Adv. Man. Chap. 1 – Integrated Marketing Communications

Communication Process
Integrated Marketing Communications
The coordination and integration of all marketing communication tools, avenues and sources within a company into a seamless program which maximizes impact at lower costs. The IMC includes all business-to-business, channel, customer, external and internal
communications.
Traditional Marketing Mix
Consists of product, price, promotion, and distribution. Traditionally, the promotion component consisted of advertising, sales promotions and personal selling. Today, it has expanded to include database marketing, direct response marketing, sponsorship marketing, online (or e-active) marketing, social media, alternative marketing, and public relations. The venues for reaching consumers has increased beyond advertising.
Steps in a Marketing Plan
In understanding integrated marketing communications, it helps to review the steps in a marketing plan. The current situational analysis and SWOT sets the stage for setting marketing objectives and choosing the target market. Once these are set, the marketing person can develop strategies and tactics. IMC will be part of the overall marketing strategy to reach consumers. It will also be part of the tactics, which are the plans for achieving the objectives and carrying out the strategies. Implementation and evaluation conclude the marketing planning process.
Emerging trends – Marketing Communications
1. Emphasis on accountability and measurable results
2. Changes in tasks performed by key individuals
3. Emergence of alternative media
Emerging trends – Marketing Communications (textbook)
Three trends have caused a change in marketing communications. First, there is a greater emphasis on accountability and measurable results. CEOs and other company officers want to know what they are getting for the millions they are spending on marketing and advertising. Advertising agencies are feeling pressure to produce measurable results to keep accounts. This has changed the tasks performed by individuals. Ad agencies and brand managers now are more concerned with the entire marketing process and integrating messages to ensure the message is being heard and that results do occur. Coupled with this is the explosion of alterative media that can be used. While the Internet continues to grow in usage, marketers are looking for other alternative ways of reaching consumers where there is less clutter
Accountability and Measurable Results
1. Economic pressures
2. Want results from marketing budgets
3. Effort led by CEOs, CFOs, and CMOs
4. Advertising agencies expected to deliver results
5. Emerging social media changes communication
6. Emerging alternative methods and media
7. Less reliance on mass TV ads
Accountability and Measurable results (textbook)
Economic pressure, especially recent downturns in the economy, has put pressure on ad agencies and marketing officers to be accountable for their expenditures. CEOs, CFOs, and CMOs want measureable results. Show us the proof that the $50 million ad campaign is working and will translate into sales. In the past, once an ad agency was hired, they stayed with a client for a number of years because they knew the brand. Now, companies want results. If not, then a new agency will be chosen. With the rise in popularity of social media, there is less reliance on mass TV advertising. Agencies continue to explore alternative ways of reaching consumers where it is less cluttered than mass media.
Changes in tasks performed
Account executive – represents advertising agency and interface with clients
Brand or product manager – oversees specific brands or line of products
Creatives – design ads and promotional materials
Account planners – voice of the consumer within the agency
*Partnership among individuals to achieve results*
Changes in task performed (textbook)
The primary change in tasks being performed is that everyone now is concerned with marketing and strategic planning. It is not just creating ads for a campaign. It is understanding who buys the product and why. There is a greater level of partnership among these individuals to achieve measurable results.
Emergence of Alternative Media
-Emergence of
–Interactive Web sites, blogs, and social networks
–Smartphones
-Companies shifting expenditures from traditional to new, alternative media
-Younger consumers
–Less likely to watch TV
–Engaged in technology-based interactions
-Challenge
–Finding ways to reach consumers
Emergence of Alternative Media (textbook)
Alternative media has become the new buzz phrase in advertising, especially online. The Internet provides an interactivity with consumers. Websites, blogs, and social networks all provide two-way communications. Smartphones are replacing cell phones so consumers now have the Internet with them at all times, increasing ways and means of reaching them. As a result, companies are shifting huge dollars from traditional media to newer, alternative media. For younger consumers, especially, technology-based interactions are the way to reach them. They do not watch TV or listen to the radio as much as they interact with newer technology. The challenge companies and agencies face now is how and when to reach consumers.
Reasons for Integrating Communications
-Advances in information technology
-Changes in channel power
-Increase in global competition
-Increase in brand parity
-Emphasis on customer engagement
-Increase in micro-marketing
Reasons for Integrating Communications (textbook)
The move to integrating communications has been spurred by a number of developments. Advances in communication and computer technology has changed the way people communicate. As a result, channel power is moving to the consumers. They do not have to buy from the local retailer, they can purchase products online and have them shipped directly to their homes. This has resulted in competition that is global. Firms no longer competing with the businesses down the street, they compete with businesses from all over the world. With increased competition has come brand parity. It is more difficult for a brand to maintain superiority. For most product categories, consumers see brands as about equal and often have several brands from which they will purchase. All of these factors has increased the pressure on businesses to retain customers and a primary way of doing that is through engagement and micro-marketing to individuals, not masses.
Advances in information technology
-Instant communications
-Consumers have access to unlimited information
-Consumer communication has increased
Advances in technology (textbook)
Advances in technology is perhaps the most significant factor in the changes in marketing communications. The Internet and cell phones provide instant communications with people and businesses all around the world. Something that happens in India can be known within minutes in the United States. Consumers now have unlimited information about companies and brands. Consumers can now talk to other consumers. They don’t have to rely on a few friends and relatives for product information. They can access it from a number of websites and get it from other consumers who have purchased the product.
Changes in channel power
Retailers:
-Control channel
-Control shelf space
-Have purchase data
-Determine products and brands on shelves
Consumers:
-Internet shifts power to consumers
-Multiple methods of making purchases
Changes in channel power (textbook)
Channel power has changed and is continuing to change. For the first 60 or so years in the 1900s, channel power resided with the manufacturers, such as Procter & Gamble. It then shifted to retailers, especially large chain retailers such as Wal-Mart. Retailers controlled shelf space, had purchase data, and determined what products and brands went on the shelves. Consumers had to buy whatever brands a retailer stocked. Power is now beginning to shift to consumers, primarily because consumers do not have to purchase from the local retail store. They have options. Retailers who realize this are providing with multiple ways for consumers to make purchases and delivery of products.
Emergence of online purchasing
The emergence of online purchasing has shifted channel power towards consumers. In addition to travel arrangements, consumers are now purchasing a large number of items online. For items not purchased online, consumers may conduct online research to determine the best brand or best price.
Increases in global competition
-Information technology and communication has changed marketplace
-Products can be purchased from multiple locations
-Customers want both low prices and high quality
-Manufacturers and retailers must work together
Increases in global competition (textbook)
Advances in communication technology have led to the rise of global competition. Every business competes in some way with global firms, either directly or indirectly, either for customers or for supplies. Products can be purchased from multiple locations. As a result, the level of competition has increased and the prices of products have fallen. The challenge businesses now face is that consumers want it all. They want the lower prices created by global competition, but they also want quality. To provide this to consumers, manufacturers and retailers must work together. They must become partners with mutual goals that benefit both parties.
Global share of Top Mobile Phone Brands
In most product categories, brand parity exists with consumers having a wide array of brands from which to choose. In the mobile phone market, the global leader is Nokia with 23.9% share of the market. Samsung is second with 17.8%.
Increase in brand parity
-Brands viewed as being equivalent
-Consumers select from group of brands
-Quality and characteristics less important
-Price more important
-Decline in brand loyalty
Increase in brand parity (textbook)
With brand parity consumers see the brands as about equal in quality and attributes. Rather than having one brand that is viewed as being superior, consumers often have a group of brands they feel are equal and would meet their needs. As a result, in brand parity situations quality and characteristics become less important since these are viewed as being equal. That makes price often the determining factor. The rise in brand parity has led to a decline in brand loyalty.
Emphasis customer engagement
-Marketers seek to engage customers
-Contact points important
-Digital media now part of IMC
-Two-way communication
-Strive to develop emotional commitment
Emphasis customer engagement (textbook)
With the increase in brand parity and the decline in brand loyalty, companies have placed greater emphasis on customer engagement. Contact points between customers and the product are examined in an effort to improve the communication and relationship. Digital media is now a critical component of IMC plans because it provides two-way communications. It is no longer sufficient to talk to customers, you must develop a dialog with customers. The goal – a deeper emotional commitment on the part of consumers towards the brand.
*Customer engagement is vital to the success of brands. It is also important for nonprofits, such as the Salvation Army*
Increase in micro-marketing
-Identify appropriate media
-Decrease in mass media advertising effectiveness
-VCR, TiVo, DVR impact
-Shift to micro-marketing
-Focus on individuals and micro-segments
-Agencies now assist with IMC efforts
Increase in micro-marketing (textbook)
Mass marketing has lost its luster and effectiveness in marketing to consumers. Because of VCRs and TiVo, consumers are skipping television ads. Clutter has compounded the problem. As a result, companies are shifting to more micro or one-on-one marketing efforts. The focus is on individuals or small groups of individuals. Advertising agencies have realized they must be involved in helping clients examine micro-marketing approaches.
Overview of IMC Text
This pyramid represents the structure of the text. At the bottom level are issues such as brand management, buyer behaviors, and the IMC planning process. Section 2 deals with advertising issues, section 3 with online and alternative channels, and level 4 with database and direct response marketing, sales promotions, and public relations. The book concludes with discussions on regulations, ethics, and evaluation of IMC effort.
International implications
-Goal – to coordinate marketing efforts
-Greater challenge due to national and cultural differences
-Standardization versus Adaptation
-“Think globally, but act locally”
International Implications (textbook)
Because of the increase in global competition, firms must coordinate marketing efforts across multiple countries. Because of cultural differences and language differences, it is a greater challenge. Firms can use a standardized approach which means the same approach and message is used in every global market. This works only for global brands that are worldwide and well known. An alternative is adaptation, which means firms adapt their marketing communications to each country, region and culture. The idea is to “think globally, but act locally.”
Integrated campaigns in action
-Actual campaigns created by:
–Agencies
–Internal marketing departments of brands
-Highlights application of theories
-14 different campaigns
-Ouachita Independent Bank:
–Continuous campaign
*The Integrated Campaigns in Action feature are actual campaigns created by either an advertising agency or the internal marketing department of brands.*
Ouachita Independent Bank (Part 1)
-Theme of campaign:
–Local people, local trust
-Integrated components:
–Magazine
–Newspaper
–Television
–Digital
Ouachita Independent Bank
(Part 1 – continued)
The Ouachita Independent Bank integrated campaign in action will be highlighted in every chapter to provide students with an example of how a campaign is built and how it is integrated across multiple media. Elements of the campaign include magazine, newspaper, television, and digital.
Ouachita Independent Bank (part 2)
In staying with the campaign theme of local people, local trust, both the print ad and the television ad convey the same message. This illustrates the importance of integration across multiple media.
*Campaign theme – local people, local trust*
Communication Process
The communication process consists of five stages, or components. The sender is the individual or company that wants to send a marketing message to consumers or to other businesses. It can be an advertisement, a brochure, or even a salesperson. Encoding is the process of taking the message and putting it into an ad, brochure, or sales presentation. The transmission device is the television, the paper on which the brochure is printed, or the salesperson at the retail store. The receiver is the consumer or business buyer. Decoding is the process of interpreting the marketing message. Effective communication has taken place if the message that is decoded is the same as was encoded. But, often noise occurs and distorts the message. Noise can be anything and can occur at any stage. Senders can obtain feedback from receivers and use the information to start the process again.
Chick-Fil-A Social Media
-Integrates online with offline
-Facebook – 500 profile mentions
-Official Chick-fil-A Facebook page
-Fan helps administer the page
-Allows fans to interact
-Announces specials, provides coupons
-Promotions on Twitter
-“Eat Mor Chikin” offline advertising
Chick-Fil-A Social Media -Continued
Social media has become an important marketing medium for businesses. A brand that has successfully used social media is Chick-fil-A. The online message has been carefully integrated with the offline marketing thrust of the brand. Fans now help to administer the social media page, which has grown rapidly. The official Facebook page for Chick-fil-A allows the company to interact with fans. It provides a venue for posting announcements, store openings, special deals, and coupons. Promotions are also now offered on Twitter.
Communication Noise
-Talking on the phone during a commercial on television.
-Driving while listening to the radio.
-Looking at attractive model in a magazine ad and ignoring the message and brand.
-Scanning a newspaper for articles to read.
-Talking to a passenger as the car passes billboards.
-Scrolling past Internet ads without looking at them.
-Annoyed by ads appearing on a social media site.
-Ignoring tweets on Twitter because they are not relevant.
-Offended by the message on a flyer for a local business.
*These are examples of noise that can impact effective communication and prevent the message that was encoded from being heard at all or to be decoded differently than was intended.*