Integrated Marketing Communications

Marketing Mix

•Product•Price•Place •Promotion

Integrated Marketing Communications

• IMC involves coordinating the various promotional elements and other marketing activities that communicate with a firm’s customers.

• Value of strategically integrating the various communications functions rather than having them operate autonomously

Tools of IMC

How BIG is the business…

Size of the global advertising business

Country 2007 2010

USA 179,251 190,210Japan 41,017 43,335Germany 25,758 27,145UK 25,433 28,691China 15,438 22,922Russia 16,110France 13,904 14,315Brazil 14,161Italy 12,249 13,050Spain 10,738South Korea 9,967 12,121Australia 9,831

USD Mn

The Indian advertising business

Year Total Newspapers Magazines TV Radio Cinema Outdoor InternetRs. Mn

2005 116,824 41 4 41 3 2 8 12006 149,113 42 5 40 2 2 7 12007 198,249 47 5 35 3 2 7 22008 217,793 45 6 37 2 2 6 22009 244,641 42 6 38 2 2 6 32010 282,683 42 7 35 2 2 6 5

% contrib.

Big spenders in IndiaCategory TV Print Radio Total

Cellular Phone Service 6497 2437 214 9148Publications/books 700 8328 95 9123Cars/jeeps 3049 5338 77 8464Educ-educational Institutions 336 7448 23 7807Properties/real Estates 790 6444 258 7492Cellular Phones 3203 2318 60 5582Two Wheelers 3286 2255 19 5560Internet Service 2596 2359 118 5073Toilet Soaps 4453 202 27 4682Shampoos 3768 198 17 3983Travel & Tourism 849 2512 34 3395Insurance-life 2585 709 98 3392Tooth Pastes 3111 63 7 3181Tv Channel Promotions 3 2444 397 2844Televisions 903 1819 15 2737Soft Drink Aerated 2567 87 44 2698Readymade Garments 649 1972 31 2652Washing Powders/liquids 2454 113 7 2575Jewellery 685 1602 73 2361DTH Providers 1441 857 62 2361

Product / Category - 2007 Spends

Rs. Mn

Big spending categories in India

Advertiser TV Print Radio Total

Bharti Airtel 2322 260 52 2634Reliance 1222 745 31 1998Vodafone Essar 1362 274 34 1670TataTeleservices 789 379 10 1178IdeaCellularLtd 558 165 21 745BSNL 102 311 2 414Aircel 64 105 1 170MTNL 11 61 51 124Bsnl/mtnl 0 50 0 50SpiceTelecomLtd 1 40 0 41Bpl Cellular 0 19 10 28MatrixCellular 24 3 0 28CellularIndustry 0 18 0 18DigitalOutsourcing 14 0 0 14SouthAsiasPremireMobile 13 0 0 13Hfcl Infotel 0 7 0 7Tata Cellular 7 0 0 7Etisalat 3 0 0 3Telenor 3 0 0 3OmanMobile 0 1 0 1Others 1 1 0 2

Total 6497 2437 214 9148

Cellular Phone Service - 2007 Spends

Rs. Mns

Big spenders in IndiaAdvertiser TV Print Radio Total

Maruti UdyogLtd 692 1678 42 2411Tata MotorsLtd 722 666 11 1399General MotorsIndiaLtd 316 606 0 923Hyundai Motors 297 599 2 897Ford India Pvt Ltd 165 504 15 685Toyota Kirloskar MotorLtd 99 272 1 371Mahindra Renault PvtLtd 213 142 6 362Mahindra & Mahindra 211 91 0 302Skoda Auto 76 189 0 266Honda Siel Cars IndiaLtd 99 157 0 257Fiat India Automobiles Ltd 80 62 0 142Audi 43 96 0 139Hindustan Motors Ltd 3 106 0 110Mercedes Benz IndiaLtd 23 42 0 65Volkswagen Group Sales IndPL 0 47 0 47Bmw 0 47 0 47Volvo India Pvt Ltd 0 12 0 12Intl Cars And Motor Ltd 0 11 0 11Nissan MotorCoLtd 1 9 0 10Kia Motors Corporation 7 0 0 7Others 0 2 0 2

Total 3049 5338 77 8464

Cars/ Jeeps - 2007 Spends

Rs in Mns

Big spenders in IndiaAdvertiser TV Print Radio Total

Hindustan Lever Ltd 2215 78 14 2307Reckitt Benckiser (india)Ltd 631 4 1 636Wipro Ltd 368 23 2 393Johnson&JohnsonLtd 302 11 0 313Godrej Consumer ProductsLtd 182 33 0 214Nirma ChemicalsLtd 198 1 7 206Henkel Spic IndiaLtd 143 8 0 151Paras Pharmaceuticals Ltd 84 0 0 84Cholayil Pharma 69 11 0 80Vvf Limited 50 0 0 50Anchor Health&Beautycare 38 8 0 45Marico IndustriesLtd 43 2 0 45SV Products 28 0 1 30Dabur IndiaLtd 19 0 0 19Jyothy LaboratoriesLtd 11 1 0 12Karnataka Soaps& Detergents 8 3 0 12The GoldCompany 11 0 0 11Elder Pharmaceuticals 10 0 0 11Shiv GramudhyogSanstha 0 8 0 8SDPharmacy 7 1 0 8LexusSoap 6 0 0 6Others 32 10 2 44

Total 4453 202 27 4682

Toilet Soaps - 2007 Spends

Rs.Mn

Advertising

•Advertising is defined as any paid form of non personal communication about an organization,

product, service, or idea by an identified sponsor.

Advertising

•The world’s second oldest profession

OR

Advertising

•A mirror and maker of culture and society ….

OR

Advertising

•Magic in the marketplace…

OR

Scope

•Understanding Integrated Marketing Communication

•The increasing importance of IMC▫Shifting from ‘advertising’ to IMC

•Role of IMC in the marketing process•Understanding consumers and audiences

Promotion

•Promotion is often regarded as a more direct form of persuasion

•Based frequently on external incentives rather than inherent product benefits

•Designed to stimulate immediate purchase

The IMC toolkit

•Advertising•Promotions•PR•Direct Marketing•Internet/Interactive marketing•Personal Selling

Objectives of Advertisements

•Building Brand image•Providing information•Persuasion•Supporting Marketing efforts•Encouraging Action

Types of Advertising

The different types of advertising•Brand Advertising : Long term brand identity and

image Nescafe, Dove, Hamam

•Retail : “ Buy it from our store” Big Bazzar, Pantaloons, Univercell

•Political: “People to vote for them or ideas” BJP shining India campaign, Obama’s campaign.

•Directory: Refer to find how out buy a product. Yellow pages, Just dial

•Corporate Advertising – “getting a corporate identity”

Wipro, TCS

Different types of advertising

•Public Service : “ Do this, its good for all of us” Aids awareness, World tobacco day

•Business to Business: “directed at retailers,

wholesalers for doing business with them” Professional publications, SAP targeting SME s

•Direct response advertising: “Directly reaching

customers” •Interactive advertising.

Banner ads, web pages, You tube

Sender

Medium

Feedback

Encoding

Decoding

Receiver

Communication process

Appeal• Appeal is how to design the advertisement that

attracts attention or presents information to consumers.

Humor Sex Fear Logic Emotions

Ethical issues• Advocacy : Persuade its audience to do

something.• Accuracy : Are all claims are verifiable?

Axe – attraction to opposite sex.

• Acquisitiveness: greed to increase one's possessions

Eg: Volvo car roof controversy

Ethical issues• Ethical issues to be considered because

advertisements are highly visible and damage the company.

• Ban on marketing of alcohol beverages through sponsorship of sports, etc.

• Targeting youth : underage drinking.• Benetton Ads – controversial.

Advertising as untruthful• False or misleading claims.• Presenting the information which is favorable to

them. Telemarketing from banks.

• Failing to award claims in contests Eg: Scratch cards

Advertising in Bad Taste• Home computers - young children couldn’t use

it, they would fail in school.• Depicting women as sex objects – condoms,

lingerie. • shock advertising, in which marketers use

nudity, sexual suggestiveness to get consumers’ attention.

Advertising and Children• Television is an important source of information

for children about products.• Lack the experience and knowledge to

understand.• child may learn practices from advertising that

can affect his or her health.

Social consequences • It provides ideas about style, morality, behavior.• Adverse effect on consumer values by

encouraging materialism.• Symbols of status, success, and accomplishment.

Eg: Onida

Stereotyping• Depicts women as preoccupied with beauty,

household duties, and motherhood.• Boys shown as aggressive and in outdoor than

girls.• Creating ads based on race.

• Advertising controls media channels.

Economic Effects of Advertising• Can encourage consumption and foster economic

growth.• Economies of scale low cost• Effects on Consumer Choice• Restricts the choice alternatives to a few well-

known soft drinks, beer, and cereals

Effects on Competition• Too much of ads restricts market entry• Results in less competition and higher prices.• Firms such as Procter & Gamble and PepsiCo,

which spend over $2 billion a year.• Critics say that it only facilitates. • Effects on Product Costs and Prices• Critics argue that advertising increases the

prices consumers pay for products and services.• increases the perceived differences and allows

brands to command a premium price

Participants in IMC• Advertiser ( Client)• Agency• Media organizations• Collateral services• Marketing communication specialists

▫E.g.: PR agency, Sales promotion agency

A Procter & Gamble – Category management

Ad agencies• In-house agency is an advertising agency that

is set up, owned, and operated by the advertiser. ▫Saving money▫Bad experiences with outside agencies▫Increased coordination

• Consolidation of number of medium-size agencies.▫Omnicom Group, WPP Group

Reasons for Using an Agency• Highly skilled who are specialists in their chosen

fields.• Specialize in a particular type of business• Previously worked with the competitor.

Types of Ad Agencies

•Full-Service Agencies•Creative Boutiques•Media Buying Services

Full service• Full range of marketing, communications ,promotions

services including planning, creating, and producing the advertising; performing research; and selecting media.▫ Account service : Understanding the advertiser’s marketing

and promotions needs and interpreting them to agency personnel

▫ Marketing services : a) Research department ▫ b) Media department

▫ Creative services : conceive the ideas for the ads and write the headlines – copy writers

Art department Production department – movie directors

▫ Management and Finance:

Creative and Media buying• A creative boutique is an agency that provides

only creative services.• Coca –cola entered into a JV with Disney.• Media buying: specialize in the buying of media,

particularly radio and television time.• Purchase such large amounts of time and space,

they receive large discounts.

Selection of agency

•Steps:▫Goal setting▫Select process and criteria▫Screen initial list of applicants▫Request client references▫Reduce the list to two or three▫Creative pitch▫Select agency

Steps

•Goal setting▫Identify and prioritize corporate goals.▫To create a fit between company and

agency•Selection criteria

▫Size of the agency▫Relevant experience▫Conflicts of interest▫Reputation – awards won▫Production capabilities

Steps▫Media purchasing capabilities – Read web

pages, annual reports, etc.

Agency compensation

•Commission system•Fee, Cost and incentive based system.•Percentage charges.