MKT570=Integrated Media Communication · MKT570 – Group IMC Account 3 Background Integrated marketing communication (IMC) is an extremely interesting area of marketing, particularly

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MKT570=Integrated Media Communication

Assignment three: Group IMC Account

Elisha Booth

Catherine Gordon

Jasmine Stone

Fiona Thompson

Due date: 12 September

Submitted: 12 September

Visit the LOUD blog for links and presentation

www.loudcommsgurus.wordpress.com


Contents

Background ........................................................................................................................................ 3

Introduction to group buying and LivingSocial ................................................................................... 3

Customer initiated communication ..................................................................................................... 4

Social Media – Web 2.0 .................................................................................................................... 5

Citizen journalism ............................................................................................................................ 6

Social media, citizen journalism and LivingSocial .............................................................................. 7

Incentivising to attract consumers and spread the word. .................................................................... 8

The consumer decision making process ............................................................................................... 8

Problem recognition ......................................................................................................................... 9

Information search ........................................................................................................................... 9

Alternative evaluation ...................................................................................................................... 9

Purchase decision ......................................................................................................................... 10

Postpurchase evaluation ................................................................................................................ 10

Conclusion........................................................................................................................................ 10

References ....................................................................................................................................... 11


Background Integrated marketing communication (IMC) is an extremely interesting area of marketing, particularly with

the changing social and technological environment and introduction of a new communication channels

including social media. The rise of citizen journalism through forums and blogs provide organisations

with a host of new opportunities for reaching target audiences.

With the increasing popularity of social media including Facebook and Twitter, any IMC campaign needs

to consider such outlets as brand touch points. Using social media for IMC is a cost effective option

providing benefits such as increased word of mouth and opportunities for promotion within friendship

groups. Group buying websites like LivingSocial already use social media in their marketing mix, and in

an environment where the customer initiates communication, must understand the consumer decision

making process and how consumers can be reached at each stage in a constantly changing media

landscape.

This report explains the concept of customer initiated communication and the consumer decision making

process, discussing how group buying organisations like LivingSocial can use social media and citizen

journalism to their advantage within a wider IMC campaign.

Introduction to group buying and LivingSocial

Group buying sites, including LivingSocial, Groupon, GrabOne, Jump On It, Cudo and Spreets, are

rapidly expanding into the Australian market. According to Howorth “In just over a year Australia's online

group-buying sector has grown from practically nothing to a $63m business.” (2011, p. 19).

LivingSocial is one of the top four group buying websites in the Australian Market, with 43 million

customers worldwide in 25 countries and 163 markets (LivingSocial Ltd., 2011B). LivingSocial is on

Facebook and Twitter and uses these to promote their daily deals – members have purchased more than

20 million vouchers since 2007.

LivingSocial offers a variety of deals on a daily basis, ranging from experiences to meals, classes,

holidays, beauty treatments and consumer goods (LivingSocial Ltd., 2011A).

group buying explained

“The group-buying model is a fairly conventional one. Sites negotiate special offers from merchants at heavily

discounted prices and advertise these to their consumers, usually via email or social media. The offers are only

honoured, however, should enough subscribers purchase them. This encourages would-be buyers to alert their

friends to the deal, in order to ensure it 'tips! The merchant is guaranteed business, albeit at a heavily discounted

rate, while the group buying service retains a hefty margin, usually around 50%.” (Howorth, 2011, p. 19)

http://www.facebook.com/livingsocial

http://twitter.com/livingsocial


Customer initiated communication Unlike mass media marketing approaches, IMC is a highly interactive

process between an organisation and its customers, stakeholders and

staff (Belch, Belch, Kerr, & Powell, 2009). In a rapidly changing consumer,

technological and media environment, organisations must take an IMC

approach to effectively respond to customer initiated communication

(Belch et al, 2009). Organisations should consider the benefits of utilising

customer touch points that impact the organisation‟s brand and brand

equity, either positively or negatively (Belch et al, 2009).

In contrast to basic communication models, the customer initiated

communication model by Duncan (2005) works in reverse. Inbound

marketing theory, where an organisation focuses on getting found by the

customer, takes a similar approach to Duncan (Halligan, Shah &

Meerman, 2009).

Customer initiated communication is where the customer is the „source‟ or „initiator‟ of the message

(Duncan, 2005). Consumers decide what, when, who and how messages are communicated, unlike in

traditional marketing where organisations send messages to consumers. The organisation „receives‟ the

message and must take action and respond to the customer (Halligan et al, 2010). Examples of ways

customers may contact an organisation include through call centres, social media, mobile internet, sales

kiosks, direct mail or email. Organisations can use this knowledge to develop effective IMC programs,

determining optimal touch points to encourage conversation (Belch et al, 2009).

Figure 1: Customer initiated marketing model (Duncan, 2005, from Belch et al, 2009, p102).

Source Customer or other

stakeholder

Message Question, complaint,

compliment

Channel 1800 number, letter, email,

salesperson, customer service, internet

Receiver Company

Noise

Busy signal, company delays, incomplete information

Feedback – Five Rs

Responsiveness, recourse, recognition, respect & reinforcement

integrated marketing

communication

“a strategic business process

used to develop, execute and

evaluate coordinated,

measurable, persuasive

brand communications

programs over time with

consumers, customers,

prospects, employees,

associates and other targeted

relevant internal and external

audiences.”

(Belch et al, 2009, p. 614)


Social Media – Web 2.0

Consumer led content or customer initiated communication has increased significantly with the

emergence of social media and other online services, in particular Facebook, Google search and Blogs

(Switched On Media Pty Ltd, 2010). In June 2010, Comscore (Switched On Media Pty Ltd, 2010)

reported that two thirds of Australians visited social media sites and Google search saw over 10 million

visitors, of which 78 per cent were visitors to social networking sites and 16 per cent were heavy social

networkers. Facebook.com ranked as the third most visited site, with 6.1 million visitors.

It is important to note customers are likely to use smartphones to communicate

socially and to make online purchases – a ChoiceStream study found 37% of

smartphone users used their phone to buy merchandise in 2009 (Miller and

Washington, 2011). According to Reed (2011, p. 54), “E-commerce sites need to

be optimised in order to work properly on smartphones, with reduced graphics

and clearer links from the main screen into web pages.” So, organisations will

benefit from the development of optimised mobile websites and linking directly to

social media outlets.

Social media is an interactive process between customers and organisations, and is usually consumer

led. Organisations can benefit by understanding and incorporating customer initiated communication

approaches when developing IMC programs. In group websites like LivingSocial, consumer led content

is extremely important. When organisations send messages, customers pass the messages on to

friends through word of mouth and social media. In the model employed by LivingSocial, the

organisation posts a heavily discounted deal via email or on their website that customers purchase,

based on a set number of buyers required to „activate‟ the deal. To ensure minimum numbers are

reached, customers share the deal with friends, family and colleagues via social media channels such as

Facebook and Twitter to encourage higher involvement. Social media links appear on the „deal‟ webpage

with a tally of deals purchased to keep the word-of-mouth or „buzz‟ alive.

Figure 2: LivingSocial deal page - the homepage provides social media sharing links for customers to drive message to the public who will initiate the communication via word of mouth (LivingSocial Ltd, 2011).

“smartphone noun

a mobile phone with

access to the internet

and the functionality

of a personal

computer.”

(Macquarie Dictionary

Online, 2011A)


Citizen journalism

Another way consumers are initiating communication messages is through

citizen journalism, evident through articles written by consumer advocates or

representatives about organisations to inform or warn the public and encourage

comment and feedback. This is usually done via websites, blogs and forums.

Grouped.com.au is a consumer blog focusing on various group buying websites

and informing consumers of the best and worst deals and organisations,

keeping them up to date on the latest industry trends (Grouped, 2011).

Figure 3: Grouped.com is a consumer based blog and website comparing group buying sites (Grouped, 2011).

Additionally, shopping comparison websites and forums are regularly visited by consumers to ask for

feedback about an organisation‟s product or service – further proof that social media and citizen

journalism should be considered by marketers. For example, whirlpool.com.au is a social forum where

customers can gain feedback on, complain about or advocate an organisation. In Figure 4 below, a

potential customer asks Whirlpool members whether an organisation‟s deal is legitimate (Whirlpool,

2010). If this case were referring to LivingSocial, the organisation would have an opportunity to respond

immediately, acquiring the customer and protecting LivingSocial‟s corporate identity – all via a customer

initiated message.

“citizen journalism noun

journalistic reporting by

bloggers who are not

part of the established

media. Also, participatory

journalism.” (Macquarie

Dictionary Online, 2011)


Social media, citizen journalism and LivingSocial

Organisations are now taking a more consumer-centric approach and adapting their marketing activities

to suit the way customers find out about products and services (Halligan et al, 2009). LivingSocial

generates thousands of leads through inbound marketing via Google search.

Moreover, the LivingSocial Facebook page asks the brand‟s „fans‟ for feedback on deals prior to going

live, or even ideas. Customers can use Facebook to make requests for specific deals in their area, and to

complain about or compliment the organisation. The organisation responds, interacts and collaborates

with the customer to enhance loyalty and advocacy or acquire new customers via word of mouth. Again,

the customer is initiating the message and the organisation responds or actions.

Figure 5: LivingSocial's Facebook page allows the brand to interact directly with consumers (Facebook, 2011).

Figure 4: Organisations can respond to consumers on forums such as www.whirpool.net.au, offering direct communication opportunities (Whirlpool, 2010).

http://www.whirpool.net.au/


Incentivising to attract consumers and spread the word.

Successful organisations will incentivise customers to

invite their friends to buy, with the customer driving the

message via social media. For example, group buying

websites such as Groupon conduct „viral‟ marketing

promotions where customers can earn $10 deal

vouchers when they get their friends to join. Here, the

organisation is providing the content to the customer

who then recruits their friends, family and colleagues

via social media channels.

Similarly, websites like GrabOne and LivingSocial

encourage consumers who purchase deals to post a

link to the deal on their Twitter and Facebook accounts

– if three of the consumer‟s friends purchase the deal

using the link provided, the original customer receives

their deal for free.

The consumer decision making process The consumer decision making process is core to strategic marketing plans. Marketers use this process

as a reference point, helping define the space they compete in and identify potential consumer touch

points to plan and implement IMC campaigns.

It is important to consider which communications tools are utilised, and when, to maximise return on

investment and successfully impact and influence consumers‟ attitudes.

The consumer decision making process in its basic form progresses through five stages (Belch et al,

2011):

Figure 8: Basic consumer decision making model (Belch et al, 2009, p127).

Understanding each stage and evaluating potential for communication is critical to the success of a

marketing program. Online shopping and group buying sites such as LivingSocial further expand the

consumer mix as well as threats and opportunities for businesses at each stage of the consumer

decision making process.

Choice magazine explains how group buying sites use the power of group, or bulk-buying to negotiate

discounts with retailers in return for a commission (Choice, 2010). This brings consumers heavily

discounted prices, but limited quantities.

Problem recognition

Information search

Alternative evaluation

Purchase decision

Postpurchase evaluation

Figure 6: Groupon customers refer friends to earn deal vouchers (Groupon, 2011).

Figure 7: LivingSocial users win deals for free if friends buy through social media links (LivingSocial Ltd, 2011A).


Using LivingSocial as an example, the below outlines how tools within the IMC suite can be utilised

during different stages of the consumer decision making process to achieve optimum results, while still

sharing and communicating the core brand messages.

Problem recognition

LivingSocial positions its products in two main ways – for gifts and personal use at a discounted rate

(LivingSocial Ltd., 2011A).

To ensure consumers consider LivingSocial, the brand must

have resonance in the problem recognition phase. For online

shopping this will mean an integrated mix of online and offline

brand advertising in a way that appeals to potential online

shoppers. Print and radio advertising should align with events

such as Father‟s Day and Christmas, ensuring the site falls into

the consumer‟s consideration set. Messages should promote the benefits of shopping online as well as

the value for money the site represents during expensive and ongoing gift giving periods.

Information search

Ensuring LivingSocial is identified during the information search phase is essential to the consumer

following through with a purchase. Search engine optimisation (SEO) involves positioning the site as a

top option when specific searches occur such as “gift” or “online shopping”. SEO coupled with targeted

online advertising through mechanisms such as Google Ads ensures the site is front of mind during every

day browsing.

Dejanseo (2011) state that 47 per cent of internet access is mobile. A mobile optimised site or application

will ensure LivingSocial is user friendly in all purchase environments, increasing the likelihood of the

consumer further exploring the site in their information search.

Alternative evaluation

A good shopping experience will increase positive word of mouth

promotion. Advertising LivingSocial‟s benefits over those of other group

buying sites is important in winning the consumer during the alternative

evaluation phase. This requires a range of quality products for the target

market – something the site advocates.

Website presentation and supporting social media promotion are also

important. A Twitter feed and Facebook page with supporting online and

telephone customer service allow LivingSocial to answer consumers‟

questions in a timely way, assisting the brand to stand out in the evaluation

search.

Figure 9: Event targeted promotion encourages purchase (LivingSocial Ltd, 2011A).

Figure 10: Clear processes promote site benefits (LivingSocial Ltd, 2011A).


Purchase decision

Haubl and Trifts (2000) highlight the unique characteristic of online versus offline shopping that allows

retail interfaces with highly interactive and personalised features to act as interactive decision aids. This

includes mechanisms that show what other products the consumer may be interested in as well as

prepopulating the consumers‟ location to highlight deals for their area.

Postpurchase evaluation

Both online and offline communications are important in the postpurchase evaluation phase. Firstly the

packaging and returns policy of online products needs to be appropriate and clear. A printed flyer should

be included in any packaging or on coupons as well as the receipt.

Feedback channels should be outlined to ensure the consumer has a positive experience from purchase

through to use, also allowing the vendor to ensure the deal provider followed through on their products

for future reference. Feedback channels should be outlined when the product is delivered and through

the online receipt delivery. Online response to Twitter and Facebook comments will also be important to

ensure consumer satisfaction.

Beyond this, ongoing communications should be utilised to keep the brand top of mind during the

consumer decision process for the next time a service like LivingSocial is required. This would include

electronic direct mail newsletters and special offers that can also be executed via Facebook and Twitter

to provide the consumer with a feeling of exclusivity.

IMC plays a key role in each phase of the consumer decision making process. Employing appropriate

tools and messages to strategically capture consumers at each stage is vital to a successful marketing

strategy and tactical execution.

Conclusion After reviewing the consumer decision making process, along with Duncan‟s customer initiated

communication model, with a focus on LivingSocial, it is apparent that both models have particular value

to the group buying websites.

Opportunities to communicate directly with the consumer have been pin-pointed for each stage of the

customer decision making process and through a variety of channels. Two-way communication is key,

and can be achieved through active monitoring of, and participation in social media, blogs and forums.

With the rise of citizen journalism and an increasingly online shopping environment, group buying

websites can continue to grow with the right IMC mix and offerings.

The ever evolving media and technology landscape make this an exciting time for marketers, reinforcing

the notion that any successful marketing campaign should have a focus on IMC, with the added bonus

that using social media, blogs and forums is a cost effective way to promote the brand.


References Belch, G., Belch, M., Kerr, G., & Powell, I. (2009). Advertising and Promotion: An integrated marketing

communication perspective. Sydney: McGraw Hill.

Choice. (2010, November 25). Group Buying Websites. Retrieved August 31, 2011, from Choice:

http://www.choice.com.au/reviews-and-tests/money/shopping-and-legal/shopping/coupon-

websites.aspx

Dejanseo. (2011, April 22). Online Shopping Statistics 2011. Retrieved August 30, 2011, from Dejanseo:

http://dejanseo.com.au/online-shopping-statistics-in-2011/

Duncan, T. (2005). The New Principles of Advertising and Promotion (2nd ed.). New York: McGraw-

Hill/Irwin.

Facebook. (2011). LivingSocial. Retrieved September 9, 2011, from Facebook:

http://www.facebook.com/LivingSocial

Grouped. (2011). Grouped - All Your Favourite Daily Deals, Scoopon, Spreets, Cudo, OurDeal, Jump On

It, LivingSocial, Catch of the Day... And More! Retrieved September 8, 2011, from Groupon:

http://grouped.com.au/about

Groupon. (2011). How Groupon Australia works. Retrieved September 8, 2011, from Groupon:

http://www.groupon.com.au/how-does-groupon-work

Halligan, B., Shah, D., & Meerman, D. S. (2009). Inbound Marketing: Get Found Using Google, Social

Media and Blogs. Wiley, Hoboken.

Haubl, G., & Trifts, V. (2000). Consumer Decision Making in Online Shopping Environments: The effects

of interactive decision aids. Marketing Science, 19(1), 4-21.

Howorth, B. (2011, March 18). What's the big deal? B and T, 18-23.

LivingSocial Ltd. (2011A). How it Works - LivingSocial. Retrieved September 5, 2011, from LivingSocial:

http://livingsocial.com/deals/how_it_works

LivingSocial Ltd. (2011B). LivingSocial by the numbers. Retrieved September 8, 2011, from LivingSocial:

http://livingsocial.com/bythenumbers

LivingSocial Ltd. (2011C, September 7). The Best Daily Deals in Sydney - Greater West. Retrieved

September 7, 2011, from LivingSocial: http://livingsocial.com/cities/847-sydney-greater-west/

Macquarie Dictionary Online. (2011). Macquarie Dictionary: citizen journalism. Retrieved September 8,

2011, from Macquarie Dictionary Publishers Ltd.:

http://www.macquariedictionary.com.au/[email protected]@9190833615573/-

/p/thes/article_display.html?type=title&first=1&mid=3&last=3&current=1&result=1&DatabaseList=dictbig

mac&query=citizen%20journalism&searchType=findrank


Macquarie Dictionary Online. (2011A). Macquarie Dictionary: smartphone. Retrieved September 8, 2011,

from Macquarie Dictionary Publishing Ltd.:

http://www.macquariedictionary.com.au/[email protected]@9190833615573/-

/p/thes/article_display.html?type=title&first=1&mid=2&last=2&current=1&result=1&DatabaseList=

dictbigmac&query=smartphone&searchType=findrank

Miller, R. K., & Washington, K. (2011). Entertainment, Media & Advertising Market Research Handbook.

Richard K Miller & Associates.

Reed, D. (2011, January). E-commerce moves closer to mobile pay day. Data Strategy, 52-54.

Switched On Media Pty Ltd. (2010). Australian Social Media Statistics: 2 million more. Retrieved

September 7, 2011, from Switched On Media: http://switchedonmedia.com.au/australian-social-

media-statistics-2-million-more/

Whirlpool. (2010, June 26). Crowdmass.com.au group buying site. - Shopping - On the internet.

Retrieved September 7, 2011, from Whirlpool: http://forums.whirlpool.net.au/archive/1473147

Documents

MKT570=Integrated Media Communication · MKT570 – Group IMC Account 3 Background Integrated marketing communication (IMC) is an extremely interesting area of marketing, particularly