Into Serious Reading...Chapter 1

An introduction to Integrated Marketing Communication

Objectives

The major objectives of this section are to examine the growing importance of promotion and advertising in the marketing programs of firms, to introduce the concept of Integrated Marketing Communication (IMC), to introduce various elements of promotional mix and consider their role in IMC and finally to introduce a model of IMC planning process and examining the steps required to develop an successful marketing campaign by integrating various elements of marketing and promotion.

Introduction

In the last decade or so the competition in various sectors have increased many fold, customers have lot many options to choose from and hence organizations have realized having a good product or service is just not important to distinct them from others. Equal emphasis needs to be laid on effectively communicating that quality or difference and hence increasing the focus on effective marketing. One of the tested and successful ways to achieve what has been said above is to integrate and coordinate various marketing activities of the firm namely- sales promotion, personal selling, direct marketing, PR activities and event sponsoring. The recognition of this fact is more so clear from the figures- advertising expenditure on average for firms outside US has increased from approx. 50 billion US $ per year to more than 200 billion. Only those organizations will stand the test of the time that are able to better coordinate all these discussed marketing activities so that all of them send the same right message to the intended targeted audience. Appropriate budgetary allocation and its distribution among these activities will again be a major challenge.

What is marketing? - The Basics

The key word in the definition of marketing is to create exchanges. Exchanges here means where one party provides the goods and/ or services (it might be social recognition and psychological satisfaction of altruism by donation) and the second party provides money or may be other goods or services in exchange.  Another major shift in today’s world is towards relationship marketing here the focus is on not only developing relationships with customers but also maintaining and strengthening them over time to increase the exchanges (directly with that party itself) or indirectly (through word of mouth publicity) or by both. This is also beneficial as recent research have shown acquiring new customers are much more costly them retaining present customers.  Today’s customers want customized products, on time, cost effectively through a convenient platform. Hence this need for mass customization has made the coordination between various marketing tools even more important.

The marketing approaches used by organizations to better focus on their effort on relationship marketing can be categorized under three levels- corporate level, marketing level and marketing communication level. At the corporate level communication with the customer to develop and maintain relationships is done through its mission, vision, annual reports and CSR activities. At marketing level it is through the 4Ps price, promotion, place and product attributes. And finally at the marketing communication level – company tries to send the message through integration of its various promotion activities like direct selling, PR activities, advertisements etc.  One important thing that needs to be kept in mind is that all these activities should be sending the same message. By effectively coordinating these activities organizations can take advantage of synergies and avoiding duplication of efforts hence saving precious money and time.

       The Integrated Marketing Communication Concept

Promotion Mix as an IMC tool

If we try to summarize numerous factors which have led towards search for better marketing alternatives and hence the invent of Integrated Marketing Communication- they can be written as increasing emphasis on more cost effective and directed marketing means, a shift in marketing power from manufacturers to retailers due to consolidation, the rapid growth of database marketing and the increasing penetration of Internet.

One of the 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. With more and more products and services competing for consideration by customers who have less and less time to make choices, well-known brands have a major competitive advantage in today’s marketplace. Building and maintaining brand identity and equity require the creation of well-known brands that have favorable, strong, and unique associations in the mind of the consumers. Brand identity is a combination of many factors, including the name, logo, symbols, design, packaging, and performance of a product or service as well as the image or type of associations that comes to mind when consumers think about a brand. It encompasses the entire spectrum of consumers’ awareness, knowledge, and image of the brand as well as the company behind it. The challenge is to understand how to use the various IMC tools to make such contacts and deliver the branding message effectively and efficiently.

Promotion has been defined as the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea. The basic tools used to accomplish an organization’s communication objectives are often referred to as the promotional mix. Traditionally the promotional mix has included four elements: advertising, sales promotion, publicity/public relations, and personal selling. However, in this text we view direct marketing as well as interactive media as major promotional-mix elements that modern-day marketers use to communicate with their target markets. Each element of the promotional mix is viewed as an integrated marketing communications tool that plays a distinctive role in an IMC program. 

Advertising is defined as any paid form of nonperson communication about an organization, product, service, or idea by an identified sponsor. An occasional exception to this is the public service announcement (PSA), whose advertising space or time is donated by the media. The non-personal component means that advertising involves mass media (e.g., TV, radio, magazines, newspapers) that can transmit a message to large groups of individuals, often at the same time. The non-personal nature of advertising means that there is generally no opportunity for immediate feedback from the message recipient (except in direct-response advertising). Another advantage of advertising is its ability to strike a responsive chord with consumers when differentiation across other elements of the marketing mix is difficult to achieve. Popular advertising campaigns attract consumers’ attention and can help generate sales.

Direct marketing, is the one in which organizations communicate directly with target customers to generate a response and/or a transaction. Direct marketing is much more than direct mail and mail order catalogs. It involves a variety of activities, including database management, direct selling, telemarketing, and direct response ads through direct mail, the Internet, and various broadcast and print media. One of the major tools of direct marketing is direct response advertising, whereby a product is promoted through an ad that encourages the consumer to purchase directly from the manufacturer. Direct-marketing tools and techniques are also being used by companies that distribute their products through traditional distribution channels or have their own sales force. Direct marketing plays a big role in the integrated marketing communications programs of consumer-product companies and business-to-business marketers.

Interactive/Internet Marketing- Interactive media allow for a back-and-forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time. Unlike traditional forms of marketing Communications such as advertising, which are one-way in nature, the new media allow users to perform a variety of functions such as receive and alter information and images, make inquiries, respond to questions, and, of course, make purchases. In addition to the Internet, other forms of interactive media include CD-ROMs, kiosks, and interactive television. Thousands of companies, ranging from large multinational corporations to small local firms, have developed websites to promote their products and services, by providing current and potential customers with information, as well as to entertain and interact with consumers.

Sales Promotion- it is generally defined as those marketing activities that provide extra value or incentives to the sales force, the 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. Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and includes couponing, sampling, premiums, rebates, contests, sweepstakes, and various point-of-purchase materials. These promotional tools encourage consumers to make an immediate purchase and thus can stimulate short term sales. Trade-oriented sales promotion is targeted toward marketing intermediaries such as wholesalers, distributors, and retailers. Promotional and merchandising allowances, price deals, sales contests, and trade shows are some of the promotional tools used to encourage the trade to stock and promote a company’s products.

Publicity/ Public Relations- Publicity refer to nonperson communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. It usually comes in the form of a news story, editorial, or announcement about an organization and/or its products and services. Like advertising, publicity involves nonperson communication to a mass audience, but unlike advertising, publicity is not directly paid for by the company. The company or organization attempts to get the media to cover or run a favorable story on a product, service, cause, or event to affect awareness, knowledge, opinions, and/or behavior. Techniques used to gain publicity include news releases, press conferences, feature articles, photographs, films, and videotapes. An advantage of publicity over other forms of promotion is its credibility, as the information comes from a source generally perceived as unbiased.

Public Relations: It is important to recognize the distinction between publicity and public relations. When an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives, it is really engaging in a function known as public relations. Public relations uses publicity and a variety of other tools—including special publications, participation in community activities, fund-raising, sponsorship of special events, and various public affairs activities—to enhance an organization’s image.

Personal Selling: This is a form of person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s product or service or to act on an idea. Unlike advertising, personal selling involves direct contact between buyer and seller, either face-to-face or through some form of telecommunications such as telephone sales. Personal selling also involves more immediate and precise feedback because the impact of the sales presentation can generally be assessed from the customer’s reactions.

Promotional management involves coordinating the promotional-mix elements to develop a controlled, integrated program of effective marketing communications.

The IMC Planning Process

The integrated marketing communications programme is developed by reference to a number of factors, i.e.

• The overall marketing plan, including marketing objectives and competitor analysis.
• The promotional programme situation, e.g. internally – previous experience and ability with respect to promotions – and externally – consumer behaviour analysis, segmentation, targeting and positioning decisions.
• Communications process analysis – e.g. communication goals, receiver's response processes, source, message and channel factors.

Finally, the available budget and decisions with respect to budget allocation will input into the planning process.