INTEGRATED MARKETING COMMUNICATION: concept, process, and application

Reza A. Nasution, PhDDirector of MBA Program

School of Business and ManagementInstitut Teknologi Bandung

COMMUNICATION

Communication is a transactional process between two or more parties whereby meaning is exchanged through intentional use of symbols

(Engel et al, 1994).

Communication is a transactional process between two or more parties whereby meaning is exchanged through intentional use of symbols

(Engel et al, 1994).

MARKETING COMMUNICATION

• Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the products and brands that they sell.

• Marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers.

• Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the products and brands that they sell.

• Marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers.

• Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the products and brands that they sell.

• Marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers.

CHANGES IN MARCOMM SPENDING

80’s

and

unde

rAds domination (almost 100%) Ea

rly 9

0’sAds spending was reduced to be 75%

200350%

trade promo, 25% consumer promo, & 25% ads

TRADITIONAL MARCOMM TOOLS

THE IMPORTANCE OF INTEGRATION

Marketing communication activities must be integrated to deliver a consistent message and achieve the strategic positioning desired.

COMMUNICATION PROBLEMS

• Level A: technical = transmission• Level B: semantic = message

representation• Level C: effectiveness = customer

behavioral change

HAVE YOU EVER EXPERIENCED THESE?

• You sent an e-mail to a friend and got a response that you did not expect. You decided to talk to him/her directly and eventually he/she understood your intention.

• You received a flyer from a reputable institution that did not match the image of the institution.

• You found different FB accounts for a single institution or company and they look different to each other.

INTEGRATED MARKETING COMMUNICATION

Management and control of all marketing communication activities = “One Voice, One Look”

EXAMPLES• Honda Jazz• Gudang Garam International

MORE TO BE INTEGRATED

• Strategic integration between brand personality and its communication through any media that entirely build the brand personality

• Analysis, choice, implementation and strategic control of all marketing communication elements that help companies to create transaction with their customers efficiently, economically and effectively

• The essence of IMC is a call to make coordination and strong brand strategy, which is driven by customer feedback data

DIFFERENT FACETS OF INTEGRATION

• Vertical• Horizontal• Marketing mix• Communication mix• Creative design• Internal-external• Financial

THREE BASIC ANTECEDENTS

1. Cross-functional strategic planning2. Mission marketing3. Interactivity

Source: Reid, 2005

IMC SEQUENCE

IMC Antecedents IMC Practices IMC

PerformanceOrganizational Prerequisites

ORGANIZATIONAL PREREQUISITES OF IMC

• Cultural predisposition to cooperate• Market and brand orientation • Market and consumer-sensing

capability• Practice of ‘informed approach’• Top management support

Source: Madhavaram, 2004 and Reid et al., 2005

STAGES OF IMC ADOPTION

• Tactical coordination• Marcomm scope redefinition• Strategic integration

Source: Adapted from Kitchen and Schultz, 2000

TACTICAL COORDINATION

6 criteria to check tactical integration:

1. Coverage2. Contribution3. Commonality

4. Complementarity

5. Versatility6. Cost

IMC TACTICAL PLANNING

Identify target audience Analyze SWOTs

Evaluate effectiveness

Determine MC Objective

Develop strategies and

tactics

Determine the budget

INTEGRATED MARKETING COMMUNICATION PLAN

Identify target audience

Analyse the various customer and prospect segments and determine which to target and to what extent

Analyse SWOTs

Summarize internal (strengths, weaknesses) and external (opportunities, threats) brand – related conditions with respect

to communicating with the selected target; determine the success of the MC functions and media used in preceding years

Determine MC Objective

Decide what marketing communication programmes should accomplish

Determine the budget

Decide what the overall MC budget will be and then how money will be divided among the selected MC

functions

Evaluate effectiveness

Conduct ongoing MC tests in an effort to find more effective ways to do IMC. Monitoring and evaluate all

the IMC efforts to determine effectiveness and accountability

Develop strategies and tactics

Determine which MC functions should be used and to what extent . Choose brand messages and means of delivery.

Support each strategy with a rationale. Decide when each MC Programme will begin and end

FACTORS TO CONSIDER

IMC Strategy & Tactics

Buyer Behavior

Buyers Readiness

Stage

Characteristics of MC Tools

Products and Brand Factors

Regulations

MC Objectives

Competitors’ MC tactics

EXAMPLE• JAKARTA EYE CENTER

IMC AUDIT• Duncan and Moriarty’s IMC Miniaudit is used

to assess marcomm integration • The audit consists of 5 aspects:

1. Interactivity2. Mission marketing3. Organizational infrastructure4. Strategic consistency5. Planning and evaluation

PRETEST

• The purpose of Pre-Test is to measure the knowledge of customer about the brand before IMC is conducted.

• The analysis includes IMC concept, creative strategy, brand awareness, brand knowledge, and perceived positioning.

• The method used are Focus Group Disscusion (FGD) and Survey

IMPLEMENTATION ISSUES

• Holm (2006)– Strategist lack of understanding about communication theory and

practice– Tactical persons lack of strategic management process and practice– The intersection area between the two is very small

• Kotler et al. (2009)– Large companies employ several communications specialists to

work with their brand mangers who know comparatively little about the other communication tools.

– Many global companies use a large number of ad agencies located in differing countries and serving different divisions.

Brand Value Chain

Activity & Program Metrics

Market Performance

Customer Perceptions & Behavior

• Marketing Investment• Program Quality

• Clarity• Relevance• Distinctiveness• Consistency

• Channel expansion

• Brand awareness• Brand associations• Perceived quality• Brand Loyalty

• Sales• Market share• Price premium• Profitability• Price elasticity• Brand penetration

ASSESSING IMC IMPACT

“Marketers can judge marketing communications according to its ability to build brand equity and drive brand

sales.” (Kotler et al., 2009)

PRACTICAL INDICATORS

Marketing communications is GREAT when :- People remember the ad and the brand- The promotion draws people into the store- The store display motivates people to try the product

Marketing communication DOES NOT work, when :- The ad is forgettable or point is unclear- No one remember the promotion- The direct email piece gets thrown away without

being opened

PERFORMANCE AUDIT

• Sales-related performance• Brand-related performance• Customer satisfaction

SALES-RELATED MEASURES

• Sales• Market share• Sales margin• Price premium• Price elasticity• Brand penetration index

EXAMPLESHonda Beat Semen Tiga Roda

2008 2009 2010 20110

200000

400000

600000

800000

1000000

1200000

208490

426935

712007

1033928

Source : okezoneautos

BRAND EQUITY EVALUATION

Academic Models

Generic/Basic Models:Aaker (1991,1996)Keller (1993, 1998,

2003)Campbell (2002)

Netemeyer (2004)

Specific Models (adapted generic

models)

Practical Models

Brand Asset ValuatorBrand Dynamics

Equity Engine

BEHAVIORAL CHANGES

(Source: Kotler et al., 2009)

LASIK LIFE CYCLE

2011 2011.5 2012 2012.5 2013 2013.5 2014 2014.5 2015 2015.5 20160

200

400

600

800

1000

1200

1400

1600

1800

2000

EVALUATION, CONTROL AND REVISION

• Driving forces:– Internal dynamics– External dynamics:

• Macro environment dynamics• Industry dynamics• Market dynamics

• Evaluation and control should be done periodically and when necessary

• Revision should be done promptly and impacts should be measured properly

• Sometimes, all IMC planning steps should be repeated entirely

THANK YOU!!

The World keeps changing and so must

we.Only when we rule the change, we can

rule the world

For further discussion please send e-mail to reza@sbm-itb.ac.id