Integrated Marketing Communications (KOM 5325)
Hamisah Zaharah Hasan, [email protected]
03-8946 8667
The course covers the functions of Integrated Marketing Communications discussing topics such as advertising, direct marketing, the Internet, interactive media, sales promotion, public relations, corporate advertising and direct selling; market environment which includes segmenting, targeting, positioning and consumer purchasing behavior; evaluation of a company’s marketing and promotional situation; Integrated Marketing Communications strategies and programs.
Course Objectives:• analyze the differences between
the major marketing • communication functions (C4);
evaluate a company’s marketing and promotional
• situation (P4);
develop effective Integrated Marketing
• Communications strategies and programs (A4) and
contribute to the planning and coordinating of group
• work (CS, LL)
Course EvaluationAssignment 1 : 10 pointsMidterm exam : 20 pointsGroup project : 30 pointsFinal exam : 40 points
Welcome to IMC
• 1980s companies see the need for more strategic integration of their promotional tools
• Process IMC involves coordinating the various elements & other marketing activities that communicate with a firm’s customers. e.g. use ads, sales promotion, corp. sponsorship, direct marketing, etc
• Companies built profitable relationship with customers, stakeholders, stockholders.
• Advertisers were not clear of advertising in the new millennium …..
• The industry realized its vulnerability to the outside world
For many years, the promotional function in most companies was dominated by mass media ads. Companies relied primarily on their ads agencies for guidance in nearly all areas of marcom.
In fact, most marketers did use additional promotional & marketing tools but, sales promotion & direct marketing agencies as well as package design firms were generally viewed as auxiliary services & often used on a per-project basis.
PR agencies were used to manage the organization’s publicity, image & affairs with relevant publics on an ongoing basis but were not viewed as integral participants in the marcom process.
• They failed to recognize that the wide range of marketing & promotional tools must be coordinated to communicate effectively and present a consistent image to target audience
• Many marketers manage its various marketing & promotional functions separately. Different budgets, views of market, goals & objectives.
…. 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 e.g. general ads., direct response, sales promotion, and public relations …. and combines these disciplines to provide clarity, consistency and maximum communications impact ….. Belch & Belch,1999
The concept or philosophy of marketing that stresses bringing together all the
variables of the marketing mix, all the media, all the
actions with which a company reaches its
publics, and integrating the company’s strategy &
programs …..
IMC follows the concept of marketing that start with the consumer needs and wants and work back to the brand. Through the information from the database companies are able to find out about consumers.
IMC is a practice of unifying communication tools from packaging ---- to sending consistent, persuasive message to target audience
….. The began asking their ad agencies to coordinate the use of a variety of promotional
tools rather than relying primarily on media advertising. …. Some companies began looking
beyond the traditional advertising agencies & use other types of promotional specialists to develop & implement various components of their promotional
plans.
….. Using all forms of promotion
…..Approach to planning marketing
….Promotion programs
….Coordinating communication functions
IMC helps companies identify the most appropriate & effective methods to conduct customers & stakeholders.
Significant marketing development
Added value of integrating various communication functions
Maximize return on investment
Media
INTERNET, VCD, DVD, MOBILE
PHONE
VS
RADIO/TV/MAGAZINES/NEWSPAPER
AVOID DUPLICATION ---- integrate marcom activities
NEW TECHNOLOGY NEW ENVIRONMENT --- new ways to reach consumers
DIFFERENT CONSUMERS ----- sophisticated, demanding,
EXPENSIVE TRADITIONAL MEDIA
Why IMC?
• Use major communication Use major communication functions in concert (synergy) to functions in concert (synergy) to provide clarity, consistency, and provide clarity, consistency, and maximum communications impact maximum communications impact
• Synergy yields results greater Synergy yields results greater than if each functional area had than if each functional area had selected its own targets, chosen its selected its own targets, chosen its own message strategy, and set its own message strategy, and set its own media schedule and timingown media schedule and timing
INTRODUCTIONto
PROMOTIONand
INTEGRATED MARKETING COMMUNICATIONS
PROMOTION• Communication Process in Marketing• Used to Create a Favorable Predisposition Toward:
– Brand of Product– Service– Idea– Person
PROMOTIONAL MIX• Blend of Communications Tools and Activities Used by a
Firm• Carries out the Promotion Process• Communicates Directly with Target Markets 1.2
Relationship Between Promotion, the Promotional Mix, and
Integrated Marketing Communications
INTEGRATED MARKETING COMMUNICATIONS (IMC)• Manages the Processes and Activities of Using Promotional Tools• Unified Way• Produces a Synergistic Communications Effect
1.3
• Promotion:
• Promotion Mix:
• IMC:
• Process
• Tools
• Management of the Promotion Mix
1.4
ADVERTISING Paid Mass Media Attempt to Persuade Complex System of Strategic Planning and Creative Genius
INTERNET ADVERTISING Electronic Mail (e-mail) Internet Relay Chat (IRC) Usenet World Wide Web (www)SALES PROMOTION Use of Incentives to Generate a Specific Short-Term Response◦ Household Consumer◦ Trade Buyer◦ Business Buyer
1.5
The Promotional Mix
ADVERTISING
Example of Sales Promotion
1.6
Example of Mass Media Advertising
1.7
Example of Sales Promotion
DIRECT MARKETING AND e-COMMERCEDistinguished From Other Primary Promotional Tools
in 3 Ways◦ Uses a Combination of Media◦ Designed to Elicit a Direct Response◦ Transactions Can Occur Anywhere
E-Commerce is Another Form of Direct Marketing◦ Business is Conducted Between Buyers
and Sellers Using Electronic Exchange Media
1.8
The Promotional MixThe Promotional Mix
SPONSORSHIP• Funding an Event• Creating an Event to Showcase a Firm’s Brand
POINT-OF-PURCHASE• Materials Used in Retail Setting to Attract Shoppers’ to a
Company’s Brand
SUPPORTIVE COMMUNICATIONS• Used to Target Audiences Outside Mainstream Media or
Electronic Communications
1.9
shelf-talkers, signage, easel stands, bottle-neckers, price cards, hang-tags, pop-ups
SUPPORTIVE COMMUNICATIONSUsed to Target Audiences Outside Mainstream Media or Electronic Communications
PUBLIC RELATIONS• Communication that can Foster Goodwill Between a Firm
and its Many Constituent Groups
PERSONAL SELLING• Presentation of Information about a Firm’s Products or
Services by One Person to Another Person or to a Small Group of People
1.10
1.11
Personal Selling is the Most Important Variable in the Promotional Mix of Many Organizations
ROLE OF PROMOTION IN MARKETING STRATEGY• Must Have Marketing Strategy Decisions about Products
(Brand)– Branding – Established Name, Term, Symbol or Design
that Identifies for Consumers that a Product is being Offered by a Particular Seller and Clearly Distinguished the Product of that Seller from those Offered by Competitors
1.12
1.12
ROLE OF PROMOTION IN MARKETING STRATEGY• Role of Promotion in Marketing Strategy Affects 3 Key
Aspects of Decision Making with Respect to Brands– Creating the Marketing Mix– Achieving Effective Market Segmentation, Product
Differentiation, and Positioning– Enhancing Revenues and Profits
1.13
ROLE OF PROMOTION IN THE MARKETING MIX– Assumes a Wide Range of Responsibilities
Related to:• Conception• Pricing• Distribution Brands
– Product (Brand)
1.14
ROLE OF PROMOTION IN THE MARKETING MIX – Promotion Affects the Product Area of the
Marketing Mix• Information and Persuasion• Introduction of New Brand or Brand Extensions• Building and Maintaining Brand Loyalty
Among Consumers• Building and Maintaining Brand Loyalty
Within the Trade
1.15
1.16
One Role for Promotion is to Help Introduce Brand ExtensionsLike this Extension of Jell-O intothe Yogurt Market
ROLE OF PROMOTION IN THE MARKETING MIX – Price
• Effects the Consumer Market• Effects the Trade Market
– Distribution• Consumer Access to Brands• Securing Trade Distribution
1.17
• Promotion is Important in Helping to Execute These Strategies– Market Segmentation– Product Differentiation– Positioning
• External• Internal
1.18
Sales Occur◦ Brand has Well-Conceived Marketing Mix◦ Complete Marketing Mix◦ Good Promotion
Large-Scale Demand /Production Produces◦ Cost to Produce Item is Reduced◦ Known as Economies of Scale
Brand Loyalty at Any Cost◦ Firm Raises Prices◦ Known as Inelasticity of Demand
1.19
The Role of Promotion in Revenue and Profits
1.20
Promotional Tools HelpIncrease Brand Loyalty
FACTORS CONTRIBUTING TO IMC’s RISING PROMINENCE
• Fragmentation of Media• Better Audience Assessment Through Database Technology• Consumer Empowerment• Increased Advertising Clutter• Shifting Channel Power• Desire of Greater Accountability
1.21
Integrated Marketing Communications
1.22
Promotion and IMCHelp Cut Through the Clutter of Advertising
1.23
Participants in IMC Management
Marketing Organization•Marketing Plan•Goal & Objectives•Customer/Prospect Databases
Specialized Promotion Organizations•Media Organizations•Event Management Firms•Web Site Designers•Sales Promotions Agencies•Direct Marketing Agencies•Public Relations Firms•P-O-P Agencies & Designers
Advertising Agency•Research•Creative Strategies•Production•Message Placement
Internet Advertising
Advertising
Sales Promotions
IMC Management Personal Selling
Direct Marketing e-Commerce
Sales PromotionsP-O-P
Supportive
Public Relations
1.22
THE PROMOTION INDUSTRY:
MARKETERS, AGENCIES,
and
MEDIA ORGANIZATIONS
The Promotion Industry in Transition ALTERED BY SIX TRENDS
• Information in Marketplace is an Interactive Systembetween Marketers and Consumers
• Proliferation of Cable TV, Direct-Marketing & Alternative New Media Causes Media Fragmentation
• Growing Investment in Advertising Causes Media Clutter
Growing Investment in Advertising Causes Media Clutter
The Promotion Industry in Transition ALTERED BY SIX TRENDS
• New Communications/Distributions Channels are Growing in Influence
• Fragmentation of Marketing Budgets Resulting in Greater Portions of Budgets going to Trade & Consumer Promotions
• Improved Information Systems Allow Retailers & Distributors more Control over Marketing & Promotional Decisions
Structure of the Promotion Industry and Participants in the ProcessStructure of the Promotion Industry and Participants in the Process
Advertising agencies: Agency services: Agency compensation:Full-service agencies Account services CommissionCreative boutiques Marketing research Markup chargesMedia-buying services Creative and production Fee systemInteractive agencies services Pay-for-resultsIn-house agencies Media planning research
Promotion agencies:Direct marketing and database agenciesE-Commerce agenciesEvent planningDesign firmsPublic relations firmsSales staffing and training firms
Manufacturers Resellers, retailers, Government andand service firms wholesalers, and social organizations
distributors
Marketers
Advertising and Promotion Agencies
Marketing and Production facilitators advertising research Consultants firms Information
intermediators
External Facilitators
Media OrganizationsAnd Trade Partners
Media Organizations: Interactive media Trade Partners: Broadcast media Support media Wholesalers, distributors, Print media Media conglomerates retailers
B-to-B trade communities
Internet portals
Household consumers Business and professional Government and socialTrade resellers buyer organizations
Target Audience(s)
Structure of Promotion Industry
MARKETERS• Manufacturing and Service Firms• Trade Resellers• Federal, State and Local Governments• Social Organizations
– March of Dimes– Nature Conservancy– MAKNA
Producer of Consumer products and services, etc…
Organizations that that buy products to sell to consumers
2.5
2.5
The U.S. Government is a The U.S. Government is a Marketer that Relies onMarketer that Relies onAdvertisingAdvertising
2.5
Structure of Promotion Industry (con’t)
AGENCIES– Advertising Agencies
• Full Service Agency• Creative Boutique• Interactive Agency• In-House Agency• Media-Buying Agency
Grey Global Group, Omnicom Group
Idea factories
Visit http://www.ad4ever.com
Gap, Calvin Klein, Revlon do their own in-house work
A German advertising agency with the colorful name "indigo:"
AGENCIES AGENCIES Promotional AgenciesPromotional Agencies
Direct Marketing and Database AgenciesDirect Marketing and Database AgenciesFulfillment CentersFulfillment Centers
E-Commerce AgenciesE-Commerce AgenciesSales Promotion AgenciesSales Promotion Agencies
Consumer Sales PromotionConsumer Sales PromotionTrade Sales PromotionTrade Sales Promotion
Event-Planning AgenciesEvent-Planning AgenciesDesign FirmsDesign Firms
Logo DesignLogo DesignPublic Relations FirmsPublic Relations FirmsSales, Staffing, Training & Assessment Sales, Staffing, Training & Assessment FirmsFirms
Design Firms HelpDesign Firms HelpMarketers Develop LogoMarketers Develop LogoDesigns that Last, Designs that Last, Like this Pillsbury LogoLike this Pillsbury Logo
2.9
AGENCIES AGENCIES Agency ServicesAgency Services
Account ServicesAccount ServicesMarketing ResearchMarketing ResearchCreative & ProductionCreative & Production
Creative ServicesCreative ServicesProduction ServicesProduction Services
Media-Planning and BuyingMedia-Planning and BuyingAdministrativeAdministrative
AGENCIES (con’t)–Agency Compensation
•Commissions•Markup Charges•Fee System•Pay-for-Results
2.72
Approaches to Determining the Advertising Appropriation
All you can affordPick all that is left after all other relevant allocations have been made.
this approach is used by Small fishes (small companies with small budget) or may be by some other firms that are big when they are introducing the new product.
This approach is merely an availability oriented budget and unsophisticated.
Approaches to Determining the Advertising Appropriation
Competitive Parity(Matching)
Match or base their sales promotion budget to that of the major competitors.
The logic attributed to this method is that the collective minds of the companies in the industry probably generate promotion budget that are close to optimal and any departure from the industry norms may lead to promotion war.
Approaches to Determining the Advertising Appropriation
Percent-of-Sales
%% Used to determine the promotional budget of the company. So they more or less pull certain percentage of the sales made in a fixed period. E.g. last year or for several past years. This decision is more dependent on the current business scenario and current working of the company.
It might be that the company may consider just last years sales figures under consideration as they may have made great sales.
You may take one year or an average of several this depends on many condition in which the org functions.
Approaches to Determining the Advertising Appropriation
Objective-and-Task
Set the ultimate promotion objectives. That may relate to reach short term sales objectives .
These objectives may even relate to introducing a new product, stimulate trial, increasing distribution, etc., within a specified period of time.
Determine how much money would be required to fulfill each of these tasks in order to achieve the promotion objectives. If the cost happens to be greater that money available then the objectives should be refined or the funds are made available the contingency reserve or by reducing the budgets of the other promotional activities.
EXTERNAL FACILITATORS• Marketing and Advertising Research
Firms• Consultants• Production Facilitators• Information Intermediator• Trade Partners
EXTERNAL FACILITATORS• Marketing and Advertising Research
Firms• Consultants• Production Facilitators• Information Intermediator• Trade Partners
Media OrganizationsMedia Organizationsand Trade Partners and Trade Partners Available to MarketersAvailable to Marketers
. Broadcast MediaBroadcast Media
. Interactive MediaInteractive Media
. Print MediaPrint Media
. Support MediaSupport Media
. Media ConglomeratesMedia Conglomerates
. Wholesalers, Retailers, Wholesalers, Retailers, B2B Communities, PortalsB2B Communities, Portals
Media Organizations and Trade Partners Available Media Organizations and Trade Partners Available to Marketersto Marketers
AUDIENCES• Household Consumers• Trade Resellers• Business and Professional Buyers• Government and Social Organizations