Trust Among Consumers

Levels of effectiveness in cutting through message clutter than single strategies

IMC wraps communications around customers and helps them move through the various stages of the buying process.

This 'Relationship Marketing' cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition.

IMC also increases profits through increased effectiveness. At its most basic level, a unified message has more impact than a disjointed myriad of messages.

IMC can boost sales by stretching messages across several communications tools to create more avenues for customers to become aware, aroused, and ultimately, to make a purchase.

Carefully linked messages also help buyers by giving timely reminders, updated information and special offers which, when presented in a planned sequence, help them move comfortably through the stages of their buying process.

IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand comparisons.

Barriers to the adoption of IMC Top Management Support (lack of).

Accurate Metrics (lack of).

Manpower (lack of).

Changes needed in the organization

Theoretical and practical foundations (lack of).

Documents

An Introduction to Integrated Marketing Communication