Integrated Marketing Communication (IMC) Sport Marketing USF Sport Management Dr. J. Andrew Choi

Integrated Marketing Communication (IMC)

Sport Marketing USF Sport Management

Dr. J. Andrew Choi

IMC

“A process through which companies accelerate returns by aligning communication objectives with corporate goals (Shultz & Schultz, 2003).”

“Strategic marketing initiative focused on one-sight, one-sound communication both internally and externally.”

• A communication tactic developed in the late 80’s and early 90’s.

• TIMES HAVE CHANGED…

Back then…

• The elder Bush occupied the White House.• China was just opening the doors to the

outside.• Internet belonged to “geeks”.• Emails and dot-com’s foreign to many.

• TV advertising – dominant form of commercial communication.

• Marketers thought in terms of products, not brands.

• Companies were strictly divided into biz functions or units, all separate and independent, and managed from the top down. No cross-functional teams.

• Integration was a difficult concept.

1990’s

The explosion of technology changed all that and IMC finally emerged!

• Tumultuous business environment of pro and anti-integration (“too difficult to implement”, “take away creativity”…etc)

• A few forward thinking pioneers began to develop and implement IMC w/in their org.(Personally lived through this period – “Brand Management”)

• Today, the IMC has achieved acceptance in businesses of all types!

Why the new IMC?

WARNING: The “New IMC” will overturn some traditional marketing principles and concepts!

• Customers now relate to brands, not to the various forms of marketing or marcomm – branding becomes the basis of integration.

• A focus on individuals, not market segments.• Increased focus on measurement and accountability –

in sport industry as well.• Strategic and value-driven, linked to the short- and

long-term goals of the entire org, not just to product sales objectives! (Strategic issues – “How much to invest, how much ROI, when will ROI occur?...etc.”)

• A global approach

What DROVE the emergence of the new IMC?

The Factors…

1. A shift away from the Four P’s:

4 P’s Model: • The traditional theory base for almost all marketing

education and practice. Governed the manner in which businesses conducted their marketing activities. “If a company got each of the Four P’s right, business would grow and prosper.”

• Only an “internal” orientation w/o the mentioning of customers or profits!

• Managers managed things they knew and controlled (4P’s) – selection of products, setting of prices, organization of distribution channels, implementation of advertising and promo programs

• Market share was the gateway to profits in the 1980’s (“outspend, out-promote, out-distribute”)

The Factors…

1990’s – the Fall of the 4P’s Model in America…

• Cost efficiency was critical and this meant integration of business functions.

• “Category killers” – giant retailers that consolidated activities for consumers and dominated suppliers (manufacturers) overnight.Ex. Wal-Mart, Home Depot, Toys-R-Us, Best Buy

• Manufacturers no longer controlled the distribution channel (Place) and the other components of the 4 P’s slipped away.

The Factors…

2. A parallel shift in marketing spending

• From the promo mix of the 80’s (sales force, media ad, publicity) to a new breed of comm strategies (sales promo, direct marketing, PR activities)

• “Below the line” – new promo techniques (discounts, contests, sponsorships) – “Push”

• “Above the line” – traditional ad building long-term brand image – “Pull”

• More and more marketing $$ were supported to measurable, incremental, fast-acting solutions – “below the line” activities.

The Factors…

3. Demand for IMC

• Traditionally, marketing $$ were devoted to ad media (TV, NPP, magazines, outdoor, radio)

• By 2000, a 50:50 split in ad and promos!• To protect from decreasing revenue

streams, ad agencies created “one-stop shopping” (ex. The fall of McCann & emergence event activation agency).

• 1st attempt at IMC but a shaky one due to lack of all-around expertise.

The Factors…

4. Growth drivers of IMC

a. Development of digital technology across entire spectrum of biz operations.

b. Increasing emphasis on branding and “experiencing” brand as the major competitive differentiating tool

c. Increasing focus on globalization as marketers spread across the traditional geographic boundaries.

d. Accountability and the measurement of financial returns on marcomm activities.

The new IMC

a. Technology• Advent of Internet and e-commerce• IMC now a two-way communication channel

(outbound AND inbound)• Consumer insights & direct marketing now

more feasible than before thanks to Internet

The new IMC

b. Branding• From “innovate and grow” to “copy and

improve” – a new breed of competitors emerged.(ex. Private Brands everywhere)

• No longer a battle of products, but of BRANDS (or “brand power”) and what they meant to consumers.

• From the battle of the “tangibles” (products) to “intangibles” (brands)

The new IMC

c. Globalization• E-communication enabled companies to

operate real-time, 24/7, around the globe “Growth of multinationals” seeking new market opportunities in the 90’s

• New communication strategies required – “Create a unified, consistent, and integrated brand strategy while remaining responsive to the unique needs of individual markets and cultures”

“Global strategies, local executions” = “Think globally, act locally”

Case Study

“Intel Inside” IMC campaign

8 Guiding principles of IMC

1. Become a customer-centric organization

Fin

an

ce/

Acct.

Mark

etin

g

R &

D

Log

istics

Op

era

tion

s

Top Management

Traditional Organization

Customers & Prospects

Finance/Accounting

Operations

Logistics

Products

Marketing

Integrated Organization


2. Use outside-in planning

Inside-out planning

Dollar or volume objectives

Costs

Contribution margin

Marketing funds

Allocation against prospects

Communication choices Marketing organization

EmergingCustomer

$$

RetainPresent

Customer$$

Grow Present

Customer$$

MigratingCustomerGroups

$$

NewProspect

$$

LapsedCustomer

$$

Outside-in planning


3. Focus on the Total Customer Experience

“How the product or service performs in the marketplace, how it is obtained, the capability of channel members to provide products in a timely and efficient manner, how customer service is delivered, and what type of social impact the firm makes in the community it inhabits.”

“Create Brand Touch Points”


4. Align consumer goals with corporate objectives

The IMC objectives must do one of the following:

• Generate short- and long-term cash flow increases greater than the cost of the marketing and communication program used to achieve them

• Accelerate cash flows – move the flow of income from customers and prospects forward in time, or increase the speed with which those cash flows are acquired.

• Stabilize on-going cash flows – smooth out cash flow fluctuations• Build shareholder value by increasing the equity of the firm or

the brand. Strong brand equity is recognized by the financial market and commonly increases the share price of the firm, both of which will provide value for shareholders. (ex. Wharton article on stock investment)


5. Set customer behavior objectivesThe 4 outcomes IMC marketers desire:

• Acquire new customers• Retain and maintain present customers• Retain and grow sales volume or profit from

existing customers – make them buy more.• Migrate existing customers through the

firm’s product or service portfolio – to higher priced or higher-margin products

Sound familiar? Remember the 4 STRATEGIES?


6. Treat customers as assets.

“Customer - the primary unit that generates income flows for the org.”

• Marcomm managers are “asset managers” (I LOVE THIS CONCEPT!) -- Should be responsible for the initiation, continuation, and maintenance of customers


7. Streamline functional activitiesToo many silos within the marketing function create unnecessary battles for turf and budget! – no relevance to the customer needs!

Customer’s view on marcomm comes down to only one of the two– “Messages and incentives”

• “Messages” – brand concepts, ideas, associations, values, and other perceptions the firm wants customers and prospects to store away in memory (= Pull Marketing = “Above the Line”)

• “Incentives” – short-term offers or rewards for doing something the firm believes will be of value to both itself and the consumer or customer.(= Push Marketing = “Below the line”)

Simplify and aggregate accordingly!


8. Converge marcomm activities

“The blending of traditional marcomm with electronic marketing and communication activities.”

Now, the customers who see the brand’s TV commercials are, for most part, the same ones who are accessing websites and shopping online. Convergence will occur sooner than expected.


Extra:

“COMPENSATION” for your employees – a key driver in how well the firm can integrate, how well it can become customer focused, how well it can develop and deliver on customer wants and needs…etc.

Reward system must be consistent with its integrated approach – how well they serve customers (not how many!)

IMC: a 5-step process1. Identify

customers & prospects

4. Estimating return on

Customer investment

3. Creating & delivering

messages & incentives

2. Valuation of customers/

prospects

5. Budgeting, allocation,

& evaluation

IMC

Documents

Integrated Marketing Communication (IMC) Sport Marketing USF Sport Management Dr. J. Andrew Choi