An Introduction to Integrated Marketing Communications

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An Overview of Chapter-I overview of the field of advertising and promotion and its role in the marketing process the concepts of marketing and relationship marketing also introduces the concept of integrated marketing communications (IMC), its evolution, and examines how various marketing and promotional elements must be coordinated to communicate effectively. importance of the IMC perspective in planning and executing advertising and promotional programs.
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 value of strategically integrating the various communication functions rather than having them operate autonomously. adaptation by marketers to a changing environment, particularly with respect to consumers, technology, and media. various elements of the promotional mix are introduced in this chapter along with a brief discussion of these basic tools of IMC. examines the various tasks and responsibilities involved in advertising and promotion management and a model of the integrated marketing communications planning process is presented
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Chapter Objectives
1. Examine the growing importance of advertising and promotional elements in the marketing programs of domestic and foreign companies. 2. Introduce the concept of integrated marketing communications (IMC). 3. Importance of IMC perspective in planning, executing advertising and promotional programs. 4. Introduce the various elements of promotional mix and role in an IMC program. 5. Evaluate how various marketing and promotional elements are coordinated to communicate effectively. 6. Introduce a model of IMC planning process and examine the steps in developing this marketing communications program.

Taking The Only Vegas Campaign in a New Direction

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Only Vegas-Vignette
The changing roles of advertising and promotional strategy in modern marketing. Importance of an organizations promotional efforts in various industries and markets. Might include the automotive market, the beer industry, soft drinks, and consumer electronics.
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Only Vegas campaign in vignette, is a good example of how R&R Partners and the Las Vegas Convention and Visitors Authority (LVCVA) uses an integrated marketing communications to market the city of Las Vegas. Not only as a tourist destination but also as a site for conferences & conventions.

GROWTH OF ADVT. AND PROMOTION 1. A&P are integral to our social and economic systems. Advertising evolved into a vital communication system for consumers and businesses. 2. In market-based economies, consumers rely on advertising and other forms of promotion. 3. In providing them information they influence making purchase decisions. 4.Corporations rely on advertising and promotion to help them market their products and services
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Statistics
In 1980, advertising expenditures in the U.S. were $53 billion and $49 billion was spent on sale promotion. By 2005 an estimated $276 billion was spent on advertising while sales promotion expenditures increased to more than $300 billion!
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The Growth of Advertising and Promotion

Expenditure in Billions of Dollars

Advertising Outside U.S. U.S. Sales Promotion 2004 1980

U.S. Advertising

$0

$50

$100

$150

$200

$250

$300

$350

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1. Billions more are spent on domestic and foreign companies in other promotional areas like: Direct marketing, event sponsorship, interactive marketing, personal selling and public relations. 3. Tremendous growth in expenditures for A&P reflect growth of U.S. and global economies. 4. Expansion-minded marketers take advantage of integrated marketing opportunities through mostly event sponsorship and use of Internet.
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What is Marketing ?
Since 1984 (two decades), the American Marketing Association, that represents Marketing professionals in US 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.
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The above definition of marketing focused on exchange as a central concept along with Various other activities involved in marketing Process. However, many experts argue that exchange is the core phenomenon for study in marketing. Therefore it can focus on the Nature of Exchange i.e. what is needed for this process to occur. This includes: 1. two or more parties with something of value to one another. 2. A desire and ability to give value to the other party; and a way for the parties to communicate with one another. 13

Change in Marketing Definition

Revised Definition of Marketing In 2004 the AMA adopted a revised definition of marketing is given below in the next slide.

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What is Marketing?
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 stake holders. Value Relationship marketing Mass customization Customer relationship management (CRM)

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Marketing Views
Views marketing as being more strategic in nature and focuses on the important role marketing plays in developing and sustaining relationships with customers and delivering value to them.

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Value
Value is the customers perception of all of the benefits of a product or service weighed against acquiring. Benefits can be functional, experiential or psychological. Costs include money paid for the product or service as well as other factors such as acquiring information, making the purchase and others.
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Relationship Marketing
Marketers are seeking more than just a one-time exchange or transaction with customers. Demanding and want personalized products and services tailored to their specific needs and wants

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Mass Customization
Flexible manufacturing systems which have led to the mass customization, company can make a product or deliver a service in response to an individual customers needs in a cost-effective way.

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Lifetime value
They give emphasis on the lifetime value of a customer. Companies recognize that it is not less than 5 times more cost effective to retain customers than to acquire new ones.

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Customer relationship management (CRM) programs

Involve the systematic tracking of customers preferences and behaviors and modifying the product or service as much as possible to meet individual needs and wants. Information technology, particularly database systems, is an integral part of CRM systems.
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Marketing Mix
The four elements of the marketing mix are product, price, place, and promotion. IMC focuses on the promotion element of the marketing mix. Promotional program is a part of a viable marketing strategy, coordinated with other marketing mix variables. This leads into the concept of integrated marketing communications.
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Coordinated Marketing Mix Elements Build Image

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IMC Genesis
In the 1990s many companies are moving toward the concept of integrated marketing communications (IMC). Coordinating the various promotional elements along with other marketing activities that communicate with a firms customers. Ad agencies to coordinate the use of a variety of promotional tools rather than relying primarily upon media advertising.
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Traditional Approach to Marketing Communications

Sales promotion

Point of purchase

Publicity

Special events

Media Advertising

Packaging

Direct response

Public relations Direct marketing

Interactive marketing
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Contemporary IMC Approach

Packaging

Sales promotion

Direct response

Point of purchase Publicity

Media Advertising

Public relations

Interactive marketing

Direct marketing

Special events
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IMC Definition
American Association of Advertising Agencies (4As) developed one of the first definitions of integrated marketing communications defining it as:

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A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.

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big picture approach

Companys marketing and promotional activities should project a consistent and unified image to the marketplace. All sources of brand or company contact that a customer or prospect has with a company, product or service.

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What IMC Looks for ???

A big picture approach to planning Marketing and promotion Programmes and communicating various Communication functions .

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Four positive personality traits for IMC consultants

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Don Schultz of Northwestern University, who has been one of the major proponents and thought leaders in the area, developed a new definition of IMC which is as follows:

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New Defining IMC

IMC is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs with consumers, customers, prospects employees and other relevant external and internal audiences. The goal of IMC is to generate short-term financial returns and build long-term brand value.

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A Contemporary Perspective of IMC Definition

Recognized as an on going Recognized as a business process strategic business process

IMC

Importance of relevant audience Multiple relevant audiences Demand for accountability and Demand for accountability Measurement of Outcomes

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Test Your Knowledge

Why are marketers decreasing their usage of advertising in mass media to reach their target market and increasing their use of integrated marketing communications? A) The mass market has become fragmented. B) The explosion of new technologies has given consumers greater control over the communication process. C) The use of the Internet and electronic commerce is growing. D) New global markets are emerging. E) All of the above explain the increasing reliance on integrated marketing communications.
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Reasons of Growing Importance of IMC

They recognize the value of strategically integrating the various communication functions rather than having them operate autonomously. Fragmentation of media and the shift from mass to micromarketing Driven by a marketing which includes: revolution

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Reasons for the Growing Importance of IMC

From
Media advertising Mass media Manufacturer dominance General focus Low agency accountability Traditional compensation Limited Internet availability

Toward
Multiple forms of communication Multiple forms of communication Ex- Trade oriented sales promo.. Specialized media Specialized media Ex: TV Network Retailer dominance Ex: Promo Retailer dominance mix Data-based marketing Greater agency accountability
Performance-based compensation

Widespread Internet availability

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Brand Identity and IMC

Major reasons for the growing importance of integrated marketing communications over the past decade is that it plays a major role in the process of developing and sustaining brand identity and equity. Brand identity: It is the sum of all points of encounter or contact that consumers have with a brand. See next for details.

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IMC and Branding Identity

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumers mind. IMC plays a major role in the process of developing and sustaining brand identity and equity. Business Week Ranking 2005 (Valued 10 Brands)
(Billions of Dollars)

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1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Disney 8. McDonalds 9. Marlboro 10. Mercedes

$67.52 $59.94 $53.38 $46.99 $35.59 $26.45 $26.44 $26.01 $24.84 39 $21.19

PROMOTIONAL MIX: THE TOOLS FOR IMC

Promotion is defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or promote an idea. Promotion is best viewed as the communication function of marketing. Implicitly communicate with consumers.

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Promotion Mix
promotional mix is defined as the basic tools or elements that are used to accomplish organizations objectives. The role and function of each promotional mix element in the marketing program can be discussed along with its advantages and limitations.

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Basic Elements of the Promotional Mix

Advertising Direct Marketing Interactive/ Internet Marketing Sales Promotion Publicity/Public Relations Personal Selling
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Different Promotional Mix

Advantages and Disadvantages

Advertisingany paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor.

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Direct Marketing is a system of marketing through which organizations communicate directly with target customers, to generate a response and/or a transaction. Direct marketing was traditionally not been considered as an element of promotional mix. However, because it has become such an integral part of integrated marketing communications program of many organizations, it is viewed as a component of promotional mix.
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Direct Marketing is Part of IMC

Direct Mail Internet Sales Direct Response Advertising

Direct Marketing
Shopping Channels Catalogs
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Telemarketing

Bose Uses Direct Response Advertising

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Interactive/Internet Marketing Interactive media allow for to-and-fro flow of information, whereby uses can participate and modify the content of information. The major interactive medium is the Internet, and is a global collection of computer networks linking both public and private computer systems. While the most prevalent perspective on the Internet is that it is an advertising medium, it is actually a medium that can be used to communicate other elements of the promotional mix including sales promotion, direct marketing, and public relations
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Using the Internet as an IMC Tool

The Internet

Educates or informs customers

A persuasive advertising medium

A sales tool or an actual sales vehicle

Obtains customer database information

Communicates and interacts with buyers

Provides customer service and support

Builds and maintains customer relationships

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Sharp Creatively Integrated Advertising and the Internet

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Sales Promotion Marketing activities that provide extra value or incentive to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into two major categories: consumer-oriented and trade-oriented activities.

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Various Uses of Sales Promotion

Introduce new products Get existing customers to buy more

Combat competition

Attract new customers

Sales Promotion
Enhance personal selling Maintain sales in off season

Tie in advertising & personal selling

Increase retail inventories

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Sales Promotion Tools

Coupons Samples Premiums
Contests/Sweepstakes

Trade Allowances POP Displays Training Programs Trade Shows Coop Advertising

Refunds/Rebates Bonus Packs Loyalty Programs Events

Consumeroriented
[For end-users]

Tradeoriented
[For resellers]
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Publicity

and

PR

Publicity: Non-personal communications about an organization, product, service or idea that is not directly paid for nor run under identified sponsorship. Public Relations: A management function which evaluates public attitudes, identifies the public policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance.
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Publicity Vehicles
Feature Articles

News Releases

Publicity Vehicles

Interviews

Press Conferences

Special Events
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Public Relations Tools

Publicity Vehicles

Special Publications

Community Activities

Corporate Advertising

Cause-related Marketing

Public Affairs Activities

Special Event Sponsorship

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The distinction should be made between publicity and public relations. In fact, broader purpose positive public relations generally has a objective than publicity, as its is to establish and maintain a image of the company among public.

Publicity is an important communications technique used in public relations; however other tools may also be used.
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Personal Selling Direct person-to-person communication whereby a seller attempts to assist and/or persuade prospective buyers to purchase a companys product or service or act on an idea.

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Classifications of Advertising
National Advertising

Retail/Local Advertising Primary vs. Selective Demand Advertising

Consumers

Business-to-Business Advertising

Professional Advertising

Trade Advertising
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Organizations 58

Test Your Knowledge

_____ is nonpersonal communication neither directly paid for nor run under identified sponsorship. A) Advertising B) Sales promotion C) Publicity D) Public relations E) Personal selling

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Advertising Versus Publicity

Factor Control Credibility Reach Frequency Cost Flexibility Timing Advertising Great Lower Measurable Schedulable High/Specific High Specifiable
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Publicity Little Higher Undetermined Uncontrollable

Low/Unspecified

Low Tentative
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IMC INVOLVES AUDIENCE CONTACTS

1. The various promotional mix elements are the major tools that marketers use to communicate with current and/or prospective customers as well as other relevant audiences. 2. They consider all of the potential ways of reaching their target audience with their messages.

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IMC Audience Contact Tools

Broadcast media (TV/radio)
Print media (newspapers, magazines)

Public Relations/ publicity

Internet/ interactive

Out-of-home media

Direct marketing

Target Audience
Personal selling
Point-ofpurchase (displays, packaging)

Sales Promotion

Word-ofmouth

Events and sponsorship

Product placements (TV and movies)

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Test Your Knowledge

The _____ is a written document that describes the overall marketing strategy and programs developed for an organization, product line, or brand. A) B) C) D) E) promotional plan marketing plan communications plan marketing audit situation analysis

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Integratedmarketingcommunications management It is defined as the process of planning, executing, evaluating, and controlling the use of the various promotional-mix elements to effectively communicate with target audiences. It involves coordinating the promotional mix elements to develop a controlled and integrated program of effective marketing communication.
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This process is guided by the development of the integrated marketing communications plan which provides the framework for developing, implementing, and controlling an organizations IMC program and activities.

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The Marketing Plan

1. A detailed situation analysis

2. Specific marketing objectives

3. A marketing strategy and program

4. A program for implementing the strategy

5. A process for monitoring and evaluating performance

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Integrated Marketing Communications Planning Model

Review of marketing plan Promotional program situation analysis Analysis of the communications process Budget determination Develop integrated marketing communications programs Advertising Advertising objectives Message strategy Sales promotion Sales promotion objectives Sales promotion strategy PR/ publicity PR/ publicity objectives PR/ publicity strategy Personal selling Personal selling objectives Personal selling strategy Direct marketing Direct marketing objectives Direct marketing strategy Internet/ interactive Internet/ interactive objectives Internet/ interactive strategy

Integrate and implement marketing communications strategies Monitor, evaluate and control IMC Program
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IMCExercise This exercise is designed to give an opportunity to think more about the concept of integrated marketing communications. How it might be used by a company.

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Choose a specific company and discuss how this firm can use the concept of integrated marketing communications in developing a promotional program for one of its products or services. You should analyze all of the companys promotional mix elements including advertising, direct marketing, interactive media, sales promotion, publicity/public relations, sponsorships, branded entertainment and personal selling and discuss how each one is used in the integrated marketing communications program. 69

You should also consider how other marketing mix elements such as the brand name, package, price and other factors communicate with the companys target audience. Is this company using all of the promotion mix tools in its marketing communications program? Are they integrated and sending a consistent image and message?
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